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$45,000,000
CREDIT AGREEMENT
DATED AS OF JUNE 11, 1997
AMONG
WAVETEK CORPORATION
AS BORROWER,
THE LENDERS LISTED HEREIN,
AS LENDERS,
DLJ CAPITAL FUNDING, INC.,
AS SYNDICATION AGENT,
AND
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
ARRANGED BY:
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
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WAVETEK CORPORATION
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. . . . . . . . . . . . . . . . 35
1.3 Other Definitional Provisions and Rules of Construction . . 35
1.4 Currency Equivalents Generally. . . . . . . . . . . . . . . 36
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS. . . . . . . . . 36
2.1 Commitments; Making of Loans; Notes; Register; General
Provisions Regarding Offshore Currency Loans. . . . . . . . 36
2.2 Interest on the Loans . . . . . . . . . . . . . . . . . . . 48
2.3 Fees. . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
2.4 Repayments, Prepayments and Reductions in Revolving Loan
Commitments; General Provisions Regarding Payments. . . . . 53
2.5 Use of Proceeds . . . . . . . . . . . . . . . . . . . . . . 61
2.6 Special Provisions Governing Offshore Rate Loans. . . . . . 62
2.7 Increased Costs; Taxes; Capital Adequacy. . . . . . . . . . 65
2.8 Obligation of Lenders and Issuing Lenders to Mitigate . . . 69
2.9 DEFAULTING LENDERS. . . . . . . . . . . . . . . . . . . . . 70
SECTION 3. LETTERS OF CREDIT . . . . . . . . . . . . . . . . . . . . . 71
3.1 Issuance of Letters of Credit and Lenders' Purchase of
Participations Therein. . . . . . . . . . . . . . . . . . . 71
3.2 Letter of Credit Fees . . . . . . . . . . . . . . . . . . . 74
3.3 Drawings and Reimbursement of Amounts Paid Under Letters
of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 75
3.4 Obligations Absolute. . . . . . . . . . . . . . . . . . . . 78
3.5 Indemnification; Nature of Issuing Lenders' Duties. . . . . 79
3.6 Increased Costs and Taxes Relating to Letters of Credit . . 80
SECTION 4. CONDITIONS TO LOANS AND LETTERS OF CREDIT . . . . . . . . . 81
4.1 Conditions to Term Loans and Initial Revolving Loans,
Offshore Currency Loans and Swing Line Loans. . . . . . . . 81
4.2 Conditions to All Loans . . . . . . . . . . . . . . . . . . 89
4.3 Conditions to Letters of Credit . . . . . . . . . . . . . . 90
(i)
PAGE
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES. . . . . . . . . . 91
5.1 Organization, Powers, Qualification, Good Standing,
Business and Subsidiaries . . . . . . . . . . . . . . . . . 91
5.2 Authorization of Borrowing, etc.. . . . . . . . . . . . . . 92
5.3 Financial Condition . . . . . . . . . . . . . . . . . . . . 93
5.4 No Material Adverse Change; No Restricted Junior Payments . 94
5.5 Title to Properties; Liens; Real Property . . . . . . . . . 94
5.6 Litigation; Adverse Facts . . . . . . . . . . . . . . . . . 95
5.7 Payment of Taxes. . . . . . . . . . . . . . . . . . . . . . 95
5.8 Performance of Agreements; Materially Adverse Agreements. . 96
5.9 Governmental Regulation . . . . . . . . . . . . . . . . . . 96
5.10 Securities Activities . . . . . . . . . . . . . . . . . . . 96
5.11 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . 96
5.12 Certain Fees. . . . . . . . . . . . . . . . . . . . . . . . 97
5.13 Environmental Protection. . . . . . . . . . . . . . . . . . 97
5.14 Employee Matters. . . . . . . . . . . . . . . . . . . . . . 98
5.15 Solvency. . . . . . . . . . . . . . . . . . . . . . . . . . 99
5.16 Matters Relating to Collateral. . . . . . . . . . . . . . . 99
5.17 Disclosure. . . . . . . . . . . . . . . . . . . . . . . . . 100
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . 100
6.1 Financial Statements and Other Reports. . . . . . . . . . . 100
6.2 Corporate Existence, etc. . . . . . . . . . . . . . . . . . 105
6.3 Payment of Taxes and Claims; Tax Consolidation. . . . . . . 106
6.4 Maintenance of Properties; Insurance. . . . . . . . . . . . 106
6.5 Inspection Rights; Lender Meeting . . . . . . . . . . . . . 107
6.6 Compliance with Laws, etc.. . . . . . . . . . . . . . . . . 108
6.7 Environmental Review and Investigation, Disclosure, Etc.;
Company's Actions Regarding Hazardous Materials
Activities, Environmental Claims and Violations of
Environmental Laws. . . . . . . . . . . . . . . . . . . . . 108
6.8 Execution of Subsidiary Guaranty and Personal Property
Collateral Documents by Certain Subsidiaries and Future
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 111
6.9 Conforming Leasehold Interests; Matters Relating to
Additional Real Property Collateral . . . . . . . . . . . . 112
SECTION 7. COMPANY'S NEGATIVE COVENANTS. . . . . . . . . . . . . . . . 114
7.1 Indebtedness. . . . . . . . . . . . . . . . . . . . . . . . 114
7.2 Liens and Related Matters . . . . . . . . . . . . . . . . . 116
7.3 Investments; Joint Ventures . . . . . . . . . . . . . . . . 117
7.4 Contingent Obligations. . . . . . . . . . . . . . . . . . . 118
7.5 Restricted Junior Payments. . . . . . . . . . . . . . . . . 120
7.6 Financial Covenants . . . . . . . . . . . . . . . . . . . . 120
(ii)
PAGE
7.7 Restriction on Fundamental Changes; Asset Sales and
Acquisitions. . . . . . . . . . . . . . . . . . . . . . . . 124
7.8 Consolidated Capital Expenditures . . . . . . . . . . . . . 126
7.9 Restriction on Leases . . . . . . . . . . . . . . . . . . . 127
7.10 Sales and Lease-Backs . . . . . . . . . . . . . . . . . . . 127
7.11 Sale or Discount of Receivables . . . . . . . . . . . . . . 127
7.12 Transactions with Shareholders and Affiliates . . . . . . . 128
7.13 Disposal of Subsidiary Stock; Restrictions on
Subsidiaries. . . . . . . . . . . . . . . . . . . . . . . . 129
7.14 Conduct of Business . . . . . . . . . . . . . . . . . . . . 129
7.15 Amendments of Certain Documents; Designation of
"Designated Senior Debt." . . . . . . . . . . . . . . . . . 129
SECTION 8. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . 130
8.1 Failure to Make Payments When Due . . . . . . . . . . . . . 130
8.2 Default in Other Agreements . . . . . . . . . . . . . . . . 130
8.3 Breach of Certain Covenants . . . . . . . . . . . . . . . . 131
8.4 Breach of Warranty. . . . . . . . . . . . . . . . . . . . . 131
8.5 Other Defaults Under Loan Documents . . . . . . . . . . . . 131
8.6 Involuntary Bankruptcy; Appointment of Receiver, etc. . . . 131
8.7 Voluntary Bankruptcy; Appointment of Receiver, etc. . . . . 132
8.8 Judgments and Attachments . . . . . . . . . . . . . . . . . 132
8.9 Dissolution . . . . . . . . . . . . . . . . . . . . . . . . 133
8.10 Employee Benefit Plans. . . . . . . . . . . . . . . . . . . 133
8.11 Change of Control . . . . . . . . . . . . . . . . . . . . . 133
8.12 Invalidity of Subsidiary Guaranty . . . . . . . . . . . . . 133
8.13 Failure of Security . . . . . . . . . . . . . . . . . . . . 133
8.14 Failure to Consummate the Recapitalization Transactions . . 133
8.15 Action Under Related Financing Documents. . . . . . . . . . 134
SECTION 9. THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . 135
9.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . 135
9.2 Powers and Duties; General Immunity . . . . . . . . . . . . 136
9.3 Representations and Warranties; No Responsibility For
Appraisal of Creditworthiness . . . . . . . . . . . . . . . 138
9.4 Right to Indemnity. . . . . . . . . . . . . . . . . . . . . 139
9.5 Successor Agents, Swing Line Lender and Offshore
Currency Funding Lender . . . . . . . . . . . . . . . . . . 139
9.6 Collateral Documents and Subsidiary Guaranty. . . . . . . . 141
9.7 Other Titles. . . . . . . . . . . . . . . . . . . . . . . . 142
SECTION 10. MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . 142
10.1 Assignments and Participations in Loans and Letters
of Credit . . . . . . . . . . . . . . . . . . . . . . . . . 142
10.2 Expenses. . . . . . . . . . . . . . . . . . . . . . . . . . 145
10.3 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . 146
(iii)
PAGE
10.4 Set-Off . . . . . . . . . . . . . . . . . . . . . . . . . . 147
10.5 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . 148
10.6 Amendments and Waivers. . . . . . . . . . . . . . . . . . . 148
10.7 Independence of Covenants . . . . . . . . . . . . . . . . . 150
10.8 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . 150
10.9 Survival of Representations, Warranties and Agreements. . . 150
10.10 Failure or Indulgence Not Waiver; Remedies Cumulative . . . 151
10.11 Marshalling; Payments Set Aside . . . . . . . . . . . . . . 151
10.12 Severability. . . . . . . . . . . . . . . . . . . . . . . . 151
10.13 Obligations Several; Independent Nature of Lenders' Rights. 151
10.14 Headings. . . . . . . . . . . . . . . . . . . . . . . . . . 152
10.15 Applicable Law. . . . . . . . . . . . . . . . . . . . . . . 152
10.16 Successors and Assigns. . . . . . . . . . . . . . . . . . . 152
10.17 Consent to Jurisdiction and Service of Process. . . . . . . 152
10.18 Waiver of Jury Trial. . . . . . . . . . . . . . . . . . . . 153
10.19 Judgment. . . . . . . . . . . . . . . . . . . . . . . . . . 154
10.20 Confidentiality . . . . . . . . . . . . . . . . . . . . . . 154
10.21 Counterparts; Effectiveness . . . . . . . . . . . . . . . . 155
Signature pages . . . . . . . . . . . . . . . . . . . . . . S-1
(iv)
EXHIBITS
I FORM OF NOTICE OF BORROWING
II FORM OF NOTICE OF CONVERSION/CONTINUATION
III FORM OF NOTICE OF ISSUANCE OF LETTER OF CREDIT
IV FORM OF TERM NOTE
V FORM OF REVOLVING NOTE
VI FORM OF SWING LINE NOTE
VII FORM OF COMPLIANCE CERTIFICATE
VIII FORM OF OPINION OF XXXXXXXX & XXXXXXXX
IX FORMS OF OPINIONS OF LOCAL AND FOREIGN COUNSEL
X FORM OF OPINION OF O'MELVENY & XXXXX LLP
XI FORM OF ASSIGNMENT AGREEMENT
XII FORM OF COLLATERAL ACCOUNT AGREEMENT
XIII FORM OF COMPANY PLEDGE AGREEMENT
XIV FORM OF COMPANY SECURITY AGREEMENT
XV FORM OF COMPANY PATENT COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT
XVI FORM OF COMPANY 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 COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT
XXI FORM OF SUBSIDIARY TRADEMARK SECURITY AGREEMENT
XXII FORM OF MORTGAGE
XXIII FORM OF FINANCIAL CONDITION CERTIFICATE
XXIV FORM OF AUDITOR'S LETTER
XXV FORM OF OFFSHORE CURRENCY NOTE
(v)
SCHEDULES
1.1 LENDING OFFICES
2.1 LENDERS' COMMITMENTS AND PRO RATA SHARES
4.1E CLOSING DATE MORTGAGED PROPERTIES
5.1 SUBSIDIARIES OF COMPANY
5.5 REAL PROPERTY
5.11 CERTAIN EMPLOYEE BENEFIT PLANS
5.13 ENVIRONMENTAL MATTERS
7.1 CERTAIN EXISTING INDEBTEDNESS
7.2 CERTAIN EXISTING LIENS
7.3 CERTAIN EXISTING INVESTMENTS
7.4 CERTAIN EXISTING CONTINGENT OBLIGATIONS
(vi)
WAVETEK CORPORATION
CREDIT AGREEMENT
This CREDIT AGREEMENT is dated as of June 11, 1997 and entered into by and
among WAVETEK CORPORATION, a Delaware corporation ("COMPANY"), THE LENDERS
LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a
"LENDER" and collectively as "LENDERS"), DLJ CAPITAL FUNDING, INC. ("DLJ"), as
syndication agent hereunder for Lenders (in such capacity, "SYNDICATION AGENT"),
and FLEET NATIONAL BANK, as administrative agent for Lenders (in such capacity,
"ADMINISTRATIVE AGENT").
R E C I T A L S
WHEREAS, Company intends to engage in certain recapitalization transactions
(the "Recapitalization Transactions") whereby Company will repurchase shares of
its common stock (including all shares of its outstanding Class B Common Stock)
and make cash payments for the surrender of stock options from employees in an
aggregate amount not to exceed $159,400,000;
WHEREAS, Company will finance the Recapitalization Transactions, including
the payment of related fees and expenses, from the proceeds of (i) the issuance
of shares of its Common Stock (terms used herein without definition shall have
the meanings set forth therefor in subsection 1.1 of this Agreement) to the New
Equity Investors for an aggregate purchase price of approximately $43,500,000,
which shares of Common Stock represent 49.7% of Company's outstanding Common
Stock following the Recapitalization Transactions, (ii) the issuance of not less
than $85,000,000 in original principal amount of Senior Subordinated Notes,
(iii) cash-on-hand of Company and (iv) $25,000,000 in Term Loans and
approximately $3,500,000 in Revolving Loans;
WHEREAS, Company desires to secure all of its 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 property, including a
pledge of all of the capital stock of each of its Domestic Subsidiaries and a
pledge of sixty-five percent (65%) of the capital stock of each of its Foreign
Subsidiaries;
WHEREAS, all of the Domestic Subsidiaries of Company have agreed 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
property, including a pledge of all of the capital stock of each of their
respective Domestic Subsidiaries and a
1
pledge of sixty-five percent (65%) of the capital stock of each of their Foreign
Subsidiaries other than any Immaterial Subsidiary;
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, Company, Lenders, Syndication Agent
and Administrative Agent agree as follows:
SECTION 1. DEFINITIONS
1.1 CERTAIN DEFINED TERMS.
The following terms used in this Agreement shall have the following
meanings:
"ACQUISITION" has the meaning assigned to that term in subsection
7.7(ii).
"ADDITIONAL MORTGAGE" has the meaning assigned to that term in
subsection 6.9B.
"ADDITIONAL MORTGAGE POLICY" has the meaning assigned to that term in
subsection 6.9B.
"ADDITIONAL MORTGAGED PROPERTY" has the meaning assigned to that term
in subsection 6.9B.
"ADJUSTED OFFSHORE RATE" means, for any Interest Rate Determination
Date with respect to an Interest Period for an Offshore Rate Loan, the rate per
annum obtained by (a) DIVIDING (i) the arithmetic average of the offered
quotations (rounded upward to the nearest 1/16 of one percent) to first class
banks in the London interbank market by Reference Lender for deposits (for
delivery on the first day of such Interest Period) in the Applicable Currency of
amounts comparable to the principal amount of the Offshore Rate Loans of
Reference Lender for which the Adjusted Offshore Rate is then being determined
with maturities comparable to such Interest Period as of approximately 11:00
a.m. (London 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 and without duplication, ADDING (b) the additional cost (expressed
as a percentage per annum and rounded upwards to the nearest 1/16 of one
percent) to the Lenders of complying with the relative reserve asset ratio
required by the Bank of England from time to time (if any) and any analogous
requirement of any central banking or financial regulatory authority imposed in
2
respect of the funding or maintenance of commitments or loans of the type
contemplated hereby and applicable to a specific Offshore Currency.
"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 (i) 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, or (ii) the ownership of more than 5% of the voting
securities of that Person. Notwithstanding the foregoing, in no event shall any
Lender, the Arranger or any Agent be deemed to be an Affiliate of Company for
purposes of any Loan Document.
"AGENTS" means, collectively, the Syndication Agent and the
Administrative Agent.
"AGREEMENT" means this Credit Agreement dated as of June 11, 1997, as
it may be amended, supplemented or otherwise modified from time to time.
"APPLICABLE BASE RATE MARGIN" means, as of any date of determination,
a percentage per annum as set forth below opposite the applicable Consolidated
Leverage Ratio; PROVIDED that for the period beginning on and including the
Closing Date to and including August 15, 1997, the Applicable Base Rate Margin
shall be 1.50% per annum:
CONSOLIDATED LEVERAGE RATIO APPLICABLE BASE RATE MARGIN
greater than 4.50:1.00 1.50%
less than or equal to 4.50:1.00
but greater than 4.00:1.00 1.25%
less than or equal to 4.00:1.00
but greater than 3.00:1.00 1.00%
less than or equal to 3.00:1.00 0.75%
"APPLICABLE OFFSHORE RATE MARGIN" means, as of any date of
determination, a percentage per annum set forth below opposite the applicable
3
Consolidated Leverage Ratio; PROVIDED that for the period beginning on and
including the Closing Date to and including August 15, 1997, the Applicable
Offshore Rate Margin shall be 2.50% per annum:
CONSOLIDATED LEVERAGE RATIO APPLICABLE OFFSHORE RATE MARGIN
greater than 4.50:1.00 2.50%
less than or equal to 4.50:1.00
but greater than 4.00:1.00 2.25%
less than or equal to 4.00:1.00
but greater than 3.00:1.00 2.00%
less than or equal to 3.00:1.00 1.75%
"APPLICABLE CURRENCY" means, as to any particular payment, Loan or
Letter of Credit, Dollars or the Offshore Currency in which it is denominated or
is payable.
"ARRANGER" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
as arranger of the credit facilities described herein.
"ASSET SALE" means the sale, lease, assignment or other transfer
(whether voluntary or involuntary) for value (collectively, a "transfer") by
Company or any of its Subsidiaries to any Person other than Company or any of
its wholly-owned Subsidiaries of (i) any of the stock of any of Company's
Subsidiaries, (ii) substantially all of the assets of any division or line of
business of Company or any of its Subsidiaries, or (iii) any other assets
(whether tangible or intangible) of Company or any of its Subsidiaries
(including, without limitation, the loss, damage or destruction of assets giving
rise to insurance proceeds to the extent such insurance proceeds are not used to
restore, repair or replace the assets so lost, damaged or destroyed within six
months following the receipt of such insurance proceeds), other than (a)
Inventory sold in the ordinary course of business, (b) any such transfer to the
extent that the aggregate value of such assets so transferred in any Fiscal Year
is equal to $250,000 or less and (c) the sale and leaseback of the manufacturing
facility located in Norwich, England.
"ASSIGNMENT AGREEMENT" means an Assignment Agreement in substantially
the form of EXHIBIT XI annexed hereto.
"AUDITOR'S LETTER" means a letter, substantially in the form of
EXHIBIT XXIV annexed hereto, from Company's independent certified public
accountants.
"BANKRUPTCY CODE" means Title 11 of the United States Code entitled
"Bankruptcy", as now and hereafter in effect, or any successor statute.
4
"BASE RATE" means, at any time, the higher of (x) the Prime Rate or
(y) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate.
"BASE RATE LOANS" means Loans bearing interest at rates determined by
reference to the Base Rate as provided in subsection 2.2A.
"BUSINESS DAY" means (i) for all purposes other than as covered by
clause (ii) and (iii) below, any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of the States of New York or California
or the Commonwealth of Massachusetts or is a day on which banking institutions
located in any such state or commonwealth are authorized or required by law or
other governmental action to close, (ii) with respect to all notices,
determinations, fundings and payments in Dollars in connection with the Adjusted
Offshore Rate or any Offshore 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, and (iii) with respect
to all notices, determinations, fundings and payments in any Offshore Currency
in connection with the Adjusted Offshore Rate or any Offshore Rate Loans, any
day that is a Business Day described in clause (i) above and that is also a day
on which banks and foreign exchange markets are open for foreign exchange
business in London, and on which banks and foreign exchange markets are also
open for foreign exchange business in the principal financial center of the
country of that Offshore Currency.
"CAPITAL LEASE", as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee that, in
conformity with GAAP, is accounted for as a capital lease on the balance sheet
of that Person.
"CASH" means money, currency or a credit balance in a Deposit Account.
"CASH EQUIVALENTS" means, as at any date of determination, (i)
marketable securities (a) issued or directly and unconditionally guaranteed as
to interest and principal by the United States Government or (b) issued by any
agency of the United States the obligations of which are backed by the full
faith and credit of the United States, in each case maturing within one year
after such date; (ii) marketable direct obligations issued by any state of the
United States of America or any political subdivision of any such state or any
public instrumentality thereof, in each case maturing within one year after such
date and having, at the time of the acquisition thereof, the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("MOODY'S"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and having, at the time of the
acquisition thereof, a rating of at least A-1 from S&P or at least P-1 from
Moody's; (iv) certificates of deposit or bankers' acceptances maturing within
one year after such date and issued or accepted by any Lender or by any
commercial bank organized under the laws of the United States of America or any
state thereof or the District of Columbia that (a) is at least
5
"adequately capitalized" (as defined in the regulations of its primary Federal
banking regulator) and (b) has Tier 1 capital (as defined in such regulations)
of not less than $100,000,000; and (v) shares of any money market mutual fund
that (a) has at least 95% of its assets invested continuously in the types of
investments referred to in clauses (i) and (ii) above, (b) has net assets of not
less than $500,000,000, and (c) has the highest rating obtainable from either
S&P or Moody's.
"CERTIFICATE RE NON-BANK STATUS" means a certificate in form and
substance satisfactory to Administrative Agent delivered by a Lender to
Administrative Agent pursuant to subsection 2.7B(iii) pursuant to which such
Lender certifies, under penalty of perjury, that it is not (i) a "bank" as such
term is defined in subsection 881(c)(3) of the Internal Revenue Code; (ii) a 10
percent shareholder of Company within the meaning of Section 871(h)(3)(B) or
Section 881(c)(3)(B) of the Internal Revenue Code; or (iii) a "controlled"
foreign corporation related to Company within the meaning of Section 864(d)(4)
of the Internal Revenue Code.
"CHANGE OF CONTROL" means (i) any Person (other than a Permitted
Holder) or any group (within the meaning of Section 13(d)(3) of the Exchange
Act) of Persons (other than any Permitted Holders), shall have acquired
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Exchange Act), directly or indirectly, in one or
more transactions, of Securities of Company (or other Securities convertible
into such Securities) representing 30% or more of the combined voting power of
all Securities of Company entitled to vote in the election of directors, other
than Securities having such power only by reason of the happening of a
contingency, (ii) the first day on which a majority of the members of the Board
of Directors of Company are not Continuing Directors or (iii) any "Change of
Control" as such term is defined in the Senior Subordinated Note Indenture shall
have occurred.
"CLOSING DATE" means June 11, 1997.
"CLOSING DATE MORTGAGE" and "CLOSING DATE MORTGAGES" have the meanings
assigned to those terms in subsection 4.1E(i).
"CLOSING DATE MORTGAGED PROPERTY" and "CLOSING DATE MORTGAGED
PROPERTIES" have the meanings assigned to those terms in subsection 4.1E(i).
"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 ACCOUNT AGREEMENT" means the Collateral Account Agreement
executed and delivered by Company and Administrative Agent on the Closing Date,
substantially in the form of EXHIBIT XII annexed hereto, as such
6
Collateral Account Agreement may hereafter be amended, supplemented or otherwise
modified from time to time.
"COLLATERAL DOCUMENTS" means the Company Pledge Agreement, the Company
Security Agreement, the Company Trademark Security Agreement, the Company Patent
Collateral Assignment and Security Agreement, the Collateral Account Agreement,
the Subsidiary Pledge Agreements, the Subsidiary Security Agreements, the
Subsidiary Trademark Security Agreements, the Subsidiary Patent Collateral
Assignment and Security Agreements, 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 Administrative 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.
"COMMITMENT FEE PERCENTAGE" means, as of any date of determination, a
percentage per annum set forth below opposite the applicable Consolidated
Leverage Ratio; PROVIDED that for the period beginning on and including the
Closing Date to and including August 15, 1997, the Commitment Fee Percentage
shall be .50% per annum:
CONSOLIDATED LEVERAGE RATIO COMMITMENT FEE PERCENTAGE
greater than 4.00:1.00 0.500%
less than or equal to 4.00:1.00
but greater than 3.00:1.00 0.375%
less than or equal to 3.00:1.00 0.250%
"COMMITMENTS" means the commitments of Lenders to make Loans as set
forth in subsection 2.1A.
"COMMON STOCK" means the Common Stock of Company, par value $0.01 per
share.
"COMPANY" has the meaning assigned to that term in the introduction to
this Agreement.
"COMPANY PLEDGE AGREEMENT" means the Company Pledge Agreement executed
and delivered by Company on the Closing Date, substantially in the form of
EXHIBIT XIII annexed hereto, or any other pledge agreement, document or
instrument
7
with a similar or comparable effect executed by Company with respect to a
Foreign Subsidiary, in form and substance satisfactory to Agents, as such
Company Pledge Agreement may thereafter be amended, supplemented or otherwise
modified from time to time.
"COMPANY SECURITY AGREEMENT" means the Company Security Agreement
executed and delivered by Company on the Closing Date, substantially in the form
of EXHIBIT XIV annexed hereto, as such Company Security Agreement may thereafter
be amended, supplemented or otherwise modified from time to time.
"COMPANY PATENT COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT" means
the Company Patent Collateral Assignment and Security Agreement executed and
delivered by Company on the Closing Date, substantially in the form of EXHIBIT
XV annexed hereto, as such Company Patent Collateral Assignment and Security
Agreement may thereafter be amended, supplemented or otherwise modified from
time to time.
"COMPANY TRADEMARK SECURITY AGREEMENT" means the Company Trademark
Security Agreement executed and delivered by Company on the Closing Date,
substantially in the form of EXHIBIT XVI annexed hereto, as such Company
Trademark Security Agreement may thereafter be amended, supplemented or
otherwise modified from time to time.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT VII annexed hereto delivered to Administrative Agent and Lenders by
Company pursuant to subsection 6.1(iv).
"COMPUTATION DATE" has the meaning specified in subsection 2.1F.
"CONFORMING LEASEHOLD INTEREST" means any Recorded Leasehold Interest
as to which the lessor has agreed in writing for the benefit of Administrative
Agent (which writing has been delivered to Administrative Agent), whether under
the terms of the applicable lease, under the terms of a Landlord Estoppel and
Consent, or otherwise, to the matters described in the definition of "Landlord
Estoppel and Consent," which interest, if a subleasehold or sub-subleasehold
interest, is not subject to any contrary restrictions contained in a superior
lease or sublease.
"CONSOLIDATED CAPITAL EXPENDITURES" means, for any period, the
aggregate of all expenditures (whether paid in cash or other consideration or
accrued as a liability and including that portion of Capital Leases which is
capitalized on the consolidated balance sheet of Company and its Subsidiaries)
by Company and its Subsidiaries during that period that, in conformity with
GAAP, are included in "additions to property, plant or equipment" or comparable
items reflected in the consolidated statement of cash flows of Company and its
Subsidiaries.
8
"CONSOLIDATED CURRENT ASSETS" means, as at any date of determination,
the total assets of Company and its Subsidiaries on a consolidated basis which
may properly be classified as current assets in conformity with GAAP, EXCLUDING
Cash and Cash Equivalents.
"CONSOLIDATED CURRENT LIABILITIES" means, as at any date of
determination, the total liabilities of Company and its Subsidiaries on a
consolidated basis which may properly be classified as current liabilities in
conformity with GAAP, EXCLUDING the current portions of Consolidated Total Debt.
"CONSOLIDATED EBITDA" means, for any period, Consolidated Net Income,
PLUS, to the extent such items were included in such computation of Consolidated
Net Income, the sum of the amounts for such period of (i) Consolidated Interest
Expense, (ii) provisions for taxes based on income, (iii) total depreciation
expense, (iv) total amortization expense, (v) other non-cash items reducing
Consolidated Net Income and (vi) with respect to the Fiscal Year ended September
30, 1996 only, any provision for restructuring operations LESS other non-cash
items increasing Consolidated Net Income, all of the foregoing as determined on
a consolidated basis for Company and its Subsidiaries in conformity with GAAP;
PROVIDED that Consolidated Net Income shall exclude the impact of foreign
currency translations and any one-time charge or expense incurred in order to
make cash payments to option holders pursuant to the Stock Purchase and
Recapitalization Agreement. Notwithstanding the foregoing, the provision for
taxes based on the income of, and the depreciation and amortization and other
non-cash charges of, a Subsidiary of the referent Person shall be added to
Consolidated Net Income to compute Consolidated EBITDA only to the extent that a
corresponding amount would be permitted at the date of determination to be
dividended to Company by such Subsidiary either (i) without prior governmental
approval or (ii) with governmental approval that has been obtained or that could
readily and reasonably be obtained, and without direct or indirect restriction
pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to that
Subsidiary or its stockholders.
"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 EBITDA and (b) the Consolidated Working Capital
Adjustment MINUS (ii) the sum, without duplication, of the amounts for such
period of (a) voluntary and scheduled repayments of Consolidated Total Debt
(excluding repayments of Revolving Loans except to the extent the Revolving Loan
Commitments are permanently reduced in connection with such repayments), (b)
Consolidated Capital Expenditures (without duplication, net of any proceeds of
any related financings with respect to such expenditures), (c) Consolidated
Interest Expense, and (d) the provision for current taxes based on income of
Company and its Subsidiaries and payable in cash with respect to such period.
9
"CONSOLIDATED FIXED CHARGES" means, for any period, the sum (without
duplication) of the amounts for such period of (i) Consolidated Interest
Expense, (ii) provisions for taxes based on income, and (iii) scheduled
principal payments in respect of Consolidated Total Debt, all of the foregoing
as determined on a consolidated basis for Company and its Subsidiaries in
conformity with GAAP.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, total interest
expense (including that portion attributable to Capital Leases in accordance
with GAAP and capitalized interest) of Company and its Subsidiaries on a
consolidated basis with respect to all outstanding Indebtedness of Company and
its Subsidiaries, including all commissions, discounts and other fees and
charges owed with respect to letters of credit and bankers' acceptance financing
and net costs under Interest Rate Agreements, but excluding, however, any
amounts payable to Arranger and Administrative Agent with respect to the
financings contemplated by this Agreement on or before the Closing Date.
"CONSOLIDATED LEVERAGE RATIO" means as at any date of determination,
the ratio of Consolidated Total Debt as of the last day of the Fiscal Quarter
immediately preceding the Fiscal Quarter in which such date of determination
occurs to Consolidated EBITDA for the four Fiscal Quarters ending as of such
last day of such immediately preceding Fiscal Quarter.
"CONSOLIDATED NET INCOME" means, for any period, the net income (or
loss) of Company and its Subsidiaries on a consolidated basis for such period
taken as a single accounting period determined in conformity with GAAP; PROVIDED
that there shall be excluded (i) the income (or loss) of any Person (other than
a Subsidiary of Company) in which any other Person (other than Company or any of
its Subsidiaries) has a joint interest, except to the extent of the amount of
dividends or other distributions actually paid to Company or any of its
Subsidiaries by such Person during such period, (ii) the income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary of Company or is merged
into or consolidated with Company or any of its Subsidiaries or that Person's
assets are acquired by Company or any of its Subsidiaries, (iii) the income of
any Subsidiary of Company to the extent that the declaration or payment of
dividends or similar distributions by that Subsidiary of that income is not at
the time permitted without prior governmental approval (unless such governmental
approval could be readily and reasonably obtained) or, directly or indirectly,
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 or its stockholders, (iv) any 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 non-cash extraordinary losses.
"CONSOLIDATED NET WORTH" means, as at any date of determination, the
sum of the capital stock and additional paid-in capital plus retained earnings
(or
10
minus accumulated deficits) of Company and its Subsidiaries on a consolidated
basis determined in conformity with GAAP.
"CONSOLIDATED RENTAL PAYMENTS" means, for any period, the aggregate
amount of all rents paid or payable by Company and its Subsidiaries on a
consolidated basis during that period under all Capital Leases and Operating
Leases to which Company 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 Company and its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"CONSOLIDATED WORKING CAPITAL" means, as at any date of determination,
the excess (or deficit) 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 monetary 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 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 Obligation shall be equal to the
11
amount of the obligation so guaranteed or otherwise supported or, if less, the
amount to which such Contingent Obligation is specifically limited.
"CONTINUING DIRECTORS" means, 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 (after the consummation of the Recapitalization
Transactions) or (ii) was nominated for election or elected to such Board of
Directors either pursuant to the Stockholders Agreement or with the affirmative
vote of a majority of the Continuing Directors who were members of such Board at
the time of nomination or election.
"CURRENCY AGREEMENT" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement to which Company or any of its Subsidiaries is
a party designed to protect Company or any of its Subsidiaries against
fluctuations in currency values with respect to known or reasonably anticipated
receipts or disbursements of funds.
"DEFAULT EXCESS" has the meaning assigned to that term in subsection
2.9.
"DEFAULTING LENDER" has the meaning assigned to that term in
subsection 2.9.
"DEFAULT PERIOD" has the meaning assigned to that term in subsection
2.9.
"DEFAULTED REVOLVING LOAN" has the meaning assigned to that term in
subsection 2.9.
"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.
"DLJ" has the meaning assigned to that term in the introduction to
this Agreement.
"DLJMB INVESTOR GROUP" means DLJ Merchant Banking Partners II, L.P.,
DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJMB Funding
II, Inc., UK Investment Plan 1997 Partners, DLJ First ESC L.L.C., DLJ EAB
Partners, L.P. and DLJ Millenium Partners, L.P.
"DOLLAR EQUIVALENT" means, at any time, (a) as to any amount
denominated in Dollars, the amount thereof at such time, and (b) as to any
amount denominated in an Offshore Currency, the equivalent amount in Dollars as
determined by the Administrative Agent at such time on the basis of the Spot
Rate for the purchase of Dollars with such Offshore Currency on the most recent
Computation Date provided for in subsection 2.1F.
12
"DOLLARS" and the sign "$" mean the lawful money of the United States
of America.
"DOMESTIC SUBSIDIARY" means a direct or indirect Subsidiary of Company
that is incorporated or organized under the laws of a state of the United States
of America.
"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, mutual funds and lease
financing companies; and (B) any Lender and any Affiliate of any Lender;
PROVIDED that no Affiliate of Company shall be an Eligible Assignee.
"EMPLOYEE BENEFIT PLAN" means any "employee benefit plan" as defined
in Section 3(3) of ERISA which is or was maintained or contributed to by
Company, any of its Subsidiaries or any of their respective ERISA Affiliates.
"ENVIRONMENTAL CLAIM" means any investigation, notice, notice of
violation, claim, action, suit, proceeding, demand, abatement order or other
order or directive (conditional or otherwise), by any governmental authority or
any other Person, arising (i) pursuant to or in connection with any actual or
alleged violation of any Environmental Law, (ii) in connection with any
Hazardous Materials or any actual or alleged Hazardous Materials Activity, or
(iii) in connection with any actual or alleged damage, injury, threat or harm to
health or safety as it relates to Hazardous Materials Activity, natural
resources or the environment.
"ENVIRONMENTAL LAWS" means any and all statutes, ordinances, orders,
rules, regulations, guidance documents, judgments, Governmental Authorizations,
or any other requirements of governmental authorities relating to (i)
environmental matters, including those relating to any Hazardous Materials
Activity, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health or industrial
hygiene as it relates to Hazardous Materials Activity, land use or the
protection of human, plant or animal health or welfare, in any manner applicable
to Company or any of its Subsidiaries or any Facility, including the
Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C.
Section 9601 ET SEQ.), the Hazardous Materials Transportation Act (49 U.S.C.
Section 1801 ET SEQ.), the Resource Conservation and Recovery Act (42 U.S.C.
Section 6901 ET SEQ.), the Federal Water Pollution Control Act (33 U.S.C.
Section 1251 ET SEQ.),
13
the Clean Air Act (42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances
Control Act (15 U.S.C. Section 2601 ET SEQ.), the Federal Insecticide,
Fungicide and Rodenticide Act (7 U.S.C. Section 136 ET SEQ.), the Occupational
Safety and Health Act (29 U.S.C. Section 651 ET SEQ.) as it relates to
Hazardous Materials Activity, the Oil Pollution Act (33 U.S.C. Section 2701 ET
SEQ) and the Emergency Planning and Community Right-to-Know Act (42 U.S.C.
Section 11001 ET SEQ.), each as amended or supplemented, any analogous present
or future state or local statutes or laws, and any regulations promulgated
pursuant to any of the foregoing.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute, and any similar or
comparable laws in a jurisdiction outside of the United States applicable to
Company or any of its Subsidiaries.
"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 Company or any of its
Subsidiaries shall continue to be considered an ERISA Affiliate of Company or
such Subsidiary within the meaning of this definition with respect to the period
such entity was an ERISA Affiliate of Company or such Subsidiary and with
respect to liabilities arising after such period for which Company or such
Subsidiary could be liable under the Internal Revenue Code or ERISA.
"ERISA EVENT" means (i) a "reportable event" within the meaning of
Section 4043 of ERISA and the regulations issued thereunder with respect to any
Pension Plan (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 accordance with Section 412(d) of the
Internal Revenue Code) or the failure to make by its due date a required
installment under Section 412(m) of the Internal Revenue Code with respect to
any Pension Plan or the failure to make any required contribution to a
Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan
pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such
plan in a distress termination described in Section 4041(c) of ERISA; (iv) the
withdrawal by Company, 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
14
proceedings to terminate any Pension Plan, or the occurrence of any event or
condition which constitutes grounds under ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan; (vi) the imposition of
liability on Company, any of its Subsidiaries or any of their respective ERISA
Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the
application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of
its Subsidiaries or any of their respective ERISA Affiliates in a complete or
partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from
any Multiemployer Plan if there is any potential liability therefor, or the
receipt by Company, any of its Subsidiaries or any of their respective ERISA
Affiliates of notice from any Multiemployer Plan that it is in reorganization or
insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to
terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the
occurrence of an act or omission which could give rise to the imposition on
Company, any of its Subsidiaries or any of their respective ERISA Affiliates of
material 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 Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in connection with any Employee Benefit Plan; (x) receipt from the
Internal Revenue Service of notice of the failure of any Pension Plan (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.
"EVENT OF DEFAULT" means each of the events set forth in Section 8.
"EXCESS INTEREST" has the meaning assigned to that term in subsection
2.4C.
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute, and any comparable or similar laws
in a jurisdiction outside of the United States applicable to Company or any of
its Subsidiaries.
"EXISTING CREDIT AGREEMENT" means the First Amended and Restated
Business Loan Agreement, dated as of August 7, 1996, as amended on February 1,
1997, between Bank of America N.T. & S.A. and Wavetek U.S. Inc.
"FACILITIES" means any and all real property (including all
buildings, fixtures or other improvements located thereon) now, hereafter or
heretofore owned,
15
leased, operated or used by Company or any of its Subsidiaries or any of their
respective predecessors or Affiliates; PROVIDED that any such real property of
any Affiliate shall not be a Facility within the meaning of this definition
unless such real property is in fact leased, operated or used by Company or any
of its Subsidiaries.
"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 Permitted
Encumbrances which as a matter of statutory law have priority over any other
Lien irrespective of the prior perfection or filing of such other Lien) and (ii)
such Lien is the only Lien (other than Permitted Encumbrances) to which such
Collateral is subject.
"FISCAL QUARTER" means a fiscal quarter of any Fiscal Year.
"FISCAL YEAR" means the fiscal year of Company and its Subsidiaries
ending on September 30 of each calendar year or such other date as may be
adopted by Company.
"FLEET" means Fleet National Bank.
"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 SUBSIDIARY" means a direct or indirect Subsidiary of Company
which is incorporated or organized under the laws of any government or
sovereignty other than any state of the United States of America.
"FUNDING AND PAYMENT OFFICE" means (i) in respect of funds or payments
in Dollars to Administrative Agent (a) the office of Administrative Agent
specified on Schedule 1.1 as Administrative Agent's Domestic Lending Office or
(b) such other office of Administrative Agent as may from time to time hereafter
be designated as
16
such in a written notice delivered by Administrative Agent to Company and each
Lender, (ii) in respect of funds or payments to Swing Line Lender (a) the office
of Swing Line Lender specified on Schedule 1.1 as Swing Line Lender's Lending
Office or (b) such other office of Swing Line Lender as may from time to time
hereafter be designated as such in a written notice delivered by Swing Line
Lender to Company, Administrative Agent and each Lender and (iii) in the case of
payments in any Offshore Currency, (a) the office of Offshore Currency Funding
Lender specified on Schedule 1.1 as Offshore Currency Funding Lender's Offshore
Lending Office or (b) such other address as the Offshore Currency Funding Lender
may from time to time designate as such in a written notice delivered by
Offshore Currency Funding Lender to Company, Administrative Agent and each
Lender.
"FUNDING DATE" means the date of the funding of a Loan.
"FUNDING DEFAULT" has the meaning assigned to that term in subsection
2.9.
"FX TRADING OFFICE" means the office at 00 Xxxxx Xxxxxx, Xxxxxx XX.,
00000, Attn: Xxxx Xxxxxx, of Administrative Agent, or such other of
Administrative Agent's offices as Administrative Agent may designate from time
to time.
"GAAP" means, subject to the limitations on the application thereof
set forth in subsection 1.2, generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board or in such other
statements by such other entity as may be approved by a significant segment of
the accounting profession, in each case as the same are applicable to the
circumstances as of the date of determination.
"GEI" means Green Equity Investors II, L.P.
"XXXXXXX GROUP" means Xx. Xxxxxxx X. Xxxxxxx and each of his Permitted
Transferees.
"GOVERNMENTAL AUTHORIZATION" means any permit, license, authorization,
plan, directive, consent order or consent decree of or from any federal, state
or local governmental authority, agency or court.
"HAZARDOUS MATERIALS" means (i) any chemical, material or substance at
any time defined as or included in the definition of "hazardous substances,"
"hazardous wastes," "hazardous materials," "extremely hazardous waste," "acutely
hazardous waste," "radioactive waste," "biohazardous waste," "pollutant," "toxic
pollutant," "contaminant," "restricted hazardous waste," "infectious waste,"
"toxic substances," or any other term or expression intended to define, list or
classify substances by reason of properties harmful to health, safety or the
indoor or outdoor
17
environment (including harmful properties such as ignitability, corrosivity,
reactivity, carcinogenicity, toxicity, reproductive toxicity, "TCLP toxicity" or
"EP toxicity" or words of similar import under any applicable Environmental
Laws); (ii) any oil, petroleum, petroleum fraction or petroleum derived
substance; (iii) any drilling fluids, produced waters and other wastes
associated with the exploration, development or production of crude oil, natural
gas or geothermal resources; (iv) any flammable substances or explosives; (v)
any radioactive materials; (vi) any asbestos-containing materials; (vii) urea
formaldehyde foam insulation; (viii) electrical equipment which contains any oil
or dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and
(x) any other chemical, material or substance, exposure to which is prohibited,
limited or regulated by any governmental authority pursuant to any Environmental
Law or which may or could pose a hazard to the health and safety of the owners,
occupants or any Persons in the vicinity of any Facility or to the indoor or
outdoor environment.
"HAZARDOUS MATERIALS ACTIVITY" means any past, current, proposed or
threatened activity, event or occurrence involving any Hazardous Materials,
including the use, manufacture, possession, storage, holding, presence,
existence, location, Release, threatened Release, discharge, placement,
generation, transportation, processing, construction, treatment, abatement,
removal, remediation, disposal, disposition or handling of any Hazardous
Materials, and any corrective action or response action with respect to any of
the foregoing.
"HEDGE AGREEMENT" means an Interest Rate Agreement or a Currency
Agreement designed to hedge against fluctuations in interest rates or currency
values, respectively.
"IMMATERIAL SUBSIDIARY" means any Subsidiary of Company that does not
engage in any significant business activity and is designated as such on
SCHEDULE 5.1 annexed hereto; PROVIDED, HOWEVER, that all Immaterial Subsidiaries
in the aggregate shall not own assets with an aggregate fair market value in
excess of $500,000 and shall not generate aggregate annual revenues in excess of
$500,000; and PROVIDED FURTHER that no Immaterial Subsidiary shall have any
Subsidiary other than an Immaterial Subsidiary.
"INDEBTEDNESS", as applied to any Person, means (i) all indebtedness
for borrowed money, (ii) that portion of obligations with respect to Capital
Leases that is properly classified as a liability on a balance sheet in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit whether or not representing obligations for borrowed money,
(iv) any obligation owed for all or any part of the deferred purchase price of
property or services (excluding any such obligations incurred under ERISA),
which purchase price is (a) due more than six months from the date of incurrence
of the obligation in respect thereof or (b) evidenced by a note or similar
written instrument, (v) all indebtedness secured by any Lien on any property or
asset owned or held by that Person regardless of whether
18
the indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person and (vi) any other liability that is
classified as indebtedness on a balance sheet in conformity with GAAP.
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.
"INDEMNITEE" has the meaning assigned to that term in subsection 10.3.
"INTELLECTUAL PROPERTY" means all patents, trademarks, tradenames,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the business of Company and its Subsidiaries as currently conducted
that are material to the condition (financial or otherwise), business or
operations of Company and its Subsidiaries, taken as a whole.
"INTEREST PAYMENT DATE" means (i) with respect to any Base Rate Loan,
the fifteenth day of each March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and (ii) with
respect to any Offshore 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 Company 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 any similar or comparable laws in a jurisdiction outside of the
United States applicable to Company or any of its Subsidiaries.
"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 Company or any of its Subsidiaries of, or of a beneficial
interest in, any Securities of any other Person, (ii) any direct or indirect
redemption, retirement,
19
purchase or other acquisition for value, by any Subsidiary of Company from any
Person other than Company or any of its wholly-owned Subsidiaries, of any equity
Securities of such Subsidiary, (iii) any direct or indirect loan, advance (other
than advances to employees for moving, entertainment and travel expenses,
drawing accounts and similar expenditures in the ordinary course of business) or
capital contribution by Company or any of its Subsidiaries to any other Person,
including all indebtedness and accounts receivable from that other Person that
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 Collateral Assignment and Security Agreement, the Company Trademark
Security Agreement, the Subsidiary Patent Collateral Assignment and Security
Agreement, and the Subsidiary Trademark Security Agreement.
"ISSUING LENDER" means, with respect to any Letter of Credit, the
Lender which is obligated to issue such Letter of Credit, determined as provided
in subsection 3.1B(ii).
"JOINT VENTURE" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; PROVIDED
that in no event shall any corporate Subsidiary of any Person be considered to
be a Joint Venture to which such Person is a party.
"LANDLORD ESTOPPEL AND CONSENT" means, with respect to any Leasehold
Property, a letter, certificate or other instrument in writing from the lessor
under the related lease, satisfactory in form and substance to Agents, pursuant
to which such lessor 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
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 any Agent, any Lender, or an Affiliate of either so
acquires such Leasehold Property) and (ii) to such other matters relating to
such Leasehold Property as Agents may reasonably request.
"LEASEHOLD PROPERTY" means any leasehold interest of any Loan Party as
lessee or sublessee under any lease of real property.
"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
20
Swing Line Lender and Offshore Currency Funding 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.
"LENDING OFFICE" means, as to any Lender, the office or offices of
such Lender specified as its "Domestic Lending Office" or "Offshore Lending
Office," as the case may be, on SCHEDULE 1.1, or such other office or offices as
to which such Lender may from time to time notify Company and Administrative
Agent.
"LETTER OF CREDIT" or "LETTERS OF CREDIT" means Commercial Letters of
Credit and Standby Letters of Credit issued or to be issued by Issuing Lenders
for the account of Company pursuant to subsection 3.1.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
sum of (i) the maximum aggregate Dollar Equivalent amount which is or at any
time thereafter may become available for drawing under all Letters of Credit
then outstanding PLUS (ii) the aggregate Dollar Equivalent amount of all
drawings under Letters of Credit honored by Issuing Lenders and not theretofore
reimbursed by Company.
"LIEN" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"LOAN" or "LOANS" means one or more of the Term Loans, Revolving
Loans, Offshore Currency 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 Subsidiary Guaranty and the Collateral Documents.
"LOAN PARTY" means each of Company and any of its Subsidiaries from
time to time executing a Loan Document, and "LOAN PARTIES" means all such
Persons, collectively.
"MARGIN DETERMINATION CERTIFICATE" means an Officer's Certificate of
Company delivered with the financial statements required pursuant to subsection
6.1(ii) or 6.1(iii) setting forth the Consolidated Leverage Ratio which is
applicable as of the last day of the fiscal period for which such financial
statements and Officer's Certificate are being delivered.
21
"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 or condition (financial or otherwise) of Company and its
Subsidiaries taken as a whole or (ii) the impairment in any material respect of
the ability of any Loan Party to perform, or of Administrative Agent or Lenders
to enforce, the Obligations or any of the Loan Documents.
"MATERIAL CONTRACT" means any contract or other arrangement to which
Company or any of its Subsidiaries is a party (other than the Loan Documents)
for which breach, nonperformance, cancellation or failure to renew could
reasonably be expected to have a Material Adverse Effect.
"MATERIAL LEASEHOLD PROPERTY" means a Leasehold Property reasonably
determined by Agents to be of material value as Collateral or of material
importance to the operations of Company or any of its Subsidiaries.
"MINIMUM AMOUNT" means (i) in the case of Base Rate Loans, $100,000
or any multiple of $100,000 in excess of that amount, (ii) in the case of
Offshore Rate Loans denominated in Dollars, $100,000 or any multiple of
$100,000 in excess of that amount, (iii) in the case of Offshore Rate Loans
denominated in British pounds sterling, L65,000 or any multiples of L65,000
in excess of that amount, (iv) in the case of Offshore Rate Loans denominated
French francs, (symbol for French franc) 600,000 or any multiples of (symbol
for French franc) 600,000 in excess of that amount and (v) in the case of
Offshore Rate Loans denominated in Deutsche marks, DM175,000 or any multiple
of DM175,000 in excess of that amount.
"MORTGAGE" means (i) a security instrument (whether designated as a
deed of trust, mortgage, leasehold deed of trust or leasehold mortgage or by any
similar title) executed and delivered by any Loan Party, substantially in the
form of EXHIBIT XXII annexed hereto or in such other form as may be approved by
Agents in their sole discretion, in each case with such changes thereto as may
be recommended by Administrative Agent's local counsel based on local laws or
customary local mortgage or deed of trust practices, or (ii) at the option of
Agents, in the case of an Additional Mortgaged Property, an amendment to an
existing Mortgage, in form satisfactory to Agents, 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 any Additional Mortgages, collectively.
"MORTGAGED PROPERTY" means a Closing Date Mortgaged Property or an
Additional Mortgaged Property.
22
"MULTIEMPLOYER PLAN" means any Employee Benefit Plan which is a
"multiemployer plan" as defined in Section 3(37) of ERISA.
"NET ASSET SALE PROCEEDS" means, with respect to any Asset Sale, 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) or proceeds received from such Asset Sale, net of any bona fide direct
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 required to be repaid
under the terms thereof as a result of such Asset Sale.
"NEW EQUITY INVESTORS" means the DLJMB Investor Group and GEI.
"NON-US LENDER" has the meaning assigned to that term in subsection
2.7B.
"NOTE OFFERING MEMORANDUM" means the Offering Memorandum dated June 6,
1997, with respect to the Senior Subordinated Notes.
"NOTES" means one or more of the Term Notes, Revolving Notes ,
Offshore Currency Note 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 Arranger, Agents, Lenders or any of them under the
Loan Documents, whether for principal, interest, reimbursement of amounts drawn
under Letters of Credit, fees, expenses, indemnification or otherwise.
23
"OFFICER'S CERTIFICATE" means, as applied to any corporation, a
certificate executed on behalf of such corporation by its president or one of
its executive or senior vice presidents, its chief financial officer or its
treasurer; PROVIDED that every Officer's Certificate with respect to the
compliance with a condition precedent to the making of any Loans hereunder shall
include (i) a statement that the officer or officers making or giving such
Officer's Certificate have read such condition and any definitions or other
provisions contained in this Agreement relating thereto and (ii) a statement as
to whether, in the opinion of the signers, such condition has been complied
with.
"OFFSHORE CURRENCY" means at any time British pounds sterling, French
francs and Deutsche Xxxx.
"OFFSHORE CURRENCY FUNDING LENDER" means Fleet or any Person serving
as a successor Offshore Currency Funding Lender hereunder, in its capacity as
Offshore Currency Funding Lender hereunder.
"OFFSHORE CURRENCY LOAN" means any Offshore Rate Loan denominated in
an Offshore Currency.
"OFFSHORE CURRENCY LOAN COMMITMENT" means the commitment of Offshore
Currency Funding Lender to make Offshore Currency Loans to Company pursuant to
subsection 2.1A(iv).
"OFFSHORE CURRENCY NOTE" means (i) the promissory note of Company
issued pursuant to subsection 2.1D(d) on the Closing Date and (ii) any
promissory note issued by Company to any successor Offshore Currency Funding
Lender pursuant to the last sentence of subsection 9.5C, in each case
substantially in the form of EXHIBIT XXV annexed hereto, as it may be amended,
supplemented or otherwise modified from time to time.
"OFFSHORE CURRENCY SUBLIMIT" means, as to all Loans or Letters of
Credit denominated in Offshore Currencies, $7,500,000.
"OFFSHORE RATE LOANS" means Loans bearing interest at rates determined
by reference to the Adjusted Offshore Rate as provided in subsection 2.2A.
"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 in
accordance with GAAP other than any such lease under which that Person is the
lessor.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto.
24
"PENSION PLAN" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to Section 412 of the Internal Revenue Code
or Section 302 of ERISA.
"PERMITTED ENCUMBRANCES" means the following types of Liens (excluding
any such Lien imposed pursuant to Section 401(a)(29) or 412(n) of the Internal
Revenue Code or by ERISA, any such Lien relating to or imposed in connection
with any Environmental Claim, and any such Lien expressly prohibited by any
applicable terms of any of the Loan 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;
(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
Company 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 minor defects or irregularities in title, in each case which do not
and will not
25
interfere in any material respect with the ordinary conduct of the business
of Company 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 7.9, (b) restriction or encumbrance (so long
as such restriction or encumbrance is approved by Agents in their
reasonable discretion) 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 and so long as Agents consent to the
subordination;
(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 similar agreements entered into in the ordinary course of
business of Company and its Subsidiaries; and
(xii) licenses of patents, trademarks and other intellectual
property rights granted by Company 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 Company or such Subsidiary.
"PERMITTED HOLDER" means (i) the DLJMB Investor Group, (ii) GEI, (iii)
the Xxxxxxx Group or (iv) any Permitted Transferee.
"PERMITTED TRANSFEREE" means, with respect to any Person, (i) any
Affiliate of such Person, (ii) the heirs, executors, administrators,
testamentary trustees, legatees or beneficiaries of any such Person or (iii) a
spouse, child, grandchild, stepchild or a child of a stepchild of any such
Person or a trust as to which such Person or such spouse, child, grandchild,
stepchild or child of a stepchild thereof exercises substantial control over the
investment of the trust assets, in each case to
26
whom such Person has transferred the beneficial ownership of any Securities of
Company.
"PERSON" means and includes natural persons, corporations, limited
partnerships, general partnerships, limited liability companies, limited
liability partnerships, joint stock companies, Joint Ventures, associations,
companies, trusts, banks, trust companies, land trusts, business trusts or other
organizations, whether or not legal entities, and governments (whether federal,
state or local, domestic or foreign, and including political subdivisions
thereof) and agencies or other administrative or regulatory bodies thereof.
"PLEDGED COLLATERAL" means, collectively, the "Pledged Collateral" as
defined in the Company Pledge Agreement and the Subsidiary Pledge Agreements.
"POTENTIAL EVENT OF DEFAULT" means a condition or event that, after
notice or lapse of time or both, would constitute an Event of Default.
"PRIME RATE" means the rate that Fleet announces from time to time as
its base rate, as in effect from time to time. The Prime Rate is a reference
rate and does not necessarily represent the lowest or best rate actually charged
to any customer. Fleet or any other Lender may make commercial loans or other
loans at rates of interest at, above or below the Prime Rate.
"PRO RATA SHARE" means (i) with respect to all payments, computations
and other matters relating to the Term Loan Commitment or the Term Loan of any
Lender, the percentage obtained by DIVIDING (x) the Term Loan Exposure of that
Lender BY (y) the aggregate Term Loan Exposure of all Lenders, (ii) with respect
to all payments, computations and other matters relating to the Revolving Loan
Commitment or the Revolving Loans of any Lender or any Letters of Credit issued
or participations therein purchased by any Lender or any participations in any
Swing Line Loans or Offshore Currency 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 Term Loan Exposure of that Lender PLUS the Revolving Loan
Exposure of that Lender BY (y) the sum of the aggregate Term Loan Exposure of
all Lenders PLUS the aggregate Revolving Loan Exposure of all Lenders, in any
such case as the applicable percentage may be adjusted by assignments permitted
pursuant to subsection 10.1. The initial Pro Rata Share of each Lender for
purposes of each of clauses (i), (ii) and (iii) of the preceding sentence is set
forth opposite the name of that Lender in SCHEDULE 2.1 annexed hereto.
"PTO" means the United States Patent and Trademark Office or any
successor or substitute office in which filings are necessary or, in the opinion
of
27
Administrative Agent, desirable in order to create or perfect Liens on any IP
Collateral.
"REAL PROPERTY ASSET" means, at any time of determination, any
interest in any real property then owned or leased (as lessee) by any Loan
Party.
"RECAPITALIZATION TRANSACTIONS" has the meaning assigned to that term
in the Recitals hereof.
"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 the reasonable judgment of Agents, to give
constructive notice of such Leasehold Property to any and all third-parties.
For purposes of this definition, the term "RECORD DOCUMENT" means, with respect
to any Leasehold Property, (a) the lease evidencing such Leasehold Property or a
memorandum thereof, executed and acknowledged by the owner of the affected real
property, as lessor, and the owner of the leasehold estate, as lessee 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 each party thereto, in each case in form sufficient to give such
constructive notice upon recordation and otherwise in form reasonably
satisfactory to Agents.
"REFERENCE LENDER" means Fleet.
"REGISTER" has the meaning assigned to that term in subsection 2.1E.
"REFUNDED OFFSHORE CURRENCY LOANS" has the meaning assigned to that
term in subsection 2.1A(iv).
"REFUNDED SWING LINE LOANS" has the meaning assigned to that term in
subsection 2.1A(iii).
"REGISTRATION RIGHTS AGREEMENT" means that certain Registration Rights
Agreement dated as of the Closing Date entered into by and among Company, the
New Equity Investors, the Xxxxxxx Group and certain other stockholders of the
Company, as such agreement may be amended, supplemented or otherwise modified
from time to time to the extent permitted under subsection 7.15.
"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.
28
"RELATED AGREEMENTS" means the Stock Purchase and Recapitalization
Agreement, the Stockholders Agreement, the Registration Rights Agreement, the
Note Offering Memorandum and the Related Financing Documents.
"RELATED FINANCING DOCUMENTS" means the Senior Subordinated Note
Indenture and all other agreements or instruments delivered pursuant to or in
connection with any of the foregoing, including any purchase agreements or
registration rights agreements.
"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
movement of any Hazardous Materials through the air, soil, surface water or
groundwater.
"REQUISITE LENDERS" means Lenders (other than a Defaulting Lender)
having or holding a majority of the sum of (i) the aggregate Term Loan Exposure
of all Lenders PLUS (ii) the aggregate Revolving Loan Exposure of all Lenders.
"RESTRICTED AGREEMENTS" has the meaning assigned to that term in
subsection 7.15B.
"RESTRICTED JUNIOR PAYMENT" means (i) any dividend or other
distribution, direct or indirect, on account of any shares of any class of stock
of Company now or hereafter outstanding, except a dividend payable solely in
shares of that class of stock to the holders of that class, (ii) any redemption,
retirement, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any shares of any class of stock of Company now or
hereafter outstanding, (iii) any payment made to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights to acquire
shares of any class of stock of Company now or hereafter outstanding, and (iv)
any payment or prepayment of principal of, premium, if any, or interest on, or
redemption, purchase, retirement, defeasance (including in-substance or legal
defeasance), sinking fund or similar payment with respect to, any Subordinated
Indebtedness.
"REVOLVING LOAN COMMITMENT" means the commitment of a Lender to make
Revolving Loans to Company pursuant to subsection 2.1A(ii), to purchase
participations in Offshore Currency Loans pursuant to subsection 2.1A(iv), to
issue and/or purchase participations in Letters of Credit pursuant to Section 3
and to purchase participations in Swing Line Loans pursuant to subsection
2.1A(iii) and "REVOLVING LOAN COMMITMENTS" means such commitments of all Lenders
in the aggregate.
29
"REVOLVING LOAN COMMITMENT TERMINATION DATE" means December 15, 2002.
"REVOLVING LOAN EXPOSURE" means, with respect to any Lender as of any
date of determination (i) prior to the termination of the Revolving Loan
Commitments, that Lender's Revolving Loan Commitment and (ii) after the
termination of the Revolving Loan Commitments, the sum of (a) the aggregate
outstanding principal Dollar Equivalent amount of the Revolving Loans of that
Lender PLUS (b) in the event that Lender is an Issuing Lender, the aggregate
Dollar Equivalent amount of the Letter of Credit Usage in respect of all Letters
of Credit issued by that Lender (in each case net of the Dollar Equivalent
amount of any funded participations purchased by other Lenders in such Letters
of Credit or any unreimbursed drawings thereunder) PLUS (c) the aggregate Dollar
Equivalent amount of all funded 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 funded participations
therein purchased by other Lenders) PLUS (e) the aggregate amount of all funded
participations purchased by that Lender in any outstanding Swing Line Loans PLUS
(f) in the case of Offshore Currency Funding Lender, the aggregate outstanding
principal Dollar Equivalent amount of all Offshore Currency Loans (net of any
funded participations therein purchased by other Lenders) PLUS (g) the aggregate
Dollar Equivalent amount of any funded participations purchased by that Lender
in any outstanding Offshore Currency Loans.
"REVOLVING LOANS" means the Loans made by Lenders to Company pursuant
to subsection 2.1A(ii).
"REVOLVING NOTES" means (i) the promissory notes of Company issued
pursuant to subsection 2.1D(b) on the Closing Date and (ii) any promissory notes
issued by Company pursuant to the last sentence of subsection 10.1B(i) in
connection with assignments of the Revolving Loan Commitments and Revolving
Loans of any Lenders, in each case substantially in the form of EXHIBIT V
annexed hereto, as they may be amended, supplemented or otherwise modified from
time to time.
"SAME DAY FUNDS" means (i) with respect to disbursements and payments
in Dollars, immediately available funds, and (ii) with respect to disbursements
and payments in an Offshore Currency, same day or other funds as may be
determined by the Administrative Agent to be customary in the place of
disbursement or payment for the settlement of international banking transactions
in the relevant Offshore Currency.
"SECURITIES" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any
profit-sharing agreement or arrangement, options, warrants, bonds, debentures,
notes, or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in
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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, and any comparable or similar laws in a
jurisdiction outside of the United States applicable to Company or any of its
Subsidiaries.
"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 7.15.
"SENIOR SUBORDINATED NOTES" means the $85,000,000 in original
principal amount of 10 1/8% Senior Subordinated Notes due June 15, 2007 of
Company issued pursuant to the Senior Subordinated Note Indenture.
"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 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 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.
"SPOT RATE" for a currency means the rate quoted by Administrative
Agent as the spot rate for the purchase by Administrative Agent of such currency
with another currency through its FX Trading Office at approximately 8:00 a.m.
(New York time) on the date two Business Days prior to the date as of which the
foreign exchange computation is made.
"STANDBY LETTER OF CREDIT" means any standby letter of credit or
similar instrument issued for the purpose of supporting (i) Indebtedness of
Company or any of its Subsidiaries in respect of industrial revenue or
development bonds or financings, (ii) workers' compensation liabilities of
Company or any of its Subsidiaries, (iii) the obligations of third party
insurers of Company or any of its Subsidiaries,
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(iv) obligations with respect to Capital Leases or Operating Leases of Company
or any of its Subsidiaries, and (v) performance, payment, deposit or surety
obligations of Company or any of its Subsidiaries, in any case if required by
law or governmental rule or regulation or in accordance with custom and practice
in the industry; 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).
"STOCK PURCHASE AND RECAPITALIZATION AGREEMENT" means that certain
Stock Purchase and Recapitalization Agreement by and among Company, the New
Equity Investors, the Xxxxxxx Group and certain other stockholders of Company,
dated as of May 23, 1997, and as such agreement may be amended, supplemented or
otherwise modified from time to time to the extent permitted under subsection
7.15.
"STOCKHOLDERS AGREEMENT" means that certain Stockholders Agreement
dated as of the Closing Date entered into by and among Company, the New Equity
Investors, the Xxxxxxx Group and certain other stockholders of Company, as such
agreement may be amended, supplemented or otherwise modified from time to time
to the extent permitted under subsection 7.15.
"SUBORDINATED INDEBTEDNESS" means Indebtedness of Company subordinated
in right of payment to the Obligations pursuant to documentation containing
maturities, amortization schedules, covenants, defaults, remedies, subordination
provisions and other material terms in form and substance satisfactory to Agents
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.
"SUBSIDIARY GUARANTOR" means any Domestic Subsidiary of 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 existing Domestic Subsidiaries of Company on the Closing Date and
to be executed and delivered by additional Domestic Subsidiaries of Company from
time to time thereafter in accordance with subsection 6.8, substantially in the
form of
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EXHIBIT XVII annexed hereto, as such Subsidiary Guaranty may hereafter be
amended, supplemented or otherwise modified from time to time.
"SUBSIDIARY PATENT COLLATERAL ASSIGNMENT AND SECURITY AGREEMENT" means
each Subsidiary Patent Collateral Assignment and Security Agreement, patent
security agreement or other security agreement executed and delivered by an
existing Subsidiary Guarantor on the Closing Date or executed and delivered by
any additional Subsidiary Guarantor from time to time thereafter in accordance
with subsection 6.8, in each case substantially in the form of EXHIBIT XX
annexed hereto, as such Subsidiary Patent Collateral Assignment and Security
Agreement may be amended, supplemented or otherwise modified from time to time,
and "SUBSIDIARY PATENT COLLATERAL ASSIGNMENT AND SECURITY AGREEMENTS" means all
such Subsidiary Patent Collateral Assignment and Security Agreements,
collectively.
"SUBSIDIARY PLEDGE AGREEMENT" means each Subsidiary Pledge Agreement
executed and delivered by an existing Subsidiary Guarantor on the Closing Date
or executed and delivered by any additional Subsidiary Guarantor from time to
time thereafter in accordance with subsection 6.8, in each case 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, and
"SUBSIDIARY PLEDGE AGREEMENTS" means all such Subsidiary Pledge Agreements,
collectively.
"SUBSIDIARY SECURITY AGREEMENT" means each Subsidiary Security
Agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by any additional Subsidiary Guarantor
from time to time thereafter in accordance with subsection 6.8, in each case
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, and "SUBSIDIARY SECURITY AGREEMENTS" means all such Subsidiary Security
Agreements, collectively.
"SUBSIDIARY TRADEMARK SECURITY AGREEMENT" means each Subsidiary
Trademark Security Agreement, copyright security agreement or other security
agreement executed and delivered by an existing Subsidiary Guarantor on the
Closing Date or executed and delivered by any additional Subsidiary Guarantor
from time to time thereafter in accordance with subsection 6.8, in each case
substantially in the form of EXHIBIT XXI annexed hereto, as such Subsidiary
Trademark Security Agreement may be amended, supplemented or otherwise modified
from time to time, and "SUBSIDIARY TRADEMARK SECURITY AGREEMENTS" means all such
Subsidiary Trademark Security Agreements, collectively.
"SUPPLEMENTAL COLLATERAL AGENT" has the meaning assigned to that term
in subsection 9.1B.
"SWING LINE LENDER" means Fleet or any Person serving as a successor
Swing Line Lender hereunder, in its capacity as Swing Line Lender hereunder.
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"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 (i) the promissory note of Company issued
pursuant to subsection 2.1D(c) on the Closing Date and (ii) any promissory note
issued by Company to any successor Swing Line Lender pursuant to the last
sentence of subsection 9.5B, in each case substantially in the form of EXHIBIT
VI 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, capital, net worth, or gains
(whether worldwide, or only insofar as such income, profits, capital, net worth,
or gains are considered to arise in or to relate to a particular jurisdiction,
or otherwise) of that Person (and/or, in the case of a Lender, its lending
office).
"TERM LOANS" means the Term Loans made by Lenders to Company pursuant
to subsection 2.1A(i).
"TERM LOAN COMMITMENT" means the commitment of a Lender to make a Term
Loan to Company pursuant to subsection 2.1A(i), and "TERM LOAN COMMITMENTS"
means such commitments of all Lenders in the aggregate.
"TERM LOAN EXPOSURE" means, with respect to any Lender as of any date
of determination (i) prior to the funding of the Term Loans, that Lender's Term
Loan Commitment and (ii) after the funding of the Term Loans, the outstanding
principal amount of the Term Loan of that Lender.
"TERM NOTES" means (i) the promissory notes of Company issued pursuant
to subsection 2.1D(a) on the Closing Date and (ii) any promissory notes issued
by Company pursuant to the last sentence of subsection 10.1B(i) in connection
with assignments of the Term Loan Commitments or Term Loans of any Lenders, in
34
each case substantially in the form of EXHIBIT IV annexed hereto, as they may be
amended, supplemented or otherwise modified from time to time.
"TOTAL UTILIZATION OF REVOLVING LOAN COMMITMENTS" means, as at any
date of determination, the sum of (i) the aggregate principal Dollar Equivalent
amount of all outstanding Revolving Loans PLUS (ii) the aggregate principal
amount of all outstanding Swing Line Loans PLUS (iii) without duplication, the
aggregate principal Dollar Equivalent amount of all outstanding Offshore
Currency Loans and (iv) the Dollar Equivalent amount of all Letter of Credit
Usage.
"UCC" means the Uniform Commercial Code (or any similar or equivalent
legislation) as in effect in any applicable jurisdiction.
1.2 ACCOUNTING TERMS; UTILIZATION OF GAAP FOR PURPOSES OF CALCULATIONS UNDER
AGREEMENT.
Except as otherwise expressly provided in this Agreement, all
accounting terms not otherwise defined herein shall have the meanings assigned
to them in conformity with GAAP. Financial statements and other information
required to be delivered by Company to Lenders pursuant to clauses (i), (ii) and
(iii) of subsection 6.1 shall be prepared in accordance with GAAP as in effect
at the time of such preparation and the Financial Plan required to be delivered
pursuant to clause (xiii) of subsection 6.1 shall be prepared on the same basis
as such financial statements. Calculations in connection with the definitions,
covenants and other provisions of this Agreement shall utilize accounting
principles and policies in conformity with those used to prepare the financial
statements referred to in subsection 5.3.
1.3 OTHER DEFINITIONAL PROVISIONS AND RULES OF CONSTRUCTION.
A. Any of the terms defined herein may, unless the context otherwise
requires, be used in the singular or the plural, depending on the reference.
B. References to "Sections" and "subsections" shall be to Sections
and subsections, respectively, of this Agreement unless otherwise specifically
provided.
C. The use in any of the Loan Documents 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.
35
1.4 CURRENCY EQUIVALENTS GENERALLY.
For all purposes of this Agreement (but not for purposes of the
preparation of any financial statements delivered pursuant hereto), the
equivalent in any Offshore Currency or other currency of an amount in Dollars,
and the equivalent in Dollars of an amount in any Offshore Currency or other
currency, shall be determined at the Spot Rate.
SECTION 2. AMOUNTS AND TERMS OF COMMITMENTS AND LOANS
2.1 COMMITMENTS; MAKING OF LOANS; NOTES; REGISTER; GENERAL PROVISIONS REGARDING
OFFSHORE CURRENCY LOANS.
A. COMMITMENTS. Subject to the terms and conditions of this Agreement
and in reliance upon the representations and warranties of Company herein set
forth, the Lenders hereby severally agree to make the Loans described in
subsections 2.1A(i) and 2.1A(ii), Swing Line Lender hereby agrees to make the
Loans described in subsection 2.1A(iii) and Offshore Currency Funding Lender
hereby agrees to make the Loans described in subsection 2.1A(iv).
(i) TERM LOANS. Each Lender severally agrees to lend to Company on
the Closing Date an amount in Dollars not exceeding its Pro Rata Share of
the aggregate amount of the Term Loan Commitments to be used for the
purposes identified in subsection 2.5A. The original amount of each
Lender's Term Loan Commitment is set forth opposite its name on SCHEDULE
2.1 annexed hereto and the aggregate amount of the Term Loan Commitments is
$25,000,000; PROVIDED that the Term Loan Commitments of Lenders shall be
adjusted to give effect to any assignments of the Term Loan Commitments
pursuant to subsection 10.1B. Each Lender's Term Loan Commitment shall
expire immediately and without further action on June 30, 1997 if the Term
Loans are not made on or before that date. Company may make only one
borrowing under the Term Loan Commitments. Amounts borrowed under this
subsection 2.1A(i) and subsequently repaid or prepaid may not be
reborrowed.
(ii) REVOLVING LOANS. Each Lender severally agrees, subject to the
limitation 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 Dollar
Equivalent 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
36
$20,000,000; 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 June 30, 1997 if the Term
Loans and the initial Revolving Loans are not made on or before that date.
Amounts borrowed under this subsection 2.1A(ii) may be repaid and
reborrowed to but excluding the Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Revolving Loans and the Revolving Loan Commitments shall be subject to
the limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect.
(iii) SWING LINE LOANS. Swing Line Lender hereby agrees, subject to
the limitation 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 $2,000,000; 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
37
shall expire immediately and without further action on June 30, 1997 if the
Term Loans and the initial Revolving 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 limitation that in no event shall the Total Utilization of Revolving
Loan Commitments at any time exceed the Revolving Loan Commitments then in
effect.
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 10:00 A.M. (New York City
time) on 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 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 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.
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Immediately upon funding of the Swing Line Loans by the Swing Line
Lender, each Lender having a Revolving Loan Commitment 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 of the unpaid
amount of such Swing Line Loans together with accrued interest thereon.
Upon notice from Swing Line Lender no later than 10:00 A.M. (New York City
time) on any Business Day, each such Lender shall deliver to Swing Line
Lender an amount equal to its respective participation in Same Day Funds at
the Funding and Payment Office no later than 5:00 P.M. (New York City time)
on such Business Day. 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 Federal
Funds Effective Rate 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 or condition (financial or otherwise) of Company
or any of its Subsidiaries; (d) any breach of this Agreement or any other
Loan Document by any party thereto; or (e) any other circumstance,
happening or event whatsoever, whether or not similar to any of the
foregoing; PROVIDED that such obligations of each Lender are subject to the
satisfaction of one of the following conditions (X) Swing Line Lender shall
not have received written notice that any condition under Section 4 to the
making of the applicable Refunded Swing Line Loans or other unpaid Swing
Line Loans, as the case may be, was unsatisfied 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.
(iv) OFFSHORE CURRENCY LOANS. Offshore Currency Funding Lender hereby
agrees, subject to the limitations set forth below with respect to the
maximum Dollar Equivalent amount of Offshore Currency Loans permitted to be
outstanding from time to time, to make a portion of the Revolving Loan
39
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 Offshore Currency Loans to Company in an aggregate amount
not exceeding the Dollar Equivalent amount of the Offshore Currency Loan
Commitment to be used for the purposes identified in subsection 2.5B,
notwithstanding the fact that such Offshore Currency Loans, when aggregated
with Offshore Currency Funding Lender's outstanding Revolving Loans and
Swing Line Loans and Offshore Currency Funding Lender's Pro Rata Share of
the Letter of Credit Usage then in effect, may exceed Offshore Currency
Funding Lender's Revolving Loan Commitment. The original Dollar Equivalent
amount of the Offshore Currency Loan Commitment is $7,500,000; 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 Offshore
Currency Loan Commitment shall result in an automatic corresponding
reduction of the Offshore Currency 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 Offshore Currency Funding
Lender. The Offshore Currency Loan Commitment shall expire on the
Revolving Loan Commitment Termination Date and all Offshore Currency Loans
and all other amounts owed hereunder with respect to the Offshore Currency
Loans shall be paid in full no later than that date; PROVIDED that the
Offshore Currency Loan Commitment shall expire immediately and without
further action on June 30, 1997 if the Term Loans and the initial Revolving
Loans are not made on or before that date. Amounts borrowed under this
subsection 2.1A(iv) may be repaid and reborrowed to but excluding the
Revolving Loan Commitment Termination Date.
Anything contained in this Agreement to the contrary notwithstanding,
the Offshore Currency Loans and the Offshore Currency Loan Commitment shall
be subject to the following limitations:
(a) in no event shall the Total Utilization of Revolving Loan
Commitments at any time exceed the Revolving Loan Commitments then in
effect; and
(b) in no event on any Computation Date pursuant to subsection
2.1F, after giving effect to any Offshore Currency Loans then being
requested, shall the aggregate principal Dollar Equivalent amount of
all outstanding Offshore Currency Loans PLUS the Letter of Credit
Usage for outstanding Letters of Credit denominated in Offshore
Currencies, exceed the Offshore Currency Sublimit.
With respect to any Offshore Currency Loans which have not been
voluntarily prepaid by Company pursuant to subsection 2.4B(i), Offshore
40
Currency Funding Lender may, at any time upon the occurrence and during the
continuation of a Potential Event of Default or an Event of Default,
deliver to Administrative Agent (with a copy to Company), five Business
Days in advance of the proposed Funding Date, a notice (which shall be
deemed to be a Notice of Borrowing given by Company) requesting Lenders
having a Revolving Loan Commitment to make Revolving Loans that are
Offshore Currency Loans on such Funding Date in an amount equal to the
amount of such Offshore Currency Loans and in the Offshore Currency in
which such Offshore Currency Loans are denominated (the "REFUNDED OFFSHORE
CURRENCY LOANS"). Anything contained in this Agreement to the contrary
notwithstanding, (i) the proceeds of such Revolving Loans made by Lenders
other than Offshore Currency Funding Lender shall be immediately delivered
by Administrative Agent to Offshore Currency Funding Lender (and not to
Company) and applied to repay a corresponding portion of the Refunded
Offshore Currency Loans and (ii) on the day such Revolving Loans are made,
Offshore Currency Funding Lender's Pro Rata Share of the Refunded Offshore
Currency Loans shall be deemed to be paid with the proceeds of a Revolving
Loan made by Offshore Currency Funding Lender, and such portion of the
Offshore Currency Loans deemed to be so paid shall no longer be outstanding
as Offshore Currency Loans but shall instead constitute part of Offshore
Currency Funding Lender's outstanding Revolving Loans. Company hereby
authorizes Administrative Agent and Offshore Currency Funding Lender to
charge Company's accounts with Administrative Agent and Offshore Currency
Funding Lender (up to the amount available in each such account) in order
to immediately pay Offshore Currency Funding Lender the amount of the
Offshore Currency Loans to the extent the proceeds of such Revolving Loans
made by Lenders, including the Revolving Loan deemed to be made by Offshore
Currency Funding Lender, are not sufficient to repay in full the Refunded
Offshore Currency Loans. If any portion of any such amount paid (or deemed
to be paid) to Offshore Currency Funding Lender should be recovered by or
on behalf of Company from Offshore Currency Funding 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.
Immediately upon funding of the Offshore Currency Loans by the
Offshore Currency Funding Lender, each Lender having a Revolving Loan
Commitment shall be deemed to, and hereby agrees to, have purchased a
participation in such outstanding Offshore Currency Loans in an amount
equal to its Pro Rata Share of the unpaid amount of such Offshore Currency
Loans together with accrued interest thereon. At any time upon the
occurrence and during the continuation of a Potential Event of Default or
an Event of Default and upon five Business Days' notice, Offshore Currency
Funding Lender may deliver to each other Lender having a Revolving Loan
Commitment a notice setting forth the amount of the outstanding Offshore
Currency Loans, the
41
Applicable Currency in which such Offshore Currency Loans are denominated
and the amount of such Lender's Pro Rata Share of such Offshore Currency
Loans, and each such Lender shall deliver to Offshore Currency Funding
Lender an amount equal to its respective participation in Same Day Funds in
the Applicable Currency at the Funding and Payment Office. In the event
any Lender fails to make available to Offshore Currency Funding Lender the
amount of such Lender's participation as provided in this paragraph,
Offshore Currency Funding Lender shall be entitled to recover such amount
on demand from such Lender together with interest thereon at the Federal
Funds Effective Rate for three Business Days and thereafter at the Base
Rate. In the event Offshore Currency Funding Lender receives a payment of
any amount in which other Lenders have purchased participations as provided
in this paragraph, Offshore Currency Funding 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 Offshore Currency Loans pursuant to the second preceding paragraph
and each Lender's obligation to purchase a participation in any unpaid
Offshore Currency 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 Offshore Currency Funding
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 or condition
(financial or otherwise) of Company or any of its Subsidiaries; (d) any
breach of this Agreement or any other Loan Document by any party thereto;
or (e) any other circumstance, happening or event whatsoever, whether or
not similar to any of the foregoing; PROVIDED that such obligations of each
Lender are subject to the satisfaction of one of the following conditions
(X) Offshore Currency Funding Lender shall not have received written notice
that any condition under Section 4 to the making of the applicable Offshore
Currency Loans was unsatisfied at the time such Offshore Currency Loans
were made or (Y) the satisfaction of any such condition not satisfied had
been waived in accordance with subsection 10.6.
B. BORROWING MECHANICS. Term Loans, Revolving Loans, or Offshore
Currency 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, Revolving Loans made
pursuant to a request by Offshore Currency Funding Lender pursuant to subsection
2.1A(iv) for the purpose of repaying any Refunded Offshore Currency 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)
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shall be in the applicable Minimum 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 Term Loans or Revolving Loans it shall deliver to Administrative Agent a
Notice of Borrowing no later than 10:00 A.M. (New York City time) at least three
Business Days in advance of the proposed Funding Date (in the case of an
Offshore Rate Loan denominated in Dollars) 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 Offshore Currency Funding Lender make Offshore
Currency Loans it shall deliver to Administrative Agent a Notice of Borrowing
five Business Days prior to the requested Funding Date. 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 and any Loans
made on the Closing Date, that such Loans shall be Base Rate Loans, (iv) in the
case of Revolving Loans not made on the Closing Date, whether such Loans shall
be Base Rate Loans or Offshore Rate Loans denominated in Dollars, (v) in the
case of any Loans requested to be made as Offshore Rate Loans, the initial
Interest Period requested therefor, and (vi) in the case of any Offshore
Currency Loans, the Applicable Currency. Term Loans, Revolving Loans and
Offshore Currency Loans may be continued as or converted into Base Rate Loans
and Offshore Rate Loans to the extent and 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.
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Except as otherwise provided in subsections 2.1F, 2.6B, 2.6C and 2.6G,
a Notice of Borrowing for an Offshore Rate Loan (or telephonic notice in lieu
thereof) shall be irrevocable on and after the related Interest Rate
Determination Date, and Company shall be bound to make a borrowing in accordance
therewith.
C. DISBURSEMENT OF FUNDS. All Term Loans and Revolving Loans under this
Agreement shall be made by Lenders simultaneously and proportionately to their
respective Pro Rata Shares of the Commitments for the Term Loans or Revolving
Loans requested, 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, Offshore Currency Funding Lender
or Swing Line Lender, as the case may be, of the proposed borrowing. In the
case of Loans in Dollars, each Lender shall make the amount of its Loan
available to Administrative Agent not later than 12:00 Noon (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. In the case of
Offshore Currency Loans, Offshore Currency Funding Lender shall make the amount
of its Loan available by such time on the applicable Funding Date as
Administrative Agent may specify in Same Day Funds in the requested currency at
the Funding and Payment Office. Except as provided in subsection 2.1A(iii),
subsection 2.1A(iv) or subsection 3.3B with respect to Revolving Loans used to
repay Refunded Swing Line Loans, to repay Refunded Offshore Currency 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 like funds as received by Administrative Agent equal
to the proceeds of all such Loans received by Administrative Agent from Lenders,
Offshore Currency Funding Lender 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
44
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 Federal Funds Effective Rate 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. NOTES. Company shall execute and deliver on the Closing Date (a) to
each Lender having a Term Loan Commitment (or to Administrative Agent for that
Lender) a Term Note substantially in the form of EXHIBIT IV annexed hereto to
evidence that Lender's Term Loan, in the principal amount of that Lender's Term
Loan and with other appropriate insertions, (b) to each Lender having a
Revolving Loan Commitment a Revolving Note substantially in the form of
EXHIBIT V annexed hereto to evidence that Lender's Revolving Loans, in the
principal amount of that Lender's Revolving Loan Commitment and with other
appropriate insertions, and (c) to Swing Line Lender (or to Administrative Agent
for Swing Line Lender) a Swing Line Note substantially in the form of EXHIBIT VI
annexed hereto to evidence Swing Line Lender's Swing Line Loans, in the
principal amount of the Swing Line Loan Commitment and with other appropriate
insertions and (d) to Offshore Currency Funding Lender (or to Administrative
Agent for Offshore Currency Funding Lender) an Offshore Currency Note
substantially in the form of EXHIBIT XXV annexed hereto to evidence Offshore
Currency Funding Lender's Offshore Currency Loans, in the principal amount of
the Offshore Currency Loan Commitment and with other appropriate insertions.
Each Lender shall endorse on the schedules annexed to any Note evidencing such
Lender's Loan the amount and Applicable Currency of each payment of principal
made by the Company with respect thereto.
E. 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.
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(ii) Administrative Agent shall record in the Register the Term Loan
Commitment and the Revolving Loan Commitment and the Term Loans 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,
the Offshore Currency Loan Commitment and Offshore Currency Loans from time
to time of Offshore Currency Funding Lender and each repayment or
prepayment in respect of the principal amount of the Term Loans or
Revolving Loans of each Lender, the Swing Line Loans of Swing Line Lender
or the Offshore Currency Loans of Offshore Currency Funding 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 the applicable
Loans.
(iii) Each Lender shall record on its internal records (including,
without limitation, the Notes held by such Lender) the amount of the 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, 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 Fleet to serve as Company's agent
solely for purposes of maintaining the Register as provided in this
subsection 2.1E, and Company and Lenders hereby agree that, to the extent
Fleet serves in such capacity, Fleet and its officers, directors,
employees, agents and affiliates shall constitute Indemnitees for all
purposes under subsection 10.3 and shall enjoy the general immunity
provided for in subsection 9.2.
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F. GENERAL PROVISIONS REGARDING OFFSHORE CURRENCY LOANS. Administrative
Agent will determine the Dollar Equivalent amount with respect to any (i)
Offshore Currency Loans as of the Interest Rate Determination Date,(ii)
outstanding Offshore Currency Loans as of the last day of the applicable
Interest Period, (iii) Letters of Credit denominated in an Offshore Currency as
of the requested date of issuance and (iv) outstanding Letters of Credit
denominated in an Offshore Currency as of the last Business Day of each month
(each such date under clauses (i) through (iv) a "COMPUTATION DATE").
In the case of proposed Offshore Currency Loans, if Offshore Currency
Funding Lender has determined that it cannot provide or continue to provide
Loans in the requested Offshore Currency, Offshore Currency Funding Lender shall
so notify Administrative Agent by 10:30 A.M. (New York time) four Business Days
prior to the proposed Funding Date or the proposed date of continuation of such
Loans in which event Administrative Agent will give notice to Company no later
than 5:00 P.M. (New York time) on the fourth Business Day prior to the requested
Funding Date or the proposed date of continuation of such Loans that the Loans
in the requested Offshore Currency are not then available, and Offshore Currency
Funding Lender shall be under no obligation to make or continue Offshore
Currency Loans in the requested Offshore Currency. If Administrative Agent
shall have so notified Company that any such Loan in a requested Offshore
Currency is not then available, Company may, by notice to Administrative Agent
not later than Noon (New York time) three Business Days prior to the requested
Funding Date of such Loan, withdraw the Notice of Borrowing relating to such
Loan. If the Company does so withdraw such Notice of Borrowing, the Loan
requested therein shall not occur and Administrative Agent will promptly so
notify Offshore Currency Funding Lender. If the Company does not so withdraw
such Notice of Borrowing, Administrative Agent will promptly notify each Lender
having a Revolving Loan Commitment and such Notice of Borrowing shall be deemed
to be a Notice of Borrowing that requests Revolving Loans comprised of Base Rate
Loans in an aggregate amount equal to the Dollar Equivalent amount of the
originally requested Loans; and in such notice by Administrative Agent to each
Lender Administrative Agent will state such aggregate amount of such Loans in
Dollars and such Lender's Pro Rata Share thereof. In the case of Offshore
Currency Loans as to which Administrative Agent shall have so notified Company
that any such continuation of such Offshore Currency Loans is not then
available, any Notice of Continuation/Conversion with respect thereto shall be
deemed withdrawn and such Offshore Currency Loans shall be repaid by Company on
the last day of the Interest Period with respect to such Offshore Currency
Loans.
The European Economic and Monetary Union (the "European Monetary
Union") anticipates the introduction of a single currency and the substitution
of the national currencies of the member states participating in the European
Monetary Union. On the date on which any of the Offshore Currencies are
replaced by the single currency, conversion into such single currency shall take
effect; PROVIDED that the original currency shall be retained for so long as is
legally permissible.
47
Conversion shall be based on the officially fixed rate of conversion. Neither
the introduction of the single currency nor the substitution of the national
currencies of the member states participating in European Monetary Union nor the
fixing of the official rate of conversion nor any economic consequences that
arise from any of the aforementioned events or in connection with European
Monetary Union shall give rise to any right to terminate prematurely, contest,
cancel, rescind, modify or renegotiate this Agreement or any of its provisions
or to raise any other objections and/or exceptions or to assert any claims for
compensation.
2.2 INTEREST ON THE LOANS.
A. RATE OF INTEREST. Subject to the provisions of subsections 2.6 and
2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
acceleration or otherwise) at a rate determined by reference to the Base Rate or
the Adjusted Offshore 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. Subject to the provisions of
subsections 2.6 and 2.7, each Offshore Currency 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 Adjusted
Offshore Rate. The applicable basis for determining the rate of interest with
respect to any Term Loan or any Revolving Loan shall be selected by Company
initially at the time a Notice of Borrowing is given with respect to such Loan
pursuant to subsection 2.1B, and the basis for determining the interest rate
with respect to any Term Loan or any Revolving Loan may be changed from time to
time pursuant to subsection 2.2D. If on any day a Term Loan or Revolving Loan is
outstanding with respect to which notice has not been delivered to
Administrative Agent in accordance with the terms of this Agreement specifying
the applicable basis for determining the rate of interest, then for that day
that Loan shall bear interest determined by reference to the Base Rate.
(i)Subject to the provisions of subsections 2.2E and 2.7, the Term
Loans and the Revolving Loans shall bear interest through maturity as follows:
(a) if a Base Rate Loan, then at the sum of the Base Rate PLUS the
Applicable Base Rate Margin; or
(b) if an Offshore Rate Loan denominated in Dollars, then at the sum
of the Adjusted Offshore Rate PLUS the Applicable Offshore 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 MINUS the Commitment Fee Percentage.
48
(iii) Subject to the provisions of subsections 2.2E and 2.7, the
Offshore Currency Loans shall bear interest through maturity at the sum of the
Adjusted Offshore Rate PLUS the Applicable Offshore Rate Margin MINUS the
Commitment Fee Percentage.
Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xv), the Applicable Base Rate
Margin and the Applicable Offshore Rate Margin shall automatically be adjusted
in accordance with such Margin Determination Certificate, such adjustment to
become effective, or to be retroactively effective to the extent a Margin
Determination Certificate is not timely delivered pursuant to subsection
6.1(xv), on the forty-sixth day following the end of the Fiscal Quarter for
which such Margin Determination Certificate is being or should have been so
delivered; PROVIDED that if a Margin Determination Certificate erroneously
indicates an applicable margin more favorable to Company than should be afforded
by the actual calculation of the Consolidated Leverage Ratio, Company shall
promptly pay additional interest and letter of credit fees to correct for such
error.
B. INTEREST PERIODS. In connection with each Offshore 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, with respect to Offshore Rate
Loans denominated in Dollars, six month period; PROVIDED that:
(i) the initial Interest Period for any Offshore Rate Loan shall
commence on the Funding Date in respect of such Loan, in the case of a Loan
initially made as an Offshore Rate Loan, or on the date specified in the
applicable Notice of Conversion/Continuation, in the case of a Loan
converted to an Offshore Rate Loan;
(ii) in the case of immediately successive Interest Periods
applicable to an Offshore 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
49
day in the calendar month at the end of such Interest Period) shall,
subject to clause (v) of this subsection 2.2B, end on the last Business Day
of a calendar month;
(v) no Interest Period with respect to any portion of the Term Loans
shall extend beyond December 15, 2002, and no Interest Period with respect
to any portion of the Revolving Loans or Offshore Currency Loans shall
extend beyond the Revolving Loan Commitment Termination Date;
(vi) no Interest Period with respect to any portion of the Term Loans
shall extend beyond a date on which Company is required to make a scheduled
payment of principal of the Term Loans, unless the sum of (a) the aggregate
principal amount of Term Loans that are Base Rate Loans PLUS (b) the
aggregate principal amount of Term Loans that are Offshore Rate Loans with
Interest Periods expiring on or before such date equals or exceeds the
principal amount required to be paid on the Term Loans on such date;
(vii) there shall be no more than 8 Interest Periods outstanding at
any time; and
(viii) in the event Company fails to specify an Interest Period for any
Offshore Rate Loan in the applicable Notice of Borrowing or Notice of
Conversion/Continuation, then 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 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 Term Loans or Revolving Loans which are Base Rate Loans in an
amount equal to the applicable Minimum Amount to Loans denominated in Dollars
and bearing interest at a rate determined by reference to the Adjusted Offshore
Rate, (ii) to convert all or any part of its outstanding Term Loans or Revolving
Loans which are Offshore Rate Loans denominated in Dollars to Base Rate Loans
upon the expiration of the Interest Period applicable to such Offshore Rate
Loans, (iii) to continue all or any part of its outstanding Term Loans or
Revolving Loans which are Offshore Rate Loans denominated in Dollars in an
amount equal to the applicable
50
Minimum Amount upon the expiration of the Interest Period applicable to such
Offshore Rate Loans, or (iv) upon the expiration of any Interest Period
applicable to an Offshore Currency Loan, to continue all or any portion of such
Loan equal to the applicable Minimum Amount as an Offshore Rate Loan denominated
in the same Offshore Currency.
Company shall deliver a Notice of Conversion/Continuation to
Administrative Agent no later than 10:00 A.M. (New York City time) (i) in the
case of a conversion to a Base Rate Loan, at least one Business Day in advance
of the proposed conversion date, (ii) in the case of a conversion to, or a
continuation of, an Offshore Rate Loan denominated in Dollars, at least three
Business Days in advance of the proposed conversion/continuation date, and
(iii) in the case of a continuation of Offshore Currency Loans, at least five
Business Days in advance of the proposed continuation date. 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, an Offshore Rate
Loan, the requested Interest Period, and (v) in the case of a conversion to, or
a continuation of, an Offshore 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,
including, if applicable, Offshore Currency Funding 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 2.1F, 2.6B, 2.6C and 2.6G,
a Notice of Conversion/Continuation for conversion to, or continuation of, an
Offshore Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable
on and after the related Interest Rate Determination Date, and Company shall be
bound to effect a conversion or continuation in accordance therewith.
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E. DEFAULT RATE. Upon the occurrence and during the continuation of any
Event of Default, the outstanding principal amount of all Loans and, to the
extent permitted by applicable law, any interest payments thereon not paid when
due and any fees and other amounts then due and payable hereunder, shall
thereafter bear interest (including post-petition interest in any proceeding
under the Bankruptcy Code or other applicable bankruptcy laws) payable upon
demand at a rate that is 2% per annum in excess of the interest rate otherwise
payable under this Agreement with respect to the applicable Loans (or, in the
case of any such fees and other amounts, at a rate which is 2% per annum in
excess of the interest rate otherwise payable under this Agreement for Base Rate
Loans); PROVIDED that, in the case of Offshore Rate Loans denominated in
Dollars, upon the expiration of the Interest Period in effect at the time any
such increase in interest rate is effective such Offshore 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 any
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 Offshore 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 an Offshore Rate
Loan, the date of conversion of such Offshore 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 an Offshore Rate Loan, the date
of conversion of such Base Rate Loan to such Offshore 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. Each
determination of an interest rate or a Dollar Equivalent amount by
Administrative Agent shall be conclusive and binding on Company and Lenders in
the absence of manifest error.
2.3 FEES.
Company agrees to pay to Administrative Agent, for distribution to each
Lender having a Revolving Loan Commitment 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) aggregate principal Dollar Equivalent amount of outstanding Revolving Loans
(but
52
not including any outstanding Swing Line Loans outstanding under subsection
2.1A(iii) or Offshore Currency Loans outstanding under subsection 2.1A(iv)) plus
(ii) the Letter of Credit Usage MULTIPLIED BY the then 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 on
the fifteenth day of each March, June, September and December of each year,
commencing on the first such date to occur after the Closing Date, and on the
Revolving Loan Commitment Termination Date. For purposes of determining the
commitment fees, the amount of any outstanding Offshore Currency Loan or any
Letter of Credit denominated in an Offshore Currency on any date shall be
determined based upon the Dollar Equivalent amount as of the most recent
Computation Date with respect to such Offshore Currency Loan or such Letter of
Credit.
Upon delivery of the Margin Determination Certificate by Company to
Administrative Agent pursuant to subsection 6.1(xv), the Commitment Fee
Percentage shall automatically be adjusted in accordance with such Margin
Determination Certificate, such adjustment to become effective, or to be
retroactively effective to the extent a Margin Determination Certificate is not
timely delivered pursuant to such subsection 6.1(xv), on the forty-sixth day
following the end of the Fiscal Quarter for which such Margin Determination
Certificate is being or should have been so delivered; PROVIDED that if a Margin
Determination Certificate erroneously indicates an applicable margin more
favorable to Company than should be afforded by the actual calculation of the
Consolidated Leverage Ratio, Company shall promptly pay additional commitment
fees to correct for such error.
2.4 REPAYMENTS, PREPAYMENTS AND REDUCTIONS IN REVOLVING LOAN COMMITMENTS;
GENERAL PROVISIONS REGARDING PAYMENTS.
A. SCHEDULED PAYMENTS OF TERM LOANS. Company shall make principal
payments on the Term Loans in installments on the dates and in the amounts set
forth below:
Scheduled Repayment
Date of Term Loans
------ -----------------------
September 15, 1998 $1,000,000
December 15, 1998 1,000,000
March 15, 1999 1,000,000
June 15, 1999 1,000,000
September 15, 1999 1,250,000
December 15, 1999 1,250,000
53
March 15, 2000 1,250,000
June 15, 2000 1,250,000
September 15, 2000 1,500,000
December 15, 2000 1,500,000
March 15, 2001 1,500,000
June 15, 2001 1,500,000
September 15, 2001 1,750,000
December 15, 2001 1,750,000
March 15, 2002 1,750,000
June 15, 2002 1,750,000
September 15, 2002 1,500,000
December 15, 2002 1,500,000
-----------
Total $25,000,000
; PROVIDED that the scheduled installments of principal of the Term Loans
set forth above shall be reduced in connection with any voluntary or
mandatory prepayments of the Term Loans in accordance with
subsection 2.4B(iv); and PROVIDED, FURTHER that the Term Loans and all
other amounts owed hereunder with respect to the Term Loans shall be paid
in full no later than December 15, 2002, and the final installment payable
by Company in respect of the Term Loans on such date shall be in an amount,
if such amount is different from that specified above, sufficient to repay
all amounts owing by Company under this Agreement with respect to the Term
Loans.
B. PREPAYMENTS AND UNSCHEDULED REDUCTIONS IN REVOLVING LOAN COMMITMENTS.
(i) VOLUNTARY PREPAYMENTS. Company may, upon 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 not less than one Business Day's prior
written or telephonic notice, in the case of Base Rate Loans, three
Business Days' prior written or telephonic notice, in the case of Offshore
Rate Loans denominated in Dollars, and five Business' Days prior written or
telephonic notice, in the case of Offshore Currency 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, including, if applicable, Offshore Currency Funding
Lender), at
54
any time and from time to time prepay any Term Loans, Revolving Loans or
Offshore Currency Loans on any Business Day in whole or in part in the
applicable Minimum Amount; PROVIDED, HOWEVER, that an Offshore Rate Loan
may only be prepaid on the expiration of the Interest Period applicable
thereto unless Company complies with subsection 2.6D with respect to any
breakage costs resulting from such prepayment being made on a date prior to
the expiration of the applicable Interest Period. 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 $500,000 and
integral multiples of $100,000 in excess of that amount. Company's notice
to Administrative Agent shall designate the date (which shall be a Business
Day) of such termination or reduction and the amount of any partial
reduction, and such termination or reduction of the Revolving Loan
Commitments shall be effective on the date specified in Company's notice
and shall reduce the Revolving Loan Commitment of each Lender
proportionately to its Pro Rata Share.
(iii) MANDATORY PREPAYMENTS 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.
Company shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to any Net
Asset Sale Proceeds received by Company or any of its Subsidiaries,
such prepayment or reduction to be made no later than the earlier to
occur of (i) the second Business Day following the date of receipt, or
if Company would incur breakage costs under subsection 2.6D as a
result of a prepayment on such date, on the earlier to occur of the
first such date thereafter on which no such breakage costs are
55
incurred or 90 days after such date of receipt, by Company or any of
its Subsidiaries of any Net Asset Sale Proceeds in an amount in excess
of $150,000, (ii) the date of the occurrence of any Event of Default,
or (iii) the forty-fifth day following the end of each Fiscal Quarter
in which Net Asset Sale Proceeds were received in respect of any Asset
Sale.
If, following the receipt by Company or any of its
Subsidiaries of Net Asset Sale Proceeds, Company is required to apply
or cause to be applied any portion of such Net Asset Sale Proceeds to
prepay any Indebtedness evidenced by any of the Related Financing
Documents pursuant to the applicable Related Financing Document, then,
notwithstanding anything contained in this subsection 2.4B(iii)(a),
Company shall prepay the Loans and/or reduce the Revolving Loan
Commitments in the order set forth in this subsection 2.4B(iii)(a) so
as to eliminate any obligation to prepay such Indebtedness.
(b) PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE OF EQUITY
SECURITIES. On the second Business Day following the date of receipt
by Company or any of its Subsidiaries of the 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 equity Securities of Company or any of its
Subsidiaries after the Closing Date (other than issuances of equity to
employees pursuant to stock plans permitted under subsection 7.12),
Company shall prepay the Loans and/or the Revolving Loan Commitments
shall be permanently reduced in an aggregate amount equal to 50% of
such Net Equity Proceeds.
(c) PREPAYMENTS AND REDUCTIONS DUE TO ISSUANCE OF DEBT
SECURITIES. On the second Business Day following the date of receipt
by Company or any of its Subsidiaries of the 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 DEBT PROCEEDS") from
the issuance of debt Securities (other than in respect of Indebtedness
permitted pursuant to subsection 7.1(i)-(viii)) of Company or any of
its Subsidiaries after the Closing Date, Company shall prepay the
Loans and/or the Revolving Loan Commitments shall be permanently
reduced in an aggregate amount equal to 100% of such Net Debt
Proceeds.
(d) PREPAYMENTS AND REDUCTIONS FROM CONSOLIDATED EXCESS CASH
FLOW. In the event that there shall be Consolidated Excess Cash Flow
for any Fiscal Year (commencing with the Fiscal Year beginning October
1, 1997), Company shall, no later than 90 days after the end of
56
such Fiscal Year, prepay the Loans and/or the Revolving Loan
Commitments shall be permanently reduced in an aggregate amount equal
to 50% of such Consolidated Excess Cash Flow.
(e) 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)-(d), Company shall
deliver to Agents an Officer's Certificate demonstrating the
calculation of the amount (the "NET PROCEEDS AMOUNT") of the
applicable Net Asset Sale Proceeds, Net Equity Proceeds or Net Debt
Proceeds (as such terms are defined in subsections 2.4B(iii)(b) and
(c)), 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 Officer's
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 Agents an
Officer's Certificate demonstrating the derivation of the additional
Net Proceeds Amount resulting in such excess.
(f) PREPAYMENTS DUE TO REDUCTIONS OR RESTRICTIONS OF REVOLVING
LOAN COMMITMENTS. Company shall from time to time prepay FIRST the
Swing Line Loans, SECOND the Offshore Currency Loans and THIRD the
Revolving Loans to the extent necessary (1) so that the Total
Utilization of Revolving Loan Commitments shall not at any time exceed
the Revolving Loan Commitments then in effect and (2) to give effect
to the limitations set forth in clause (b) of the second paragraph of
subsection 2.1A(iv).
(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 to Term Loans, Revolving Loans, Offshore
Currency Loans and Swing Line Loans 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 Term Loans to the full extent thereof, THIRD to repay
outstanding Offshore Currency Loans to the full extent thereof, and
FOURTH to repay outstanding Revolving Loans to the full extent
thereof.
57
Any voluntary prepayments of the Term Loans pursuant to subsection
2.4B(i) shall be applied first to amortization payments scheduled
within six months of the prepayment in forward order of maturity, and
second to the remaining scheduled amortization payments of the Term
Loans on a pro rata basis.
(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)-(d) shall be applied
FIRST to prepay the Term Loans to the full extent thereof, 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 Offshore Currency Loans to the full
extent thereof and to permanently reduce the Revolving Loan
Commitments by the amount of such prepayment, FOURTH 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, FIFTH, to
the extent of any remaining portion of the Applied Amount, to cash
collateralize any outstanding Letters of Credit, and SIXTH, to the
extent of any 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 TERM LOANS BY ORDER
OF MATURITY. Any mandatory prepayments of the Term Loans pursuant to
subsection 2.4B(iii) shall be applied on a pro rata basis to the
remaining scheduled installments of principal of the Term Loans set
forth in subsection 2.4A.
(d) APPLICATION OF PREPAYMENTS TO BASE RATE LOANS AND OFFSHORE
RATE LOANS. Considering Term Loans and Revolving Loans being prepaid
separately, any prepayment thereof shall be applied first to Base Rate
Loans to the full extent thereof before application to Offshore 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. Except for principal of, interest
on, and any other amounts relating to any Offshore Currency Loan which
shall be made in Same Day Funds in the Offshore Currency in which such Loan
is
58
denominated or payable, 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. Payments relating to any Loan shall be made
without defense, setoff or counterclaim, free of any restriction or
condition, and delivered to Administrative Agent not later than 12:00 Noon
(New York City time) in the case of any Dollar payments, and not later than
such time as may be determined by the Administrative Agent and notified to
Company to be necessary for such payment to be credited on such date in
accordance with normal banking procedures in the place of payment, 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.
(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 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 Lending Office 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 Offshore 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) INTEREST LAWS. Notwithstanding any provision to the contrary
contained in this Agreement or the other Loan Documents, Company shall not
be required to pay, and neither Administrative Agent nor any Lender shall
59
collect, any amount of interest in excess of the maximum amount of interest
permitted by law ("EXCESS INTEREST") to be paid to such Lender. If any
Excess Interest is provided for or determined by a court of competent
jurisdiction to have been provided for in this Agreement or in any of the
other Loan Documents to be paid to any Lender, then in such event: (1) the
provisions of this subsection shall govern and control; (2) neither Company
nor any Loan Party shall be obligated to pay any Excess Interest; (3) any
Excess Interest that any Lender may have received hereunder shall be, at
such Lender's option, (a) applied as a credit against the outstanding
principal balance of the Obligations or accrued and unpaid interest (not to
exceed the maximum amount permitted by law) owing to such Lender, (b)
refunded to the payor thereof, or (c) any combination of the foregoing; (4)
the interest rate(s) provided for herein with respect to such Lender shall
be automatically reduced to the maximum lawful rate allowed from time to
time under applicable law (the "Maximum Rate"), and this Agreement and the
other Loan Documents shall be deemed to have been and shall be, reformed
and modified to reflect such reduction; and (5) neither Company nor any
Loan Party shall have any action against such Lender for any damages
arising out of the payment or collection of any Excess Interest.
Notwithstanding the foregoing, if for any period of time interest on any
Obligations owing to any Lender is calculated at the Maximum Rate rather
than the applicable rate under this Agreement, and thereafter such
applicable rate becomes less than the Maximum Rate, the rate of interest
payable on such Obligations shall remain at the Maximum Rate until such
Lender shall have received the amount of interest which such Lender would
have received during such period on such Obligations had the rate of
interest not been limited to the Maximum Rate during such period.
D. APPLICATION OF PROCEEDS OF COLLATERAL AND PAYMENTS UNDER SUBSIDIARY
GUARANTY.
(i) APPLICATION OF PROCEEDS OF COLLATERAL. Except as provided in
subsection 2.4B(iii)(a) with respect to prepayments from Net Asset Sale
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 Administrative Agent's
agents and counsel, and all other expenses, liabilities and advances
made or incurred by Administrative Agent in connection therewith, and
all amounts for which Administrative Agent is entitled to
indemnification
60
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 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 SUBSIDIARY GUARANTY. All payments
received by Administrative Agent under the Subsidiary 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 the Subsidiary Guaranty, including
Administrative Agent's agents and counsel, and all expenses,
liabilities and advances made or incurred by Administrative Agent in
connection therewith, all in accordance with the terms of this
Agreement and the Subsidiary Guaranty;
(b) thereafter, to the extent of any excess such payments, to
the payment of all other Guarantied Obligations (as defined in the
Subsidiary Guaranty) for the ratable benefit of the holders thereof;
and
(c) thereafter, to the extent of any excess such payments, to
the payment to the applicable 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. TERM LOANS. The proceeds of the Term Loans, together with the
proceeds of (i) the issuance of shares of its Common Stock to the New Equity
Investors for an aggregate purchase price of approximately $43,500,000, (ii) the
issuance for cash of not less than $85,000,000 in original principal amount of
Senior Subordinated Notes, (iii) cash-on-hand of Company and (iv) approximately
$3,500,000 of Revolving Loans on the Closing Date, shall be applied by Company
(i) to
61
repurchase shares of the outstanding Common Stock of Company (including all
shares of its outstanding Class B Common Stock) and make cash payments for
employee stock options in an aggregate amount not to exceed $159,400,000, and
(ii) to pay fees and expenses incurred in connection with the Recapitalization
Transactions in an approximate aggregate amount not to exceed $4,800,000.
B. REVOLVING LOANS; SWING LINE LOANS; OFFSHORE CURRENCY LOANS. The
proceeds of the Revolving Loans made on the Closing Date shall be applied by the
Company as provided in subsection 2.5A. The proceeds of any other Revolving
Loans, Offshore Currency Loans and any Swing Line Loans shall be applied by
Company for working capital requirements and general corporate purposes of the
Company and its Subsidiaries.
C. MARGIN REGULATIONS. No portion of the proceeds of any borrowing under
this Agreement shall be used by Company or any of its Subsidiaries in any manner
that might cause the borrowing or the application of such proceeds to violate
Regulation G, Regulation U, Regulation T or Regulation X of the Board of
Governors of the Federal Reserve System or any other regulation of such Board or
to violate the Exchange Act, in each case as in effect on the date or dates of
such borrowing and such use of proceeds.
2.6 SPECIAL PROVISIONS GOVERNING OFFSHORE RATE LOANS.
Notwithstanding any other provision of this Agreement to the contrary,
the following provisions shall govern with respect to Offshore Rate Loans as to
the matters covered:
A. DETERMINATION OF APPLICABLE INTEREST RATE. As soon as practicable
after 11:00 A.M. (London time) on each Interest Rate Determination Date,
Administrative Agent shall determine (which determination shall, absent manifest
error, be conclusive and binding upon all parties) the interest rate that shall
apply to the Offshore 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 funding such Offshore Rate Loan.
B. INABILITY TO DETERMINE APPLICABLE INTEREST RATE. In the event that
Administrative Agent shall have determined (which determination shall be
conclusive and binding upon all parties hereto), on any Interest Rate
Determination Date with respect to any Offshore Rate Loans, that by reason of
circumstances affecting the London interbank market adequate and fair means do
not exist for ascertaining the interest rate applicable to such Loans on the
basis provided for in the definition of Adjusted Offshore Rate, Administrative
Agent shall on such date give notice (by telefacsimile or by telephone confirmed
in writing) to Company and each Lender funding such Offshore Rate Loan of such
determination, whereupon (i) no Loans may
62
be made as, or converted to, such Offshore Rate Loans until such time as
Administrative Agent notifies Company and such 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 OFFSHORE RATE LOANS. In the event
that on any date any Lender shall reasonably determine (which determination
shall be 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 Offshore Rate Loans (i) has become unlawful
as a result of compliance by such Lender or its applicable Lending Office 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 or its applicable Lending Office material hardship, as a
result of contingencies occurring after the date of this Agreement which
materially and adversely affect the London interbank market or the position of
such Lender or its applicable Lending Office 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,
Offshore 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 an Offshore 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
Offshore 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 an Offshore Rate Loan then being requested
by Company pursuant to a Notice of Borrowing or a Notice of Conversion/
Continuation, Company shall have the option, subject to the provisions of
subsection 2.6D, to rescind such Notice of Borrowing or Notice of Conversion/
Continuation as to all Lenders by giving notice (by telefacsimile or by
telephone confirmed in writing) to Administrative Agent of such rescission on
the date on which the Affected Lender gives notice of its determination as
described above (which notice of rescission Administrative Agent shall promptly
transmit to each other Lender). Except as provided in the immediately preceding
sentence, nothing in this subsection 2.6C shall affect the obligation of any
Lender other than an Affected Lender to make or
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maintain Loans as, or to convert Loans to, Offshore Rate Loans in accordance
with the terms of this Agreement.
D. COMPENSATION FOR BREAKAGE OR NON-COMMENCEMENT OF INTEREST PERIODS.
Company shall compensate each Lender, upon written request by that Lender (which
request shall set forth the basis for requesting such amounts), for all
reasonable losses, expenses and liabilities (including any interest paid by that
Lender to lenders of funds borrowed by it to make or carry its Offshore Rate
Loans and any loss, expense or liability sustained by that Lender in connection
with the liquidation or re-employment of such funds or from fees payable to
terminate the deposits from which such funds were obtained or from charges
relating to any Offshore Currency Loans) which that Lender may sustain: (i) if
for any reason (other than a default by that Lender) a borrowing of any Offshore
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
Offshore 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 Offshore 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 Offshore 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 Offshore
Rate Loans when required by the terms of this Agreement.
E. BOOKING OF OFFSHORE RATE LOANS. Any Lender may make, carry or
transfer Offshore 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 OFFSHORE 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 Offshore Rate Loans through the purchase of a deposit in the Applicable
Currency bearing interest at the rate obtained pursuant to clause (i) of the
definition of Adjusted Offshore Rate in an amount equal to the amount of such
Offshore Rate Loan and having a maturity comparable to the relevant Interest
Period and through the transfer of such 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 Offshore Rate Loans in
any manner it sees fit and the foregoing assumptions shall be utilized only for
the purposes of calculating amounts payable under this subsection 2.6 and under
subsection 2.7A.
G. OFFSHORE RATE LOANS AFTER DEFAULT. After the occurrence of and during
the continuation of a Potential Event of Default or an Event of Default, Company
may not elect to have a Loan be made or maintained as, or converted to, an
Offshore Rate Loan after the expiration of any Interest Period then in effect
for that Loan and
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subject to the provisions of subsection 2.6D, any Notice of Borrowing or Notice
of Conversion/Continuation given by Company with respect to a requested
borrowing or conversion/continuation that has not yet occurred shall be deemed
to be rescinded by Company.
2.7 INCREASED COSTS; TAXES; CAPITAL ADEQUACY.
A. COMPENSATION FOR INCREASED COSTS AND TAXES. Subject to the provisions
of subsection 2.7B (which shall be controlling with respect to the matters
covered thereby), in the event that any Lender shall reasonably determine (which
determination shall be 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 or its
applicable Lending Office or any corporation controlling the Lender with any
guideline, request or directive issued or made after the date hereof by any
central bank, the National Association of Insurance Commissioners ("NAIC") 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 Offshore Rate Loans that are
reflected in the definition of Adjusted Offshore 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;
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
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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 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
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(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 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
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that such Lender is not subject to deduction or withholding of United
States federal income tax with respect to any payments to such Lender
of interest payable under any of the Loan Documents.
(b) Each Lender required to deliver any forms, certificates or
other evidence with respect to United States federal income tax
withholding matters pursuant to subsection 2.7B(iii)(a) hereby agrees,
from time to time after the initial delivery by such Lender of such
forms, certificates or other evidence, whenever a lapse in time or
change in circumstances renders such forms, certificates or other
evidence obsolete or inaccurate in any material respect, that such
Lender shall promptly (1) deliver to Administrative Agent for
transmission to Company two new original copies of Internal Revenue
Service Form 1001 or 4224, or a 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 or Issuing 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, the NAIC or
comparable agency charged with the interpretation or administration thereof, or
compliance by any Lender or
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Issuing 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, the NAIC or comparable agency,
has or would have the effect of reducing the rate of return on the capital of
such Lender or Issuing Lender or any corporation controlling such Lender or
Issuing Lender as a consequence of, or with reference to, such Lender's or
Issuing 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 Issuing 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 Issuing 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 or Issuing Lender
of the statement referred to in the next sentence, Company shall pay to such
Lender or Issuing Lender such additional amount or amounts as will compensate
such Lender or Issuing Lender or such controlling corporation on an after-tax
basis for such reduction. Such Lender or Issuing Lender shall deliver to Company
(with a copy to Administrative Agent) a written statement, setting forth in
reasonable detail the basis of the calculation of such additional amounts, which
statement shall be conclusive and binding upon all parties hereto absent
manifest error.
2.8 OBLIGATION OF LENDERS AND ISSUING LENDERS TO MITIGATE.
Each Lender and 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 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 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 Office pursuant to this
subsection 2.8 unless Company
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agrees to pay all incremental expenses incurred by such Lender or Issuing Lender
as a result of utilizing such other Lending 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 having a Revolving Loan Commitment (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, then (i) during
any Default Period (as defined below) with respect to such Defaulting Lender,
the Revolving Loan Exposure of such Defaulting Lender shall be determined as
though the Revolving Loan Commitments of such Lender have been terminated (but
such Commitments shall not actually be terminated) for purposes of voting on any
matters (including without limitation the granting of any consents or waivers)
with respect to any of the Loan Documents; (ii) 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 pursuant to
subsection 2.4B(i) shall 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 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); PROVIDED that the
provisions of this clause (b) shall not affect any mandatory reductions of the
Revolving Loan Commitment of such Defaulting Lender pursuant to subsection
2.4B(iii); (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 in respect of Letters of Credit shall be excluded for
purposes of calculating the commitment fee payable to Lenders having Revolving
Loan Commitments pursuant to subsection 2.3 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 2.3 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.
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For purposes of this Agreement (A) "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 (B) "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 Defaulting 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.
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
having a Revolving Loan Commitment make Revolving Loans pursuant to subsection
2.1A(ii), that Swing Line Lender make Swing Line Loans pursuant to subsection
2.1A(iii) and that Offshore Currency Funding Lender make Offshore Currency Loans
pursuant to subsection 2.1A(iv), Company may request, in accordance with the
provisions of this subsection 3.1, from time to time during the period from the
Closing Date to but excluding the Revolving Loan Commitment Termination Date,
that Administrative Agent 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 Company shall not request that
Administrative Agent issue:
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(i) any Letter of Credit if, after giving effect to such issuance,
the Total Utilization of Revolving Loan Commitments would exceed the
Revolving Loan Commitments then in effect;
(ii) any Letter of Credit if, after giving effect to such issuance,
the Letter of Credit Usage would exceed $5,000,000;
(iii) any Standby Letter of Credit having a final expiration date later
than the earlier of (a) the date which is 30 days prior to the Revolving
Loan Commitment Termination Date and (b) the date which is 18 months 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 18 months 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 received written notice that an Event of
Default has occurred and is continuing (and has not been waived in
accordance with subsection 10.6);
(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 of such Commercial Letter of Credit or
(b) that is otherwise unacceptable to the applicable Issuing Lender in its
reasonable discretion;
(v) any Letter of Credit denominated in a currency other than Dollars
or an Offshore Currency; and
(vi) any Letter of Credit denominated in an Offshore Currency if the
Dollar Equivalent amount of all outstanding Offshore Currency Loans PLUS
the Letter of Credit Usage for outstanding Letters of Credit denominated in
Offshore Currencies exceed the Offshore Currency Sublimit.
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 12:00 Noon (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 and Letters of Credit
denominated in an Offshore Currency), 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
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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 an Offshore Currency, the Applicable 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 Administrative Agent prior to the
issuance of any Letter of Credit in the event that any of the matters to
which Company is required to certify in the applicable Notice of Issuance
of Letter of Credit is no 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, Administrative Agent
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,
Offshore Currency Loans and Swing Line Loans, may exceed Administrative
Agent's Revolving Loan Commitment then in effect.
(iii) ISSUANCE OF LETTER OF CREDIT. Upon satisfaction or waiver (in
accordance with subsection 10.6) of the conditions set forth in subsection
4.3, the Issuing Lender shall issue the requested Letter of Credit in
accordance with the Issuing Lender's standard operating procedures.
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(iv) NOTIFICATION TO LENDERS. Upon the issuance of any Letter of
Credit the Administrative Agent shall promptly notify each other Lender of
such issuance, which notice shall be accompanied by a copy of such Letter
of Credit. 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,
Administrative Agent shall deliver to each other Lender a report setting
forth for such calendar quarter the daily aggregate Dollar Equivalent
amount available to be drawn under the Letters of Credit that were
outstanding during such calendar quarter.
C. LENDERS' PURCHASE OF PARTICIPATIONS IN LETTERS OF CREDIT. Immediately
upon the issuance of each Letter of Credit, each Lender 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
of the maximum Dollar Equivalent amount which is or at any time may become
available to be drawn thereunder.
3.2 LETTER OF CREDIT FEES.
Company agrees to pay to Administrative Agent the following amounts
with respect to Letters of Credit issued hereunder:
(i) with respect to each Standby Letter of Credit, a letter of credit
fee equal to the Applicable Offshore Rate Margin MULTIPLIED BY the daily
maximum Dollar Equivalent amount available to be drawn under such Standby
Letter of Credit (whether or not conditions to drawing thereunder could be
met), payable in arrears on and to (but excluding) the fifteenth day of
each March, June, September and December 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 letter of
credit fee equal to (x) the Applicable Offshore Rate Margin MINUS 1.00% per
annum PROVIDED that in no event shall the amount utilized under this clause
(x) be less than 1.00% per annum MULTIPLIED BY (y) the daily maximum Dollar
Equivalent amount available to be drawn under such Commercial Letter of
Credit (whether or not conditions to drawing thereunder could be met),
payable in arrears on and to (but excluding) the fifteenth day of each
March, June, September and December of each year and computed on the basis
of a 360-day year for the actual number of days elapsed; and
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(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, the daily amount or the daily maximum 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 the Dollar Equivalent amount of any Letter of
Credit denominated in an Offshore Currency shall be determined based on the
Dollar Equivalent amount as of the most recent Computation Date for such Letter
of Credit. Upon receipt by Administrative Agent of any amount described in
clause (i) or (ii) of this subsection 3.2, Administrative Agent shall retain an
amount equal to 0.25% per annum of the daily Dollar Equivalent amount available
to be drawn under such Letter of Credit for its own account as a fronting fee
and Administrative Agent shall promptly distribute to each Lender having a
Revolving Loan Commitment its Pro Rata Share of the remaining portion of such
Letter of Credit fees.
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 promptly 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 the Applicable Currency 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 10:00 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 or in the
case of Letters of Credit denominated in an Offshore Currency, to make Revolving
Loans that are Offshore
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Rate Loans in the Applicable Currency on the Reimbursement Date in an amount
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 or Revolving
Loans that are Offshore Rate Loans in the Applicable Currency 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 and in
the Applicable Currency equal to the excess of the amount of such honored
drawing over the aggregate amount of such Revolving Loans, if any, which are so
received. Nothing in this subsection 3.3B shall be deemed to relieve any Lender
from its obligation to make Revolving Loans on the terms and conditions set
forth in this Agreement, and Company shall retain any and all rights it may have
against any Lender resulting from the failure of such Lender to make such
Revolving Loans under this subsection 3.3B.
C. PAYMENT BY LENDERS OF UNREIMBURSED AMOUNTS PAID UNDER LETTERS OF
CREDIT.
(i) PAYMENT BY LENDERS. In the event that Company shall fail for any
reason to reimburse any Issuing Lender as provided in subsection 3.3B in an
amount 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 having a Revolving Loan Commitment of the
unreimbursed amount of such honored drawing and of such other Lender's
respective participation therein based on such Lender's Pro Rata Share.
Each Lender shall make available to such Issuing Lender an amount equal to
its respective participation, in the Applicable Currency 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 Federal Funds Effective Rate 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
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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 in the Applicable Currency at its
Lending Office 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 in the
Applicable Currency 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 is
reimbursed by Company (including any such reimbursement out of the proceeds
of Revolving Loans pursuant to subsection 3.3B) at a rate equal to (a) for
the period from the date such drawing is honored to but excluding the
Reimbursement Date, the rate then in effect under this Agreement with
respect to Revolving Loans that are Base Rate Loans and (b) thereafter, 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 360-day year for the actual number of days
elapsed in the period during which it accrues and shall be payable on
demand or, if no demand is made, on the date on which the related drawing
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
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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 of Credit (or any Persons for whom any such
transferee may be acting), any Issuing Lender or other Lender or any other
Person or, in the case of a Lender, against Company, whether in connection
with this Agreement, the transactions contemplated herein or any unrelated
transaction (including any underlying transaction between Company or one of
its Subsidiaries and the beneficiary for which any Letter of Credit was
procured);
(iii) any draft or other document presented under any Letter of
Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect;
(iv) payment by the applicable Issuing Lender under any Letter of
Credit against presentation of a draft or other document which does not
substantially comply with the terms of such Letter of Credit;
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(v) any adverse change in the business, operations, properties,
assets, condition (financial or otherwise) or prospects of Company or any
of its Subsidiaries;
(vi) any breach of this Agreement or any other Loan Document by any
party thereto;
(vii) any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing; or
(viii) the fact that an Event of Default or a Potential Event of
Default shall have occurred and be continuing;
PROVIDED, in each case, that payment by the applicable Issuing Lender under the
applicable Letter of Credit shall not have constituted gross negligence or
willful misconduct of such Issuing Lender under the circumstances in question
(as determined by a final judgment of a court of competent jurisdiction).
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 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").
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
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assigning or purporting to transfer or assign any such Letter of Credit or the
rights or benefits thereunder or proceeds thereof, in whole or in part, which
may prove to be invalid or ineffective for any reason; (iii) failure of the
beneficiary of any such Letter of Credit to comply fully with any conditions
required in order to draw upon such Letter of Credit; (iv) errors, omissions,
interruptions or delays in transmission or delivery of any messages, by mail,
cable, telegraph, telex or otherwise, whether or not they be in cipher; (v)
errors in interpretation of technical terms; (vi) any loss or delay in the
transmission or otherwise of any document required in order to make a drawing
under any such Letter of Credit or of the proceeds thereof; (vii) the
misapplication by the beneficiary of any such Letter of Credit of the proceeds
of any drawing under such Letter of Credit; or (viii) any consequences arising
from causes beyond the control of 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 solely out of the gross negligence or willful
misconduct of such Issuing Lender, as determined by a final judgment of a court
of competent jurisdiction.
3.6 INCREASED COSTS AND TAXES RELATING TO LETTERS OF CREDIT.
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 having a Revolving Loan Commitment shall reasonably
determine (which determination shall be 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 or its applicable Lending Office with any guideline,
request or directive issued or made after the date hereof by any central bank,
the NAIC or other governmental or quasi-governmental authority (whether or not
having the force of law):
(i) subjects such Issuing Lender or Lender (or its applicable
Lending Office) to any additional Tax (other than any Tax on the overall
net income of
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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 (or its applicable Lending Office);
(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 its applicable Lending Office); 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 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 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 TERM LOANS AND INITIAL REVOLVING LOANS, OFFSHORE CURRENCY
LOANS AND SWING LINE LOANS.
The obligations of Lenders to make the Term Loans and any Revolving
Loans, Offshore Currency Loans and Swing Line 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:
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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 Agents for
Lenders 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 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 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 Agents may reasonably request.
B. NO MATERIAL ADVERSE EFFECT. Since September 30, 1996, no Material
Adverse Effect (in the sole opinion of Arranger and Agents) shall have occurred.
C. CORPORATE AND CAPITAL STRUCTURE, OWNERSHIP, MANAGEMENT, ETC.
(i) CORPORATE STRUCTURE. The organization structure of Company
and its Subsidiaries, both before and after giving effect to the
Recapitalization Transactions, shall be as set forth on SCHEDULE 5.1
annexed hereto and be satisfactory to Agents, Arranger and Lenders.
(ii) CAPITAL STRUCTURE AND OWNERSHIP. The capital structure and
ownership of Company, both before and after giving effect to the
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Recapitalization Transactions, shall be as described in the Note Offering
Materials and be satisfactory to Agents, Arranger and Lenders.
(iii) MANAGEMENT. The management structure of Company, after giving
effect to the Recapitalization Transactions, shall be as described in the
Note Offering Memorandum and be satisfactory to Agents and Arranger.
(iv) RELATED AGREEMENTS. Each of the Related Agreements shall be
satisfactory in form and substance to Agents and Arranger. Agents shall
have received a fully executed or conformed copy of each Related Agreement
and any documents executed in connection therewith, and each Related
Agreement shall be in full force and effect and no provision thereof shall
have been modified or waived in any respect determined by Agents to be
material, in each case without the consent of Agents and Arranger. Any
existing stockholders or similar agreements shall have been terminated.
(v) STOCK PURCHASE AND RECAPITALIZATION AGREEMENT. The Stock
Purchase and Recapitalization Agreement shall be in full force and effect
and shall not have been modified or waived in any material respect without
the consent of Agents and Arranger. All conditions to the Recapitalization
Transactions shall have been satisfied in all material respects or the
fulfillment of any such conditions shall have been waived with the consent
of Agents and Arranger.
D. DEBT AND EQUITY CAPITALIZATION OF COMPANY.
(i) COMMON STOCK. On or prior to the Closing Date, Company shall
have authorized such amendments to its Certificate of Incorporation as may
be required to permit the Recapitalization Transactions to occur as
described in the Note Offering Memorandum, including without limitation
eliminating its Class B Common Stock, shall have obtained the requisite
approval of its shareholders thereto, and shall have filed its amended
Certificate of Incorporation with the Secretary of State of the State of
Delaware. The terms of such Company's Common Stock, as so amended on or
prior to the Closing Date, shall be satisfactory to Agents and Arranger and
a copy of its Certificate of Incorporation, as filed with the Secretary of
State of the State of Delaware, shall have been delivered to Agents.
(ii) ISSUANCE OF EQUITY SECURITIES TO NEW EQUITY INVESTORS. On or
prior to the Closing Date, Company shall have issued approximately
$43,500,000 of shares of its Common Stock to the New Equity Investors for
Cash, which shares shall represent 49.7% of Company's outstanding Common
Stock on a fully-diluted basis following the Recapitalization Transactions.
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(iii) REPURCHASE OF COMMON STOCK. On or prior to the Closing Date,
Company shall have repurchased approximately 651,361 shares of Common Stock
and all of its outstanding Class B Common Stock for an aggregate purchase
amount not exceeding $159,400,000. Upon consummation of the
Recapitalization Transactions, the shares of Company's Common Stock owned
by the Xxxxxxx Group shall represent not less than 31.3% of the Company's
outstanding Common Stock, and the shares of Company's Common Stock owned by
all Persons owning shares of Company's common stock immediately prior to
the effectiveness of the Recapitalization Transactions shall represent not
less than 50.3% of the Company's outstanding Common Stock.
(iv) SENIOR SUBORDINATED NOTES. On or prior to the Closing Date,
Company shall have issued not less than $85,000,000 in original principal
amount of Senior Subordinated Notes. The terms and conditions of the
Senior Subordinated Notes shall be substantially as described in the Note
Offering Memorandum and shall be satisfactory to Agents, Arranger and
Lenders, PROVIDED that the Senior Subordinated Notes shall be unsecured and
shall not mature or provide for any scheduled principal payments prior to
the tenth anniversary of the Closing Date; PROVIDED FURTHER that the
negative covenants and default provisions shall be less restrictive than
those contained in this Agreement. Company shall have delivered to
Administrative Agent a fully executed or conformed copy of the Senior
Subordinated Note Indenture.
E. CLOSING DATE MORTGAGES. Administrative Agent shall have
received from 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 4.1E 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 Agents) 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 Agents may reasonably request, in each
case substantially in the form of Exhibit IX attached hereto;
(iii) LANDLORD ESTOPPELS AND CONSENTS. In the case of each
Leasehold Property of Company or such Subsidiary constituting a Closing
Date Mortgaged Property, a Landlord Estoppel and Consent from the landlords
of such real property.
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(iv) MATTERS RELATING TO FLOOD HAZARD PROPERTIES. (a) Evidence,
which may be in the form of a letter from an insurance broker or a
municipal engineer, as to 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; and
F. SECURITY INTERESTS IN PERSONAL AND MIXED PROPERTY. To the extent not
otherwise satisfied pursuant to subsection 4.1E, Agents shall have received
evidence satisfactory to each of them that Company and Subsidiary Guarantors
shall have taken or caused to be taken all such actions, executed and delivered
or caused to be executed and delivered all such agreements, documents and
instruments, and made or caused to be made all such filings and recordings
(other than the filing or recording of items described in clauses (iii), (iv)
and (v) below) that may be necessary or, in the opinion of Agents, 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 Agents 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 Agents) representing all
capital stock of Company's Subsidiaries other than any Immaterial
Subsidiary pledged pursuant to the Company Pledge Agreement and the
Subsidiary Pledge Agreements and (b) all promissory notes or other
instruments (duly endorsed, where appropriate, in a manner satisfactory to
Agents) evidencing any Collateral;
(iii) LIEN SEARCHES AND UCC TERMINATION STATEMENTS. Delivery to
Agents of (a) the results of a recent search, by a Person satisfactory to
Agents, of all effective UCC financing statements and fixture filings and
all judgment and tax lien filings which may have been made with respect to
any personal or mixed property of any Loan Party, together with copies of
all such filings
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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. Delivery to Administrative Agent of
UCC financing statements, duly executed by each applicable Loan Party with
respect to all personal property Collateral of such Loan Party, for filing
in all jurisdictions as may be necessary or, in the opinion of Agents,
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 filed
with the PTO in order to create or perfect Liens in respect of any IP
Collateral;
(vi) OPINIONS OF LOCAL AND FOREIGN COUNSEL. Delivery to Agents of
an opinion of counsel (which counsel shall be reasonably satisfactory to
Agents) under the laws of each jurisdiction in which any Loan Party or any
personal or mixed property Collateral is located, including without
limitation each such jurisdiction in which a Foreign Subsidiary is located
the stock of which will be pledged to secure the Obligations, 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 Agents
may reasonably request, in each case in form and substance reasonably
satisfactory to Agents dated as of the Closing Date and setting forth
substantially the matters in the forms of opinion annexed hereto as EXHIBIT
IX and as to such other matters as Agents may reasonably require.
G. MATTERS RELATING TO EXISTING INDEBTEDNESS OF COMPANY AND ITS
SUBSIDIARIES.
(i) TERMINATION OF EXISTING CREDIT AGREEMENT AND RELATED LIENS.
On the Closing Date, Company 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, and (c) delivered to Agents all documents or instruments
necessary to release all Liens securing Indebtedness or other obligations
of Company and its Subsidiaries thereunder.
(ii) EXISTING INDEBTEDNESS TO REMAIN OUTSTANDING. Agents shall
have received an Officer's Certificate of Company stating that, after
giving effect to the transactions described in this subsection 4.1G, the
Indebtedness of
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Company and its Subsidiaries (other than Indebtedness under the Loan
Documents and the Senior Subordinated Notes) shall consist only of the
Indebtedness described on Schedule 7.1 hereto and Indebtedness permitted
pursuant to subsection 7.1(iv) and (vii). Company shall be in compliance
with its obligations under such existing Indebtedness and Company shall
have delivered to Agents a fully-executed or conformed copy of each of the
agreements or documents setting forth the terms and conditions of such
existing Indebtedness. The terms and conditions of all such Indebtedness
shall be in form and in substance satisfactory to Arrangers and Agents.
H. EVIDENCE OF INSURANCE. Administrative Agent shall have received a
certificate from Company's insurance broker or other evidence satisfactory to it
that all insurance required to be maintained pursuant to subsection 6.4 is in
full force and effect 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.
I. OPINIONS OF COUNSEL TO LOAN PARTIES. Lenders and their respective
counsel shall have received originally executed copies of one or more favorable
written opinions of Xxxxxxxx & Xxxxxxxx, counsel for Loan Parties, in form and
substance reasonably satisfactory to Agents and their 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 Agents
acting on behalf of Lenders may reasonably request.
J. OPINIONS OF SYNDICATION AGENT'S COUNSEL. Lenders shall have received
originally executed copies of one or more favorable written opinions of
O'Melveny & Xxxxx LLP, counsel to Syndication Agent, dated as of the Closing
Date, substantially in the form of EXHIBIT X annexed hereto and as to such other
matters as Syndication Agent acting on behalf of Lenders may reasonably request.
K. FEES. Company shall have paid to Agents and Arranger the fees payable
on the Closing Date with respect to the financings contemplated by this
Agreement.
L. REPRESENTATIONS AND WARRANTIES; PERFORMANCE OF AGREEMENTS. Company
shall have delivered to Agents an Officer's Certificate, in form and substance
satisfactory to Agents, 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
Company shall have performed in all material respects all agreements and
satisfied all conditions which this Agreement provides shall be performed or
satisfied by it on or before the Closing Date except as otherwise disclosed to
and agreed to in writing by Agents and Requisite Lenders.
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M. NECESSARY GOVERNMENTAL AUTHORIZATIONS AND CONSENTS; EXPIRATION OF
WAITING PERIODS, ETC. Company shall have obtained all Governmental
Authorizations and all consents of other Persons, in each case that are
necessary or advisable in connection with the Recapitalization Transactions 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. 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.
N. OPINIONS OF COUNSEL UNDER RELATED AGREEMENTS. Agents shall have
received copies of each of the opinions of counsel delivered on behalf of or to
any Loan Party, under the Related Agreements, together with a letter from each
such counsel authorizing Lenders to rely on such opinion to the same extent as
though it were addressed to Lenders.
O. FINANCIAL STATEMENTS; PRO FORMA CONSOLIDATED BALANCE SHEET. On or
before the Closing Date, Lenders shall have received from Company (i) audited
financial statements of Company and its Subsidiaries for Fiscal Years 1995 and
1996, consisting of balance sheets and the related consolidated statements of
income, stockholders' equity and cash flows for such Fiscal Years, (ii)
unaudited financial statements of Company and its Subsidiaries as at April 30,
1997 consisting of a balance sheet and the related consolidated statement of
income for the one-month period ending on such date, all in reasonable detail
and certified by the chief financial officer of Company that they fairly present
the financial condition of Company and its Subsidiaries as at the date indicated
and the results of their operations for the period indicated, subject to changes
resulting from audit and normal year-end adjustments, (iii) unaudited financial
statements of Company and its Subsidiaries as at March 31, 1997, consisting of a
balance sheet and the related consolidated statement of income, stockholders'
equity and cash flows for the six-month period ending on such date, all in
reasonable detail and certified by the chief financial officer of Company that
they fairly present the financial condition of Company and its Subsidiaries as
at the dates indicated and the results of their operations and their cash flows
for the periods indicated, subject to changes resulting from audit and normal
year-end adjustments, and (iv) pro forma consolidated balance sheet of Company
and its Subsidiaries as at March 31, 1997, prepared in accordance with GAAP and
giving effect to the consummation of the Recapitalization Transactions, the
related financings and the other transactions contemplated by the Loan Documents
and the Related Agreements, which pro forma financial statements shall be in
form and substance satisfactory to Lenders.
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P. SOLVENCY ASSURANCES. On the Closing Date, Agents, Arranger, and
Lenders shall have received a Financial Condition Certificate dated the Closing
Date, substantially in the form of EXHIBIT XXIII annexed hereto and with
appropriate attachments, certifying that, after giving effect to the
consummation of the Recapitalization Transactions, the related financings and
the other transactions contemplated by the Loan Documents, Company will be
Solvent.
Q. LETTER TO AUDITOR. Agents shall have received an executed copy of a
letter to be delivered to Ernst & Young LLP with respect to Lenders' reliance on
Company's audited consolidated financial statements for the Fiscal Year ended
September 30, 1996.
R. 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 each Agent,
acting on behalf of Lenders, and its counsel shall be satisfactory in form and
substance to Agents and such counsel, and Agents and such counsel shall have
received all such counterpart originals or certified copies of such documents as
Agents may reasonably request.
S. LENDER APPROVAL. Each Lender hereby agrees that by its execution and
delivery of its signature page hereto and by the funding of its Loans to be made
on the Closing Date, such Lender approves of and consents to each of the matters
set forth in this subsection 4.1 which must be approved by, or which must be
satisfactory to, all or Requisite Lenders; PROVIDED that in the case of any
agreement or document which must be approved by, or which must be satisfactory
to, all or Requisite Lenders, Agent or Company shall have delivered a copy of
such agreement or document in substantially the form in which executed or
delivered to such Lender on or prior to the Closing Date.
4.2 CONDITIONS TO ALL LOANS.
The obligations of Lenders to make Loans on each Funding Date are
subject to the following further conditions precedent:
A. Administrative Agent shall have received before that Funding Date, in
accordance with the provisions of subsection 2.1B, an originally executed Notice
of Borrowing, in each case signed by the chief executive officer, the chief
financial officer or the treasurer of Company or by any executive officer of
Company designated by any of the above-described officers on behalf of Company
in a writing delivered to Administrative Agent.
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B. As of that Funding Date:
(i) The representations and warranties contained herein and in the
other Loan Documents shall be true, correct and complete in all material
respects on and as of that Funding Date to the same extent as though made
on and as of that date, except to the extent such representations and
warranties specifically relate to an earlier date, in which case such
representations and warranties shall have been true, correct and complete
in all material respects on and as of such earlier date;
(ii) No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by such Notice of
Borrowing that would constitute an Event of Default or a Potential Event of
Default;
(iii) Each Loan Party shall have performed in all material respects
all agreements and satisfied all conditions which this Agreement provides
shall be performed or satisfied by it on or before that Funding Date;
(iv) No order, judgment or decree of any court, arbitrator or
governmental authority shall purport to enjoin or restrain any Lender from
making the Loans to be made by it on that Funding Date;
(v) The making of the Loans requested on such Funding Date shall
not violate any law including Regulation G, Regulation T, Regulation U or
Regulation X of the Board of Governors of the Federal Reserve System or any
other comparable or similar law of any Governmental Authority applicable to
the Loans; and
(vi) There shall not be pending or, to the knowledge of Company,
threatened, any action, suit, proceeding, governmental investigation or
arbitration against or affecting Company or any of its Subsidiaries or any
property of Company or any of its Subsidiaries that has not been disclosed
by Company in writing pursuant to subsection 5.6 or 6.1(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 opinion of Agents or of Requisite Lenders, would be expected
to have a Material Adverse Effect.
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:
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A. On or before the date of issuance of the initial Letter of Credit
pursuant to this Agreement, the initial Loans shall have been made.
B. On or before the date of issuance of such Letter of Credit,
Administrative Agent shall have received, in accordance with the provisions of
subsection 3.1B(i), an originally executed Notice of Issuance of Letter of
Credit, in each case signed by the chief executive officer, the chief financial
officer or the treasurer of Company or by any executive officer of Company
designated by any of the above-described officers on behalf of Company in a
writing delivered to Administrative Agent, together with all other information
specified in subsection 3.1B(i) and such other documents or 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.
SECTION 5. COMPANY'S REPRESENTATIONS AND WARRANTIES
In order to induce Lenders and the Agents 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, Company
represents and warrants to each Lender and the Agents, 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 duly
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 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 could not reasonably be expected to have a Material Adverse Effect.
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C. CONDUCT OF BUSINESS. Company and its Subsidiaries are engaged only in
the businesses permitted to be engaged in pursuant to subsection 7.14.
D. SUBSIDIARIES. All of the Subsidiaries of Company are identified in
SCHEDULE 5.1 annexed hereto, as said SCHEDULE 5.1 may be supplemented from time
to time pursuant to the provisions of subsection 6.1(xiv). The capital stock of
each of the Subsidiaries of Company identified in SCHEDULE 5.1 annexed hereto
(as so supplemented) is duly authorized, validly issued, fully paid and
nonassessable and none of such capital stock constitutes Margin Stock. Each of
the Subsidiaries of Company identified in SCHEDULE 5.1 annexed hereto (as so
supplemented) is a corporation duly organized, validly existing and in good
standing under the laws of its respective jurisdiction of incorporation set
forth therein, 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 could not reasonably be expected to have a Material Adverse
Effect. SCHEDULE 5.1 annexed hereto (as so supplemented) correctly sets forth
the ownership interest of Company and each of its Subsidiaries in each of the
Subsidiaries of Company identified therein.
5.2 AUTHORIZATION OF BORROWING, ETC.
A. AUTHORIZATION OF BORROWING. The execution, delivery and performance
of the Loan Documents 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 consummation of the transactions contemplated by
the Loan Documents do not and will not (i) violate any provision of any law or
any governmental rule or regulation applicable to Company or any of its
Subsidiaries, the Certificate or Articles of Incorporation or Bylaws of Company
or any of its Subsidiaries or any order, judgment or decree of any court or
other agency of government binding on Company or any of its Subsidiaries, (ii)
conflict with, result in a breach of or constitute (with due notice or lapse of
time or both) a default under any Material Contract of Company 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 Company or any of its Subsidiaries
(other than any Liens created under any of the Loan Documents in favor of
Administrative Agent on behalf of Lenders), or (iv) require any approval of
stockholders or any approval or consent of any Person under any Material
Contract of Company or any of its Subsidiaries, except for such approvals or
consents which will be obtained on or before the Closing Date.
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C. GOVERNMENTAL CONSENTS. The execution, delivery and performance by
Loan Parties of the Loan Documents and the consummation of the transactions
contemplated by the Loan Documents do not and will not require any registration
with, consent or approval of, or notice to, or other action to, with or by, any
federal, state or other governmental authority or regulatory body except for
filings and recordings required in connection with the perfection of the
security interests granted pursuant to the Loan Documents.
D. BINDING OBLIGATION. Each of the Loan Documents 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.
E. VALID ISSUANCE OF COMMON STOCK AND SENIOR SUBORDINATED NOTES.
(i) COMMON STOCK. The Common Stock issued to the New Equity
Investors in the Recapitalization Transactions is, or when issued and
delivered will be, duly and validly issued, fully paid and nonassessable.
No stockholder of Company has any preemptive rights to subscribe for any
additional equity Securities of Company except pursuant to the Related
Agreements. The issuance and sale of Company's Common Stock in the
Recapitalization Transactions, 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 . Company has the corporate power
and authority to issue the Senior Subordinated Notes. The Senior
Subordinated 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 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 Indebtedness" included in such provisions. Senior Subordinated
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
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sheets of Company and its Subsidiaries as at September 30, 1996 and September
30, 1995 and the related consolidated statements of income, stockholders' equity
and cash flows of Company and its Subsidiaries for the Fiscal Years then ended,
(ii) the unaudited consolidated balance sheets of Company and its Subsidiaries
as at March 31, 1997 and the related unaudited consolidated statements of
income, stockholders' equity and cash flows of Company and its Subsidiaries for
the six months then ended and (iii) the unaudited consolidated balance sheet of
Company and its Subsidiaries as at April 30, 1997 and the related unaudited
consolidated statement of income of Company and its Subsidiaries for the one
month then ended. All such statements in (i) and (ii) were prepared in
conformity with GAAP and all such statements 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
normal year-end adjustments. Company does not (and will not following the
funding of the initial Loans) have any Contingent Obligation, contingent
liability or liability for taxes, long-term lease or unusual forward or
long-term commitment that is not reflected in the foregoing financial statements
or the notes thereto or, if not so reflected, is material in relation to the
business, operations or condition (financial or otherwise) of Company or any of
its Subsidiaries.
5.4 NO MATERIAL ADVERSE CHANGE; NO RESTRICTED JUNIOR PAYMENTS.
Since September 30, 1996, no event or change has occurred that has
caused or evidences, either in any case or in the aggregate, a Material Adverse
Effect. Since September 30, 1996, neither Company nor any of its Subsidiaries
has directly or indirectly declared, ordered, paid or made, or set apart any sum
or property for, any Restricted Junior Payment or agreed to do so except as
permitted by subsection 7.5, in the ordinary course of business consistent with
past practices or as described in the Note Offering Memorandum.
5.5 TITLE TO PROPERTIES; LIENS; REAL PROPERTY.
A. TITLE TO PROPERTIES; LIENS. Company and its Subsidiaries have (i)
good, sufficient and legal title to (in the case of fee interests in real
property), (ii) valid leasehold interests in (in the case of leasehold interests
in real or personal property), or (iii) good title to (in the case of all other
personal property), all of their respective properties and assets reflected in
the financial statements referred to in subsection 5.3 or in the most recent
financial statements delivered pursuant to subsection 6.1, in each case except
for assets disposed of since the date of such financial statements in the
ordinary course of business or as otherwise permitted under subsection 7.7.
Except as permitted by this Agreement, all such properties and assets are free
and clear of Liens.
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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 owned by
Company or any Subsidiary and (ii) all leases, subleases or assignments of
leases (together with all amendments, modifications, supplements, renewals or
extensions of any thereof) affecting each Real Property Asset of any Loan Party,
regardless of whether such Loan Party is the landlord or tenant (whether
directly or as an assignee or successor in interest) under such lease, sublease
or assignment. Except as specified in SCHEDULE 5.5 annexed hereto, each
agreement listed in clause (ii) of the immediately preceding sentence is in full
force and effect and Company does not have knowledge of any material default
that has occurred and is continuing thereunder, and each such agreement
constitutes the legally valid and binding obligation of each applicable Loan
Party, enforceable against such Loan Party in accordance with its terms, except
as enforcement may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles.
5.6 LITIGATION; ADVERSE FACTS.
There are no actions, suits, proceedings, arbitrations or governmental
investigations (whether or not purportedly on behalf of Company or any of its
Subsidiaries) at law or in equity, or before or by any federal, state, municipal
or other governmental department, commission, board, bureau, agency or
instrumentality, domestic or foreign (including any Environmental Claims) that
are pending or, to the knowledge of Company, threatened against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries and that, individually or in the aggregate, could reasonably be
expected to result in a Material Adverse Effect. Neither Company nor any of its
Subsidiaries (i) is in violation of any applicable laws (including Environmental
Laws) that, individually or in the aggregate, could 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, could reasonably be expected to
result in a Material Adverse Effect.
5.7 PAYMENT OF TAXES.
Except to the extent permitted by subsection 6.3, all tax returns that
could reasonably be expected to have a Material Adverse Effect on Company or its
Subsidiaries if not filed, and reports of Company and its Subsidiaries required
to be filed by any of them, have been timely filed, and all taxes shown on such
tax returns to be due and payable and all assessments, fees and other
governmental charges upon Company and its Subsidiaries and upon their respective
properties, assets, income, businesses and franchises which are due and payable
have been paid when due and payable. Company knows of no proposed tax
assessment against Company or any of
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its Subsidiaries which is not in the ordinary course of business or being
actively contested by Company 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 Company nor any of its Subsidiaries is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any of its securities, indentures, mortgages, deeds of
trust, contracts, undertakings, agreements or other instruments, 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 Company nor any of its Subsidiaries is a party to or is
otherwise subject to any agreements or instruments or any charter or other
internal restrictions which, individually or in the aggregate, could reasonably
be expected to result in a Material Adverse Effect.
5.9 GOVERNMENTAL REGULATION.
Neither Company nor any of its Subsidiaries is subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act or the Investment Company Act of 1940 or under any other
federal or state statute or regulation or under any other comparable or similar
laws of any governmental authority which may limit its ability to incur
Indebtedness or which may otherwise render all or any portion of the Obligations
unenforceable.
5.10 SECURITIES ACTIVITIES.
A. Neither Company nor any of its Subsidiaries is engaged
principally, or as one of its important activities, in the business of extending
credit for the purpose of purchasing or carrying any Margin Stock.
B. Following application of the proceeds of each Loan, not more
than 25% of the value of the assets (either of Company only or of Company and
its Subsidiaries on a consolidated basis) subject to the provisions of
subsection 7.2 or 7.7 or subject to any restriction contained in any agreement
or instrument, between Company and any Lender or any Affiliate of any Lender,
relating to Indebtedness and within the scope of subsection 8.2, will be Margin
Stock.
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5.11 EMPLOYEE BENEFIT PLANS.
A. Company, each of its Subsidiaries and each of their respective
ERISA Affiliates are in substantial compliance 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 material obligations under each Employee Benefit Plan. To the best
knowledge of Company, 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
that could be reasonably expected to subject Company, any of its Subsidiaries or
their respective ERISA Affiliates to a liability in excess of $500,000.
C. Except as disclosed on SCHEDULE 5.11, and except to the extent
required under Section 4980B of the Internal Revenue Code or Part 6 of Subtitle
B of Title I of ERISA, no "employee welfare benefit plan" (within the meaning of
Section 3(1) of ERISA) of Company provides benefits to any retired or former
employee of Company, any of its Subsidiaries or any of their respective ERISA
Affiliates in excess of $500,000.
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 (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), does not exceed $500,000.
E. As of the most recent valuation date for each Multiemployer
Plan for which the actuarial report is available to Company, the potential
liability of Company, its Subsidiaries and their respective ERISA Affiliates for
a complete withdrawal from such Multiemployer Plan (within the meaning of
Section 4203 of ERISA), when aggregated with such potential liability for a
complete withdrawal from all Multiemployer Plans, based on information available
pursuant to Section 4221(e) of ERISA, does not exceed $500,000 in the aggregate
for all such benefits.
5.12 CERTAIN FEES.
Other than as disclosed in the Note Offering Memorandum, 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 Company hereby indemnifies
Lenders against, and agrees that it will hold Lenders harmless from, any claim,
demand or liability for any such broker's or finder's fees alleged to have been
incurred in connection herewith or therewith and any expenses (including
reasonable fees, expenses and disbursements of counsel) arising in connection
with any such claim, demand or liability.
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5.13 ENVIRONMENTAL PROTECTION.
Except as set forth in SCHEDULE 5.13 annexed hereto:
(i) neither Company nor any of its Subsidiaries nor any of their
respective Facilities or operations are subject to any outstanding written
order, consent decree or settlement agreement with any Person relating to
(a) any Environmental Law, (b) any Environmental Claim, or (c) any
Hazardous Materials Activity;
(ii) neither Company nor any of its Subsidiaries has received any
letter or request for information under Section 104 of the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section
9604) or any comparable state law with respect to a matter which could
reasonably be expected to have a Material Adverse Effect on Company;
(iii) there are and, to Company's knowledge, have been no
conditions, occurrences, or Hazardous Materials Activities which could
reasonably be expected to form the basis of an Environmental Claim against
Company or any of its Subsidiaries reasonably likely to have a Material
Adverse Effect;
(iv) neither Company nor any of its Subsidiaries nor, to Company's
knowledge, any predecessor of Company or any of its Subsidiaries has filed
any notice under any Environmental Law indicating past or present treatment
of Hazardous Materials at any Facility, and none of Company' or any of its
Subsidiaries' operations involves the generation, transportation,
treatment, storage or disposal of hazardous waste, as defined under 40
C.F.R. Parts 260-270 or any state equivalent; and
(v) compliance with all Environmental Laws will not, individually
or in the aggregate, have a reasonable likelihood of giving rise to a
Material Adverse Effect.
Notwithstanding anything in this subsection 5.13 to the contrary, no
event or condition has occurred or is occurring with respect to Company or any
of its Subsidiaries relating to any Environmental Law, any Release of Hazardous
Materials, or any Hazardous Materials Activity, including any matter disclosed
on SCHEDULE 5.13 annexed hereto, which individually or in the aggregate has had
or could reasonably be expected to have a Material Adverse Effect.
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5.14 EMPLOYEE MATTERS.
There is no strike or work stoppage in existence or, to Company's
knowledge, threatened involving Company 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 4.1E, 4.1F,
6.8 and 6.9 and (ii) the delivery to Administrative Agent of any Pledged
Collateral not delivered to Administrative Agent at the time of execution and
delivery of the applicable Collateral Document (all of which Pledged Collateral
has been so delivered) are effective to create in favor of Administrative Agent
for the benefit of Lenders, as security for the respective Secured Obligations
(as defined in the applicable Collateral Document in respect of any Collateral),
a valid and perfected First Priority Lien on all of the Collateral, and all
filings and other actions necessary or desirable to perfect and maintain the
perfection and First Priority status of such Liens have been duly made or taken
and remain in full force and effect, other than the filing of any UCC financing
statements delivered to Administrative Agent for filing (but not yet filed) and
the periodic filing of UCC continuation statements in respect of UCC financing
statements filed by or on behalf of Administrative Agent.
B. GOVERNMENTAL AUTHORIZATIONS. No authorization, approval or other
action by, and no notice to or filing with, any governmental authority or
regulatory body is required for either (i) the pledge or grant by any Loan Party
of the Liens purported to be created in favor of Administrative Agent pursuant
to any of the Collateral Documents or (ii) the exercise by Administrative Agent
of any rights or remedies in respect of any Collateral (whether specifically
granted or created pursuant to any of the Collateral Documents or created or
provided for by applicable law), except for filings or recordings contemplated
by subsection 5.16A and except as may be required, in connection with the
disposition of any Pledged Collateral, by laws generally affecting the offering
and sale of securities.
C. ABSENCE OF THIRD-PARTY FILINGS. Except such as may have been filed in
favor of Administrative 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 and (ii) no effective filing covering all or any part of the IP
Collateral is on file in the PTO.
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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.
5.17 DISCLOSURE.
No information contained in the Loan Documents or in any other
document, certificate or written statement furnished to Lenders by or on behalf
of Company or any of its Subsidiaries for use in connection with the
transactions contemplated by this Agreement is inaccurate, incomplete, untrue or
misleading in any material respect. Any projections and pro forma financial
information contained in such materials are based upon good faith estimates and
assumptions believed by Company to be reasonable at the time made, it being
recognized by Lenders that such projections as to future events are not to be
viewed as facts and that actual results during the period or periods covered by
any such projections may differ from the projected results. There are no facts
known (or which should upon the reasonable exercise of diligence be known) to
Company (other than matters of a general economic nature) that, individually or
in the aggregate, 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.
SECTION 6. COMPANY'S AFFIRMATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 6.
6.1 FINANCIAL STATEMENTS AND OTHER REPORTS.
Company will maintain, and cause each of its Subsidiaries to maintain,
a system of accounting established and administered in accordance with sound
business practices to permit preparation of financial statements in conformity
with GAAP. Company will deliver to Agents and Lenders:
(i) MONTHLY FINANCIALS: as soon as available and in any event
within 30 days after the end of each month ending after the Closing Date,
the consolidated statement of income of Company and its Subsidiaries as at
the end of 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, to the extent prepared on a monthly basis and in
the form
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prepared for internal reporting purposes, all in reasonable detail and
certified by the chief financial officer, chief accounting officer or
controller of Company that they fairly present the financial condition of
Company and its Subsidiaries as at the dates indicated and the results of
their operations for the periods indicated, subject to changes resulting
from audit and normal year-end adjustments;
(ii) QUARTERLY FINANCIALS: as soon as available and in any event
within 45 days after the end of each Fiscal Quarter, (a) the consolidated
balance sheet of Company and its Subsidiaries as at the end of such Fiscal
Quarter and the related consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal
Quarter and for the period from the beginning of the then current Fiscal
Year to the end of such Fiscal Quarter, setting forth in each case in
comparative form the corresponding figures for the corresponding periods of
the previous Fiscal Year and, if available, the corresponding figures from
the Financial Plan for the current Fiscal Year, (b) sales, gross profit,
operating income and EBITDA figures on a business unit basis for such
Fiscal Quarter and for the period from the beginning of the then current
Fiscal Year to the end of such Fiscal Quarter and prepared on a basis
consistent with the financial statements delivered pursuant to subsection
4.1O, all in reasonable detail and certified by the chief financial officer
of Company that they fairly present the financial condition of Company and
its Subsidiaries as at the dates indicated and the results of their
operations and their cash flows for the periods indicated, subject to
changes resulting from audit and normal year-end adjustments, and (c) a
narrative report describing the operations of Company 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 that delivery of the
financial statements and narrative required pursuant to the foregoing
clause (a) and (c) may be satisfied by delivery of Company's Quarterly
Report on Form 10-Q as filed with the Securities and Exchange Commission;
(iii) YEAR-END FINANCIALS: as soon as available and in any event
within 90 days after the end of each Fiscal Year, (a) the consolidated
balance sheet of Company and its Subsidiaries as at the end of such Fiscal
Year and the related consolidated statements of income, stockholders'
equity and cash flows of Company and its Subsidiaries for such Fiscal Year,
setting forth in each case in comparative form the corresponding figures
for the previous Fiscal Year and, if available, the corresponding figures
from the Financial Plan for the Fiscal Year covered by such financial
statements, (b) sales, gross profit, operating income and EBITDA figures on
a business unit basis for such Fiscal Year and for the period from the
beginning of the then current Fiscal Year to the end of such Fiscal Year
and prepared on a basis consistent with the financial statements delivered
pursuant to subsection 4.1O, all in reasonable
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detail and certified by the chief financial officer, chief accounting
officer or controller of Company that they fairly present the financial
condition of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated,
(c) a narrative report describing the operations of Company and its
Subsidiaries in the form prepared for presentation to senior management for
such Fiscal Year, and (d) in the case of such consolidated financial
statements, (1) a report thereon of Ernst & Young LLP, or other independent
certified public accountants of recognized national standing selected by
Company and satisfactory to Agents, which report shall be unqualified as to
scope of audit, shall express no doubts about the ability of Company and
its Subsidiaries to continue as a going concern, and shall state that such
consolidated financial statements fairly present the consolidated financial
position of Company and its Subsidiaries as at the dates indicated and the
results of their operations and their cash flows for the periods indicated
in conformity with GAAP applied on a basis consistent with prior years
(except as otherwise disclosed in such financial statements) and that the
examination by such accountants in connection with such consolidated
financial statements has been made in accordance with generally accepted
auditing standards, and (2) a copy of an Auditor's Letter substantially in
the form of EXHIBIT XXIV from Ernst & Young LLP or other independent
certified public accountants to Company with respect to such audited
consolidated financial statements; PROVIDED that delivery of the financial
statements and narrative required pursuant to the foregoing clause (a) and
(c) may be satisfied by delivery of Company's Annual Report on Form 10-K as
filed with the Securities and Exchange Commission;
(iv) OFFICER'S AND COMPLIANCE CERTIFICATES: together with each
delivery of financial statements of Company and its Subsidiaries pursuant
to subdivisions (i), (ii) and (iii) above, (a) an Officer's Certificate of
Company stating that the signers do not have knowledge of the existence as
at the date of such Officer's Certificate, of any condition or event that
constitutes an Event of Default or Potential Event of Default, or, if any
such condition or event existed or exists, specifying the nature and period
of existence thereof and what action Company has taken, is taking and
proposes to take with respect thereto; and (b) a Compliance Certificate
demonstrating in reasonable detail compliance during and at the end of the
applicable accounting periods with the restrictions contained in Section 7,
in each case to the extent compliance with such restrictions is required to
be tested at the end of the applicable accounting period;
(v) CERTAIN ACCOUNTING CHANGES: if, as a result of any change in
accounting principles and policies from those used in the preparation of
the audited financial statements referred to in subsection 5.3, the
consolidated financial statements of Company and its Subsidiaries delivered
pursuant to subdivisions (i), (ii), (iii) or (xiii) of this subsection 6.1
will differ in any
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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 or, if as a result of any
change in Company's Fiscal Year-end, the numbers set forth in the financial
covenants or other covenants set forth herein do not measure Company's
compliance with such covenants in the same manner as before such change,
then (a) Company shall promptly notify Administrative Agent of any such
change and Company and Lenders will negotiate in good faith to amend
Sections 1, 6 and 7 hereof so that the criteria for evaluating Company's
financial condition and performance shall be the same as they were prior to
such changes, and (b) together with each delivery of financial statements
pursuant to subdivision (i), (ii), (iii) or (xiii) of this subsection 6.1
following such change until such time as Company and Lenders have agreed on
such amendments to Sections 1, 6 and 7, a written statement of the chief
accounting officer or chief financial officer of Company 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, or
compliance with such covenants had been measured, without giving effect to
such change;
(vi) ACCOUNTANTS' CERTIFICATION: together with each delivery of
consolidated financial statements of Company and its Subsidiaries pursuant
to subdivision (iii) above, a written statement by the independent
certified public accountants giving the report thereon (a) stating that
their audit examination has included a review of the terms of Section 7 of
this Agreement 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 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 any comment
letter submitted by such accountants to management in connection with their
annual audit;
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(viii) SEC FILINGS AND PRESS RELEASES: promptly upon their becoming
available, copies of (a) all financial statements, reports, notices and
proxy statements sent or made available generally by Company to its
security holders or by any Subsidiary of Company to its security holders
other than Company or another Subsidiary of Company, and (b) all regular
and periodic reports and all registration statements (other than on Form
S-8 or a similar form) and prospectuses, if any, filed by Company or any of
its Subsidiaries with any securities exchange or with the Securities and
Exchange Commission or any governmental or regulatory authority;
(ix) EVENTS OF DEFAULT, ETC.: promptly upon any officer of Company
obtaining knowledge (a) of any condition or event that constitutes an Event
of Default or Potential Event of Default, or becoming aware that any Lender
has given any notice (other than to Administrative Agent) or taken any
other action with respect to a claimed Event of Default or Potential Event
of Default, (b) that any Person has given any notice to Company or any of
its Subsidiaries or taken any other action with respect to a claimed
default or event or condition of the type referred to in subsection 8.2,
(c) of any condition or event that would be required to be disclosed in a
current report filed by Company with the Securities and Exchange Commission
on Form 8-K (Items 1, 2, 4, 5 and 6 of such Form as in effect on the date
hereof) if Company were required to file such reports under the Exchange
Act, or (d) of the occurrence of any event or change that has caused or
evidences, either in any case or in the aggregate, a Material Adverse
Effect, an Officer's Certificate specifying the nature and period of
existence of such condition, event or change, or specifying the notice
given or action taken by any such Person and the nature of such claimed
Event of Default, Potential Event of Default, default, event or condition,
and what action Company has taken, is taking and proposes to take with
respect thereto;
(x) LITIGATION OR OTHER PROCEEDINGS: promptly upon any officer of
Company obtaining knowledge of (X) the institution of, or written threat
of, any action, suit, proceeding (whether administrative, judicial or
otherwise), governmental investigation or arbitration against or affecting
Company or any of its Subsidiaries or any property of Company or any of its
Subsidiaries (collectively, "PROCEEDINGS") not previously disclosed in
writing by Company to Lenders or (Y) any material development in any
Proceeding that, in any case:
(1) if adversely determined, could reasonably be expected
to give 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;
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written notice thereof;
(xi) ERISA EVENTS: promptly upon becoming aware of the occurrence
of or forthcoming occurrence of any ERISA Event that individually or in the
aggregate could reasonably be expected to result in a material liability to
Company, a written notice specifying the nature thereof, what action
Company, any of its Subsidiaries or any of their respective ERISA
Affiliates has taken, is taking or proposes to take with respect thereto
and, when known, any action taken or threatened in writing by the Internal
Revenue Service, the Department of Labor or the PBGC with respect thereto;
(xii) FISCAL YEAR: promptly upon any decision by Company to change
Company's Fiscal Year, written notice of such new Fiscal Year-end;
(xiii) FINANCIAL PLANS: at such time as prepared by Company, a
consolidated plan and financial forecast for such Fiscal Year or for at
least the six month period succeeding the delivery of such plan and
financial forecast (the "FINANCIAL PLAN") as customarily prepared by
Company, including without limitation (a) forecasted balance sheets and
forecasted statements of income and cash flows of Company and its
Subsidiaries on a consolidated basis, together with an explanation of the
assumptions on which such forecasts are based and (b) forecasted statements
of income and cash flows of Company and its Subsidiaries on a consolidated
basis for each Fiscal Period of such Fiscal Year, together with an
explanation of the assumptions on which such forecasts are based; PROVIDED
that at all times Administrative Agent and Lenders shall have a Financial
Plan effective for at least the next succeeding month;
(xiv) NEW SUBSIDIARIES: promptly upon any Person becoming a
Subsidiary of Company, a written notice setting forth with respect to such
Person (a) the date on which such Person became a Subsidiary of Company and
(b) all of the data required to be set forth in SCHEDULE 5.1 annexed hereto
with respect to all Subsidiaries of Company (it being understood that such
written notice shall be deemed to supplement SCHEDULE 5.1 annexed hereto
for all purposes of this Agreement);
(xv) MARGIN DETERMINATION CERTIFICATE: concurrently with the
delivery of the financial statements required under subsections 6.1(ii) and
6.1(iii), Company shall deliver a Margin Determination Certificate;
(xvi) INSURANCE: as soon as practicable and in any event by the
last day of each Fiscal Year, an Officer's Certificate or other report or
certificates of insurance outlining all material insurance coverage
maintained as of the date of such report or certificate by Company and its
Subsidiaries; and
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(xvii) OTHER INFORMATION: with reasonable promptness, such other
information and data with respect to Company or any of its Subsidiaries as
from time to time may be reasonably requested by any Lender.
6.2 CORPORATE EXISTENCE, ETC.
Except as permitted under subsection 7.7, Company will, and will cause
each of its Subsidiaries to, at all times preserve and keep in full force and
effect its corporate existence and all rights and franchises material to its
business; PROVIDED, HOWEVER that neither Company nor any of its Subsidiaries
shall be required to preserve any such right or franchise if the Board of
Directors of Company or such Subsidiary shall determine that the preservation
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
6.3 PAYMENT OF TAXES AND CLAIMS; TAX CONSOLIDATION.
A. Company will, and will cause each of its Subsidiaries to, pay all
taxes that could reasonably be expected to have a Material Adverse Effect on
Company or its Subsidiaries if not paid, 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, 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. Company will not, nor will it permit any of its Subsidiaries to, file
or consent to the filing of any consolidated income tax return with any Person
(other than Company or any of its Subsidiaries).
6.4 MAINTENANCE OF PROPERTIES; INSURANCE.
A. MAINTENANCE OF PROPERTIES. Company will, and will cause each of its
Subsidiaries to, maintain or cause to be maintained in good repair, working
order and condition, ordinary wear and tear excepted, all material properties
used in the business of Company and its Subsidiaries (including all Intellectual
Property) and from time to time will make or cause to be made all appropriate
repairs, renewals
106
and replacements thereof; PROVIDED, HOWEVER that neither Company nor any of its
Subsidiaries shall be required to maintain any such property if the Board of
Directors of Company or such Subsidiary shall determine that the maintenance
thereof is no longer desirable in the conduct of the business of Company or such
Subsidiary, as the case may be, and that the loss thereof is not disadvantageous
in any material respect to Company, such Subsidiary or Lenders.
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. Each such policy of insurance 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, satisfactory in
form and substance to Agents, that names Administrative Agent for the benefit of
Lenders as the loss payee thereunder for any covered loss in excess of $500,000
and provides for at least 30 days prior written notice to Agents of any
modification or cancellation of such policy.
6.5 INSPECTION RIGHTS; LENDER MEETING.
A. INSPECTION RIGHTS. Company shall, and shall cause each of its
Subsidiaries to, permit any authorized representatives designated by any Lender
to visit and inspect any of the properties of Company or of any of its
Subsidiaries, to inspect, copy and take extracts from its and their financial
and accounting records, and to discuss its and their affairs, finances and
accounts with its and their officers and independent public accountants
(provided that Company may, if it so chooses, be present at or participate in
any such discussion), all upon reasonable notice and at such reasonable times
during normal business hours and as often as may reasonably be requested and for
all such purposes as are reasonably related to this Agreement or the extensions
of credit hereunder.
B. LENDER MEETING. Company will, upon the request of Agents or Requisite
Lenders, participate in a meeting of Agents and Lenders once during each
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Fiscal Year to be held at Company's corporate offices (or at such other location
as may be agreed to by Company and Agents) at such time as may be agreed to by
Company and Agents.
6.6 COMPLIANCE WITH LAWS, ETC.
Company shall comply, and shall cause each of its Subsidiaries to
comply, and shall use its best efforts to cause all other Persons on or
occupying any Facilities to comply, with the requirements of all applicable
laws, rules, regulations and orders of any governmental authority (including all
Environmental Laws), noncompliance with which could 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. Company agrees that Agents
may, if an Event of Default has occurred and is continuing, or if Administrative
Agent has received information indicating a Release, Environmental Claim or
other environmental liability at a Facility having a reasonable possibility of
causing a Material Adverse Effect, and to the extent permitted by any lease or
other third party agreement governing activities at such Facility, (i) retain,
at Company's expense, an independent professional consultant to review any
environmental audits, investigations, analyses and reports relating to Hazardous
Materials prepared by or for Company and (ii) conduct its own investigation of
any such Facility; PROVIDED that, in the case of any Facility no longer owned,
leased, operated or used by Company or any of its Subsidiaries, Company shall
only be obligated to use its reasonable efforts to obtain permission for Agents'
professional consultant to conduct an investigation of such Facility. For
purposes of conducting such a review and/or investigation, Company hereby grants
to Agents and their respective agents, employees, consultants and contractors
the right to enter into or onto any Facilities currently owned, leased, operated
or used by Company 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. Any such investigation of any Facility shall be conducted in
compliance with all Environmental Laws and any lease or other third party
document governing activities at such Facility, unless otherwise agreed to by
Company and Agents, 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. Company and Agents hereby acknowledge and agree that any report
of any investigation conducted at the request of Agents pursuant to this
subsection 6.7A will be obtained and shall be used by Agents 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, and any
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other purpose required by law. Agents agree to deliver a copy of any such
report, subject to any contractual obligations restricting or prohibiting such
delivery, to Company with the understanding that Company acknowledges and agrees
that neither of the Agents nor any Lender makes any representation or warranty
with respect to such report, and (z) by delivering such report to Company,
neither of the Agents 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 Agents and Lenders:
(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 under its
control, whether prepared by personnel of Company or any of its
Subsidiaries or by independent consultants, governmental authorities or any
other Persons, with respect to significant environmental matters at any
Facility;
(ii) NOTICE OF CERTAIN RELEASES, REMEDIAL ACTIONS, ETC. As soon as
practicable 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, (b) any remedial action taken by Company or any other
Person in response to (1) any Hazardous Materials Activities the existence
of which has a reasonable possibility of resulting in one or more
Environmental Claims having, individually or in the aggregate, a Material
Adverse Effect, or (2) any Environmental Claims that, individually or in
the aggregate, have a reasonable likelihood of resulting in a Material
Adverse Effect, and (c) Company's discovery of any occurrence or condition
on any real property adjoining or in the vicinity of any Facility that
could cause such Facility or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use thereof
under any Environmental Laws reasonably likely to have a Material Adverse
Effect on Company.
(iii) WRITTEN COMMUNICATIONS REGARDING ENVIRONMENTAL CLAIMS,
RELEASES, ETC. As soon as practicable following the sending or receipt
thereof by Company 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, have a reasonable possibility of giving
rise to a Material Adverse Effect, (b) any Release required to be reported
to any federal, state or local governmental or regulatory agency, and (c)
any request for information from any governmental agency that suggests such
agency is investigating whether Company or any of its Subsidiaries may be
potentially responsible for any Hazardous Materials Activity.
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(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 Company or any of its
Subsidiaries that could reasonably be expected to (1) expose Company 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) impair the ability of Company 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 Company or any of its
Subsidiaries to commence manufacturing or other industrial operations or to
modify current operations in a manner that could reasonably be expected to
subject Company or any of its Subsidiaries to any additional material
obligations or requirements under any Environmental Laws.
(v) OTHER INFORMATION. With reasonable promptness, such other
documents and information as from time to time may be reasonably requested
by Agents in relation to any matters disclosed pursuant to this subsection
6.7.
C. COMPANY'S ACTIONS REGARDING HAZARDOUS MATERIALS ACTIVITIES,
ENVIRONMENTAL CLAIMS AND VIOLATIONS OF ENVIRONMENTAL LAWS.
(i) REMEDIAL ACTIONS RELATING TO HAZARDOUS MATERIALS ACTIVITIES.
Company 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 xxxxx any Hazardous Materials
Activity on, under or about any Facility that puts Company or any
Subsidiary in violation of any Environmental Laws or that presents a
material risk of giving rise to an Environmental Claim against Company or
any Subsidiary. In the event Company or any of its Subsidiaries undertakes
any such action with respect to any Hazardous Materials, Company or such
Subsidiary shall conduct and complete such action in compliance with all
applicable Environmental Laws and in accordance with the policies, orders
and directives of all federal, state and local governmental authorities
except when, and only to the extent that, Company's or such Subsidiary's
liability with respect to such Hazardous Materials Activity is being
contested in good faith by Company or such Subsidiary.
(ii) ACTIONS WITH RESPECT TO ENVIRONMENTAL CLAIMS AND VIOLATIONS OF
ENVIRONMENTAL LAWS. Company 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 Company or its
Subsidiaries and (ii) make an appropriate response to any Environmental
Claim against
110
Company or any of its Subsidiaries and discharge any obligations it may
have to any Person thereunder.
6.8 EXECUTION OF SUBSIDIARY GUARANTY, PERSONAL PROPERTY COLLATERAL
DOCUMENTS BY CERTAIN SUBSIDIARIES, FUTURE SUBSIDIARIES AND COMPANY
PLEDGE AGREEMENTS.
A. EXECUTION OF SUBSIDIARY GUARANTY AND PERSONAL PROPERTY COLLATERAL
DOCUMENTS. In the event that any Person becomes a Subsidiary of Company after
the date hereof, Company will promptly notify Administrative Agent of that fact
and cause such Subsidiary which is a Domestic Subsidiary to execute and deliver
to Administrative Agent a counterpart of the Subsidiary Guaranty, and, as
appropriate, a Subsidiary Pledge Agreement, a Subsidiary Security Agreement,
Additional Mortgages, a Subsidiary Patent Collateral Assignment and Security
Agreement and a Subsidiary 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 4.1E) as may be necessary or, in the opinion of Agents, desirable to
create in favor of Administrative 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.
With respect to any such Domestic Subsidiary, Company shall also deliver to
Administrative Agent a pledge amendment to the Company Pledge Agreement or the
applicable Subsidiary Pledge Agreement, as appropriate, granting to
Administrative Agent on behalf of Lenders a first priority security interest in
100% of the capital stock of such Domestic Subsidiary.
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 or an assistant secretary of such Subsidiary as to (a)
the fact that the attached resolutions of the Board of Directors of such
Subsidiary approving and authorizing the execution, delivery and performance of
such Loan Documents are in full force and effect and have not been modified or
amended and (b) the incumbency and signatures of the officers of such Subsidiary
executing such Loan Documents, and (iv) a favorable opinion of counsel to such
Subsidiary, in form and substance satisfactory to Agents and their respective
counsel, as to (a) the due organization and good standing of such Subsidiary,
(b) the due authorization,
111
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 Agents may reasonably
request, all of the foregoing to be satisfactory in form and substance to Agents
and their respective counsel.
C. FUTURE FOREIGN SUBSIDIARIES. In the event that any Person becomes a
Subsidiary of Company after the date hereof and such Subsidiary is a Foreign
Subsidiary which is not an Immaterial Subsidiary, with respect to any such
Foreign Subsidiary, Company shall deliver to Administrative Agent a pledge
amendment to the Company Pledge Agreement or shall execute a Company Pledge
Agreement under the laws of the jurisdiction of organization or incorporation of
such Foreign Subsidiary, in each case granting to Administrative Agent on behalf
of Lenders a first priority security interest in 65% of the capital stock of
such Foreign Subsidiary, and, in each case, Company shall take, or cause to be
taken, all such other actions as Administrative Agent shall deem necessary or
desirable to perfect such security interest.
D. COMPANY PLEDGE AGREEMENTS. To the extent not delivered to
Administrative Agent on the Closing Date, by June 20, 1997, Administrative Agent
shall have received executed originals of all Company Pledge Agreements, in each
case in form and substance satisfactory to Administrative Agent, with respect to
the pledge of 65% of the capital stock of each Foreign Subsidiary that is a
direct Subsidiary of Company, together with evidence satisfactory to
Administrative Agent that all filings, recordings and other actions that
Administrative Agent deems necessary or advisable to establish, preserve and
protect the Liens granted to Administrative Agent on behalf of Lenders with
respect to such Foreign Subsidiary stock under the Collateral Documents shall
have been made.
6.9 CONFORMING LEASEHOLD INTERESTS; MATTERS RELATING TO ADDITIONAL REAL
PROPERTY COLLATERAL.
A. CONFORMING LEASEHOLD INTERESTS. If Company or any of its Subsidiaries
acquires any Leasehold Property, Company shall, or shall cause such Subsidiary
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) Company 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 Company and its Subsidiaries are unable to obtain such
lessor's or senior lienholder's consent (any such
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non-excluded Real Property Asset described in the foregoing clause (i) or (ii)
being an "ADDITIONAL MORTGAGED PROPERTY"), Company 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"), duly recorded 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 Agents and their
respective counsel, as to the due authorization, execution and delivery by
such Loan Party of such Additional Mortgage and such other matters as
Agents may reasonably request, and (b) if required by Agents, an opinion of
counsel (which counsel shall be reasonably satisfactory to Agents) in the
state in which such Additional Mortgaged Property is located with respect
to the enforceability of the form of Additional Mortgage recorded in such
state and such other matters (including any matters governed by the laws of
such state regarding personal property security interests in respect of any
Collateral) as Agents may reasonably request, in each case in form and
substance reasonably satisfactory to Agents;
(iii) LANDLORD ESTOPPEL AND CONSENT; RECORDED LEASEHOLD INTEREST.
In the case of an Additional Mortgaged Property consisting of a Leasehold
Property, (a) a Landlord Estoppel and Consent and (b) evidence that such
Leasehold Property is a Recorded Leasehold Interest;
(iv) TITLE INSURANCE. (a) If required by Agents with respect to
fee interests in real property owned by Company or any Subsidiary
Guarantor, an ALTA mortgagee title insurance policy or an unconditional
commitment therefor (an "ADDITIONAL MORTGAGE POLICY") issued by a reputable
title company with respect to such Additional Mortgaged Property, in an
amount satisfactory to Agents, insuring fee simple title to, or a valid
leasehold interest in, such Additional Mortgaged Property vested in such
Loan Party and assuring Agents that such Additional Mortgage creates a
valid and enforceable First Priority mortgage Lien on such Additional
Mortgaged Property, subject only to a standard survey exception, which
Additional Mortgage Policy (1) shall include an endorsement for mechanics'
liens, for future advances under this Agreement and for any other matters
reasonably requested by Agents and (2) shall provide for affirmative
insurance and such reinsurance as Agents may reasonably request, all of the
foregoing in form and substance reasonably satisfactory to Agents; and (b)
evidence satisfactory to Agents that such Loan Party has (i) delivered to
such title company all certificates and affidavits required by such title
company in connection with the issuance of the Additional Mortgage
113
Policy and (ii) paid to such title company or to the appropriate
governmental authorities all expenses and premiums of such title company in
connection with the issuance of the Additional Mortgage Policy and all
recording and stamp taxes (including mortgage recording and intangible
taxes) payable in connection with recording the Additional Mortgage in the
appropriate real estate records;
(v) TITLE REPORT. If no Additional Mortgage Policy is required
with respect to such Additional Mortgaged Property, a title report issued
by such title company with respect thereto, dated not more than 30 days
prior to the date such Additional Mortgage is to be recorded and
satisfactory in form and substance to Agents;
(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 letter from an insurance broker or a
municipal engineer, as to (1) whether such Additional Mortgaged Property is
a Flood Hazard Property and (2) if so, whether the community in which such
Flood Hazard Property is located is participating in the National Flood
Insurance Program, (b) if such Additional Mortgaged Property is a Flood
Hazard Property, such Loan Party's written acknowledgement of receipt of
written notification from Administrative Agent (1) that such Additional
Mortgaged Property is a Flood Hazard Property and (2) as to whether the
community in which such Flood Hazard Property is located is participating
in the National Flood Insurance Program, and (c) in the event such
Additional Mortgaged Property is a Flood Hazard Property that is located in
a community that participates in the National Flood Insurance Program,
evidence that Company has obtained flood insurance in respect of such Flood
Hazard Property to the extent required under the applicable regulations of
the Board of Governors of the Federal Reserve System; and
(viii) ENVIRONMENTAL AUDIT. If required by Agents, reports and other
information, in form, scope and substance satisfactory to Agents and
prepared by environmental consultants satisfactory to Agents, concerning
any environmental hazards or liabilities to which Company or any of its
Subsidiaries may be subject with respect to such Additional Mortgaged
Property.
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SECTION 7. COMPANY'S NEGATIVE COVENANTS
Company covenants and agrees that, so long as any of the Commitments
hereunder shall remain in effect and until payment in full of all of the Loans
and other Obligations and the cancellation or expiration of all Letters of
Credit, unless Requisite Lenders shall otherwise give prior written consent,
Company shall perform, and shall cause each of its Subsidiaries to perform, all
covenants in this Section 7.
7.1 INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create, incur, assume or guaranty, or otherwise become
or remain directly or indirectly liable with respect to, any Indebtedness,
except:
(i) Company may become and remain liable with respect to the
Obligations;
(ii) Company 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 Indebtedness in respect of Capital Leases, mortgage financings
or purchase money obligations; PROVIDED that such Capital Leases, mortgage
financings or purchase money obligations are incurred for the purpose of
financing all or any part of the purchase price or cost of construction or
improvements of property used in the business of the Company or its
Subsidiaries, in an aggregate principal amount not to exceed $4,000,000 at
any time outstanding;
(iv) Company may become and remain liable with respect to
Indebtedness to any of its wholly-owned Subsidiaries, and any wholly-owned
Subsidiary of Company may become and remain liable with respect to
Indebtedness to Company or any other wholly-owned Subsidiary of Company;
PROVIDED that (a) all such intercompany Indebtedness shall be evidenced by
promissory notes which promissory notes (other than notes issued and
payable to Foreign Subsidiaries) are pledged to Administrative Agent
pursuant to the terms of the applicable Collateral Documents, (b) all such
intercompany Indebtedness owed by Company or by any guarantor Subsidiary to
Company or to any of Company's Subsidiaries 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, in each case in form and substance satisfactory to
Administrative Agent, and (c) any payment by any Subsidiary of Company
under any guaranty of the Obligations shall
115
result in a PRO TANTO reduction of the amount of any intercompany
Indebtedness owed by such Subsidiary to Company or to any of its
Subsidiaries for whose benefit such payment is made;
(v) Company and its Subsidiaries, as applicable, may remain liable
with respect to the existing Indebtedness described in SCHEDULE 7.1 annexed
hereto and any Indebtedness incurred to refinance such existing
Indebtedness; PROVIDED that after giving effect to such refinancing
Indebtedness and the repayment of the corresponding existing Indebtedness
with the proceeds thereof, (a) the aggregate principal amount of the
refinancing Indebtedness and the corresponding existing Indebtedness so
refinanced shall not be greater than the outstanding principal amount of
such existing Indebtedness immediately prior to such refinancing, (b) the
weighted average life to maturity of such refinancing Indebtedness shall be
no shorter than the existing Indebtedness being refinanced and (c) such
refinancing Indebtedness shall not be secured by any additional property
than that which secures the existing Indebtedness being refinanced;
PROVIDED FURTHER that with respect to Foreign Subsidiaries, such
Indebtedness is permitted pursuant to subsection 7.1(vii);
(vi) Company and its Subsidiaries may become and remain liable with
respect to Indebtedness evidenced by the Senior Subordinated Notes in an
aggregate principal amount not to exceed $85,000,000;
(vii) Company's Foreign Subsidiaries may become and remain liable
with respect to committed or uncommitted lines of credit for loans to, or
for the sale with recourse or discounting of notes or accounts receivable
of, such Foreign Subsidiaries, such lines of credit to be in form and
substance satisfactory to Administrative Agent, including without
limitation existing lines of credit described on Schedule 7.1 annexed
hereto, in an aggregate amount for all such lines of credit of up to
$6,500,000; PROVIDED HOWEVER that the aggregate amount outstanding and
drawn under all such lines of credit, together with the aggregate amount of
any liabilities or Indebtedness which is outstanding and drawn with respect
to the Contingent Obligations permitted under subsection 7.4(iii), does not
exceed $6,500,000 at any time; and
(viii) Company and its Subsidiaries may become and remain liable with
respect to other Indebtedness in an aggregate principal amount not to
exceed $2,500,000 at any time outstanding.
7.2 LIENS AND RELATED MATTERS.
A. PROHIBITION ON LIENS. Company shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or permit to
exist any Lien on or with respect to any property or asset of any kind
(including any document or instrument in respect of goods or accounts
receivable) of Company or any of its
116
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 granted pursuant to the Collateral Documents, including
Liens securing its obligations to Lenders or Affiliates of Lenders as
Interest Rate Exchangers or Currency Exchangers (as such terms are defined
in the Collateral Documents);
(iii) Existing Liens described in SCHEDULE 7.2 annexed hereto;
(iv) Liens on the assets of Company's Foreign Subsidiaries securing
the Indebtedness permitted under subsection 7.1(vii) and the Contingent
Obligations under subsection 7.4(iii);
(v) Liens securing Indebtedness permitted under subsection
7.1(iii); PROVIDED that such Liens extend only to the property or asset so
financed and the proceeds thereof; and
(vi) Other Liens on assets other than Collateral securing
Indebtedness in an aggregate amount not to exceed $2,500,000 at any time
outstanding.
B. EQUITABLE LIEN IN FAVOR OF LENDERS. If Company or any of its
Subsidiaries shall create or assume any Lien upon any of its properties or
assets, whether now owned or hereafter acquired, other than Liens excepted by
the provisions of subsection 7.2A, it shall make or cause to be made effective
provision whereby the Obligations will be secured by such Lien equally and
ratably with any and all other Indebtedness secured thereby as long as any such
Indebtedness shall be so secured; PROVIDED that, notwithstanding the foregoing,
this covenant shall not be construed as a consent by Requisite Lenders to the
creation or assumption of any such Lien not permitted by the provisions of
subsection 7.2A.
C. NO FURTHER NEGATIVE PLEDGES. Except with respect to specific property
encumbered to secure payment of particular Indebtedness or to be sold pursuant
to an executed agreement with respect to an Asset Sale, neither Company nor any
of its Subsidiaries shall enter into any agreement (other than the Senior
Subordinated Note Indenture 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.
117
7.3 INVESTMENTS; JOINT VENTURES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, make or own any Investment in any Person, including any
Joint Venture, except:
(i) Company and its Subsidiaries may make and own Investments in
Cash Equivalents;
(ii) Company and its Subsidiaries may make and own Investments in
any wholly-owned Subsidiaries of Company that is engaged in the test
instrumentation business or a business reasonably related thereto;
(iii) Company and its wholly-owned Subsidiaries may make
intercompany loans to the extent permitted under subsection 7.1(iv);
(iv) Company and its wholly-owned Domestic Subsidiaries may make
and own Investments in Persons that, as a result of such Investments,
become additional wholly-owned Domestic Subsidiaries, and Company may make
and own Investments in Persons that, as a result of such Investments,
become additional direct wholly-owned Foreign Subsidiaries, in each case to
the extent such Investments are permitted under subsection 7.7(ii);
(v) Company and its Subsidiaries may continue to own the existing
Investments owned by them and described in SCHEDULE 7.3 annexed hereto;
(vi) Company may make loans to its employees for the purposes of
purchasing Common Stock from Company in connection with the exercise of
stock options granted pursuant to a stock option plan approved by Company's
Board of Directors; PROVIDED that the aggregate principal amount of such
loans shall not exceed $2,000,000 at any time outstanding;
(vii) Company and its Subsidiaries may accept promissory notes
received in consideration of any Asset Sale to the extent permitted
pursuant to subsection 7.7(vi); PROVIDED that any such promissory notes so
accepted shall be pledged as security for the Obligations pursuant to the
applicable Collateral Documents; and
(viii) Company and its Subsidiaries may make and own other
Investments in an aggregate amount not to exceed at any time $2,500,000.
7.4 CONTINGENT OBLIGATIONS.
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Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, create or become or remain liable with respect to any
Contingent Obligation, except:
(i) Subsidiaries of Company may become and remain liable with
respect to Contingent Obligations in respect of the Subsidiary Guaranty,
including Contingent Obligations thereunder for the benefit of Lenders or
Affiliates of Lenders as Interest Rate Exchangers or Currency Exchangers
(as such terms are defined in the Subsidiary Guaranty);
(ii) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of Letters of Credit;
(iii) Foreign Subsidiaries of Company may become and remain liable
with respect to Contingent Obligations in respect of letters of credit,
performance, completion or surety bonds or guaranties or other similar
Contingent Obligations, including without limitation existing Contingent
Obligations described on Schedule 7.4 annexed hereto, in an aggregate
amount for all such Contingent Obligations of up to $4,000,000; PROVIDED
that the aggregate amount of any liabilities or Indebtedness which is
outstanding and drawn with respect to such Contingent Obligations, together
with the aggregate amount outstanding and drawn under the lines of credit
permitted under subsection 7.1(vii), does not exceed $6,500,000 at any
time; and Company may become and remain liable with respect to guarantees
of the Foreign Subsidiaries' Contingent Obligations permitted under this
subsection 7.4(iii) and with respect to guarantees of the Foreign
Subsidiaries' Indebtedness permitted under subsection 7.1(vii);
(iv) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations under Currency Agreements entered into in
the ordinary course of business with a Lender or an Affiliate of a Lender
in a notional amount not to exceed $10,000,000 for all such Currency
Agreements;
(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 Company and its Subsidiaries in an aggregate amount not to
exceed at any time $2,500,000;
(vi) Company and its Subsidiaries may become and remain liable with
respect to Contingent Obligations in respect of any Indebtedness of Company
or any of its Subsidiaries permitted by subsection 7.1 and Company may
become and remain liable with respect to Contingent Obligations in respect
of any other liabilities or obligations or any of its Subsidiaries not
prohibited under this Agreement;
119
(vii) Company and its Subsidiaries, as applicable, may remain
liable with respect to existing Contingent Obligations described in
SCHEDULE 7.4 annexed hereto; PROVIDED that with respect to Foreign
Subsidiaries, such Contingent Obligations are permitted pursuant to
subsection 7.4(iii);
(viii) Subsidiary Guarantors may become and remain liable with
respect to Contingent Obligations arising under their subordinated
guaranties of the Senior Subordinated Notes as set forth in the Senior
Subordinated Note Indenture as in effect on the Closing Date; and
(ix) Company and its Domestic Subsidiaries may become and remain
liable with respect to other Contingent Obligations; PROVIDED that the
maximum aggregate liability, contingent or otherwise, of Company and its
Domestic Subsidiaries in respect of all such Contingent Obligations shall
at no time exceed $2,500,000.
7.5 RESTRICTED JUNIOR PAYMENTS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, declare, order, pay, make or set apart any sum for any
Restricted Junior Payment; PROVIDED that, so long as no Event of Default or
Potential Event of Default shall have occurred and be continuing or occurs as a
result thereof: (i) on the Closing Date, Company may purchase for cash up to
approximately 651,361 shares in aggregate of Company's Common Stock (including
stock options) and all of its outstanding shares of Class B Common Stock for an
aggregate price not exceeding $159,400,000; (ii) Company may make regularly
scheduled payments of interest in respect of the Senior Subordinated 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 Note
Indenture; (iii) Company may make Restricted Junior Payments in an aggregate
amount not to exceed $1,000,000 in any Fiscal Year or $5,000,000 during the term
of this Agreement to repurchase shares of its common stock from officers and
employees of Company; PROVIDED that after the date of this Agreement such
repurchases shall be pursuant to stock plans permitted under subsection 7.12;
and (iv) Company and any Subsidiary may make Restricted Junior Payments on
Indebtedness permitted pursuant to Section 7.1(iv) subject to the subordination
provisions contained in the notes or agreements governing such Indebtedness.
Neither Company nor any of its Subsidiaries will directly or indirectly declare,
order, pay or make, or set apart any sum or property for, any Restricted Junior
Payment or agree to do so except as permitted by this subsection 7.5.
7.6 FINANCIAL COVENANTS.
With respect to the calculation of the financial covenants contained in
this subsection 7.6, to the extent that during the period for which compliance
is being determined, Company or any Subsidiary of Company has made an
Acquisition
120
permitted under subsection 7.7(ii) or has disposed of any assets or operations
in an amount for any such transaction or series of related transactions
exceeding $1,000,000, such calculations shall be made as if such Acquisition or
such disposition took place on the first day of such period on a PRO FORMA basis
for the portion of such period prior to the date of such Acquisition or after
the date of such disposition and on an actual basis for the portion of such
period after the date of such Acquisition or before the date of such
disposition, and such calculations shall be made after giving effect to the
incurrence, assumption or repayment of any Indebtedness made in connection with
such acquisition or disposition. With respect to any such Acquisition, such PRO
FORMA calculations shall be based on the audited or reviewed financial results
delivered in compliance with clause (c)(3) of subsection 7.7(ii).
A. MINIMUM FIXED CHARGE COVERAGE RATIO. Company shall not permit the
ratio of (i) Consolidated EBITDA to (ii) Consolidated Fixed Charges for any
consecutive four-Fiscal Quarter period ending on the dates set forth below to be
less than the correlative ratio indicated:
MINIMUM FIXED CHARGE
FISCAL QUARTER ENDING DATE COVERAGE RATIO
-------------------------- --------------------
06/30/1997 1.30:1.00
09/30/1997 1.36:1.00
12/31/1997 1.27:1.00
03/31/1998 1.30:1.00
06/30/1998 1.34:1.00
09/30/1998 1.34:1.00
12/31/1998 1.37:1.00
03/31/1999 1.40:1.00
06/30/1999 1.40:1.00
09/30/1999 1.43:1.00
12/31/1999 1.46:1.00
03/31/2000 1.48:1.00
06/30/2000 1.48:1.00
09/30/2000 1.50:1.00
12/31/2000 1.50:1.00
03/31/2001 1.50:1.00
06/30/2001 1.50:1.00
09/30/2001 1.51:1.00
12/31/2001 1.51:1.00
03/31/2002 1.51:1.00
06/30/2002 1.52:1.00
09/30/2002 1.53:1.00
12/31/2002 1.53:1.00
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B. MAXIMUM LEVERAGE RATIO. Company shall not permit the Consolidated
Leverage Ratio at any time during any of the periods set forth below to exceed
the correlative ratio indicated:
MAXIMUM
PERIOD LEVERAGE RATIO
------ --------------------
06/30/1997 5.9:1.00
09/30/1997 5.7:1.00
12/31/1997 5.7:1.00
03/31/1998 5.4:1.00
06/30/1998 4.5:1.00
09/30/1998 4.3:1.00
12/31/1998 4.0:1.00
03/31/1999 3.6:1.00
06/30/1999 3.3:1.00
09/30/1999 3.0:1.00
12/31/1999 2.9:1.00
03/31/2000 2.7:1.00
06/30/2000 2.6:1.00
09/30/2000 2.5:1.00
12/31/2000 2.5:1.00
03/31/2001 2.4:1.00
06/30/2001 2.4:1.00
09/30/2001 2.3:1.00
12/31/2001 2.3:1.00
03/31/2002 2.2:1.00
06/30/2002 2.2:1.00
09/30/2002 2.1:1.00
12/31/2002 2.1:1.00
C. MINIMUM CONSOLIDATED EBITDA. Company shall not permit Consolidated
EBITDA for the consecutive four-Fiscal Quarter period ending on the date
indicated below to be less than the correlative amount indicated:
MINIMUM
CONSOLIDATED EBITDA
-------------------------
PERIOD ($ in millions)
------
06/30/1997 $20.7
09/30/1997 21.7
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MINIMUM
CONSOLIDATED EBITDA
-------------------------
PERIOD ($ in millions)
------
12/31/1997 20.8
03/31/1998 21.8
06/30/1998 25.2
09/30/1998 26.2
12/31/1998 27.4
03/31/1999 28.9
06/30/1999 30.3
09/30/1999 31.8
12/31/1999 32.7
03/31/2000 33.9
06/30/2000 34.8
09/30/2000 36.0
12/31/2000 36.0
03/31/2001 37.0
06/30/2001 38.2
09/30/2001 39.3
12/31/2001 39.9
03/31/2002 40.7
06/30/2002 41.7
09/30/2002 42.5
12/31/2002 42.5
D. MINIMUM CONSOLIDATED NET WORTH. Company shall not permit Consolidated
Net Worth at any time during the period ending on the dates set forth below to
be less than the correlative amount indicated:
MINIMUM
PERIOD ENDING CONSOLIDATED NET WORTH
------------- ----------------------
($ in millions)
06/30/1997 ($76.7)
09/30/1997 (76.6)
12/31/1997 (75.7)
03/31/1998 (73.3)
06/30/1998 (70.5)
09/30/1998 (68.1)
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MINIMUM
PERIOD ENDING CONSOLIDATED NET WORTH
------------- ----------------------
($ in millions)
12/31/1998 (65.3)
03/31/1999 (60.4)
06/30/1999 (56.2)
09/30/1999 (51.4)
12/31/1999 (47.7)
03/31/2000 (43.6)
06/30/2000 (39.0)
09/30/2000 (35.4)
12/31/2000 (32.0)
03/31/2001 (27.4)
06/30/2001 (21.8)
09/30/2001 (18.3)
12/31/2001 (14.2)
03/31/2002 (9.0)
06/30/2002 (2.4)
09/30/2002 1.9
12/31/2002 1.9
7.7 RESTRICTION ON FUNDAMENTAL CHANGES; ASSET SALES AND ACQUISITIONS.
Company shall not, and shall not permit any of Company's Subsidiaries
to, 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, Company
or such wholly-owned Subsidiary Guarantor shall be the continuing or
surviving corporation;
(ii) Company and its wholly-owned Subsidiaries may acquire all or
substantially all the business, property or fixed assets of, or stock or
other
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evidence of beneficial ownership of, any Person, or any division or line of
business of any Person, in each case in the test instrumentation business
or a business reasonably related thereto (collectively, an "Acquisition");
PROVIDED that (a) such Person becomes a wholly-owned Subsidiary of Company,
or such business, property or other assets are acquired by Company or a
wholly-owned Subsidiary of Company, and any such wholly-owned Subsidiary
which is a Foreign Subsidiary shall be a direct Subsidiary of Company; (b)
the aggregate consideration paid by Company or any of its Subsidiaries in
connection with all such Acquisitions, including without limitation, the
fair market value of all Cash (including without limitation earn outs or
deferred compensation or non-competition arrangements), Common Stock or
other property so paid or transferred, and the amount of all Indebtedness
or other liabilities assumed or incurred by Company or any of its
Subsidiaries, shall not exceed $25,000,000 or, in the event that Company's
Consolidated Leverage Ratio as of the last day of each of the two
immediately preceding Fiscal Quarters is less than or equal to 3.50:1.00,
$35,000,000; PROVIDED that with respect to such aggregate consideration,
the aggregate Cash consideration paid by Company or any of its
Subsidiaries, including the amount of all Indebtedness or other liabilities
so assumed or incurred, shall not exceed (x) for all Acquisitions of
Foreign Subsidiaries or of businesses, properties or other assets not
located in the United States the lesser of (I) the amount permitted
therefor under the Senior Subordinated Note Indenture or (II) $7,500,000
or, in the event that Company's Consolidated Leverage Ratio as of the last
day of each of the two immediately preceding Fiscal Quarters is less than
or equal to 3.50:1.00, the lesser of (I) the amount permitted therefor
under the Senior Subordinated Note Indenture or (II) $15,000,000, and
(y) for all Acquisitions $10,000,000 or, in the event that Company's
Consolidated Leverage Ratio as of the last day of each of the two
immediately preceding Fiscal Quarters is less than or equal to 3.50:1.00,
$20,000,000; (c) prior to the consummation of such Acquisition, Company
shall deliver to Agents an Officer's Certificate (1) certifying that no
Potential Event of Default or Event of Default under this Agreement or
under the Senior Subordinated Note Indenture shall then exist or shall
occur as a result of such Acquisition, (2) demonstrating that after giving
effect to such Acquisition and to all Indebtedness to be incurred or
assumed or repaid in connection with or as consideration for such
Acquisition, that Company is in PRO FORMA compliance with the financial
covenants referred to in subsection 7.6 for the four consecutive Fiscal
Quarter period ending immediately prior to the date of the proposed
Acquisition and that, giving effect to such Acquisition, Company is in
compliance with the clause (b) of this subsection 7.7(ii) on a cumulative
basis for all Acquisitions, and (3) delivering a copy, prepared in
conformity with GAAP, of (i) financial statements of the Person or business
so acquired for the immediately preceding four consecutive Fiscal Quarter
period corresponding to the calculation period for the financial covenants
in the immediately preceding clause, and (ii) audited financial statements
of the Person or business so acquired for the fiscal year ended within such
period;
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(d) concurrently with the consummation of such Acquisition, Company shall,
and shall cause its Subsidiaries to, comply with the requirements of
subsections 6.8 and 6.9 with respect to such Acquisitions; and (e) the
earnings before interest, income taxes, depreciation and amortization of
the Person or business so acquired for the preceding twelve-month period
shall exceed zero.
(iii) Company and its Subsidiaries may dispose of obsolete, worn out
or surplus property in the ordinary course of business;
(iv) Company and its Subsidiaries may sell or otherwise dispose of
assets in transactions that do not constitute Asset Sales; PROVIDED that
the consideration received for such assets shall be in an amount at least
equal to the fair market value thereof;
(v) Company and its Subsidiaries may sell and leaseback the
facility located in Norwich, England for a consideration at least equal to
the fair market value thereof; PROVIDED that the proceeds thereof shall be
applied as required by subsection 2.4B(iii)(a), shall be utilized to make
Consolidated Capital Expenditures or shall be used to make an acquisition
of a business permitted under subsection 7.7(ii); and
(vi) Company and its Subsidiaries may make Asset Sales of assets
having a fair market value not in excess of $1,000,000 in any Fiscal Year;
PROVIDED that (x) the consideration received for such assets shall be in an
amount at least equal to the fair market value thereof; (y) at least 75% of
the consideration received therefor is in the form of cash (PROVIDED that
any liabilities which are assumed by the transferee of such Assets pursuant
to a customary novation agreement that releases Company or such Subsidiary
from further liability, and any promissory notes received that are
converted into cash, shall be deemed to be cash for purposes of this
provision); and (z) the proceeds of such Asset Sales shall be applied as
required by subsection 2.4B(iii)(a).
7.8 CONSOLIDATED CAPITAL EXPENDITURES.
Company shall not, and shall not permit its Subsidiaries to, make or
incur Consolidated Capital Expenditures, in any Fiscal Year indicated below, in
an aggregate amount in excess of the corresponding amount set forth below
opposite such Fiscal Year:
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MAXIMUM CONSOLIDATED
FISCAL YEAR CAPITAL EXPENDITURES
------------------------- --------------------
1997 $7,500,000
1998 $6,500,000
1999 $6,500,000
2000 $7,000,000
2001 $7,000,000
2002 $7,000,000
PROVIDED, HOWEVER, to the extent that any expenditures of Company or any of its
Subsidiaries constitute an Acquisition permitted under subsection 7.7(ii), then
for purposes of this subsection 7.8 such expenditures shall not constitute or be
deemed to be Consolidated Capital Expenditures under this subsection 7.8.
7.9 RESTRICTION ON LEASES.
Company shall not, and shall not permit any of its Subsidiaries to,
become liable in any way, whether directly or by assignment or as a guarantor or
other surety, for the obligations of the lessee under any lease, whether an
Operating Lease or a Capital Lease (other than intercompany leases between
Company and its wholly-owned Subsidiaries), unless, immediately after giving
effect to the incurrence of liability with respect to such lease, the
Consolidated Rental Payments at the time in effect during the then current
Fiscal Year shall not exceed the corresponding amount set forth below opposite
such Fiscal Year:
MAXIMUM CONSOLIDATED
FISCAL YEAR RENTAL PAYMENTS
------------------------- --------------------
1997 $4,500,000
1998 $5,000,000
1999 $5,500,000
2000 $6,000,000
2001 $6,500,000
2002 $7,000,000
7.10 SALES AND LEASE-BACKS.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, become liable as lessee or as a guarantor or other
surety with respect to any lease, whether an Operating Lease or a Capital Lease,
of any property (whether real, personal or mixed), whether now owned or
hereafter acquired, (i) which Company or any of its Subsidiaries has sold or
transferred or is to sell or transfer to any other Person (other than Company or
any of its Subsidiaries) or
127
(ii) which Company or any of its Subsidiaries intends to use for substantially
the same purpose as any other property which has been or is to be sold or
transferred by Company or any of its Subsidiaries to any Person (other than
Company or any of its Subsidiaries) in connection with such lease; PROVIDED that
Company and its Subsidiaries may become liable as lessee, guarantor or other
surety with respect to any such lease if and to the extent that Company or any
of its Subsidiaries would be permitted to enter into, and remain liable under,
such lease under subsection 7.9.
7.11 SALE OR DISCOUNT OF RECEIVABLES.
Other than as permitted pursuant to subsection 7.1(vii) with respect
to Company's Foreign Subsidiaries, Company shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, sell with recourse, or discount
or otherwise sell for less than the face value thereof, any of its notes or
accounts receivable.
7.12 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES.
Company shall not, and shall not permit any of its Subsidiaries to,
directly or indirectly, enter into or permit to exist any transaction (including
the purchase, sale, lease or exchange of any property or the rendering of any
service) with any holder of 5% or more of any class of equity Securities of
Company or with any Affiliate of Company or of any such holder, on terms that
are less favorable to Company or that Subsidiary, as the case may be, than those
that might be obtained at the time from Persons who are not such a holder or
Affiliate; PROVIDED that the foregoing restriction shall not apply to (i) any
transaction between Company and any of its wholly-owned Subsidiaries or between
any of its wholly-owned Subsidiaries, (ii) reasonable and customary fees paid to
members of the Boards of Directors of Company and its Subsidiaries,
(iii) issuances of stock, payments of bonuses and other transactions pursuant to
employment or compensation agreements, stock option agreements, indemnification
agreements, severance agreements and other arrangements, in each case as in
effect as of the Closing Date, and such substantially similar agreements as may
hereafter become effective, in each case with officers or directors who are
Affiliates of Company or any of its Subsidiaries, (iv) payment of customary
consulting and other fees and expenses to Arranger and its Affiliates in
connection with the Recapitalization Transactions, including without limitation
under this Agreement or in connection with the Senior Subordinated Notes,
(v) transactions pursuant to the Distribution Agreement, dated April 23, 1996,
and the Technical Collaboration Agreement, dated as of April 23, 1996, each
between Company or one of its Subsidiaries and Yokogawa Electric Corporation, to
the extent that such transactions are on terms that are at least as favorable as
those that could reasonably be expected to be obtained by Company or the
relevant Subsidiary in a comparable transaction by Company or such Subsidiary
with an unrelated Person, (vi) lease payments, renewals and extensions under the
lease agreement, dated June 29, 1996, between Company and Toyon Investments, a
corporation controlled by Xxxxxxx, to the extent that aggregate annual lease
payments do not exceed $585,000 per year, plus
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annual consumer price index adjustments, not to exceed 3% per annum, (vii) the
exercise by Xxxxxxx of his option to purchase Company's executive offices at
00000 Xx Xxxxxx Xxxx, Xxx Xxxxx, Xxxxxxxxxx, including all the leasehold
improvements and fixed assets therein pursuant to the terms set forth in the
resolution of Company adopted on September 19, 1995 and (viii) Restricted Junior
Payments permitted pursuant to subsection 7.5.
7.13 DISPOSAL OF SUBSIDIARY STOCK; RESTRICTIONS ON SUBSIDIARIES.
A. DISPOSAL OF 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), Company shall not:
(i) directly or indirectly sell, assign, pledge or otherwise
encumber or dispose of any shares of capital stock or other equity
Securities of any of its Subsidiaries, except 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 wholly-owned Domestic
Subsidiary of Company, or to qualify directors if required by applicable
law.
B. NO RESTRICTIONS ON SUBSIDIARY DISTRIBUTIONS TO COMPANY OR OTHER
SUBSIDIARIES. Except as provided herein or in the Subordinated Note Indenture,
Company will not, and will not permit any of its Subsidiaries to, create or
otherwise cause or suffer to exist or become effective any consensual
encumbrance or restriction of any kind on the ability of any such Subsidiary to
(i) pay dividends or make any other distributions on any of such Subsidiary's
capital stock owned by Company or any other Subsidiary of Company, (ii) repay or
prepay any Indebtedness owed by such Subsidiary to Company or any other
Subsidiary of Company, (iii) make loans or advances to Company or any other
Subsidiary of Company, or (iv) transfer any of its property or assets to Company
or any other Subsidiary of Company.
7.14 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
test instrumentation business engaged in by Company and its Subsidiaries on the
Closing Date and businesses reasonably related thereto and (ii) such other lines
of business as may be consented to by Requisite Lenders.
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7.15 AMENDMENTS OF CERTAIN DOCUMENTS; DESIGNATION OF "DESIGNATED SENIOR DEBT."
A. AMENDMENTS OR WAIVERS OF CERTAIN RELATED AGREEMENTS. Company shall
not, and shall not permit any of its Subsidiaries to, amend, waive any of its
rights under, or otherwise change the terms of any of the Related Agreements
(other than the Related Financing Documents) in each case as in effect on the
Closing Date, without the prior written consent of the Requisite Lenders, if
such amendment, waiver or change would increase materially the obligations of
Company or any of its Subsidiaries or confer additional rights on any other
party to any such agreement which would be adverse in any material respect to
Company or any of its Subsidiaries or to the Lenders.
B. AMENDMENTS OF DOCUMENTS RELATING TO SUBORDINATED INDEBTEDNESS.
Company shall not, and shall not permit any of its Subsidiaries to, amend or
otherwise change the terms of any of the Senior Subordinated Notes or the Senior
Subordinated Note Indenture (collectively, "RESTRICTED AGREEMENTS"), 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 any such Restricted
Agreements, change any dates upon which payments of principal or interest are
due thereon, change any of the covenants with respect thereto in a manner which
is more restrictive to Company or any of its Subsidiaries, change any event of
default or condition to an event of default with respect thereto, change the
redemption, prepayment or defeasance provisions thereof, change the
subordination provisions thereof (or of any guaranty thereof), or if the effect
of such amendment or change, together with all other amendments or changes made,
is to increase the obligations of the obligor thereunder or to confer any
additional rights on the holders of any such Restricted Agreements (or a trustee
or other representative on their behalf) which would be adverse to any Loan
Party or Lenders.
C. DESIGNATION OF "DESIGNATED SENIOR DEBT." Company shall not designate
any Indebtedness as "Designated Senior Debt" (as defined in the Senior
Subordinated Note Indenture) for purposes of the Senior Subordinated Note
Indenture without the prior written consent of Requisite Lenders.
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
130
a Letter of Credit; or failure by Company to pay any interest on any Loan or any
fee or any other amount due under this Agreement within five days after the date
due; or
8.2 DEFAULT IN OTHER AGREEMENTS.
(i) Failure of Company or any of its Subsidiaries to pay when due
any principal of or interest on or any other amount payable in respect of one or
more items of Indebtedness (other than Indebtedness referred to in subsection
8.1) or Contingent Obligations with respect to any Indebtedness in either an
individual or an aggregate principal amount of $5,000,000 or more, in each case
beyond the end of any grace period provided therefor; or (ii) breach or default
by Company or any of its Subsidiaries with respect to any other material term of
(a) one or more items of Indebtedness or Contingent Obligations with respect to
any Indebtedness in the individual or aggregate principal amounts referred to in
clause (i) above or (b) any loan agreement, mortgage, indenture or other
agreement relating to such item(s) of Indebtedness or Contingent Obligation(s),
if the effect of such breach or default is to cause, or to permit the holder or
holders of that Indebtedness or Contingent Obligation(s) (or a trustee on behalf
of such holder or holders) to cause, that Indebtedness or Contingent
Obligation(s) to become or be declared due and payable prior to its stated
maturity or the stated maturity of any underlying obligation, as the case may be
(upon the giving or receiving of notice, lapse of time, both, or otherwise); or
8.3 BREACH OF CERTAIN COVENANTS.
Failure of Company to perform or comply with any term or condition
contained in subsection 2.5 or 6.2 or Section 7 of this Agreement; or
8.4 BREACH OF WARRANTY.
Any representation, warranty, certification or other statement made by
Company or any of its Subsidiaries in any Loan Document or in any statement or
certificate at any time given by Company or any of its Subsidiaries in writing
pursuant hereto or thereto or in connection herewith or therewith shall be false
in any material respect on the date as of which made; or
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 twenty Business Days
after the earlier of (i) an officer of Company or such Loan Party becoming aware
of such default or (ii) receipt by Company and such Loan Party of notice from
any Agent or any Lender of such default; or
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8.6 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) A court having jurisdiction in the premises shall enter a
decree or order for relief in respect of Company or any of its Subsidiaries
(other than an Immaterial Subsidiary) in an involuntary case under the
Bankruptcy Code or under any other applicable bankruptcy, insolvency or similar
law now or hereafter in effect, which decree or order is not stayed; or any
other similar relief shall be granted under any applicable federal or state law;
or (ii) an involuntary case shall be commenced against Company or any of its
Subsidiaries (other than an Immaterial Subsidiary) under the Bankruptcy Code or
under any other applicable bankruptcy, insolvency or similar law now or
hereafter in effect; or a decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator, trustee,
custodian or other officer having similar powers over Company or any of its
Subsidiaries (other than an Immaterial Subsidiary), or over all or a substantial
part of its property, shall have been entered; or there shall have occurred the
involuntary appointment of an interim receiver, trustee or other custodian of
Company or any of its Subsidiaries (other than an Immaterial Subsidiary) for all
or a substantial part of its property; or a warrant of attachment, execution or
similar process shall have been issued against any substantial part of the
property of Company or any of its Subsidiaries (other than an Immaterial
Subsidiary), and any such event described in this clause (ii) shall continue for
60 days unless dismissed, bonded or discharged; or
8.7 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(i) Company or any of its Subsidiaries (other than an Immaterial
Subsidiary) shall have an order for relief entered with respect to it or
commence a voluntary case under the Bankruptcy Code or under any other
applicable bankruptcy, insolvency or similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking possession by a receiver,
trustee or other custodian for all or a substantial part of its property; or
Company or any of its Subsidiaries (other than an Immaterial Subsidiary) shall
make any assignment for the benefit of creditors; or (ii) Company or any of its
Subsidiaries (other than an Immaterial Subsidiary) shall be unable, or shall
fail generally, or shall admit in writing its inability, to pay its debts as
such debts become due; or the Board of Directors of Company or any of its
Subsidiaries (other than an Immaterial Subsidiary) (or any committee thereof)
shall adopt any resolution or otherwise authorize any action to approve any of
the actions referred to in clause (i) above or this clause (ii); or
8.8 JUDGMENTS AND ATTACHMENTS.
Any money judgment, writ or warrant of attachment or similar process
involving either in any individual case or in the aggregate at any time an
amount in excess of $5,000,000 (in either case not adequately covered by
insurance as to which a
132
solvent and unaffiliated insurance company has acknowledged coverage) shall be
entered or filed against Company or any of its Subsidiaries or any of their
respective assets and shall remain undischarged, unvacated, unbonded or unstayed
for a period of 60 days (or in any event later than five days prior to the date
of any proposed sale thereunder); or
8.9 DISSOLUTION.
Any order, judgment or decree shall be entered against Company or any
of its Subsidiaries (other than an Immaterial Subsidiary) decreeing the
dissolution or split up of Company or that Subsidiary and such order shall
remain undischarged or unstayed for a period in excess of 30 days; or
8.10 EMPLOYEE BENEFIT PLANS.
There shall occur one or more ERISA Events which individually or in
the aggregate results in or might reasonably be expected to result in liability
of Company, any of its Subsidiaries or any of their respective ERISA Affiliates
in excess of $500,000 during the term of this Agreement; or there shall exist an
amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of
ERISA), individually or in the aggregate for all Pension Plans (excluding for
purposes of such computation any Pension Plans with respect to which assets
exceed benefit liabilities), which exceeds $500,000; or
8.11 CHANGE OF CONTROL.
A Change of Control shall have occurred; or
8.12 INVALIDITY OF SUBSIDIARY GUARANTY.
Upon execution and delivery thereof, the Subsidiary Guaranty for any
reason, other than the satisfaction in full of all Obligations, ceases to be in
full force and effect (other than in accordance with its terms) or is declared
to be null and void, or any Loan Party denies that it has any further liability,
including without limitation with respect to future advances by Lenders, under
any Loan Document to which it is a party, or gives notice to such effect; or
8.13 FAILURE OF SECURITY.
Any Collateral Document shall, at any time, cease to be in full force
and effect (other than by reason of a release of Collateral in accordance with
the terms thereof) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party, or Agent shall not
have or cease to have a valid and perfected first priority security interest in
any significant part of the Collateral
133
(other than as a direct result of a breach by Agent of any obligation imposed on
Agent under the Collateral Documents); or
8.14 FAILURE TO CONSUMMATE THE RECAPITALIZATION TRANSACTIONS.
The Recapitalization Transactions (i) shall not be consummated in
accordance with the Loan Documents and the Related Agreements prior to or
concurrently with or immediately after the making of the initial Loans (and in
any event on the Closing Date), or (ii) shall be unwound, reversed or otherwise
rescinded or modified in whole or in part for any reason; or
8.15 ACTION UNDER RELATED FINANCING DOCUMENTS.
Any holder of any Indebtedness evidenced by the Related Financing
Documents shall file an action seeking the rescission thereof or damages or
injunctive relief relating thereto; or any event shall occur which, under the
terms of any Related Financing Documents, shall require Company or any of its
Subsidiaries to purchase, redeem or otherwise acquire or offer to purchase,
redeem or otherwise acquire all or any portion of any Indebtedness evidenced by
the Related Financing Documents; or Company or any of its Subsidiaries shall for
any other reason purchase, redeem or otherwise acquire or offer to purchase,
redeem or otherwise acquire, or make any other payments in respect of, all or
any portion of any Indebtedness evidenced by the Related Financing Documents,
except to the extent expressly permitted by subsection 7.5:
THEN (i) upon the occurrence of any Event of Default described in subsection 8.6
or 8.7, each of (a) the unpaid principal amount of and accrued interest on the
Loans, (b) an amount equal to the maximum amount that may at any time be drawn
under all Letters of Credit then outstanding (whether or not any beneficiary
under any such Letter of Credit shall have presented, or shall be entitled at
such time to present, the drafts or other documents or certificates required to
draw under such Letter of Credit), and (c) all other Obligations shall
automatically become immediately due and payable, without presentment, demand,
protest or other requirements of any kind, all of which are hereby expressly
waived by Company, and the obligation of each Lender to make any Loan (including
the obligation of Swing Line Lender to make any Swing Line Loans and of Offshore
Currency Funding Lender to make any Offshore Currency Loans), the obligation of
Administrative Agent 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 (including the obligation of Swing
Line Lender to make any Swing Line Loans and of Offshore Currency Funding Lender
to make any Offshore Currency Loans), the obligation of Administrative
134
Agent to issue any Letter of Credit hereunder shall thereupon terminate;
PROVIDED that the foregoing shall not affect in any way the obligations of
Revolving Lenders to purchase participations in Letters of Credit as provided in
subsection 3.3C or the obligations of Lenders to purchase participations in any
unpaid Swing Line Loans as provided in subsection 2.1A(iii) or any unpaid
Offshore Currency Loans as provided in subsection 2.1A(iv).
Any amounts described in clause (b) above, when received by
Administrative Agent, shall be held by Administrative Agent pursuant to the
terms of the Collateral Account Agreement and shall be applied as therein
provided.
Notwithstanding anything contained in the second preceding paragraph,
if at any time within 60 days after an acceleration of the Loans pursuant to
such paragraph Company shall pay all arrears of interest and all payments on
account of principal which shall have become due otherwise than as a result of
such acceleration (with interest on principal and, to the extent permitted by
law, on overdue interest, at the rates specified in this Agreement) and all
Events of Default and Potential Events of Default (other than non-payment of the
principal of and accrued interest on the Loans, in each case which is due and
payable solely by virtue of acceleration) shall be remedied or waived pursuant
to subsection 10.6, then Requisite Lenders, by written notice to Company, may at
their option rescind and annul such acceleration and its consequences; but such
action shall not affect any subsequent Event of Default or Potential Event of
Default or impair any right consequent thereon. The provisions of this
paragraph are intended merely to bind Lenders to a decision which may be made at
the election of Requisite Lenders and are not intended to benefit Company and do
not grant Company the right to require Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
SECTION 9. THE AGENTS
9.1 APPOINTMENT.
A. APPOINTMENT OF AGENTS. Fleet 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. DLJ is hereby appointed Syndication
Agent hereunder and under the other Loan Documents 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. Each of Syndication Agent and
Administrative Agent agrees to act upon the express conditions contained in this
Agreement and the other Loan Documents, as applicable. The provisions of this
Section 9 are solely for the benefit of each of Syndication Agent and
Administrative Agent, and Lenders and Company shall have no rights as a third
party beneficiary of any of the provisions thereof. In performing its functions
and duties under this
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Agreement, each of Syndication Agent and Administrative Agent shall act solely
as an agent of Lenders and does not assume and shall not be deemed to have
assumed any obligation towards or relationship of agency or trust with or for
Company or any of its Subsidiaries.
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 Company or any other Loan Party
be required by any Supplemental Collateral Agent so appointed by Administrative
Agent for more fully and certainly vesting in and confirming to him or it such
rights, powers, privileges and duties, Company shall, or shall cause such Loan
Party to, execute, acknowledge and deliver any and all such instruments promptly
upon request by Administrative Agent. In case any Supplemental Collateral
Agent, or a successor thereto, shall die, become incapable of acting, resign or
be removed, all the rights, powers, privileges and duties of such Supplemental
Collateral Agent, to the extent
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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.
X. XXXXXX; 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, perfection 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 such Agent to Lenders or by or on
behalf of Company to such Agent or any Lender in connection with the Loan
Documents and the transactions contemplated thereby or for the financial
condition or business affairs of Company or any other Person liable for the
payment of any Obligations, nor shall such Agent be required to ascertain or
inquire as to the performance or observance of any of the terms, conditions,
provisions, covenants or agreements contained in any of the Loan Documents or as
to the use of the proceeds of the Loans or the use of the Letters of Credit or
as to the existence or possible existence of any Event of Default or Potential
Event of Default. Anything contained in this Agreement to the contrary
notwithstanding, Administrative Agent shall not have any liability arising from
confirmations of the amount of outstanding Loans or the Letter of Credit Usage
or the component amounts thereof.
C. EXCULPATORY PROVISIONS. Neither of the Agents nor any of their
respective officers, directors, employees or agents shall be liable to Lenders
for any action taken or omitted by any such Agent under or in connection with
any of the Loan Documents except to the extent caused by such Agent's gross
negligence or willful misconduct. 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,
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discretion or authority vested in it hereunder or thereunder unless and until
such Agent shall have received instructions in respect thereof from Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6) and, upon receipt of such instructions from Requisite
Lenders (or such other Lenders, as the case may be), 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 Company and its Subsidiaries), accountants,
experts and other professional advisors selected by it; and (ii) no Lender shall
have any right of action whatsoever against 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 accordance with the instructions of Requisite
Lenders (or such other Lenders as may be required to give such instructions
under subsection 10.6).
D. AGENTS ENTITLED TO ACT AS LENDER. The agency hereby created shall in
no way impair or affect any of the rights and powers of, or impose any duties or
obligations upon, any Agent in its individual capacity as a Lender hereunder.
With respect to its participation in the Loans and the Letters of Credit, each
Agent shall have the same rights and powers hereunder as any other Lender and
may exercise the same as though it were not performing the duties and functions
delegated to it hereunder, and the term "Lender" or "Lenders" or any similar
term shall, unless the context clearly otherwise indicates, include such Agent
in its individual capacity. 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 Company or any of its Affiliates as if
it were not performing the duties specified herein, and may accept fees and
other consideration from Company for services in connection with this Agreement
and otherwise without having to account for the same to Lenders.
9.3 REPRESENTATIONS AND WARRANTIES; NO RESPONSIBILITY FOR APPRAISAL OF
CREDITWORTHINESS.
Each Lender represents and warrants that it has made its own
independent investigation of the financial condition and affairs of Company and
its Subsidiaries in connection with the making of the Loans and the issuance of
Letters of Credit hereunder and that it has made and shall continue to make its
own appraisal of the creditworthiness of Company and its Subsidiaries. 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
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its possession before the making of the Loans or at any time or times
thereafter, and no Agent shall have any responsibility with respect to the
accuracy of or the completeness of any information provided to Lenders.
9.4 RIGHT TO INDEMNITY.
Each Lender, in proportion to its Pro Rata Share, severally agrees to
indemnify each Agent, to the extent that such Agent shall not have been
reimbursed by Company, for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including 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
Administrative Agent or Syndication Agent, as the case may be, 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 any Agent's gross negligence or willful
misconduct as determined by a court of competent jurisdiction. 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.
9.5 SUCCESSOR AGENTS, SWING LINE LENDER AND OFFSHORE CURRENCY FUNDING LENDER.
A. SUCCESSOR AGENTS. The Syndication Agent may resign at any time upon
one Business Days' prior notice thereof to Company and Administrative Agent.
Administrative Agent may resign at any time by giving 30 days' prior written
notice thereof to Syndication Agent, 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 of
Syndication Agent or Administrative Agent or any such removal of Administrative
Agent, Requisite Lenders shall have the right, upon five Business Days' notice
to Company, to appoint a successor Syndication Agent or Administrative Agent, as
the case may be. Upon the acceptance of any appointment as Administrative Agent
or Syndication Agent, as the case may be, hereunder by a successor
Administrative Agent or Syndication Agent, as the case may be, that successor
Administrative Agent or Syndication Agent, as the case may be, shall thereupon
succeed to and become vested with all the rights, powers, privileges and duties
of the retiring or removed Administrative Agent or Syndication Agent, as the
case may be, and the retiring or removed Administrative Agent or Syndication
Agent, as the case may be, shall be discharged from its duties and obligations
under this Agreement. After any retiring or removed Administrative Agent's or
Syndication Agent's resignation or removal hereunder as Administrative Agent or
Syndication Agent, as the case may be, the provisions of this Section 9 shall
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inure to its benefit as to any actions taken or omitted to be taken by it while
it was Administrative Agent or Syndication Agent, as the case may be, under this
Agreement.
B. SUCCESSOR SWING LINE LENDER. The Swing Line Lender may resign at any
time upon one Business Days' prior notice thereof to Company, Lenders and
Administrative Agent, and Swing Line Lender may be removed at any time with
or without cause by an instrument or concurrent instruments in writing
delivered to Company and Swing Line Lender and signed by Requisite Lenders.
Upon any such notice of resignation of Swing Line Lender or any such removal
of Swing Line Lender, Requisite Lenders shall have the right, upon five
Business Days' notice to Company, to appoint a successor Swing Line Lender.
After any retiring or removed Swing Line Lender's resignation or removal
hereunder, 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 Swing Line Lender
under this Agreement. Upon the acceptance of any appointment as Swing Line
Lender hereunder by a successor Swing Line Lender, that successor Swing Line
Lender shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Swing Line Lender,
and the retiring or removed Swing Line Lender shall be discharged from its
duties and obligations under this Agreement. In such event (i) Company shall
prepay any outstanding Swing Line Loans made by the retiring or removed Swing
Line Lender in its capacity as Swing Line Lender, (ii) upon such prepayment,
the retiring or removed Swing Line Lender shall surrender the Swing Line Note
held by it to Company for cancellation, and (iii) Company shall issue a new
Swing Line Note to the successor Swing Line Lender substantially in the form
of EXHIBIT VI annexed hereto, in the principal amount of the Swing Line Loan
Commitment then in effect and with other appropriate insertions.
C. SUCCESSOR OFFSHORE CURRENCY FUNDING LENDER. The Offshore Currency
Funding Lender may resign at any time upon one Business Days' prior notice
thereof to Company, Lenders and Administrative Agent, and Offshore Currency
Funding Lender may be removed at any time with or without cause by an instrument
or concurrent instruments in writing delivered to Company and Offshore Currency
Funding Lender and signed by Requisite Lenders. Upon any such notice of
resignation of Offshore Currency Funding Lender or any such removal of Offshore
Currency Funding Lender, Requisite Lenders shall have the right, upon five
Business Days' notice to Company, to appoint a successor Offshore Currency
Funding Lender. After any retiring or removed Offshore Currency Funding
Lender's resignation or removal hereunder, 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 Offshore Currency Funding Lender under this Agreement. Upon the
acceptance of any appointment as Offshore Currency Funding Lender hereunder by a
successor Offshore Currency Funding Lender, that successor Offshore Currency
Funding Lender shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring or removed Offshore Currency
Funding Lender, and the retiring or removed Offshore
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Currency Funding Lender shall be discharged from its duties and obligations
under this Agreement. In such event (i) Company shall prepay any outstanding
Offshore Currency Loans made by the retiring or removed Offshore Currency
Funding Lender, (ii) upon such prepayment, the retiring or removed Offshore
Currency Funding Lender shall surrender the Offshore Currency Note held by it to
Company for cancellation, and (iii) Company shall issue a new Offshore Currency
Note to the successor Offshore Currency Funding Lender substantially in the form
of EXHIBIT XXV annexed hereto, in the principal amount of the Offshore Currency
Loan Commitment then in effect and with other appropriate insertions.
9.6 COLLATERAL DOCUMENTS AND SUBSIDIARY GUARANTY.
Each Lender hereby further authorizes Administrative Agent, on behalf
of and for the benefit of Lenders, to enter into each Collateral Document as
secured party and to be the agent for and representative of Lenders under each
Guaranty, and each Lender agrees to be bound by the terms of each Collateral
Document and Guaranty; PROVIDED that Administrative Agent shall not (i) enter
into or consent to any material amendment, modification, termination or waiver
of any provision contained in any Collateral Document or Guaranty or
(ii) release any Collateral (except as otherwise expressly permitted or required
pursuant to the terms of this Agreement or the applicable Collateral Document),
in each case without the prior consent of Requisite Lenders (or, if required
pursuant to subsection 10.6, all Lenders); PROVIDED FURTHER, HOWEVER, that,
without further written consent or authorization from Lenders, Administrative
Agent may execute any documents or instruments necessary to (a) release any Lien
encumbering any item of Collateral that is the subject of a sale or other
disposition of assets permitted by this Agreement or to which Requisite Lenders
have otherwise consented or (b) release any Subsidiary Guarantor from the
Subsidiary Guaranty if all of the capital stock of such Subsidiary Guarantor is
sold to any Person (other than an Affiliate of Company) pursuant to a sale or
other disposition permitted hereunder or to which Requisite Lenders have
otherwise consented. Anything contained in any of the Loan Documents to the
contrary notwithstanding, Company, each 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 any Guaranty, it being
understood and agreed that all rights and remedies under the Collateral
Documents and the Subsidiary Guaranty may be exercised solely by Administrative
Agent for the benefit of Lenders in accordance with the terms thereof, and
(Y) in the event of a foreclosure by Administrative Agent on any of the
Collateral pursuant to a public or private sale, any Agent or any Lender may be
the purchaser of any or all of such Collateral at any such sale and
Administrative Agent, as agent for and representative of Lenders (but not any
Lender or Lenders in its or their respective individual capacities unless
Requisite Lenders shall otherwise agree in writing) shall be entitled, for the
purpose of bidding and making settlement or payment of the purchase price for
all or any portion of the Collateral sold at any such public sale, to use and
apply
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any of the Obligations as a credit on account of the purchase price for any
collateral payable by Administrative Agent at such sale.
9.7 OTHER TITLES.
None of the Lenders identified on the facing page or signature pages
of this Agreement as a "syndication agent," "co-agent", "lead manager" or
"arranger" or other similar title or capacity shall have any right, power,
obligation, liability, responsibility or duty under this Agreement other than
those applicable to all Lenders as such. Without limiting the foregoing, none
of the Lenders so identified as a "syndication agent," "co-agent", "lead
manager" or "arranger" or other similar title or capacity shall have or be
deemed to have any fiduciary relationship with any Lender. Each Lender
acknowledges that it has not relied, and will not rely, on any of the Lenders so
identified in deciding to enter into this Agreement or in taking or not taking
action hereunder.
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 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 same percentage 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 and the Offshore
Currency Loan Commitment and the Offshore Currency Loans of Offshore Currency
Funding Lender may not be sold, assigned or transferred as described in clause
(i) above to any Person other than a successor Swing Line Lender or Offshore
Currency Funding 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
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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 in the case of Lenders other than DLJ and $3,000,000
in the case of DLJ (or in either case such lesser amount as shall
constitute the aggregate amount of the Commitments, Loans, Letters of
Credit and participations therein, and other Obligations of the assigning
Lender or as may be consented to by Company and Agents) to any other
Eligible Assignee with the consent of Company (which consent shall only
be required so long as no Event of Default has occurred and is
continuing) and, with respect to all Lenders other than DLJ, Syndication
Agent and Administrative Agent (which consent of Company, Syndication
Agent and Administrative Agent shall not be unreasonably withheld or
delayed). To the extent of any such assignment in accordance with either
clause (a) or (b) above, the assigning Lender shall be relieved of its
obligations with respect to its Commitments, Loans, Letters of Credit or
participations therein, or other Obligations or the portion thereof so
assigned. The parties to each such assignment shall execute and deliver
to Administrative Agent, for its acceptance and recording in the
Register, an Assignment Agreement, together with a processing and
recordation fee of $3,500 (to be assessed at Administrative Agent's
election) 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
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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 the Notes hereunder, the assigning Lender shall, upon the
effectiveness of such assignment or as promptly thereafter as
practicable, surrender its applicable Notes to Administrative Agent for
cancellation, and thereupon new Notes shall be issued to the assignee and
to the assigning Lender, substantially in the form of EXHIBIT IV, EXHIBIT
V, EXHIBIT VI or EXHIBIT XXV annexed hereto, as the case may be, with
appropriate insertions, to reflect the new Commitments and/or outstanding
Term Loans, as the case may be, of the assignee and the assigning Lender.
(ii) ACCEPTANCE BY ADMINISTRATIVE AGENT; RECORDATION IN REGISTER.
Upon its receipt of an Assignment Agreement executed by an assigning
Lender and an assignee representing that it is an Eligible Assignee,
together with the processing 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 Agents 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 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
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direct obligation of Company to the participant and (b) the participant shall be
considered to be a "Lender".
D. ASSIGNMENTS TO FEDERAL RESERVE BANKS. In addition to the assignments
and participations permitted under the foregoing provisions of this subsection
10.1, any Lender may assign and pledge all or any portion of its Loans, the
other Obligations owed to such Lender, and its Notes to any Federal Reserve Bank
as collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any operating circular issued by such Federal Reserve
Bank; PROVIDED that (i) no Lender shall, as between Company and such Lender, be
relieved of any of its obligations hereunder as a result of any such assignment
and pledge and (ii) in no event shall such Federal Reserve Bank be considered to
be a "Lender" or be entitled to require the assigning Lender to take or omit to
take any action hereunder.
E. INFORMATION. Each Lender may furnish any information concerning
Company and its Subsidiaries in the possession of that Lender from time to time
to assignees and participants (including prospective assignees and
participants), subject to subsection 10.20.
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 shall be
consummated, Company agrees to pay promptly (i) all the actual and reasonable
costs and expenses of preparation of the Loan Documents and any consents,
amendments, waivers or other modifications thereto; (ii) all the costs of
furnishing all opinions by counsel for Company (including any opinions requested
by Agents or 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 Arranger and Syndication Agent (including allocated costs of
internal counsel) in
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connection with the negotiation, preparation and execution of the Loan Documents
and after the Closing Date, the reasonable fees, expenses and disbursements of
counsel to Agents in connection with the administration of the Loan Documents
and with respect to any consents, amendments, waivers or other modifications to
the Loan Documents and any other documents or matters requested by Company;
(iv) all the actual costs and reasonable expenses of creating and perfecting
Liens in favor of Administrative Agent on behalf of Lenders pursuant to any
Collateral Document, including 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 each of Syndication
Agent and Administrative Agent and of counsel providing any opinions that
Syndication Agent, Administrative Agent or Requisite Lenders may request in
respect of the Collateral Documents or the Liens created pursuant thereto;
(v) all the actual 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
Syndication Agent, Administrative Agent or their respective counsel) of
obtaining and reviewing any environmental audits or reports provided for under
subsection 6.9B(viii); (vi) the custody or preservation of any of the
Collateral; (vii) all other actual and reasonable costs and expenses incurred by
Arranger, 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, 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 Agents 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 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 shall be consummated,
Company agrees to defend (subject to Indemnitees' selection of counsel),
indemnify, pay and hold harmless Arranger, Agents and Lenders, and the officers,
directors, trustees, employees, agents and affiliates of Arranger, Agents and
Lenders (collectively called the "INDEMNITEES"), from and against any and all
Indemnified Liabilities (as hereinafter defined); PROVIDED that Company shall
not have any obligation to any Indemnitee hereunder with respect to any
Indemnified Liabilities to the extent such Indemnified Liabilities arise solely
from the gross negligence or willful misconduct of
146
that Indemnitee as determined by a final judgment of a court of competent
jurisdiction.
As used herein, "INDEMNIFIED LIABILITIES" means, collectively, any and
all liabilities, obligations, losses, damages (including natural resource
damages), penalties, actions, judgments, suits, claims (including Environmental
Claims), costs (including the costs of any investigation, study, sampling,
testing, abatement, cleanup, removal, remediation or other response action
necessary to remove, remediate, clean up or xxxxx any Hazardous Materials
Activity), expenses and disbursements of any kind or nature whatsoever
(including the reasonable fees and disbursements of counsel for Indemnitees in
connection with any investigative, administrative or judicial proceeding
commenced or threatened by any Person, whether or not any such Indemnitee shall
be designated as a party or a potential party thereto, and any fees or expenses
incurred by Indemnitees in enforcing this indemnity), whether direct, indirect
or consequential and whether based on 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
transactions contemplated hereby or thereby (including Lenders' agreement to
make the Loans hereunder or the use or intended use of the proceeds thereof or
the issuance of Letters of Credit hereunder or the use or intended use of any
thereof, or any enforcement of any of the Loan Documents (including any sale of,
collection from, or other realization upon any of the Collateral or the
enforcement of the Subsidiary Guaranty), (ii) the statements contained in the
commitment letter delivered by any Lender to Company with respect thereto, or
(iii) any Environmental Claim or any Hazardous Materials Activity relating to or
arising from, directly or indirectly, any past or present activity, operation,
land ownership, or practice of Company or any of its Subsidiaries.
To the extent that the undertakings to defend, indemnify, pay and hold
harmless set forth in this subsection 10.3 may be unenforceable in whole or in
part because they are violative of any law or public policy, Company shall
contribute the maximum portion that it is permitted to pay and satisfy under
applicable law to the payment and satisfaction of all Indemnified Liabilities
incurred by Indemnitees or any of them.
10.4 SET-OFF.
In addition to any rights now or hereafter granted under applicable
law and not by way of limitation of any such rights, upon the occurrence of any
Event of Default each Lender is hereby authorized by Company at any time or from
time to time, without notice to Company or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, including Indebtedness evidenced by
certificates of deposit,
147
whether matured or unmatured, but not including trust accounts) and any other
Indebtedness at any time held or owing by that Lender to or for the credit or
the account of Company against and on account of the obligations and liabilities
of Company to that Lender under this Agreement, the Letters of Credit and
participations therein and the other Loan Documents, including all claims of any
nature or description arising out of or connected with this Agreement, the
Letters of Credit and participations therein or any other Loan Document,
irrespective of whether or not (i) that Lender shall have made any demand
hereunder or (ii) the principal of or the interest on the Loans or any amounts
in respect of the Letters of Credit or any other amounts due hereunder shall
have become due and payable pursuant to Section 8 and although said obligations
and liabilities, or any of them, may be contingent or unmatured.
10.5 RATABLE SHARING.
Lenders hereby agree among themselves that if any of them shall,
whether by voluntary payment (other than a voluntary prepayment of Loans made
and applied in accordance with the terms of this Agreement), by realization upon
security, through the exercise of any right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any right under the Loan
Documents or otherwise, or as adequate protection of a deposit treated as cash
collateral under the Bankruptcy Code, receive payment or reduction of a
proportion of the aggregate amount of principal, interest, amounts payable in
respect of Letters of Credit, fees and other amounts then due and owing to that
Lender hereunder or under the other Loan Documents (collectively, the "AGGREGATE
AMOUNTS DUE" to such Lender) which is greater than the proportion received by
any other Lender in respect of the Aggregate Amounts Due to such other Lender,
then the Lender receiving such proportionately greater payment shall (i) notify
Administrative Agent and each other Lender of the receipt of such payment and
(ii) apply a portion of such payment to purchase participations (which it shall
be deemed to have purchased from each seller of a participation simultaneously
upon the receipt by such seller of its portion of such payment) in the Aggregate
Amounts Due to the other Lenders so that all such recoveries of Aggregate
Amounts Due shall be shared by all Lenders in proportion to the Aggregate
Amounts Due to them; PROVIDED that if all or part of such proportionately
greater payment received by such purchasing Lender is thereafter recovered from
such Lender upon the bankruptcy or reorganization of Company or otherwise, those
purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to such purchasing Lender ratably to the extent
of such recovery, but without interest. Company expressly consents to the
foregoing arrangement and agrees that any holder of a participation so purchased
may exercise any and all rights of banker's lien, set-off or counterclaim with
respect to any and all monies owing by Company to that holder with respect
thereto as fully as if that holder were owed the amount of the participation
held by that holder.
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10.6 AMENDMENTS AND WAIVERS.
No amendment, modification, termination or waiver of any provision of
this Agreement or of the Notes, and no consent to any departure by Company
therefrom, shall in any event be effective without the written concurrence of
Requisite Lenders; PROVIDED that any such amendment, modification, termination,
waiver or consent which: increases the amount of any of the Commitments or
reduces the principal amount of any of the Loans; increases the maximum amount
of Letters of Credit or of Commercial Letters of Credit or Standby Letters of
Credit; changes in any manner the definition of "Pro Rata Share" or the
definition of "Requisite Lenders"; changes in any manner any provision of this
Agreement which, by its terms, expressly requires the approval or concurrence of
all Lenders; postpones the scheduled final maturity date (but not the date of
any scheduled installment of principal) of any of the Loans; postpones the date
on which any interest or any fees are payable; decreases the interest rate borne
by any of the Loans (other than any waiver of any increase in the interest rate
applicable to any of the Loans pursuant to subsection 2.2E) or the amount of any
fees payable hereunder; increases the maximum duration of Interest Periods
permitted hereunder; reduces the amount or postpones the due date of any amount
payable in respect of, or extends the required expiration date of, any Letter of
Credit; changes in any manner the obligations of Lenders relating to the
purchase of participations in Letters of Credit; releases any Lien granted in
favor of Administrative Agent with respect to 25% or more in aggregate fair
market value of the Collateral, other than in accordance with the Loan
Documents; releases any Subsidiary Guarantor from its obligations under the
Subsidiary Guaranty, in each case other than in accordance with the terms of the
Loan Documents; or changes in any manner the provisions contained in subsection
8.1 or this subsection 10.6 shall be effective only if evidenced by a writing
signed by or on behalf of all Lenders. In addition, (i) any amendment,
modification, termination or waiver of any of the provisions contained in
Section 4 shall be effective only if evidenced by a writing signed by or on
behalf of Agents and Requisite Lenders, (ii) no amendment, modification,
termination or waiver of any provision of any Note shall be effective without
the written concurrence of the Lender which is the holder of that Note, (iii) no
amendment, modification, termination or waiver of any provision of
subsection 2.1A(iv) or of any other provision of this Agreement relating to the
Offshore Currency Loan Commitment or the Offshore Currency Loans shall be
effective without the written concurrence of the Offshore Currency Funding
Lender, (iv) no amendment, modification, termination or waiver of any provision
of subsection 2.1A(iii) or of any other provision of this Agreement relating to
the Swing Line Loan Commitment or the Swing Line Loans shall be effective
without the written concurrence of Swing Line Lender, and (v) no amendment,
modification, termination or waiver of any provision of Section 9 or of any
other provision of this Agreement which, by its terms, expressly requires the
approval or concurrence of Agents shall be effective without the written
concurrence of Agents. 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
149
shall be effective only in the specific instance and for the specific purpose
for which it was given. No notice to or demand on Company in any case shall
entitle Company to any other or further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this subsection 10.6 shall be binding upon each
Lender at the time outstanding, each future Lender and, if signed by Company, on
Company.
10.7 INDEPENDENCE OF COVENANTS.
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or would otherwise be within
the limitations of, another covenant shall not avoid the occurrence of an Event
of Default or Potential Event of Default if such action is taken or condition
exists.
10.8 NOTICES.
Unless otherwise specifically provided herein, any notice or other
communication herein required or permitted to be given shall be in writing and
may be personally served or sent by telefacsimile or United States mail or
courier service, to the address or number, as the case may be, specified on
SCHEDULE 1.1, and shall be deemed to have been given when delivered in person or
by courier service, upon receipt of telefacsimile, or three Business Days after
depositing it in the United States mail with postage prepaid and properly
addressed; PROVIDED that notices to Agents shall not be effective until
received; PROVIDED FURTHER that any matter transmitted by Company by
telefacsimile (i) shall be immediately confirmed by a telephone call to the
recipient at the number specified on SCHEDULE 1.1, and (ii) shall be followed
promptly by delivery of a hard copy original thereof. 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, on Schedule 1.1 annexed hereto or (i) as to
Company and Agents, such other address as shall be designated by such Person in
a written notice delivered to the other parties hereto and (ii) as to each other
party, such other address as shall be designated by such party in a written
notice delivered to Administrative Agent.
10.9 SURVIVAL OF REPRESENTATIONS, WARRANTIES AND AGREEMENTS.
A. All representations, warranties and agreements made herein shall
survive the execution and delivery of this Agreement and the making of the Loans
and the issuance of the Letters of Credit hereunder.
B. Notwithstanding anything in this Agreement or implied by law to the
contrary, the agreements of Company set forth in subsections 2.6D, 2.7, 3.5A,
3.6, 10.2, 10.3 and 10.4 and the agreements of Lenders set forth in subsections
9.2C, 9.4 and 10.5 shall survive the payment of the Loans, the cancellation or
expiration of the
150
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 any Agent or any Lender in the
exercise of any power, right or privilege hereunder or under any other Loan
Document shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other power, right or privilege. All rights and
remedies existing under this Agreement and the other Loan Documents are
cumulative to, and not exclusive of, any rights or remedies otherwise available.
10.11 MARSHALLING; PAYMENTS SET ASIDE.
None of Agents or Lenders 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 any of Agents 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
151
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 OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES.
10.16 SUCCESSORS AND ASSIGNS.
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of Lenders (it being understood that
Lenders' rights of assignment are subject to subsection 10.1). Neither
Company's rights or obligations hereunder nor any interest therein may be
assigned or delegated by Company without the prior written consent of all
Lenders.
10.17 CONSENT TO JURISDICTION AND SERVICE OF PROCESS.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR
RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS
THEREUNDER, MAY BE BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT
JURISDICTION IN XXX XXXXX, XXXXXX XXX XXXX XX XXX XXXX. BY EXECUTING AND
DELIVERING THIS AGREEMENT, COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY
(I) ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVE
JURISDICTION AND VENUE OF SUCH COURTS;
(II) WAIVES ANY DEFENSE OF FORUM NON CONVENIENS;
152
(III) AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDING IN
ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL, RETURN
RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SUBSECTION 10.8;
(IV) AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT;
(V) AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESS IN ANY
OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY IN
THE COURTS OF ANY OTHER JURISDICTION; AND
(VI) AGREES THAT THE PROVISIONS OF THIS SUBSECTION 10.17 RELATING
TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THE
FULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW
SECTION 5-1402 OR OTHERWISE.
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,
153
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 JUDGMENT.
If, for the purposes of obtaining judgment in any court, it is
necessary to convert a sum due hereunder or any other Loan Document in one
currency into another currency, the rate of exchange used shall be that at which
in accordance with normal banking procedures Administrative Agent could purchase
the first currency with such other currency on the Business Day preceding that
on which final judgment is given. The obligation of Company in respect of any
such sum due from it to Administrative Agent hereunder or under the other Loan
Documents shall, notwithstanding any judgment in a currency (the "Judgment
Currency") other than that in which such sum is denominated in accordance with
the applicable provisions of this Agreement (the "Agreement Currency"), be
discharged only to the extent that on the Business Day following receipt by
Administrative Agent of any sum adjudged to be so due in the Judgment Currency,
Administrative Agent may in accordance with normal banking procedures purchase
the Agreement Currency with the Judgment Currency. If the amount of the
Agreement Currency so purchased is less than the sum originally due to
Administrative Agent in the Agreement Currency, Company agrees, as a separate
obligation and notwithstanding any such judgment, to indemnify Administrative
Agent or the Person to whom such obligation was owing against such loss. If the
amount of the Agreement currency so purchased is greater than the sum originally
due to Administrative Agent in such currency, Administrative Agent agrees to
return the amount of any excess to Company (or to any other Person who may be
entitled thereto under applicable law).
10.20 CONFIDENTIALITY.
Each Lender shall hold all non-public information obtained pursuant to
the requirements of this Agreement which has been identified as confidential by
Company in accordance with such Lender's customary procedures for handling
confidential information of this nature and in accordance with safe and sound
banking practices, it being understood and agreed by Company that in any event a
Lender may make disclosures to Affiliates and professional advisors of such
Lender or disclosures reasonably required by (a) 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 (b) by any
direct or indirect contractual counterparties in swap agreements or such
contractual counterparties' professional advisors provided that such contractual
counterparty or professional advisor to such contractual counterparty agrees in
writing to keep such information confidential to the same extent required of the
Lenders hereunder, or disclosures
154
required or requested by any governmental agency or representative thereof or
pursuant to legal process; PROVIDED that, unless specifically prohibited by
applicable law or court order, each Lender shall notify Company of any request
by any governmental agency or representative thereof (other than any such
request in connection with any examination of the financial condition of such
Lender by such governmental agency) for disclosure of any such non-public
information prior to disclosure of such information; and PROVIDED, FURTHER that
in no event shall any Lender be obligated or required to return any materials
furnished by Company or any of its Subsidiaries.
10.21 COUNTERPARTS; EFFECTIVENESS.
This Agreement and any amendments, waivers, consents or supplements
hereto or in connection herewith may be executed in any number of counterparts
and by different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed an original, but all such counterparts
together shall constitute but one and the same instrument; signature pages may
be detached from multiple separate counterparts and attached to a single
counterpart so that all signature pages are physically attached to the same
document. This Agreement shall become effective upon the execution of a
counterpart hereof by each of the parties hereto and receipt by Company and
Agents of written or telephonic notification of such execution and authorization
of delivery thereof.
[Remainder of page intentionally left blank]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their respective officers thereunto duly
authorized as of the date first written above.
COMPANY:
WAVETEK CORPORATION
By: /s/ Xxxxxx X. Xxxxx
--------------------------------------
Name: Xxxxxx X. Xxxxx
--------------------------------
Title: Chief Financial Officer
-------------------------------
Notice Address: 00000 Xx Xxxxxx Xxxx
Xxxxx 000
Xxx Xxxxx, XX 00000
Tel: (000) 000-0000
Fax: (000) 000-0000
S-1
LENDERS:
DLJ CAPITAL FUNDING, INC., individually and as
Syndication Agent
By: /s/ Xxxx Xxxxxxx
----------------------------------------
Title: Managing Director
----------------------------------------
Notice Address: 2121 Avenue of the Stars
Xxx Xxxxxxx, XX 00000-0000
Attention: Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-2
FLEET NATIONAL BANK
individually and as Administrative Agent
By: /s/ Xxxx Van Der Xxx
------------------------------------------
Title: Vice President
------------------------------------------
Notice Address: Xxx Xxxxxxx Xxxxxx
Xxxxxx, XX 00000
Attention: Xxxx Van der Xxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-3
IMPERIAL BANK
By: /s/ Xxxx Xxxxxxx
--------------------------------------
Title: Senior Vice President
--------------------------------------
Notice Address: 0000 X. Xx Xxxxxxx
Xxx Xxxxxxx, XX 00000
Attention: Xxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-4
UNION BANK OF CALIFORNIA
By: /s/ Xxxxxxx Xxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
Notice Address: 000 X Xxxxxx, 0xx Xxxxx
Xxx Xxxxx, XX 00000
Attention: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-5
CREDITANSTALT BANKVEREIN
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Title: Vice President
-------------------------------------
By: /s/ Xxxxxx Xxxxxx
-------------------------------------
Title: Deputy Chief Executive Officer
-------------------------------------
Notice Address: 0 Xxxxxxxxxxx Xxxxxx
Xxxxx 000
Xxx Xxxxxxxxx, XX 00000
Attention: Xxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
S-6
