Credit Agreement
among
Big Dog Holdings, Inc.,
Big Dog USA, Inc.
and
Bank of America, N.A.,
as Administrative Agent
and
Letter of Credit Issuing Lender
and
The Other Financial
Institutions Party Hereto
Dated as of July 28, 2000
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TABLE OF CONTENTS
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SECTION 1. DEFINITIONS AND ACCOUNTING TERMS....................................1
1.01 Defined Terms............................................................1
1.02 Use of Certain Terms....................................................27
1.03 Accounting Terms........................................................28
1.04 Rounding................................................................28
1.05 Exhibits and Schedules..................................................28
1.06 References to Agreements and Laws.......................................28
SECTION 2. THE COMMITMENTS AND EXTENSIONS OF CREDIT...........................28
2.01 Loans...................................................................28
2.02 Borrowings, Conversions and Continuations of Loans......................29
2.03 Letters of Credit.......................................................30
2.04 Prepayments.............................................................34
2.05 Reduction or Termination of Commitments.................................35
2.06 Principal and Interest..................................................36
2.07 Fees....................................................................36
2.08 Computation of Interest and Fees........................................36
2.09 Making Payments.........................................................37
2.10 Funding Sources.........................................................38
2.11 Joint and Several Liability.............................................38
2.12 Borrower Waivers........................................................39
SECTION 3. TAXES, YIELD PROTECTION AND ILLEGALITY.............................39
3.01 Taxes. ................................................................39
3.02 Illegality..............................................................40
3.03 Inability to Determine Rates............................................40
3.04 Increased Cost and Reduced Return; Capital Adequacy.....................41
3.05 Breakfunding Costs......................................................41
3.06 Matters Applicable to all Requests for Compensation.....................42
3.07 Survival................................................................42
SECTION 4. CONDITIONS PRECEDENT TO EFFECTIVENESS AND EXTENSIONS OF CREDIT.....42
4.01 Closing Date............................................................42
4.02 Effective Date..........................................................43
4.03 Conditions to all Extensions of Credit..................................46
SECTION 5. REPRESENTATIONS AND WARRANTIES.....................................46
5.01 Existence and Qualification; Power; Compliance with Laws................46
5.02 Power; Authorization; Enforceable Obligations...........................46
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Continued
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5.03 No Legal Bar............................................................47
5.04 Financial Statements; No Material Adverse Effect........................47
5.05 Litigation..............................................................47
5.06 No Default..............................................................47
5.07 Ownership of Property; Liens............................................48
5.08 Taxes...................................................................48
5.09 Margin Regulations; Investment Company Act; Public Utility
Holding Company Act.....................................................48
5.10 ERISA Compliance........................................................48
5.11 Intangible Assets.......................................................49
5.12 Compliance With Laws....................................................49
5.13 Environmental Compliance................................................49
5.14 Insurance...............................................................49
5.15 Disclosure..............................................................49
SECTION 6. AFFIRMATIVE COVENANTS..............................................50
6.01 Financial Statements....................................................50
6.02 Certificates, Notices and Other Information.............................50
6.03 Payment of Taxes........................................................51
6.04 Preservation of Existence...............................................51
6.05 Maintenance of Properties...............................................51
6.06 Maintenance of Insurance................................................52
6.07 Compliance With Laws....................................................52
6.08 Inspection Rights.......................................................52
6.09 Keeping of Records and Books of Account.................................52
6.10 Compliance with ERISA...................................................52
6.11 Compliance With Agreements..............................................52
6.12 Use of Proceeds.........................................................52
6.13 Assumption by New Subsidiaries..........................................52
SECTION 7. NEGATIVE COVENANTS.................................................53
7.01 Indebtedness............................................................53
7.02 Liens and Negative Pledges..............................................53
7.03 Fundamental Changes.....................................................53
7.04 Dispositions............................................................54
7.05 Investments.............................................................54
7.06 Lease Obligations.......................................................54
7.07 Restricted Payments.....................................................54
7.08 ERISA...................................................................54
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Continued
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7.09 Change in Nature of Business............................................55
7.10 Transactions with Affiliates............................................55
7.11 Limitations on Upstreaming..............................................55
7.12 Financial Covenants.....................................................55
7.13 Change in Auditors......................................................56
SECTION 8. EVENTS OF DEFAULT AND REMEDIES.....................................56
8.01 Events of Default.......................................................56
8.02 Remedies Upon Event of Default..........................................58
SECTION 9. ADMINISTRATIVE AGENT...............................................59
9.01 Appointment and Authorization of Administrative Agent...................59
9.02 Delegation of Duties....................................................60
9.03 Liability of Administrative Agent.......................................60
9.04 Reliance by Administrative Agent........................................60
9.05 Notice of Default.......................................................61
9.06 Credit Decision; Disclosure of Information by Administrative Agent......61
9.07 Indemnification of Administrative Agent.................................62
9.08 Administrative Agent in Individual Capacity.............................62
9.09 Successor Administrative Agent..........................................63
SECTION 10. MISCELLANEOUS.....................................................63
10.01 Amendments; Consents...................................................63
10.02 Transmission and Effectiveness of Communications and Signatures........64
10.03 Attorney Costs, Expenses and Taxes.....................................65
10.04 Binding Effect; Assignment.............................................65
10.05 Set-off................................................................67
10.06 Sharing of Payments....................................................67
10.07 No Waiver; Cumulative Remedies.........................................68
10.08 Usury..................................................................69
10.09 Counterparts...........................................................69
10.10 Integration............................................................69
10.11 Nature of Lenders' Obligations.........................................69
10.12 Survival of Representations and Warranties.............................69
10.13 Indemnity by Borrowers.................................................70
10.14 Nonliability of Lenders................................................70
10.15 No Third Parties Benefitted............................................71
10.16 Severability...........................................................71
10.17 Confidentiality........................................................71
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10.18 Further Assurances.....................................................72
10.19 Headings...............................................................72
10.20 Time of the Essence....................................................72
10.21 Foreign Lenders and Participants.......................................72
10.22 Governing Law..........................................................73
10.23 Waiver of Right to Trial by Jury.......................................74
10.24 Entire Agreement.......................................................74
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Continued
EXHIBITS
FORM OF
A Request for Extension of Credit
B Compliance Certificate
C Note
D Notice of Assignment and Acceptance
E Opinion of Counsel
SCHEDULES
2.01 Commitments and Pro Rata Shares
7.01 Existing Indebtedness, Liens and Negative Pledges
10.02 Offshore and Domestic Lending Offices, Addresses for Notices
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CREDIT AGREEMENT
This CREDIT AGREEMENT ("AGREEMENT") is entered into as of July 28, 2000
by and among BIG DOG HOLDINGS, INC., a Delaware corporation ("HOLDINGS"), BIG
DOG USA, INC., a California corporation ("BDUSA"; and together with Holdings,
the "BORROWERS"), each lender from time to time party hereto (collectively,
"LENDERS" and individually, a "LENDER"), and BANK OF AMERICA, N.A., as
Administrative Agent and Issuing Lender.
RECITAL
Borrowers have requested that Lenders and Issuing Lender provide a
revolving line of credit, and Lenders, Issuing Lender and Administrative Agent
are willing to do so on the terms and conditions set forth herein.
In consideration of the mutual covenants and agreements herein
contained, the parties hereto covenant and agree as follows:
SECTION 1.
DEFINITIONS AND ACCOUNTING TERMS
1.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the meanings set forth below:
"ACQUISITION" means any transaction or series of related transactions
for the purpose of or resulting, directly or indirectly, in (a) the acquisition
of all or substantially all of the assets of a Person, or of any business or
division of a Person, (b) the acquisition of in excess of 50% of the capital
stock, partnership interests, membership interests or equity of any Person, or
otherwise causing any Person to become a Subsidiary, or (c) a merger,
consolidation, amalgamation or any other combination with another Person (other
than a Person that is a Subsidiary) provided that Holdings or a Subsidiary of
Holdings is the surviving entity.
"ADMINISTRATIVE AGENT" means Bank of America, N.A., in its capacity as
Administrative agent under any of the Loan Documents, or any successor
administrative agent.
"ADMINISTRATIVE AGENT'S OFFICE" means Administrative Agent's address
and, as appropriate, account as set forth on SCHEDULE 10.02, or such other
address or account as Administrative Agent hereafter may designate by written
notice to Borrowers and Lenders.
"ADMINISTRATIVE AGENT-RELATED PERSONS" means Administrative Agent
(including any successor agent), together with its Affiliates, and the officers,
directors, employees, agents and attorneys-in-fact of such Persons and
Affiliates.
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"AFFILIATE" means any Person directly or indirectly controlling,
controlled by, or under direct or indirect common control with, another Person.
A Person shall be deemed to be "controlled by" any other Person if such other
Person possesses, directly or indirectly, power (a) to vote 10% or more of the
securities (on a fully diluted basis) having ordinary voting power for the
election of directors or managing general partners; or (b) to direct or cause
the direction of the management and policies of such Person whether by contract
or otherwise.
"AGREEMENT" means this Credit Agreement, as amended, restated,
extended, supplemented or otherwise modified in writing from time to time.
"APPLICABLE AMOUNT" means the following amounts per annum, based upon
the Pricing Ratio as set forth in the most recent Compliance Certificate
received by Administrative Agent pursuant to SECTION 6.02(b); PROVIDED, HOWEVER,
that, until Administrative Agent receives the first Compliance Certificate after
the Closing Date, such amounts shall be those indicated for pricing level 2 set
forth below:
Applicable Amount
Pricing Commitment Offshore Base Rate
Level Pricing Ratio Fee Rate + +
---------------------------------------------------------------------------------------------------------------------
1 greater than or equal to 2.00:1 0.375% 2.75% 0.75%
2 greater than or equal to 1.00:1 but less than 2.00:1 0.250% 2.25% 0.25%
3 less than 1.00 0.1250% 1.75% -0.25%
The Applicable Amount shall be in effect from the date the most recent
Compliance Certificate is received by Administrative Agent to but excluding the
date the next Compliance Certificate is received; PROVIDED, HOWEVER, that if
Holdings fails to timely deliver the next Compliance Certificate, the Applicable
Amount from the date such Compliance Certificate was due to but excluding the
date such Compliance Certificate is received by Administrative Agent shall be
the highest pricing level set forth above, and, thereafter, the pricing level
indicated by such Compliance Certificate when received.
"APPLICABLE PAYMENT DATE" means, (a) as to any Offshore Rate Loan, the
last day of the relevant Interest Period and any date that such Loan is prepaid
or converted in whole or in part and the Maturity Date; PROVIDED, HOWEVER, that
if any Interest Period for an Offshore Rate Loan exceeds three months, interest
shall also be paid on the date which falls every three months after the
beginning of such Interest Period, (b) as to any Base Rate Loan, the last
Business Day of each calendar month and the Maturity Date, and (c) as to any
other Obligations, the last Business Day
2
of each calendar quarter and the Maturity Date; PROVIDED, FURTHER, that interest
accruing at the Default Rate shall be payable from time to time upon demand of
Administrative Agent.
"ATTORNEY COSTS" means and includes all fees and disbursements of any
law firm or other external counsel and the allocated cost of internal legal
services and all disbursements of internal counsel.
"AUDITED FINANCIAL STATEMENTS" means the audited consolidated balance
sheet of Holdings and its Subsidiaries for the fiscal year ended December 31,
1999, and the related consolidated statements of income and cash flows for such
fiscal year of Holdings.
"BANK OF AMERICA" means Bank of America, N.A.
"BANKRUPTCY CODE" means the Federal Bankruptcy Reform Act of 1978 (11
U.S.C. Section101, ET SEQ.).
"BASE RATE" means a fluctuating rate per annum equal to the higher of
(a) the Federal Funds Rate plus 1/2 of 1% and, (b) the rate of interest in
effect for such day as publicly announced from time to time by Bank of America
as its "prime rate." Such rate is a rate set by Bank of America based upon
various factors including Bank of America's costs and desired return, general
economic conditions and other factors, and is used as a reference point for
pricing some loans, which may be priced at, above, or below such announced rate.
Any change in such rate announced by Bank of America shall take effect at the
opening of business on the day specified in the public announcement of such
change.
"BASE RATE LOAN" means a Loan which bears interest based on the Base
Rate.
"BDUSA" has the meaning set forth in the introductory paragraph hereto.
"BORROWER" means either of the Borrowers.
"BORROWERS" has the meaning set forth in the introductory paragraph
hereto.
"BORROWER PARTY" means Borrowers or any Person other than Lenders and
any Affiliates of Lenders, Administrative Agent, Issuing Lender from time to
time party to a Loan Document.
"BORROWING" and "BORROW" each mean a borrowing of Loans hereunder.
"BORROWING DATE" means the date that a Loan is made, which shall be a
Business Day.
3
"BUSINESS DAY" means any day other than a Saturday, Sunday, or other
day on which commercial banks are authorized to close under the Laws of, or are
in fact closed in, the state where Administrative Agent's Office is located and,
if such day relates to any Offshore Rate Loan, means any such day on which
dealings in Dollar deposits are conducted by and between banks in the offshore
Dollar interbank market.
"CHANGE OF CONTROL" means (i) the failure of Xxxx Xxxxx, Xxxxxx X.
Xxxxxxxx and/or their immediate family members to, directly or indirectly, (a)
beneficially own (as defined in the rules of the Securities Exchange Act of
1934) in the aggregate at least 55% of the outstanding shares of voting stock of
Holdings or (b) have the power to direct the management policies of Holdings; or
(ii) the failure of Holdings to, directly or indirectly, own in the aggregate
100% of the outstanding shares of voting stock of BDUSA.
"CLOSING DATE" means the date all the conditions precedent in SECTION
4.01 are satisfied or waived in accordance with SECTION 4.01.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time.
"COMMITMENT" means, for each Lender, the obligation of such Lender to
make certain Extensions of Credit in an aggregate principal amount not exceeding
the amount set forth opposite such Lender's name on SCHEDULE 2.01 at any one
time outstanding, as such amount may be reduced or adjusted from time to time in
accordance with this Agreement (collectively, the "COMBINED COMMITMENTS"). From
the Closing Date until the Effective Date, the combined Commitments shall be in
an aggregate amount of $30,000,000. On the Effective Date, the combined
Commitments shall be in an aggregate amount equal to the lesser of (i)
$30,000,000 and (ii) the sum of (a) $10,000,000 and (b) the amount needed by
Holdings to fund its share repurchase pursuant to the Tender Offer. The combined
Commitments shall reduce, from time to time, as provided in SECTION 2.05.
"COMPLIANCE CERTIFICATE" means a certificate substantially in the form
of EXHIBIT B, properly completed and signed by a Responsible Officer of
Holdings.
"CONSOLIDATED EBIT" means, as of any date of determination, for
Holdings and its Subsidiaries on a consolidated basis, an amount equal to the
sum of (a) Consolidated Net Income, (b) Consolidated Interest Charges and (c)
the amount of taxes, based on or measured by income, used or included in the
determination of such Consolidated Net Income.
"CONSOLIDATED EBITDA" means, for any period, for Holdings and its
Subsidiaries on a
4
consolidated basis, an amount equal to the sum of (a) Consolidated Net Income,
(b) Consolidated Interest Charges, (c) the amount of taxes, based on or measured
by income, used or included in the determination of such Consolidated Net
Income, and (d) the amount of depreciation and amortization expense deducted in
determining such Consolidated Net Income.
"CONSOLIDATED FUNDED INDEBTEDNESS" means, as of any date of
determination the outstanding principal amount of all Indebtedness of Holdings
and its Subsidiaries on a consolidated basis, of the nature referred to in
clauses (a), (b), (c) and (d) of the definition of "Indebtedness". Consolidated
Funded Indebtedness shall not include trade payables.
"CONSOLIDATED INTEREST CHARGES" means, for any period, for Holdings and
its Subsidiaries on a consolidated basis, the sum of (a) all interest, premium
payments, fees, charges and related expenses payable by Holdings and its
Subsidiaries in connection with borrowed money (including capitalized interest)
or in connection with the deferred purchase price of assets, in each case to the
extent treated as interest in accordance with GAAP, and (b) the portion of rent
payable by Holdings and its Subsidiaries with respect to such period under
capital leases that is treated as interest in accordance with GAAP.
"CONSOLIDATED NET INCOME" means, for any period, for Holdings and its
Subsidiaries on a consolidated basis, the net income of Holdings and its
Subsidiaries from continuing operations after extraordinary items (excluding
gains or losses from Dispositions of assets) for that period.
"CONTINUATION" and "CONTINUE" mean, with respect to any Offshore Rate
Loan, the continuation of such Offshore Rate Loan as an Offshore Rate Loan on
the last day of the Interest Period for such Loan.
"CONTRACTUAL OBLIGATION" means, as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or undertaking to
which such Person is a party or by which it or any of its property is bound.
"CONVERSION" and "CONVERT" mean, with respect to any Loan, the
conversion of such Loan from or into another type of Loan.
"DEBTOR RELIEF LAWS" means the Bankruptcy Code, and all other
liquidation, conservatorship, bankruptcy, assignment for the benefit of
creditors, moratorium, rearrangement, receivership, insolvency, reorganization,
or similar debtor relief Laws of the United States of America or other
applicable jurisdictions from time to time in effect affecting the rights of
creditors generally.
5
"DEFAULT" means any event that, with the giving of any notice, the
passage of time, or both, would be an Event of Default.
"DEFAULT RATE" means an interest rate equal to the Base Rate PLUS the
Applicable Amount, if any, applicable to Base Rate Loans PLUS 2% per annum, to
the fullest extent permitted by applicable Laws; PROVIDED, HOWEVER, that with
respect to an Offshore Rate Loan, the Default Rate shall be an interest rate
equal to the interest rate (including any Applicable Amount) otherwise
applicable to such Loan plus 2% per annum.
"DESIGNATED DEPOSIT ACCOUNT" means a deposit account maintained by
Borrowers with Bank of America, as from time to time designated by Borrowers to
Administrative Agent by Requisite Notice.
"DISPOSITION" or "DISPOSE" means the sale, transfer or other
disposition (including any sale and leaseback transaction) of any property by
any Person and the grant of an exclusive license (including exclusive of the
Borrowers) of all or substantially all of the intellectual property of any
Person for all or a material portion of such Person's product lines in a single
transaction or series of related transactions, including any sale, assignment,
transfer or other disposal with or without recourse of any notes or accounts
receivable or any rights and claims associated therewith; PROVIDED, HOWEVER,
that to the extent that any Investment in, or contribution of assets to, a joint
venture qualifies as a Permitted Acquisition and Investment hereunder, such
Investment or contribution shall not be deemed to be a Disposition.
"DOLLAR" and "$" means lawful money of the United States of America.
"DRAFT SCHEDULE TO" means that certain draft dated July __, 2000 of the
Schedule TO to be filed by Holdings with the Securities and Exchange Commission
promptly following the Closing Date.
"EFFECTIVE DATE" means the date all the conditions precedent in SECTION
4.02 are satisfied or waived in accordance with SECTION 4.02.
"ELIGIBLE ASSIGNEE" means (a) a financial institution organized under
the laws of the United States, or any state thereof, and having a combined
capital and surplus of at least $100,000,000; (b) a commercial bank organized
under the laws of any other country which is a member of the Organization for
Economic Cooperation and Development, or a political subdivision of any such
country, and having a combined capital and surplus of at least $100,000,000,
provided that such bank is acting through a branch or agency located in the
United States; (c) a Person that is primarily engaged in the business of
commercial banking and that is
6
(i) a Subsidiary of a Lender, (ii) a Subsidiary of a Person of which a Lender is
a Subsidiary, or (iii) a Person of which a Lender is a Subsidiary; (d) another
Lender; (e) any other entity which is an "accredited investor" (as defined in
Regulation D under the Securities Act of 1933, as amended) which extends credit
or buys loans as one of its businesses, including but not limited to, insurance
companies, mutual funds and lease financing companies; or (f) other lenders or
institutional investors consented to in writing in advance by Administrative
Agent and Holdings. No Borrower Party or any Affiliate of a Borrower Party shall
be an Eligible Assignee.
"ENVIRONMENTAL LAWS" means all Laws relating to environmental, health,
safety and land use matters applicable to any property.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
any regulations issued pursuant thereto, as amended from time to time.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) under common control with Holdings within the meaning of Sections
414(b) or (c) of the Code (and Sections 414(m) and (o) of the Code for purposes
of provisions relating to Section 412 of the Code).
"ERISA EVENT" means (a) a Reportable Event with respect to a Pension
Plan; (b) a withdrawal by Holdings or any ERISA Affiliate from a Pension Plan
subject to Section 4063 of ERISA during a plan year in which it was a
substantial employer (as defined in Section 4001(a)(2) of ERISA) or a cessation
of operations that is treated as such a withdrawal under Section 4062(e) of
ERISA; (c) a complete or partial withdrawal by Holdings, or any ERISA Affiliate
from a Multiemployer Plan or notification that a Multiemployer Plan is in
reorganization; (d) the filing of a notice of intent to terminate, the treatment
of a Plan amendment as a termination under Sections 4041 or 4041A of ERISA, or
the commencement of proceedings by the PBGC to terminate a Pension Plan or
Multiemployer Plan; (e) an event or condition which might reasonably be expected
to constitute grounds under Section 4042 of ERISA for the termination of, or the
appointment of a trustee to administer, any Pension Plan or Multiemployer Plan;
or (f) the imposition of any liability under Title IV of ERISA, other than PBGC
premiums due but not delinquent under Section 4007 of ERISA, upon Holdings or
any ERISA Affiliate.
"EVENT OF DEFAULT" means any of the events specified in SECTION 8.
"EXISTING CREDIT FACILITY" means that certain grid promissory note
dated as of February 19, 1998 among Borrowers and Israel Discount Bank Limited,
Los Angeles Agency.
"EXTENSION OF CREDIT" means (a) a Borrowing, Conversion or Continuation
of Loans, (b) a Letter of Credit Action wherein a new Letter of Credit is issued
or which has the effect of
7
increasing the amount of, extending the maturity of, or making a material
modification to an outstanding Letter of Credit or the reimbursement of drawings
thereunder, or (c) each Lender's purchase of a risk participation in a new
Letter of Credit (collectively, the "EXTENSIONS OF CREDIT").
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upwards to the nearest 1/100 of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank on the Business Day next succeeding such day; PROVIDED that
(a) if such day is not a Business Day, the Federal Funds Rate for such day shall
be such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day, and (b) if no such rate is so
published on such next succeeding Business Day, the Federal Funds Rate for such
day shall be the average rate charged to Bank of America on such day on such
transactions as determined by Administrative Agent.
"FIXED CHARGE COVERAGE RATIO" means, as of any date of determination,
the ratio of (a) (i) Consolidated EBITDA for the period of the four prior fiscal
quarters ending on such date plus (ii) lease and rental expense of Holdings and
its Subsidiaries on a consolidated basis for such period minus (iii) cash taxes
paid, capital expenditures incurred and cash dividends paid on a consolidated
basis during such period TO (b) the sum of, without duplication, (i)
Consolidated Interest Charges during such period and (ii) lease and rental
expense during such period.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board and the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or such other principles as may be
approved by a significant segment of the accounting profession, that are
applicable to the circumstances as of the date of determination, consistently
applied. If at any time any change in GAAP would affect the computation of any
financial ratio or requirement set forth in any Loan Document, and either
Borrowers or Requisite Lenders shall so request, Administrative Agent, Lenders
and Borrowers shall negotiate in good faith to amend such ratio or requirement
to preserve the original intent thereof in light of reflect such change in GAAP
(subject to the approval of Requisite Lenders), provided that, until so amended,
(a) such ratio or requirement shall continue to be computed in accordance with
GAAP prior to such change therein and (b) Borrowers shall provide to
Administrative Agent, and Lenders financial statements and other documents
required under this Agreement or as reasonably requested hereunder setting forth
a reconciliation between calculations of such ratio or requirement made before
and after giving effect to such change in GAAP.
"GOVERNING STATE" means the State of California.
8
"GOVERNMENTAL AUTHORITY" means (a) any international, foreign, federal,
state, county or municipal government, or political subdivision thereof, (b) any
governmental or quasi-governmental agency, authority, board, bureau, commission,
department, instrumentality, central bank or public body, or (c) any court,
administrative tribunal or public utility.
"GUARANTY OBLIGATION" means, as to any Person, any (a) guaranty by that
Person of Indebtedness of, or other obligation payable or performable by, any
other Person or (b) assurance, agreement, letter of responsibility, letter of
awareness, undertaking or arrangement given by that Person to an obligee of any
other Person with respect to the payment or performance of an obligation by, or
the financial condition of, such other Person, whether direct, indirect or
contingent, including any purchase or repurchase agreement covering such
obligation or any collateral security therefor, any agreement to provide funds
(by means of loans, capital contributions or otherwise) to such other Person,
any agreement to support the solvency or level of any balance sheet item of such
other Person or any "keep-well" or other arrangement of whatever nature given
for the purpose of assuring or holding harmless such obligee against loss with
respect to any obligation of such other Person; PROVIDED, HOWEVER, that the term
Guaranty Obligation shall not include endorsements of instruments for deposit or
collection in the ordinary course of business. The amount of any Guaranty
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the related primary obligation, or portion thereof, covered by such
Guaranty Obligation or, if not stated or determinable, the maximum reasonably
anticipated liability in respect thereof as determined by the Person in good
faith.
"HOLDINGS" has the meaning set forth in the introductory paragraph
hereto.
"INDEBTEDNESS" means, as to any Person at a particular time, all items
which would, in conformity with GAAP, be classified as liabilities on a balance
sheet of such Person as at such time (excluding trade and other accounts payable
in the ordinary course of business in accordance with customary trade terms and
which are not overdue for a period of more than 60 days and excluding deferred
taxes), but in any event including:
(a) all obligations of such Person for borrowed money and all
other interest-bearing obligations of such Person including all obligations of
such Person evidenced by bonds, debentures, notes or other similar instruments;
(b) any direct or contingent obligations of such Person arising
under letters of credit (including standby and commercial), banker's
acceptances, bank guaranties, surety bonds and similar instruments;
9
(c) whether or not so included as liabilities in accordance with
GAAP, all obligations of such Person to pay the deferred purchase price of
property or services, and indebtedness (excluding prepaid interest thereon)
secured by a Lien on property owned or being purchased by such Person (including
indebtedness arising under conditional sales or other title retention
agreements), whether or not such indebtedness shall have been assumed by such
Person or is limited in recourse; and
(d) all Guaranty Obligations of such Person in respect of any of
the foregoing. For all purposes of this Agreement, the Indebtedness of any
Person shall include the Indebtedness of any partnership or joint venture in
which such Person is a general partner or a joint venturer, unless such
Indebtedness is expressly made non-recourse to such Person except for customary
exceptions acceptable to Requisite Lenders.
"INDEMNIFIED LIABILITIES" has the meaning set forth in SECTION 10.13.
"INDEMNITEES" has the meaning set forth in SECTION 10.13.
"INTEREST PERIOD" means, for each Offshore Rate Loan, (a) initially,
the period commencing on the date such Offshore Rate Loan is disbursed,
Continued as, or Converted into, an Offshore Rate Loan and (b) thereafter, the
period commencing on the last day of the preceding Interest Period, and ending,
in each case, on the earlier of (x) the scheduled Maturity Date, or (y) one,
two, three or six months thereafter; PROVIDED that:
(i) any Interest Period that would otherwise end on a day that
is not a Business Day shall be extended to the next succeeding Business
Day unless such Business Day falls in another calendar month, in which
case such Interest Period shall end on the next preceding Business Day;
(ii) any Interest Period which begins on the last Business Day
of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at the
end of such Interest Period; and
(iii) unless Administrative Agent otherwise consents, there
may not be more than five Interest Periods in effect at any time.
"INVESTMENT" means, as to any Person, any acquisition or any investment
by such Person, whether by means of the purchase or other acquisition of stock
or other securities of any other Person or by means of a loan, creating a debt,
capital contribution, guaranty or other debt or
10
equity participation or interest in any other Person, including any partnership
and joint venture interests in such other Person. For purposes of covenant
compliance, the amount of any Investment shall be the amount actually invested,
without adjustment for subsequent increases or decreases in the value of such
Investment.
"IRS" means the Internal Revenue Service.
"ISSUING LENDER" means Bank of America, or any successor issuing lender
hereunder.
"LAWS" or "LAW" means all international, foreign, federal, state and
local statutes, treaties, rules, guidelines, regulations, ordinances, codes and
administrative or judicial precedents or authorities, including the
interpretation or administration thereof by any Governmental Authority charged
with the enforcement, interpretation or administration thereof, and all
applicable administrative orders, directed duties, requests, licenses,
authorizations and permits of, and agreements with, any Governmental Authority,
in each case whether or not having the force of law.
"LENDER" means each lender from time to time party hereto and, as the
context requires, Issuing Lender.
"LENDING OFFICE" means, as to any Lender, the office or offices of such
Lender described as such on SCHEDULE 10.02, or such other office or offices as a
Lender may from time to time notify Administrative Agent.
"LETTER OF CREDIT" means any letter of credit issued or outstanding
hereunder. A Letter of Credit may be a commercial letter of credit or a standby
letter of credit.
"LETTER OF CREDIT ACTION" means the issuance, supplement, amendment,
renewal, extension, modification or other action relating to a Letter of Credit
hereunder.
"LETTER OF CREDIT APPLICATION" means an application for a Letter of
Credit Action from time to time in use by Issuing Lender.
"LETTER OF CREDIT CASH COLLATERAL ACCOUNT" means a blocked deposit
account at Bank of America with respect to which Borrowers hereby grant a
security interest in such account to Bank of America, for the benefit of the
Issuing Lender and all Lenders, as security for Letter of Credit Usage and with
respect to which Borrowers agree to execute and deliver from time to time such
documentation as Administrative Agent or Bank of America may reasonably request
to further assure and confirm such security interest.
11
"LETTER OF CREDIT EXPIRATION DATE" means the Maturity Date.
"LETTER OF CREDIT SUBLIMIT" means an amount equal to $5,000,000 in the
aggregate for commercial and standby letters of credit and an amount equal to
$1,000,000 in the aggregate for standby letters of credit. The Letter of Credit
Sublimit is part of, and not in addition to, the Commitments.
"LETTER OF CREDIT USAGE" means, as at any date of determination, the
aggregate undrawn face amount of outstanding Letters of Credit PLUS the
aggregate amount of all drawings under the Letters of Credit not reimbursed by
Borrowers or converted into Loans.
"LEVERAGE RATIO" means, as of any date of determination, for Holdings
and its Subsidiaries on a consolidated basis, the ratio of (a) Consolidated
Funded Indebtedness as of such date TO (b) Consolidated EBITDA for the period of
the four fiscal quarters ending on that date.
"LIEN" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement (in the nature of compensating balances, cash collateral accounts or
security interests), encumbrance, lien (statutory or other), charge, or
preference, priority or other security interest or preferential arrangement of
any kind or nature whatsoever (including any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable Laws of any jurisdiction), including
the interest of a purchaser of accounts receivable.
"LOAN" means any advance made by any Lender to Borrowers as provided in
SECTION 2.01 (collectively, the "LOANS").
"LOAN DOCUMENTS" means this Agreement, the Subsidiary Guaranty, the
Security Agreement, and any Note, any Letter of Credit Application, any Request
for Extension of Credit, any certificate, any fee letter, and any other
instrument, document or agreement from time to time delivered in connection with
this Agreement.
"MATERIAL ADVERSE EFFECT" means any set of circumstances or events
which (a) has or would reasonably be expected to have any material adverse
effect whatsoever upon the validity or enforceability of any Loan Document, (b)
is or would reasonably be expected to be material and adverse to the condition
(financial or otherwise), business, assets, operations or prospects of Borrowers
as a whole, or (c) materially impairs or would reasonably be expected to
materially
12
impair the ability of any Borrowers as a whole to perform the Obligations, in
each case as determined by Requisite Lenders.
"MATURITY DATE" means the third anniversary of the Closing Date, as
such date may be earlier terminated or extended in accordance with the terms
hereof.
"MINIMUM AMOUNT" means, with respect to each of the following actions,
the minimum amount and any multiples in excess thereof set forth opposite such
action:
TYPE OF ACTION MINIMUM MULTIPLES IN
AMOUNT EXCESS THEREOF
Borrowing or prepayment of, or Conversion $500,000 $100,000
into, Base Rate Loans
Borrowing, prepayment or Continuation of, $500,000 $100,000
or Conversion into, Offshore Rate Loans
Letter of Credit Action $5,000 None
Reduction in Commitments $1,000,000 $500,000
Assignments $1,000,000 None
"MULTIEMPLOYER PLAN" means any employee benefit plan of the type
described in Section 4001(a)(3) of ERISA.
"NEGATIVE PLEDGE" means a Contractual Obligation that restricts Liens
on property.
"NOTE" means a promissory note made by Borrowers in favor of a Lender
evidencing Loans made by such Lender, substantially in the form of EXHIBIT C
(collectively, the "NOTES").
"NOTICE OF ASSIGNMENT AND ACCEPTANCE" means a Notice of Assignment and
Acceptance substantially in the form of EXHIBIT D.
"OBLIGATIONS" means all advances to, and debts, liabilities,
obligations, covenants and duties of, any Borrower Party arising under any Loan
Document, whether direct or indirect (including those acquired by assignment),
absolute or contingent, due or to become due, now existing or hereafter arising
and including interest that accrues after the commencement of any proceeding
under any Debtor Relief Laws by or against any Borrower Party or any Subsidiary
or Affiliate of any Borrower Party.
"OFFSHORE BASE RATE" has the meaning set forth in the definition of
Offshore Rate.
13
"OFFSHORE RATE" means for any Interest Period with respect to any
Offshore Rate Loan, a rate per annum determined by Administrative Agent pursuant
to the following formula:
Offshore Rate = Offshore Base Rate
------------------------------------------
1.00 - Eurodollar Reserve Percentage
Where,
"OFFSHORE BASE RATE" means, for such Interest Period:
(a) the rate per annum (carried out to the fifth decimal
place) equal to the rate determined by Administrative Agent to be the
offered rate that appears on page 3750 of the Telerate Screen that
displays an average British Bankers Association Interest Settlement
Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or
(b) in the event the rate referenced in the preceding
subsection (a) does not appear on such page or service or such page or
service shall cease to be available, the rate per annum (carried out to
the fifth decimal place) equal to the rate determined by Administrative
Agent to be the offered rate on such other page or other service that
displays an average British Bankers Association Interest Settlement
Rate for deposits in Dollars (for delivery on the first day of such
Interest Period) with a term equivalent to such Interest Period,
determined as of approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such Interest Period, or
(c) in the event the rates referenced in the preceding
subsections (a) and (b) are not available, the rate per annum
determined by Administrative Agent as the rate of interest at which
Dollar deposits (for delivery on the first day of such Interest Period)
in same day funds in the approximate amount of the applicable Offshore
Rate Loan and with a term equivalent to such Interest Period would be
offered by its London Branch to major banks in the offshore Dollar
market at their request at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period.
"EURODOLLAR RESERVE PERCENTAGE" means, for any day during any
Interest Period, the reserve percentage (expressed as a decimal,
rounded upward to the next 1/100th of 1%) in effect on such day,
whether or not applicable to any Lender, under regulations issued from
time to time by the Board of Governors of the Federal Reserve System
for
14
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency
liabilities"). The Offshore Rate for each outstanding Offshore Rate
Loan shall be adjusted automatically as of the effective date of any
change in the Eurodollar Reserve Percentage.
The determination of the Eurodollar Reserve Percentage and the
Offshore Base Rate by Administrative Agent shall be conclusive in the
absence of manifest error.
"OFFSHORE RATE LOAN" means a Loan bearing interest based on the
Offshore Rate.
"ORDINARY COURSE DISPOSITIONS" means:
(a) Dispositions of obsolete or worn out property, whether now
owned or hereafter acquired, in the ordinary course of business;
(b) Dispositions of cash, cash equivalents, inventory and other
property in the ordinary course of business;
(c) Dispositions of property to the extent that such property is
exchanged for credit against the purchase price of similar replacement property,
or the proceeds of such sale are reasonably promptly applied to the purchase
price of such replacement property or where Holdings or its Subsidiary determine
in good faith that the failure to replace such equipment will not be detrimental
to the business of Holdings or such Subsidiary; and
(d) Dispositions of assets or property by any Subsidiary of
Holdings to Holdings or another wholly-owned Subsidiary of Holdings; PROVIDED,
HOWEVER, that no such Disposition shall be for less than the fair market value
of the property being disposed of.
"ORDINARY COURSE INDEBTEDNESS" means:
(a) Indebtedness under the Loan Documents;
(b) intercompany Guaranty Obligations of Holdings or any of its
Subsidiaries guarantying Indebtedness otherwise permitted hereunder of Holdings
or any wholly-owned Subsidiary of Holdings;
(c) Indebtedness arising from the honoring of a check, draft or
similar instrument against insufficient funds; and
21
(d) trade payables incurred in the ordinary course of business.
"ORDINARY COURSE INVESTMENTS" means Investments consisting of:
(a) cash and cash equivalents;
(b) advances not to exceed $500,000 in the aggregate at any time
outstanding to officers, directors and employees of Holdings and its
Subsidiaries for travel, entertainment, relocation, residential purposes and
analogous ordinary business purposes;
(c) Investments of Holdings in any of its Subsidiaries and
Investments of any Subsidiary of Holdings in Holdings or another Subsidiary of
Holdings;
(d) extensions of credit to customers or suppliers of Holdings and
its Subsidiaries in the ordinary course of business and any Investments received
in satisfaction or partial satisfaction thereof; and
(e) Guaranty Obligations permitted by SECTION 7.01.
"ORDINARY COURSE LIENS" means:
(a) Liens pursuant to any Loan Document;
(b) Liens for taxes not yet due or which are being contested in
good faith and by appropriate proceedings, if adequate reserves with respect
thereto are maintained on the books of the applicable Person in accordance with
GAAP;
(c) carriers', warehousemen's, mechanics', materialmen's,
landlord's, repairmen's or other like Liens arising in the ordinary course of
business which are not overdue for a period of more than 30 days or which are
being contested in good faith and by appropriate proceedings, if adequate
reserves with respect thereto are maintained on the books of the applicable
Person;
(d) pledges or deposits in connection with worker's compensation,
unemployment insurance and other social security legislation;
(e) deposits to secure the performance of bids, trade contracts
(other than for borrowed money), leases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;
22
(f) easements, rights-of-way, restrictions and other similar
encumbrances affecting real property which, in the aggregate, are not
substantial in amount, and which do not in any case materially detract from the
value of the property subject thereto or materially interfere with the ordinary
conduct of the business of any Person; and
(g) attachment, judgment or other similar Liens arising in
connection with litigation or other legal proceedings (and not otherwise a
Default hereunder) in the ordinary course of business that is currently being
contested in good faith by appropriate proceedings, adequate reserves have been
set aside and no material property is subject to a material risk of loss or
forfeiture and the claims in respect of such Liens are fully covered by
insurance (subject to ordinary and customary deductibles).
"ORGANIZATION DOCUMENTS" means, (a) with respect to any corporation,
the certificate or articles of incorporation and the bylaws; (b) with respect to
any limited liability company, the articles of formation and operating
agreement; and (c) with respect to any partnership, joint venture, trust or
other form of business entity, the partnership or joint venture agreement and
any agreement, instrument, filing or notice with respect thereto filed in
connection with its formation with the secretary of state or other department in
the state of its formation, in each case as amended from time to time.
"OUTSTANDING OBLIGATIONS" means, as of any date, and giving effect to
making any Extensions of Credit requested on such date and all payments,
repayments and prepayments made on such date, (a) when reference is made to all
Lenders, the sum of (i) the aggregate outstanding principal amount of all Loans,
and (ii) all Letter of Credit Usage, and (b) when reference is made to one
Lender the sum of (i) the aggregate outstanding principal amount of all Loans
made by such Lender and (ii) such Lender's ratable risk participation in all
Letter of Credit Usage.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
thereto established under ERISA.
"PENSION PLAN" means any "employee pension benefit plan" (as such term
is defined in Section 3(2) of ERISA), other than a Multiemployer Plan, that is
subject to Title IV of ERISA and is sponsored or maintained by Holdings or any
ERISA Affiliate or to which Holdings or any ERISA Affiliate contributes or has
an obligation to contribute, or in the case of a multiple employer plan (as
described in Section 4064(a) of ERISA) has made contributions at any time during
the immediately preceding five plan years.
23
"PERMITTED ACQUISITION AND INVESTMENT" shall mean an Acquisition or
Investment, consummated or to be consummated by Holdings or any Subsidiary of
Holdings: (a) which does not or would not result in Holdings or any of its
Subsidiaries being engaged to any substantial extent in any line or lines of
business activity other than those conducted as of the Closing Date; (b) the
terms of which have been accepted by the board of directors or other managing
body of the target Person (which, if such Person is the debtor in any proceeding
under the Bankruptcy Code, shall be the court having jurisdiction in such case);
(c) immediately before which and after giving effect to which the
representations and warranties of Holdings in Section 5 of this Agreement shall
be true in all material respects; (d) the aggregate consideration (including
Indebtedness assumed in connection therewith) for all such Acquisitions and
Investments after the Closing Date does not exceed $3,000,000; (e) the stock and
the assets of each new wholly-owned Subsidiary created thereby shall thereafter
be pledged as Collateral as required pursuant to SECTION 6.13 and (f) the stock
held by any Borrower Party in each new Subsidiary created thereby that is not
wholly-owned shall thereafter be pledged as Collateral as required pursuant to
SECTION 6.13.
"PERMITTED STOCK REPURCHASES" means the repurchase by Holdings from and
after the Closing Date of up to 4,000,000 shares of its common stock and
warrants and options to purchase its common stock at a price per share not to
exceed $6.50 (less the exercise price for any warrants or options) so long as
immediately before and after giving effect thereto (i) the representations and
warranties of Holdings in Section 5 of this Agreement shall be true and correct
in all material respects and (ii) no Default or Event of Default shall have
occurred and be continuing.
"PERSON" means any individual, trustee, corporation, general
partnership, limited partnership, limited liability company, joint stock
company, trust, unincorporated organization, bank, business association, firm,
joint venture, Governmental Authority, or otherwise.
"PLAN" means any employee benefit plan maintained or contributed to by
a Borrower Party or by any trade or business (whether or not incorporated) under
common control with a Borrower Party as defined in Section 4001(b) of ERISA and
insured by the Pension Benefit Guaranty Corporation under Title IV of ERISA.
"PRICING RATIO" means, as of any date of determination, the ratio of
(a) the sum of (i) Consolidated Funded Indebtedness as of such date plus (ii)
the amount by which the combined Commitments exceed the Outstanding Obligations
as of such date to (b) Consolidated EBITDA for the period of the four prior
fiscal quarters ending on such date.
"PRO RATA SHARE" means, with respect to each Lender, the percentage of
the combined
24
Commitments set forth opposite the name of that Lender on SCHEDULE 2.01.
"REPORTABLE EVENT" means any of the events set forth in Section 4043(b)
of ERISA or the regulations thereunder, a withdrawal from a Plan described in
Section 4063 of ERISA, or a cessation of operations described in Section 4062(e)
of ERISA.
"REQUEST FOR EXTENSION OF CREDIT" means, unless otherwise specified
herein, (a) with respect to a Borrowing, Conversion or Continuance of Loans, a
written request substantially in the form of EXHIBIT A and (b) with respect to a
Letter of Credit Action, a Letter of Credit Application, in each case of a
written Request for Extension of Credit, duly completed and signed by a
Responsible Officer of Borrowers and delivered by Requisite Notice.
"REQUISITE LENDERS" means, as of any date of determination: (a) if the
Commitments are then in effect, Lenders (excluding any Lenders not funding when
required to so hereunder) having in the aggregate 66-2/3% or more of the
combined Commitments then in effect and (b) if the Commitments have then been
terminated and there are Outstanding Obligations, Lenders holding Outstanding
Obligations aggregating 66-2/3% or more of such Outstanding Obligations.
"REQUISITE NOTICE" means, unless otherwise provided herein, (a)
irrevocable written notice to the intended recipient or (b) except with respect
to Letter of Credit Actions (which must be in writing), irrevocable telephonic
notice to the intended recipient, promptly followed by a written notice to such
recipient. Such notices shall be (i) delivered to such recipient at the address
or telephone number specified on SCHEDULE 10.02 or as otherwise designated by
such recipient by Requisite Notice to Administrative Agent, and (ii) if made by
any Borrower Party, given or made by a Responsible Officer of such Borrower
Party. Any written notice delivered in connection with any Loan Document shall
be in the form, if any, prescribed herein or therein. Any notice sent by other
than hardcopy shall be promptly confirmed by a telephone call to the recipient
and, if requested by Administrative Agent, by a manually-signed hardcopy
thereof.
"REQUISITE TIME" means, with respect to any of the actions listed
below, the time and date set forth below opposite such action:
CALIFORNIA
TYPE OF ACTION TIME DATE OF ACTION
Delivery of Request for Extension of
Credit for, or notice for:
* Borrowing or prepayment of, or 8:30 a.m. Same date as such Borrowing,
Conversion into, Base Rate Loans prepayment or Conversion
25
* Borrowing, prepayment or 10:00 a.m. 3 Business Days prior to such
Continuation of, or Conversion Borrowing, prepayment
into, Offshore Rate Loans Continuation or Conversion
* Letter of Credit Action 10:00 a.m. 1 Business Day prior to such action
(OR SUCH LESSER TIME WHICH IS
ACCEPTABLE TO ISSUING LENDER)
* Voluntary reduction in or 10:00 a.m. 2 Business Days prior to such
termination of Commitments reduction or termination
Payments by Lenders or Borrowers 10:00 a.m. On date payment is due
to Administrative Agent
"RESPONSIBLE OFFICER" means the president, chief financial officer,
executive vice president, treasurer or assistant treasurer of a Borrower Party.
Any document or certificate hereunder that is signed by a Responsible Officer of
a Borrower Party shall be conclusively presumed to have been authorized by all
necessary corporate, partnership and/or other action on the part of such
Borrower Party and such Responsible Officer shall be conclusively presumed to
have acted on behalf of such Borrower Party.
"RESTRICTED PAYMENT" means:
(a) the declaration or payment of any dividend or distribution by
Holdings or any of its Subsidiaries, either in cash or property, on any shares
of the capital stock of any class of Holdings or any of its Subsidiaries (except
dividends or other distributions payable solely in shares of capital stock of
Holdings or any of its Subsidiaries or payable by a Subsidiary to Holdings or
another wholly-owned Subsidiary of Holdings);
(b) the purchase, redemption or retirement by Holdings or any of
its Subsidiaries of any shares of its capital stock of any class or any
warrants, rights or options to purchase or acquire any shares of its capital
stock, whether directly or indirectly, other than Permitted Stock Repurchases;
(c) any other payment or distribution by Holdings or any of its
Subsidiaries in respect of its capital stock, either directly or indirectly; and
(d) the prepayment, repayment, redemption, defeasance or other
acquisition or retirement for value prior to any scheduled maturity, scheduled
repayment or scheduled sinking fund payment, of any Indebtedness not otherwise
permitted under any Loan Document to be so paid.
26
"SECURITY AGREEMENT" means that certain Security Agreement dated as of
even date herewith executed by Holdings and each Subsidiary of Holdings in favor
of the Administrative Agent for the benefit of the Lenders.
"SUBSIDIARY" means a corporation, partnership, joint venture, limited
liability company or other business entity of which a majority of the shares of
securities or other interests having ordinary voting power for the election of
directors or other governing body (other than securities or interests having
such power only by reason of the happening of a contingency) are at the time
beneficially owned, or the management of which is otherwise controlled,
directly, or indirectly through one or more intermediaries, or both, by
Holdings.
"SUBSIDIARY GUARANTY" means the Guaranty executed by each Subsidiary of
Holdings other than BDUSA.
"TENDER OFFER" means the offer by Holdings to repurchase up to
3,500,000 shares of its common stock at a price not to exceed $6.25 per share as
more particularly described in the Draft Schedule TO to be filed by Holdings
with the Securities and Exchange Commission promptly following the Closing Date.
"THRESHOLD AMOUNT" means $500,000.
"TO THE BEST KNOWLEDGE OF" means, when modifying a representation,
warranty or other statement of any Person, that the fact or situation described
therein is known by such Person (or, in the case of a Person other than a
natural Person, known by any officer of such Person) making the representation,
warranty or other statement, or with the exercise of reasonable due diligence
under the circumstances (in accordance with the standard of what a reasonable
Person in similar circumstances would have done) would have been known by such
Person (or, in the case of a Person other than a natural Person, would have been
known by an officer of such Person).
"TYPE" of Loan means (a) a Base Rate Loan and (b) an Offshore Rate
Loan.
"UNFUNDED PENSION LIABILITY" means the excess of a Pension Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the current value
of that Pension Plan's assets, determined in accordance with the assumptions
used for funding the Pension Plan pursuant to Section 412 of the Code for the
applicable plan year.
1.02 USE OF CERTAIN TERMS.
(a) All terms defined in this Agreement shall have the defined
meanings when used in any certificate or other document made or delivered
pursuant hereto or thereto, unless otherwise
27
defined therein.
(b) As used herein, unless the context requires otherwise, the
masculine, feminine and neuter genders and the singular and plural include one
another.
(c) The words "HEREIN" and "HEREUNDER" and words of similar import
when used in any Loan Document shall refer to the Loan Documents as a whole and
not to any particular provision thereof. The term "INCLUDING" is by way of
example and not limitation. References herein to a Section, subsection or clause
shall, unless the context otherwise requires, refer to the appropriate Section,
subsection or clause in this Agreement.
(d) The term "OR" is disjunctive; the term "AND" is conjunctive.
The term "SHALL" is mandatory; the term "MAY" is permissive.
1.03 ACCOUNTING TERMS. All accounting terms not specifically or
completely defined in this Agreement shall be construed in conformity with, and
all financial data required to be submitted by this Agreement shall be prepared
in conformity with, GAAP applied on a consistent basis, as in effect from time
to time, applied in a manner consistent with that used in preparing the Audited
Financial Statements, EXCEPT as otherwise specifically prescribed herein.
1.04 ROUNDING. Any financial ratios required to be maintained by
Holdings pursuant to this Agreement shall be calculated by dividing the
appropriate component by the other component, carrying the result to one place
more than the number of places by which such ratio is expressed in this
Agreement and rounding the result up or down to the nearest number (with a
round-up if there is no nearest number) to the number of places by which such
ratio is expressed in this Agreement.
1.05 EXHIBITS AND SCHEDULES. All exhibits and schedules to this
Agreement, either as originally existing or as the same may from time to time be
supplemented, modified or amended, are incorporated herein by this reference. A
matter disclosed on any Schedule shall be deemed disclosed on all Schedules.
1.06 REFERENCES TO AGREEMENTS AND LAWS. Unless otherwise expressly
provided herein, (a) references to agreements (including the Loan Documents) and
other contractual instruments shall include all amendments, restatements,
extensions, supplements and other modifications thereto (unless prohibited by
any Loan Document), and (b) references to any Law shall include all statutory
and regulatory provisions consolidating, amending, replacing, supplementing or
interpreting such Law.
SECTION 2.
THE COMMITMENTS AND EXTENSIONS OF CREDIT
2.01 LOANS.
(a) Subject to the terms and conditions set forth in this
Agreement, each Lender severally agrees to make, Convert and Continue Loans
until the Maturity Date in such amounts as Borrowers may from time to time
request; PROVIDED, HOWEVER, that the Outstanding Obligations of each Lender
shall not exceed such Lender's Commitment, and the Outstanding Obligations of
all Lenders shall not exceed the combined Commitments at any time. This is a
28
revolving credit and, subject to the foregoing and the other terms and
conditions hereof, Borrowers may borrow, Convert, Continue, prepay and reborrow
Loans as set forth herein without premium or penalty.
(b) Loans made by each Lender shall be evidenced by one or more
Notes. The date, amount and maturity of each Lender's Loans and payments and
other particulars with respect thereto may be endorsed on schedule(s) attached
to its Note by each Lender and/or recorded on one or more loan accounts or
records maintained by such Lender in the ordinary course of business. Such
Notes, loan accounts and records shall be conclusive absent manifest error of
the amount of such Loans and payments thereon. Any failure to record or any
error in doing so shall not, however, limit or otherwise affect the obligation
of Borrowers to pay any amount owing with respect to the Loans.
2.02 BORROWINGS, CONVERSIONS AND CONTINUATIONS OF LOANS.
(a) Borrowers may irrevocably request a Borrowing, Conversion or
Continuation of Loans in a Minimum Amount therefor by delivering a Request for
Extension of Credit therefor by Requisite Notice to Administrative Agent not
later than the Requisite Time therefor. All Borrowings, Conversions and
Continuations shall constitute Base Rate Loans unless properly and timely
otherwise designated as set forth in the prior sentence.
(b) Following receipt of a Request for Extension of Credit,
Administrative Agent shall promptly notify each Lender of its Pro Rata Share
thereof by Requisite Notice. In the case of a Borrowing of Loans, each Lender
shall make the funds for its Loan available to Administrative Agent at
Administrative Agent's Office not later than the Requisite Time therefor on the
Business Day specified in such Request for Extension of Credit. Upon
satisfaction of the applicable conditions set forth in SECTION 4.03 (and, if the
initial Extension of Credit hereunder, SECTION 4.02), all funds so received
shall be made available to Borrowers in like funds received. Administrative
Agent shall promptly notify Borrowers and Lenders of the interest rate
applicable to any Loan other than a Base Rate Loan upon determination of same.
(c) Except as otherwise provided herein, an Offshore Rate Loan may
be Continued or Converted only on the last day of the Interest Period for such
Offshore Rate Loan. During the existence of a Default or Event of Default, no
Loans may be requested as, Converted into or Continued as Offshore Rate Loans
without the consent of Requisite Lenders, and Requisite Lenders may demand that
any or all of the then outstanding Offshore Rate Loans be Converted immediately
into Base Rate Loans.
(d) If a Loan is to be made on the same date that another Loan is
due and payable, Borrowers or Lenders, as the case may be, shall, unless
Administrative Agent otherwise requests, make available to Administrative Agent
the net amount of funds giving effect to both such Loans and the effect for
purposes of this Agreement shall be the same as if separate transfers of funds
had been made with respect to each such Loan.
(e) The failure of any Lender to make any Loan on any date shall
not relieve any other Lender of any obligation to make a Loan on such date, but
no Lender shall be responsible
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for the failure of any other Lender to so make its Loan.
2.03 LETTERS OF CREDIT.
(a) THE LETTER OF CREDIT SUBLIMIT. Subject to the terms and
conditions set forth in this Agreement, until the Letter of Credit Expiration
Date, Issuing Lender shall take such Letter of Credit Actions as Borrowers may
from time to time request; PROVIDED, HOWEVER, that (i) the Outstanding
Obligations of each Lender shall not exceed such Lender's Commitment, and the
Outstanding Obligations of all Lenders shall not exceed the combined Commitments
at any time, and (ii) Letter of Credit Usage shall not exceed the Letter of
Credit Sublimit at any time. Subject to subsection (f) below and unless
consented to by Issuing Lender and Requisite Lenders, no standby Letter of
Credit may expire more than 12 months after the date of its issuance or last
renewal and no commercial Letter of Credit may expire more than 120 days after
the date of its issuance; PROVIDED, HOWEVER, that no Letter of Credit shall
expire after the Letter of Credit Expiration Date. If any Letter of Credit Usage
remains outstanding after such date, Borrowers shall, not later than such date,
deposit cash in an amount equal to such Letter of Credit Usage in a Letter of
Credit Cash Collateral Account.
(b) REQUESTING LETTER OF CREDIT ACTIONS. Borrowers may irrevocably
request a Letter of Credit Action in a Minimum Amount therefor by delivering a
Letter of Credit Application therefor to Issuing Lender, with a copy to
Administrative Agent (who shall notify Lenders), by Requisite Notice not later
than the Requisite Time therefor. Each Letter of Credit Action shall be in a
form acceptable to Issuing Lender in its sole discretion. Unless Administrative
Agent notifies Issuing Lender that such Letter of Credit Action is not permitted
hereunder, or Issuing Lender notifies Administrative Agent that it has
determined that such Letter of Credit Action is contrary to any Laws or policies
of Issuing Lender, Issuing Lender shall, upon satisfaction of the applicable
conditions set forth in SECTION 4.03 with respect to any Letter of Credit Action
constituting an Extension of Credit, effect such Letter of Credit Action. This
Agreement shall control in the event of any conflict with any Letter of Credit
Application. Upon the issuance of a Letter of Credit, each Lender shall be
deemed to have purchased from Issuing Lender a risk participation therein in an
amount equal to that Lender's Pro Rata Share TIMES the amount of such Letter of
Credit Usage.
(c) REIMBURSEMENT OF PAYMENTS UNDER LETTERS OF CREDIT. Borrowers
shall reimburse Issuing Lender through Administrative Agent for any payment that
Issuing Lender makes under a Letter of Credit on or before the date of such
payment; PROVIDED, HOWEVER, that if the conditions precedent set forth in
SECTION 4.03 can be satisfied, Borrowers may request a Borrowing of Loans to
reimburse Issuing Lender for such payment pursuant to SECTION 2.02, or, failing
to make such request, Borrowers shall be deemed to have requested a Borrowing of
Loans which are Base Rate Loans on such payment date pursuant to subsection (e)
below.
(d) FUNDING BY LENDERS WHEN ISSUING LENDER NOT REIMBURSED. Upon
any drawing under a Letter of Credit, Issuing Lender shall notify Administrative
Agent and Borrowers. If Borrowers fail to timely make the payment required
pursuant to subsection (c)
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above, Issuing Lender shall notify Administrative Agent of such fact and the
amount of such unreimbursed payment. Administrative Agent shall promptly notify
each Lender of its Pro Rata Share of such amount by Requisite Notice. Each
Lender shall make funds in an amount equal its Pro Rata Share of such amount
available to Administrative Agent at Administrative Agent's Office not later
than the Requisite Time therefor on the Business Day specified by Administrative
Agent, Administrative Agent shall remit the funds so received to Issuing Lender.
The obligation of each Lender to so reimburse Issuing Lender shall be absolute
and unconditional and shall not be affected by the occurrence of a Default or
Event of Default or any other occurrence or event. Any such reimbursement shall
not relieve or otherwise impair the obligation of Borrowers to reimburse Issuing
Lender for the amount of any payment made by Issuing Lender under any Letter of
Credit, together with interest as provided herein.
(e) NATURE OF LENDERS' FUNDING. If the conditions precedent set
forth in SECTION 4.03 can be satisfied (except for the giving of a Request for
Extension of Credit) on any date Borrowers are obligated to, but fail to,
reimburse Issuing Lender for a drawing under a Letter of Credit, the funding by
Lenders pursuant to the previous subsection shall be deemed to be a Borrowing of
Base Rate Loans (without regard to the Minimum Amount therefor) deemed requested
by Borrowers. If the conditions precedent set forth in SECTION 4.03 cannot be
satisfied on the date Borrowers are obligated to, but fail to, reimburse Issuing
Lender for a drawing under a Letter of Credit, the funding by Lenders pursuant
to the previous subsection shall be deemed to be a funding by each Lender of its
risk participation in such Letter of Credit, and each Lender making such funding
shall thereupon acquire a pro rata participation, to the extent of its
reimbursement, in the claim of Issuing Lender against Borrowers in respect of
such payment and shall share, in accordance with that pro rata participation, in
any payment made by Borrowers with respect to such claim. Any amounts made
available by a Lender under its risk participation shall be payable by Borrowers
upon demand of Administrative Agent, and shall bear interest at a rate per annum
equal to the Default Rate.
(f) SPECIAL PROVISIONS RELATING TO EVERGREEN LETTERS OF CREDIT.
Borrowers may request standby Letters of Credit that have automatic extension or
renewal provisions ("evergreen" Letters of Credit) so long as Issuing Lender
consents in its sole and absolute discretion thereto and has the right to not
permit any such extension or renewal at least annually within a notice period to
be agreed upon at the time each such standby Letter of Credit is issued. Once an
evergreen Letter of Credit is issued, unless Administrative Agent has notified
Issuing Lender that Requisite Lenders have elected not to permit such extension
or renewal, the Borrower Parties, Administrative Agent and Lenders shall be
deemed to have authorized (but may not require) Issuing Lender to, in its sole
and absolute discretion, permit the renewal of such evergreen Letter of Credit
at any time to a date not later than the Letter of Credit Expiration Date, and,
unless directed by Issuing Lender, Borrowers shall not be required to request
such extension or renewal. Issuing Lender may, in its sole and absolute
discretion elect not to permit an evergreen Letter of Credit to be extended or
renewed at any time.
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(g) OBLIGATIONS ABSOLUTE. The obligation of Borrowers to pay to
Issuing Lender the amount of any payment made by Issuing Lender under any Letter
of Credit shall be absolute, unconditional, and irrevocable. Without limiting
the foregoing, Borrowers' obligation shall not be affected by any of the
following circumstances:
(i) any lack of validity or enforceability of the Letter
of Credit, this Agreement, or any other agreement or instrument
relating thereto;
(ii) any amendment or waiver of or any consent to
departure from the Letter of Credit, this Agreement, or any other
agreement or instrument relating hereto or thereto;
(iii) the existence of any claim, setoff, defense, or other
rights which Borrowers may have at any time against Issuing Lender,
Administrative Agent or any Lender, any beneficiary of the Letter of
Credit (or any persons or entities for whom any such beneficiary may be
acting) or any other Person, whether in connection with the Letter of
Credit, this Agreement, or any other agreement or instrument relating
thereto, or any unrelated transactions;
(iv) any demand, statement, or any other document
presented under the 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 whatsoever so long as any such
document appeared to comply with the terms of the Letter of Credit;
(v) payment by Issuing Lender in good faith under the
Letter of Credit against presentation of a draft or any accompanying
document which does not strictly comply with the terms of the Letter of
Credit; or any payment made by Issuing Lender under any Letter of
Credit to any Person purporting to be a trustee in bankruptcy,
debtor-in-possession, assignee for the benefit of creditors,
liquidator, receiver or other representative of or successor to any
beneficiary or any transferee of any Letter of Credit, including any
arising in connection with any proceeding under any Debtor Relief Laws;
(vi) the existence, character, quality, quantity,
condition, packing, value or delivery of any property purported to be
represented by documents presented in connection with any Letter of
Credit or for any difference between any such property and the
character, quality, quantity, condition, or value of such property as
described in such documents;
(vii) the time, place, manner, order or contents of
shipments or deliveries of property as described in documents presented
in connection with any Letter of Credit or the existence, nature and
extent of any insurance relative thereto;
(viii) the solvency or financial responsibility of any party
issuing any documents in connection with a Letter of Credit;
(ix) any failure or delay in notice of shipments or
arrival of any property;
(x) any error in the transmission of any message relating
to a Letter of Credit not caused by Issuing Lender, or any delay or
interruption in any such message;
(xi) any error, neglect or default of any correspondent of
Issuing Lender in
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connection with a Letter of Credit;
(xii) any consequence arising from acts of God, wars,
insurrections, civil unrest, disturbances, labor disputes, emergency
conditions or other causes beyond the control of Issuing Lender;
(xiii) so long as Issuing Lender in good faith determines
that the document appears to comply with the terms of the Letter of
Credit, the form, accuracy, genuineness or legal effect of any contract
or document referred to in any document submitted to Issuing Lender in
connection with a Letter of Credit; and
(xiv) where Issuing Lender has acted in good faith under
any other circumstances whatsoever.
In addition, Borrowers will promptly examine a copy of each Letter of
Credit and amendments thereto delivered to it and, in the event of any claim of
noncompliance with Borrowers' instructions or other irregularity, Borrowers will
immediately notify Issuing Lender in writing. Borrowers shall be conclusively
deemed to have waived any such claim against Issuing Lender and its
correspondents unless such notice is given as aforesaid.
(h) ROLE OF ISSUING LENDER. Each Lender and Borrower Party agree
that, in paying any drawing under a Letter of Credit, Issuing Lender shall not
have any responsibility to obtain any document (other than any sight draft,
certificates and documents expressly required by the Letter of Credit) or to
ascertain or inquire as to the validity or accuracy of any such document or the
authority of the Person executing or delivering any such document. No
Administrative Agent-Related Person nor any of the respective correspondents,
participants or assignees of Issuing Lender shall be liable to any Lender for
any action taken or omitted in connection herewith at the request or with the
approval of Lenders or Requisite Lenders, as applicable; any action taken or
omitted in the absence of gross negligence or willful misconduct; or the due
execution, effectiveness, validity or enforceability of any document or
instrument related to any Letter of Credit. Borrowers hereby assume all risks of
the acts or omissions of any beneficiary or transferee with respect to its use
of any Letter of Credit; PROVIDED, HOWEVER, that this assumption is not intended
to, and shall not, preclude Borrowers' pursuing such rights and remedies as it
may have against the beneficiary or transferee at law or under any other
agreement. No Administrative Agent-Related Person, nor any of the respective
correspondents, participants or assignees of Issuing Lender, shall be liable or
responsible for any of the matters described in subsection (g) above. In
furtherance and not in limitation of the foregoing, Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
and Issuing Lender shall not be responsible for the validity or sufficiency of
any instrument transferring or assigning or purporting to transfer or assign a
Letter of Credit or the rights or benefits thereunder or proceeds thereof, in
whole or in part, which may prove to be invalid or ineffective for any reason.
(i) APPLICABILITY OF ISP98 AND UCP. Unless otherwise expressly
agreed by Issuing
33
Lender and Borrowers when a Letter of Credit is issued and subject to applicable
laws, performance under Letters of Credit by Issuing Lender, its correspondents,
and beneficiaries will be governed by (i) with respect to standby Letters of
Credit, the rules of the "International Standby Practices 1998" (ISP98) or such
later revision as may be published by the International Chamber of Commerce (the
"ICC"), and (ii) with respect to commercial Letters of Credit, the rules of the
Uniform Customs and Practice for Documentary Credits, as published in its most
recent version by the ICC on the date any commercial Letter of Credit is issued,
and including the ICC decision published by the Commission on Banking Technique
and Practice on April 6, 1998 regarding the European single currency (euro).
(j) LETTER OF CREDIT FEE. On each Applicable Payment Date,
Borrowers shall pay to Administrative Agent in arrears, for the account of each
Lender in accordance with its Pro Rata Share, a standby Letter of Credit fee in
an amount equal to 1.50% TIMES the actual daily maximum amount available to be
drawn under each standby Letter of Credit since the later of the Effective Date
and the previous Applicable Payment Date.
(k) FRONTING FEE AND DOCUMENTARY AND PROCESSING CHARGES PAYABLE TO
ISSUING LENDER. On each Applicable Payment Date, Borrowers shall pay to
Administrative Agent for the sole account of Issuing Lender a fronting fee in an
amount (i) with respect to standby Letters of Credit, equal to 1/8 of 1% per
annum on the daily average face amount thereof, payable quarterly in arrears on
each Applicable Payment Date, and (ii) with respect to commercial Letters of
Credit, equal to the greater of (A) $80 and (B) 1/10 of 1% of the face amount
thereof, payable upon the issuance thereof. In addition, Borrowers shall pay
directly to Issuing Lender, upon demand, for its sole account its customary
documentary and processing charges in accordance with its standard schedule, as
from time to time in effect, for any Letter of Credit Action or other occurrence
relating to a Letter of Credit for which such charges are customarily made. Such
fees and charges are nonrefundable.
2.04 PREPAYMENTS.
(a) Upon Requisite Notice to Administrative Agent not later than
the Requisite Time therefor, Borrowers may at any time and from time to time
voluntarily prepay Loans in part in the Minimum Amount therefor or in full
without premium or penalty. Administrative Agent will promptly notify each
Lender thereof and of such Lender's Pro Rata Share of such prepayment. Any
prepayment of an Offshore Rate Loan shall be accompanied by all accrued interest
thereon, together with the costs set forth in SECTION 3.05.
(b) If for any reason the Outstanding Obligations exceed the
combined Commitments as in effect or as reduced or because of any limitation set
forth in this Agreement or otherwise, Borrowers shall immediately prepay Loans
and/or deposit cash in a Letter of Credit Cash Collateral Account in an
aggregate amount equal to such excess.
(c) If Holdings or any of its Subsidiaries shall at any time make
or agree to make a Disposition, then Holdings shall promptly notify the
Administrative Agent of such proposed Disposition (including the amount of
estimated net proceeds to be received in respect thereof)
34
and shall, promptly but in no event later than five days after receipt by
Holdings or such Subsidiary of the net proceeds of such Disposition, prepay
Loans and make a corresponding reduction of the Commitments in an amount equal
to 100% of the amount of such aggregate net proceeds to the extent that the
aggregate proceeds received in any fiscal year exceed $250,000. Net proceeds
shall be calculated after giving effect to any expenses, fees and balance sheet
offsets of Holdings and its Subsidiaries.
(d) If Holdings or any of its Subsidiaries shall at any time issue
equity in any public or private offering for cash, Holdings shall promptly
notify the Administrative Agent of the estimated net proceeds to be received in
respect thereof. Promptly upon, and in no event later than five days after
receipt by Holdings or such Subsidiary of proceeds from such issuance, Holdings
shall prepay Loans and make a corresponding reduction of the Commitments in an
amount equal to 50% of the amount of such net cash proceeds.
2.05 REDUCTION OR TERMINATION OF COMMITMENTS.
(a) Upon the making of any mandatory prepayment under clauses (c)
and (d) of SECTION 2.04, the combined Commitments shall automatically be reduced
by an amount equal to the aggregate principal repaid, effective as of the
earlier of the date such payment is made or the date such payment is due and
payable hereunder.
(b) The combined Commitments shall be reduced on or before each
date set forth below to an amount not more than the amount set forth opposite
such date:
DATE COMBINED COMMITMENTS
December 31, 2000 $25,000,000
December 31, 2001 $20,000,000
June 30, 2002 $15,000,000
December 31, 2002 $10,000,000
Maturity Date -0-
(c) Upon Requisite Notice to Administrative Agent not later than
the Requisite Time therefor, Borrowers may at any time and from time to time,
without premium or penalty, permanently and irrevocably reduce the Commitments
in a Minimum Amount therefor to an amount not less than the Outstanding
Obligations at such time or terminate the Commitments. Any such reduction or
termination shall be accompanied by payment of all accrued and unpaid commitment
fees with respect to the portion of the Commitments being reduced or terminated.
Administrative Agent shall promptly notify Lenders of any such request for
reduction or termination of the Commitments. Each Lender's Commitment shall be
reduced by an amount equal to such Lender's Pro Rata Share TIMES the amount of
such reduction.
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2.06 PRINCIPAL AND INTEREST.
(a) Except as otherwise provided hereunder, if not sooner paid,
Borrowers agree to pay the outstanding principal amount of each Loan on the
Maturity Date.
(b) Subject to subsection (c) below, Borrowers shall pay interest
on the unpaid principal amount of each Loan (before and after default, before
and after maturity, before and after judgment, and before and after the
commencement of any proceeding under any Debtor Relief Laws) from the date
borrowed until paid in full (whether by acceleration or otherwise) on each
Applicable Payment Date at a rate per annum equal to the interest rate
determined in accordance with the definition of such type of Loan, PLUS, to the
extent applicable in each case, the Applicable Amount.
(c) If any amount payable by any Borrower Party under any Loan
Document is not paid when due (without regard to any applicable grace periods),
it shall thereafter bear interest (after as well as before entry of judgment
thereon to the extent permitted by law) at a fluctuating interest rate per annum
at all times equal to the Default Rate to the fullest extent permitted by
applicable Law. Accrued and unpaid interest on past due amounts (including
interest on past due interest) shall be payable upon demand.
2.07 FEES.
(a) COMMITMENT FEE. Borrowers shall pay to Administrative Agent
for the account of each Lender PRO RATA according to its Pro Rata Share, a
Commitment fee equal to the Applicable Amount TIMES the actual daily amount by
which the combined Commitments exceed the Outstanding Obligations. The
commitment fee shall accrue at all times from the Closing Date until the
Maturity Date and shall be payable quarterly in arrears on each Applicable
Payment Date. The commitment fee shall be calculated quarterly in arrears, and
if there is any change in the Applicable Amount during any quarter, the actual
daily amount shall be computed and multiplied by the Applicable Amount
separately for each period during such quarter that such Applicable Amount was
in effect. The commitment fee shall accrue at all times, including at any time
during which one or more conditions in SECTION 4 are not met.
(b) ARRANGEMENT FEE. On the Closing Date, Borrowers shall pay to
Administrative Agent an arrangement fee in the amount set forth in a separate
letter agreement between Borrowers and Administrative Agent. Such arrangement
fee is for the services of Administrative Agent in arranging the credit
facilities under this Agreement and is fully earned on the date paid. The
arrangement fee paid to Administrative Agent is solely for its own account and
is nonrefundable.
2.08 COMPUTATION OF INTEREST AND FEES. Computation of interest on
Base Rate Loans when the Base Rate is determined by Bank of America's "prime
rate" shall be calculated on the basis of a year of 365 or 366 days, as the case
may be, and the actual number of days elapsed. Computation of all other types of
interest and all fees shall be calculated on the basis of a year of 360 days and
the actual number of days elapsed, which results in a higher yield to Lenders
than a method based on a year of 365 or 366 days. Interest shall accrue on each
Loan for the day on
36
which the Loan is made, and shall not accrue on a Loan, or any portion thereof,
for the day on which the Loan or such portion is paid, PROVIDED that any Loan
that is repaid on the same day on which it is made shall bear interest for one
day.
2.09 MAKING PAYMENTS.
(a) Except as otherwise provided herein, all payments by Borrowers
or any Lender hereunder shall be made to Administrative Agent at Administrative
Agent's Office not later than the Requisite Time for such type of payment. All
payments received after such Requisite Time shall be deemed received on the next
succeeding Business Day. All payments shall be made in immediately available
funds in lawful money of the United States of America. All payments by Borrowers
shall be made without condition or deduction for any counterclaim, defense,
recoupment or setoff.
(b) Borrowers agree that interest and principal payments and any
fees will be deducted automatically on the due date from Borrowers' account with
Administrative Agent as designated in writing by Borrowers. Borrowers will
maintain sufficient funds in the account on the dates Administrative Agent
enters debits authorized by this Agreement. If there are insufficient funds in
the account on the date Administrative Agent enters any debit authorized by this
agreement, Administrative Agent may reverse the debit.
(c) Upon satisfaction of any applicable terms and conditions set
forth herein, Administrative Agent shall promptly make any amounts received in
accordance with the prior subsection available in like funds received as
follows: (i) if payable to Borrowers, by crediting the Designated Deposit
Account, and (ii) if payable to any Lender, by wire transfer to such Lender at
its Lending Office. If such conditions are not so satisfied, Administrative
Agent shall return any funds it is holding to the Lenders making such funds
available, without interest.
(d) Subject to the definition of "Interest Period," if any payment
to be made by any Borrower Party shall come due on a day other than a Business
Day, payment shall instead be considered due on the next succeeding Business
Day, and such extension of time shall be reflected in computing interest and
fees.
(e) Unless Borrowers or any Lender has notified Administrative
Agent prior to the date any payment to be made by it is due, that it does not
intend to remit such payment, Administrative Agent may, in its sole and absolute
discretion, assume that Borrowers or Lender, as the case may be, has timely
remitted such payment and may, in its sole and absolute discretion and in
reliance thereon, make available such payment to the Person entitled thereto. If
such payment was not in fact remitted to Administrative Agent in immediately
available funds, then:
(i) if Borrowers failed to make such payment, each Lender
shall forthwith on demand repay to Administrative Agent the amount of
such assumed payment made available to such Lender, together with
interest thereon in respect of each day from and including the date
such amount was made available by Administrative Agent to such Lender
to the date such amount is repaid to Administrative Agent at the
Federal Funds Rate; and
37
(ii) if any Lender failed to make such payment,
Administrative Agent shall be entitled to recover such corresponding
amount on demand from such Lender. If such Lender does not pay such
corresponding amount forthwith upon Administrative Agent's demand
therefor, Administrative Agent promptly shall notify Borrowers, and
Borrowers shall pay such corresponding amount to Administrative Agent.
Administrative Agent also shall be entitled to recover from such Lender
interest on such corresponding amount in respect of each day from the
date such corresponding amount was made available by Administrative
Agent to Borrowers to the date such corresponding amount is recovered
by Administrative Agent, (A) from such Lender at a rate per annum equal
to the daily Federal Funds Rate. and (B) from Borrowers, at a rate per
annum equal to the interest rate applicable to such Borrowing. Nothing
herein shall be deemed to relieve any Lender from its obligation to
fulfill its Commitment or to prejudice any rights which Administrative
Agent or Borrowers may have against any Lender as a result of any
default by such Lender hereunder.
(f) If Administrative Agent or any Lender is required at any time
to return to Borrowers, or to a trustee, receiver, liquidator, custodian, or any
official under any proceeding under Debtor Relief Laws, any portion of a
payments made by Borrowers, each Lender shall, on demand of Administrative
Agent, return it share of the amount to be returned, plus interest thereon from
the date of such demand to the date such payment is made at a rate per annum
equal to the daily Federal Funds Rate.
2.10 FUNDING SOURCES. Nothing in this Agreement shall be deemed to
obligate any Lender to obtain the funds for any Loan in any particular place or
manner or to constitute a representation by any Lender that it has obtained or
will obtain the funds for any Loan in any particular place or manner.
2.11 JOINT AND SEVERAL LIABILITY. Each Borrower has determined that
it is in its best interest and in furtherance of its legitimate business
purposes to induce the Lenders to extend credit to the Borrowers pursuant to
this Agreement. Each Borrower acknowledges and represents that the availability
of the Commitments to both of the Borrowers benefits each Borrower individually
and that the Loans made will be for and inure to the benefit of both of the
Borrowers individually and jointly. Accordingly, each Borrower shall be jointly
and severally liable (as a principal and not as a surety, guarantor or other
accommodation party) for each and every representation, warranty, covenant and
obligation to be performed by the Borrowers under this Agreement, the Notes and
the other Loan Documents, and each Borrower acknowledges that in extending the
credit provided herein each Lender is relying upon the fact that the obligations
of each Borrower hereunder are the joint and several obligations of a principal.
The invalidity, unenforceability or illegality of this Agreement, the Notes or
any other Loan Document as to one Borrower or the release by the Lenders of a
Borrower thereunder shall not affect the Obligations of the other Borrower under
this Agreement, the Notes or the other Loan Documents, all of which shall
otherwise remain the valid and legally binding obligations of the other
Borrower.
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2.12 BORROWER WAIVERS. Each Borrower acknowledges that the Lenders
may, at any time and from time to time, without notice or demand, and without
affecting the enforceability or security hereof or of any other Loan Document:
(a) accept partial payments on the Obligations;
(b) receive and hold additional security or guaranties for the
Obligations or any part thereof;
(c) release, reconvey, terminate, waive, abandon, subordinate,
exchange, substitute, transfer and enforce any security or guaranties, and apply
any security and direct the order or manner of sale thereof as the
Administrative Agent, in its sole and absolute discretion may determine;
(d) release any Person or any guarantor from any personal
liability with respect to the Obligations or any part thereof;
(e) settle, release on terms satisfactory to the Administrative
Agent or by operation of applicable Laws or otherwise liquidate or enforce any
Obligations and any security or guaranty therefor in any manner, or consent to
the transfer of any security and bid and purchase at any sale; and
(f) consent to the merger, change or any other restructuring or
termination of the corporate existence of any Borrower or any other Person, and
correspondingly restructure the Obligations, and any such merger, change
restructuring or termination shall not affect the liability of the Borrowers or
the continuing existence of any Lien under any Loan Document to which a Borrower
is a party or the enforceability hereof or thereof with respect to all or any
part of the Obligations.
SECTION 3.
TAXES, YIELD PROTECTION AND ILLEGALITY
3.01 TAXES.
(a) Any and all payments by Borrowers to or for the account of
Administrative Agent or any Lender under any Loan Document shall be made free
and clear of and without deduction for any and all present or future taxes,
duties, levies, imposts, deductions, assessments, fees, withholdings or similar
charges, and all liabilities with respect thereto, EXCLUDING, in the case of
Administrative Agent and any Lender, taxes imposed on or measured by its net
income, and franchise taxes imposed on it (in lieu of net income taxes), by the
jurisdiction (or any political subdivision thereof) under the Laws of which
Administrative Agent or such Lender, as the case may be, is organized or
maintains a lending office (all such non-excluded taxes, duties, levies,
imposts, deductions, assessments, fees, withholdings or similar charges, and
liabilities being hereinafter referred to as "TAXES"). If Borrowers shall be
required by any Laws to deduct any Taxes from or in respect of any sum payable
under any Loan Document to Administrative Agent or any Lender, (i) the sum
payable shall be increased as necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section), Administrative Agent and such Lender receives an amount equal to
the sum it would
39
have received had no such deductions been made, (ii) Borrowers shall make such
deductions, (iii) Borrowers shall pay the full amount deducted to the relevant
taxation authority or other authority in accordance with applicable Laws, and
(iv) within 30 days after the date of such payment, Borrowers shall furnish to
Administrative Agent (who shall forward the same to such Lender) the original or
a certified copy of a receipt evidencing payment thereof.
(b) In addition, Borrowers agree to pay any and all present or
future stamp, court or documentary taxes and any other excise or property taxes
or charges or similar levies which arise from any payment made under any Loan
Document or from the execution, delivery, performance, enforcement or
registration of, or otherwise with respect to, any Loan Document (hereinafter
referred to as "OTHER TAXES").
(c) If Borrowers shall be required by the Laws of any jurisdiction
outside the United States to deduct any Taxes from or in respect of any sum
payable under any Loan Document to Administrative Agent or any Lender, Borrowers
shall also pay to such Lender or Administrative Agent (for the account of such
Lender), at the time interest is paid, such additional amount that the
respective Lender specifies as necessary to preserve the after-tax yield (after
factoring in United States (federal and state) taxes imposed on or measured by
net income) such Lender would have received if such deductions (including
deductions applicable to additional sums payable under this Section) had not
been made.
(d) Borrowers agree to indemnify Administrative Agent and each
Lender for the full amount of Taxes and Other Taxes (including any Taxes or
Other Taxes imposed or asserted by any jurisdiction on amounts payable under
this Section) paid by Administrative Agent and such Lender and any liability
(including penalties, interest and expenses) arising therefrom or with respect
thereto.
3.02 ILLEGALITY. If any Lender determines that any Laws have made
it unlawful, or that any Governmental Authority has asserted that it is
unlawful, for any Lender or its applicable Lending Office to make, maintain or
fund Offshore Rate Loans, or materially restricts the authority of such Lender
to purchase or sell, or to take deposits of, Dollars in the applicable offshore
Dollar market, or to determine or charge interest rates based upon the Offshore
Rate, then, on notice thereof by Lender to Borrowers through Administrative
Agent, any obligation of that Lender to make Offshore Rate Loans shall be
suspended until Lender notifies Administrative Agent and Borrowers that the
circumstances giving rise to such determination no longer exist. Upon receipt of
such notice, Borrowers shall, upon demand from such Lender (with a copy to
Administrative Agent), prepay or Convert all Offshore Rate Loans of that Lender,
either on the last day of the Interest Period thereof, if Lender may lawfully
continue to maintain such Offshore Rate Loans to such day, or immediately, if
Lender may not lawfully continue to maintain such Offshore Rate Loans. Each
Lender agrees to designate a different Lending Office if such designation will
avoid the need for such notice and will not, in the good faith judgment of such
Lender, otherwise be materially disadvantageous to such Lender.
3.03 INABILITY TO DETERMINE RATES. If, in connection with any
Request for Extension
40
of Credit involving any Offshore Rate Loan, Administrative Agent determines that
(a) Dollar deposits are not being offered to banks in the applicable offshore
dollar market for the applicable amount and Interest Period of the requested
Offshore Rate Loan, (b) adequate and reasonable means do not exist for
determining the underlying interest rate for such Offshore Rate Loan, or (c)
such underlying interest rate does not adequately and fairly reflect the cost to
Lender of funding such Offshore Rate Loan, Administrative Agent will promptly
notify Borrowers and all Lenders. Thereafter, the obligation of all Lenders to
make or maintain such Offshore Rate Loan shall be suspended until Administrative
Agent revokes such notice. Upon receipt of such notice, Borrowers may revoke any
pending request for a Borrowing of Offshore Rate Loans or, failing that, be
deemed to have converted such request into a request for a Borrowing of Base
Rate Loans in the amount specified therein.
3.04 INCREASED COST AND REDUCED RETURN; CAPITAL ADEQUACY.
(a) If any Lender determines that any Laws:
(i) subject such Lender to any Tax, duty, or other charge
with respect to any Offshore Rate Loans or its obligation to make
Offshore Rate Loans, or change the basis on which taxes are imposed on
any amounts payable to such Lender under this Agreement in respect of
any Offshore Rate Loans;
(ii) shall impose or modify any reserve, special deposit,
or similar requirement (other than the reserve requirement utilized in
the determination of the Offshore Rate) relating to any extensions of
credit or other assets of, or any deposits with or other liabilities or
commitments of, such Lender (including its Commitment); or
(iii) shall impose on such Lender or on the offshore Dollar
interbank market any other condition affecting this Agreement or any of
such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender of
making, Converting into, Continuing, or maintaining any Offshore Rate Loans or
to reduce any sum received or receivable by such Lender under this Agreement
with respect to any Offshore Rate Loans, then from time to time upon demand of
Lender (with a copy of such demand to Administrative Agent), Borrowers shall pay
to such Lender such additional amounts as will compensate such Lender for such
increased cost or reduction.
(b) If any Lender determines that any change in or the
interpretation of any Laws have the effect of reducing the rate of return on the
capital of such Lender or compliance by such Lender (or its Lending Office) or
any corporation controlling such Lender as a consequence of such Lender's
obligations hereunder (taking into consideration its policies with respect to
capital adequacy and such Lender's desired return on capital), then from time to
time upon demand of such Lender (with a copy to Administrative Agent), Borrowers
shall pay to such Lender such additional amounts as will compensate such Lender
for such reduction.
3.05 BREAKFUNDING COSTS. Upon demand of any Lender (with a copy to
41
Administrative Agent) from time to time, Borrowers shall promptly compensate
such Lender for and hold such Lender harmless from any loss, cost or expense
incurred by it as a result of:
(a) any Continuation, Conversion, payment or prepayment of any
Loan other than a Base Rate Loan on a day other than the last day of the
Interest Period for such Loan (whether voluntary, mandatory, automatic, by
reason of acceleration, or otherwise); or
(b) any failure by Borrowers (for a reason other than the failure
of such Lender to make a Loan) to prepay, borrow, Continue or Convert any Loan
other than a Base Rate Loan on the date or in the amount notified by Borrowers;
including any loss of anticipated profits and any loss or expense arising from
the liquidation or reemployment of funds obtained by it to maintain such Loan or
from fees payable to terminate the deposits from which such funds were obtained.
Borrowers shall also pay any customary administrative fees charged by such
Lender in connection with the foregoing.
3.06 MATTERS APPLICABLE TO ALL REQUESTS FOR COMPENSATION. A
certificate of Administrative Agent or a Lender claiming compensation under this
SECTION 3 and setting forth the additional amount or amounts to be paid to it
hereunder shall be conclusive in the absence of clearly demonstrable error. In
determining such amount, Administrative Agent or a Lender may use any reasonable
averaging and attribution methods. For purposes of this SECTION 3, a Lender
shall be deemed to have funded each Offshore Rate Loan at the Offshore Base Rate
used in determining the Offshore Rate for such Loan by a matching deposit or
other borrowing in the offshore Dollar interbank market, whether or not such
Offshore Rate Loan was in fact so funded.
3.07 SURVIVAL. All of Borrowers' obligations under this SECTION 3
shall survive termination of the Commitments and payment in full of all
Obligations.
SECTION 4.
CONDITIONS PRECEDENT TO EFFECTIVENESS AND EXTENSIONS OF CREDIT
4.01 CLOSING DATE. The effectiveness of this Agreement is subject
to satisfaction of the following conditions precedent:
(a) Unless waived by Requisite Lenders (or by Administrative Agent
with respect to immaterial matters or items specified in subsections (iii) or
(iv) below with respect to which Borrowers have given assurances satisfactory to
Administrative Agent that they will be delivered promptly following the Closing
Date), Administrative Agent's receipt of the following, each of which shall be
originals or facsimiles (followed promptly by originals) unless otherwise
specified, each properly executed by a Responsible Officer of the signing
Borrower Party, each dated on, or in the case of third-party certificates,
recently before the Closing Date and each in form and substance satisfactory to
Administrative Agent and its legal counsel:
(i) executed counterparts of this Agreement, sufficient
in number for distribution to Administrative Agent, Lenders and
Borrowers;
(ii) such certificates of resolutions or other action,
incumbency certificates and/or other certificates of Responsible
Officers of each Borrower Party as
42
Administrative Agent may require to establish the identities of and
verify the authority and capacity of each Responsible Officer thereof
authorized to act as a Responsible Officer thereof;
(iii) such evidence as Administrative Agent may reasonably
require to verify that each Borrower Party is duly organized or formed,
validly existing, in good standing and qualified to engage in business
in each jurisdiction in which it operates more than six retail
locations, including certified copies of each Borrower Party's
Organization Documents;
(iv) a certificate signed by a Responsible Officer of each
Borrower certifying (A) that the conditions specified in SECTIONS
4.01(C) and (D) have been satisfied ,and (B) that there has been no
event or circumstance since the date of the Audited Financial
Statements which has a Material Adverse Effect;
(v) the Subsidiary Guaranty executed by each Subsidiary
of Holdings other than BDUSA;
(vi) the Security Agreement executed by Holdings and its
Subsidiaries;
(vii) an opinion of counsel to Borrowers substantially in
the form of EXHIBIT E hereto; and
(viii) such other assurances, certificates, documents,
consents or opinions as Administrative Agent, Issuing Lender or
Requisite Lenders reasonably may require.
(b) Any fees required to be paid on or before the Closing Date
shall have been paid.
(c) The representations and warranties made by Borrowers herein,
or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith or therewith,
shall be correct in all material respects on and as of the Closing Date.
(d) Each Borrower Party shall be in compliance with all the terms
and provisions of the Loan Documents to which it is a party, and no Default or
Event of Default shall have occurred and be continuing.
(e) The Administrative Agent shall have reviewed and approved the
Draft Schedule TO.
4.02 EFFECTIVE DATE. The obligation of each Lender to make its
initial Extension of Credit hereunder is subject to satisfaction of the
following conditions precedent:
(a) Unless waived by all Lenders, Administrative Agent's receipt
of the following, each of which shall be originals or facsimiles (followed
promptly by originals) unless otherwise specified, each properly executed by a
Responsible Officer of the signing Borrower Party, each dated on, or in the case
of third-party certificates, recently before the Effective Date and each in form
and substance satisfactory to Administrative Agent and its legal counsel:
(i) Notes executed by Borrowers in favor of each Lender,
each in a principal amount equal to that Lender's Commitment;
43
(ii) a certificate signed by the chief financial officer
of Holdings as to the financial condition and solvency of the Borrowers
and their Subsidiaries after giving effect to the Tender Offer and the
financing hereunder;
(iii) an opinion of counsel to Borrowers substantially in
the form of EXHIBIT E hereto;
(iv) written evidence that the Existing Credit Agreement
has been or concurrently is being terminated and all Liens securing
obligations under the Existing Credit Agreement have been or
concurrently are being released; and
(v) such other assurances, certificates, documents,
consents or opinions as Administrative Agent, Issuing Lender or
Requisite Lenders reasonably may require.
(b) The Administrative Agent shall have received the following:
(i) all UCC-l financing statements to be filed,
registered or recorded to perfect the security interests of the
Administrative Agent for the benefit of the Lenders;
(ii) written advice relating to such Lien and
judgment searches as the Administrative Agent shall have requested, and
such termination statements or other documents as may be necessary to
confirm that the collateral described therein is subject to no other
Liens in favor of any Persons;
(iii) all certificates and instruments representing
the stock and instruments pledged pursuant to the Security
Agreement (including, without limitation, all instruments evidencing
Indebtedness of Subsidiaries to Holdings), and stock transfer powers
executed in blank as the Administrative Agent may specify;
(iv) evidence that all other actions necessary
or, in the opinion of the Administrative Agent, desirable to perfect
and protect the first priority security interest created by the
Security Agreement have been taken;
(v) funds sufficient to pay any filing or
recording tax or fee in connection with any and all UCC-1 financing
statements;
(vi) such consents, estoppels, subordination
agreements and other documents and instruments executed by the landlord
and owner of the Borrowers'
44
warehouse facility in Santa Fe Springs, California, as reasonably
requested by the Administrative Agent; and
(vii) evidence that all other actions necessary
or, in the opinion of the Administrative Agent, desirable to perfect
and protect the first priority Lien created by the Security Agreement,
and to enhance the Administrative Agent's ability to preserve and
protect its interests in and access to the collateral described
therein, have been taken;
(c) The Tender Offer shall have been consummated at a price not to
exceed $6.25 per share for no more than 3,500,000 shares and otherwise
substantially in accordance with the terms of the Draft Schedule TO.
(d) All governmental, shareholder and third-party consents and
approvals necessary or desirable in connection with the Tender Offer and the
financing transaction contemplated hereby shall have been obtained; all such
consents and approvals shall be in full force and effect; and all applicable
waiting periods shall have expired without any action being taken by any
authority that could restrain, prevent or impose any material adverse conditions
on the Tender Offer or the financing transaction that could seek to threaten any
of the foregoing.
(e) There shall not exist (a) any order, decree, judgment, ruling
or injunction which restrains the consummation of the Tender Offer, and (b) any
pending or threatened action, suit, investigation or proceeding, which, if
adversely determined, would reasonably be expected to materially and adversely
affect Borrowers as a whole, any transaction contemplated hereby or the ability
of Borrowers as a whole or any other Guarantor to perform its obligations under
the Loan Documents or the ability of the Lenders to exercise their rights
thereunder.
(f) The representations and warranties made by Borrowers herein,
or which are contained in any certificate, document or financial or other
statement furnished at any time under or in connection herewith or therewith,
shall be correct in all material respects on and as of the Effective Date.
(g) Each Borrower Party shall be in compliance with all the terms
and provisions of the Loan Documents to which it is a party, and no Default or
Event of Default shall have occurred and be continuing.
(h) Unless waived by Administrative Agent, Borrowers shall have
paid all Attorney Costs of Administrative Agent to the extent invoiced prior to
or on the Effective Date, plus such additional amounts of Attorney Costs as
shall constitute its reasonable estimate of Attorney Costs incurred or to be
incurred by it through the closing proceedings (provided that such
45
estimate shall not thereafter preclude final settling of accounts between
Borrowers and Administrative Agent).
4.03 CONDITIONS TO ALL EXTENSIONS OF CREDIT. In addition to any
applicable conditions precedent set forth elsewhere in this SECTION 4 or in
SECTION 2, the obligation of each Lender to honor any Request for Extension of
Credit other than a Conversion or Continuation is subject to the following
conditions precedent:
(a) the representations and warranties of Holdings contained in
SECTION 5, or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection herewith or
therewith, shall be correct in all material respects on and as of the date of
such Extension of Credit, except to the extent that such representations and
warranties specifically refer to an earlier date.
(b) no Default or Event of Default exists, or would result from
such proposed Extension of Credit.
(c) Administrative Agent shall have timely received a Request for
Extension of Credit by Requisite Notice by the Requisite Time therefor.
(d) Administrative Agent shall have received, in form and
substance satisfactory to it, such other assurances, certificates, documents or
consents related to the foregoing as Administrative Agent or Requisite Lenders
reasonably may require.
Each Request for Extension of Credit by Borrowers shall be deemed to be
a representation and warranty that the conditions specified in SECTIONS 4.03(A)
and (B) have been satisfied and on and as of the date of such Extension of
Credit.
SECTION 5.
REPRESENTATIONS AND WARRANTIES
The Borrowers represent and warrant to Administrative Agent and Lenders
that:
5.01 EXISTENCE AND QUALIFICATION; POWER; COMPLIANCE WITH LAWS. Each
Borrower Party is a corporation, partnership or limited liability company duly
organized or formed, validly existing and in good standing under the Laws of the
state of its incorporation or organization, has the power and authority and the
legal right to own and operate its properties, to lease the properties it
operates and to conduct its business, is duly qualified and in good standing
under the Laws of each jurisdiction where its ownership, lease or operation of
properties or the conduct of its business requires such qualification, and is in
compliance with all Laws except to the extent that noncompliance does not have a
Material Adverse Effect.
5.02 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each Borrower
Party has the power and authority and the legal right to make, deliver and
perform each Loan Document to which it is a party and each Borrower has power
and authority to borrow hereunder and has taken all necessary action to
authorize the borrowings on the terms and conditions of this Agreement
46
and to authorize the execution, delivery and performance of this Agreement and
the other Loan Documents to which it is a party. No consent or authorization of,
filing with, or other act by or in respect of any Governmental Authority, is
required in connection with the borrowings hereunder or with the execution,
delivery, performance, validity or enforceability of this Agreement or any of
the other Loan Documents. The Loan Documents have been duly executed and
delivered by each Borrower Party, and constitute a legal, valid and binding
obligation of each Borrower Party, enforceable against each Borrower Party in
accordance with their respective terms.
5.03 NO LEGAL BAR. The execution, delivery, and performance by each
Borrower Party of the Loan Documents to which it is a party and compliance with
the provisions thereof have been duly authorized by all requisite action on the
part of such Borrower Party and do not and will not (a) violate or conflict
with, or result in a breach of, or require any consent under (i) any
Organization Documents of such Borrower Party or any of its Subsidiaries, (ii)
any applicable Laws, rules, or regulations or any order, writ, injunction, or
decree of any Governmental Authority or arbitrator, or (iii) any Contractual
Obligation of such Borrower Party or any of its Subsidiaries or by which any of
them or any of their property is bound or subject, (b) constitute a default
under any such agreement or instrument, or (c) result in, or require, the
creation or imposition of any Lien on any of the properties of such Borrower
Party or any of its Subsidiaries.
5.04 FINANCIAL STATEMENTS; NO MATERIAL ADVERSE EFFECT.
(a) The Audited Financial Statements (i) were prepared in
accordance with GAAP consistently applied throughout the period covered thereby,
except as otherwise expressly noted therein; (ii) fairly present the financial
condition of Holdings and its Subsidiaries as of the date thereof and their
results of operations for the period covered thereby in accordance with GAAP
consistently applied throughout the period covered thereby, except as otherwise
expressly noted therein; and (iii) show all material indebtedness and other
liabilities, direct or contingent, of Holdings and its Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments and
Indebtedness in accordance with GAAP consistently applied throughout the period
covered thereby.
(b) Since the date of the Audited Financial Statements, there has
been no event or circumstance which has a Material Adverse Effect.
5.05 LITIGATION. No litigation, investigation or proceeding of or
before an arbitrator or Governmental Authority is pending or, to the knowledge
of Borrowers after due and diligent investigation, threatened by or against any
Borrower Party or any of its Subsidiaries or against any of their properties or
revenues which, if determined adversely, would reasonably be expected to have a
Material Adverse Effect.
5.06 NO DEFAULT. Neither any Borrower Party nor any its
Subsidiaries are in default under or with respect to any Contractual Obligation
which would reasonably be expected to have a Material Adverse Effect, and no
Default or Event of Default has occurred and is continuing or will result from
the consummation of this Agreement or any of the other Loan Documents, or the
47
making of the Extensions of Credit hereunder.
5.07 OWNERSHIP OF PROPERTY; LIENS. Each Borrower Party and its
Subsidiaries have valid fee or leasehold interests in all real property which
they use in their respective businesses, and each Borrower Party and their
respective Subsidiaries have good and marketable title to all their other
property, and none of such property is subject to any Lien, EXCEPT as permitted
in SECTION 7.02.
5.08 TAXES. Each Borrower Party and its Subsidiaries have filed all
tax returns which are required to be filed, and have paid, or made provision for
the payment of, all taxes with respect to the periods, property or transactions
covered by said returns, or pursuant to any assessment received by such Borrower
Party or its respective Subsidiaries, EXCEPT (a) such taxes, if any, as are
being contested in good faith by appropriate proceedings and as to which
adequate reserves have been established and maintained, and (b) immaterial
taxes; PROVIDED, HOWEVER, that in each case no material item or portion of
property of any Borrower Party or any of its Subsidiaries is in jeopardy of
being seized, levied upon or forfeited.
5.09 MARGIN REGULATIONS; INVESTMENT COMPANY ACT; PUBLIC UTILITY
HOLDING COMPANY ACT.
(a) No Borrower Party is engaged or will engage, principally or as
one of its important activities, in the business of extending credit for the
purpose of "purchasing" or "carrying" "margin stock" within the respective
meanings of each of the quoted terms under Regulation U of the Board of
Governors of the Federal Reserve System as now and from time to time hereafter
in effect. No part of the proceeds of any Extensions of Credit hereunder will be
used for "purchasing" or "carrying" "margin stock" as so defined or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulations U or X of such Board of Governors.
(b) No Borrower Party or any of its Subsidiaries (i) is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company," within
the meaning of the Public Utility Holding Company Act of 1935, or (ii) is or is
required to be registered as an "investment company" under the Investment
Company Act of 1940.
5.10 ERISA COMPLIANCE.
(a) Each Plan is in compliance in all material respects with the
applicable provisions of ERISA, the Code and other federal or state Laws. Each
Plan that is intended to qualify under Section 401(a) of the Code has received a
favorable determination letter from the IRS or an application for such a letter
is currently being processed by the IRS with respect thereto and, to the best
knowledge of Holdings, nothing has occurred which would prevent, or cause the
loss of, such qualification. Holdings and each ERISA Affiliate have made all
required contributions to each Plan subject to Section 412 of the Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Code has been made with respect to any Plan.
48
(b) There are no pending or, to the best knowledge of Holdings,
threatened claims, actions or lawsuits, or action by any Governmental Authority,
with respect to any Plan that has a Material Adverse Effect. There has been no
prohibited transaction or violation of the fiduciary responsibility rules with
respect to any Plan that has a Material Adverse Effect.
(c) (i) No ERISA Event has occurred or is reasonably expected to
occur; (ii) no Pension Plan has any Unfunded Pension Liability; (iii) neither
Borrowers nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability under Title IV of ERISA with respect to any Pension Plan (other
than premiums due and not delinquent under Section 4007 of ERISA); (iv) neither
Holdings nor any ERISA Affiliate has incurred, or reasonably expects to incur,
any liability (and no event has occurred which, with the giving of notice under
Section 4219 of ERISA, would result in such liability) under Sections 4201 or
4243 of ERISA with respect to a Multiemployer Plan; and (v) neither Holdings nor
any ERISA Affiliate has engaged in a transaction that could be subject to
Sections 4069 or 4212(c) of ERISA.
5.11 INTANGIBLE ASSETS. Each Borrower Party and its Subsidiaries
own, or possess the right to use, all trademarks, trade names, copyrights,
patents, patent rights, franchises, licenses and other intangible assets that
are used in the conduct of their respective businesses as now operated, and none
of such items, to the best knowledge of Holdings, conflicts with the valid
trademark, trade name, copyright, patent, patent right or intangible asset of
any other Person to the extent that such conflict has a Material Adverse Effect.
5.12 COMPLIANCE WITH LAWS. Each Borrower Party and its Subsidiaries
are in compliance in all material respects with all Laws that are applicable to
it where the failure to so comply would reasonably be expected to have a
Material Adverse Effect.
5.13 ENVIRONMENTAL COMPLIANCE. Each Borrower Party and its
Subsidiaries conduct in the ordinary course of business a review of the effect
of existing Environmental Laws and claims alleging potential liability or
responsibility for violation of any Environmental Law on their respective
businesses, operations and properties, and as a result thereof Holding has
reasonably concluded that such Environmental Laws and claims do not,
individually or in the aggregate, have a Material Adverse Effect.
5.14 INSURANCE. The properties of each Borrower Party and its
Subsidiaries are insured with financially sound and reputable insurance
companies not Affiliates of Holdings, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in similar
businesses and owning similar properties in localities where Holdings or such
Subsidiary operates.
5.15 DISCLOSURE. No statement, information, report, representation,
or warranty made by any Borrower Party in any Loan Document or furnished to
Administrative Agent or any Lender in connection with any Loan Document contains
any untrue statement of a material fact or omits to state any material fact
necessary to make the statements herein or therein not misleading.
49
SECTION 6.
AFFIRMATIVE COVENANTS
So long as any Obligation remains unpaid or unperformed, or any portion
of the Commitments remains outstanding, Holdings shall, and shall (except in the
case of Holdings' reporting covenants), cause each of its Subsidiaries, to:
6.01 FINANCIAL STATEMENTS. Deliver to Administrative Agent in form
and detail satisfactory to Administrative Agent and Requisite Lenders, with
sufficient copies for each Lender:
(a) as soon as available, but in any event within 90 days after
the end of each fiscal year of Holdings, a consolidated balance sheet of
Holdings and its Subsidiaries as at the end of such fiscal year, and the related
consolidated statements of income and cash flows for such fiscal year, setting
forth in each case in comparative form the figures for the previous fiscal year,
all in reasonable detail, audited and accompanied by a report and opinion of an
independent certified public accountant of nationally recognized standing
reasonably acceptable to Requisite Lenders, which report and opinion shall be
prepared in accordance with GAAP and shall not be subject to any qualifications
or exceptions as to the scope of the audit nor to any qualifications and
exceptions not reasonably acceptable to Requisite Lenders; and
(b) as soon as available, but in any event within 45 days after
the end of each of the first three fiscal quarters of each fiscal year of
Holdings, a consolidated balance sheet of Holdings and its Subsidiaries as at
the end of such fiscal quarter, and the related consolidated statements of
income and cash flows for such fiscal quarter and for the portion of Holdings'
fiscal year then ended, setting forth in each case in comparative form the
figures for the corresponding fiscal quarter of the previous fiscal year and the
corresponding portion of the previous fiscal year, all in reasonable detail and
certified by a Responsible Officer of Holdings as fairly presenting the
financial condition, results of operations and cash flows of Holdings and its
Subsidiaries in accordance with GAAP, subject only to normal year-end audit
adjustments and the absence of footnotes.
6.02 CERTIFICATES, NOTICES AND OTHER INFORMATION. Deliver to
Administrative Agent in form and detail satisfactory to Administrative Agent and
Requisite Lenders, with sufficient copies for each Lender:
(a) concurrently with the delivery of the financial statements
referred to in SECTION 6.01(a), a certificate of its independent certified
public accountants certifying such financial statement and stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default hereunder or, if any such Default or Event of
Default shall exist, stating the nature and status of such event;
(b) concurrently with the delivery of the financial statements
referred to in SECTIONS 6.01(a) and (b), a duly completed Compliance Certificate
signed by a Responsible Officer of Holdings;
50
(c) promptly after request by Administrative Agent or any Lender,
copies of any detailed audit reports, management letters or recommendations
submitted to the board of directors (or the audit committee of the board of
directors) of Holdings by independent accountants in connection with the
accounts or books of Holdings or any of its Subsidiaries, or any audit of any of
them;
(d) promptly after the same are available, copies of each annual
report, proxy or financial statement or other report or communication sent to
the stockholders of Holdings, and copies of all annual, regular, periodic and
special reports and registration statements which Holdings may file or be
required to file with the Securities and Exchange Commission under Sections 13
or 15(d) of the Securities Exchange Act of 1934, and not otherwise required to
be delivered to Administrative Agent pursuant hereto;
(e) promptly after the occurrence thereof, notice of any Default
or Event of Default;
(f) notice of any material change in accounting policies or
financial reporting practices by Holdings or any of its Subsidiaries;
(g) promptly after the commencement thereof, notice of any
litigation, investigation or proceeding affecting any Borrower Party where the
amount involved exceeds the Threshold Amount, or in which injunctive relief or
similar relief is sought, which relief, if granted, has a Material Adverse
Effect;
(h) promptly after the occurrence thereof, notice of any
Reportable Event with respect to any Plan or the intent to terminate any Plan,
or the institution of proceedings or the taking or expected taking of any other
action to terminate any Plan or withdraw from any Plan;
(i) promptly after the occurrence thereof, notice of any Material
Adverse Effect; and
(j) promptly, such other data and information as from time to time
may be reasonably requested by Administrative Agent, or, through Administrative
Agent or any Lender.
Each notice pursuant to this Section shall be accompanied by a
statement of a Responsible Officer of Holdings setting forth details of the
occurrence referred to therein and stating what action Holdings has taken and
proposes to take with respect thereto.
6.03 PAYMENT OF TAXES. Pay and discharge when due all taxes,
assessments, and governmental charges, Ordinary Course Liens or levies imposed
on any Borrower Party or its Subsidiaries or on its income or profits or any of
its property, except for any such tax, assessment, charge, or levy which is an
Ordinary Course Lien under subsection (b) of the definition of such term.
6.04 PRESERVATION OF EXISTENCE. Preserve and maintain its
existence, licenses, permits, rights, franchises and privileges necessary or
desirable in the normal conduct of its business, except where failure to do so
does not have a Material Adverse Effect.
6.05 MAINTENANCE OF PROPERTIES. Maintain, preserve and protect all
of its material properties and equipment necessary in the operation of its
business in good order and condition, subject to wear and tear in the ordinary
course of business, and not permit any waste of its
51
properties.
6.06 MAINTENANCE OF INSURANCE. Maintain liability and casualty
insurance with responsible insurance companies satisfactory to Administrative
Agent in such amounts and against such risks as is customary for similarly
situated businesses.
6.07 COMPLIANCE WITH LAWS.
(a) Comply with the requirements of all applicable Laws and orders
of any Governmental Authority, noncompliance with which has a Material Adverse
Effect.
(b) Conduct its operations and keep and maintain its property in
compliance with all Environmental Laws.
6.08 INSPECTION RIGHTS. At any time during regular business hours
and as often as reasonably requested, permit Administrative Agent or any Lender,
or any employee, agent or representative thereof, to examine, audit and make
copies and abstracts from the Borrower Parties' records and books of account and
to visit and inspect their properties and to discuss their affairs, finances and
accounts with any of their officers and key employees, and, upon request,
furnish promptly to Administrative Agent or any Lender true copies of all
financial information and internal management reports made available to their
senior management.
6.09 KEEPING OF RECORDS AND BOOKS OF ACCOUNT. Keep adequate records
and books of account reflecting all financial transactions in conformity with
GAAP, consistently applied, and in material conformity with all applicable
requirements of any Governmental Authority having regulatory jurisdiction over
Holdings or any of its Subsidiaries.
6.10 COMPLIANCE WITH ERISA. Cause, and cause each of its ERISA
Affiliates to: (a) maintain each Plan in compliance in all material respects
with the applicable provisions of ERISA, the Code and other federal or state
law; (b) cause each Plan which is qualified under Section 401(a) of the Code to
maintain such qualification; and (c) make all required contributions to any Plan
subject to Section 412 of the Code.
6.11 COMPLIANCE WITH AGREEMENTS. Promptly and fully comply with all
Contractual Obligations to which any one or more of them is a party, EXCEPT for
any such Contractual Obligations (a) the nonperformance of which would cause a
Default or Event of Default, (b) then being contested by any of them in good
faith by appropriate proceedings, or (c) if the failure to comply therewith does
not have a Material Adverse Effect.
6.12 USE OF PROCEEDS. Use the proceeds of Extensions of Credit for
lawful general corporate purposes not otherwise in contravention of this
Agreement.
6.13 ASSUMPTION BY NEW SUBSIDIARIES. As soon as practicable
following the acquisition or creation of any Subsidiary by Holdings after the
Closing Date, Holdings shall immediately notify the Administrative Agent thereof
and shall cause any such wholly-owned Subsidiary to become a party to the
Subsidiary Guaranty by executing an Amendment to Agreement in the form of
Exhibit A to the Subsidiary Guaranty and to become a party to the Security
Agreement by executing an Amendment to Agreement in the form of Exhibit A to the
Security Agreement. In addition, the stock or other ownership interests held by
a Borrower Party
52
in each such new Subsidiary shall be pledged to the Administrative Agent for the
benefit of the Lenders. In addition, Holdings shall cause such Subsidiary to
provide the Administrative Agent with such additional instruments or documents,
including, without limitation, opinions of counsel, certified resolutions,
incumbency certificates, third party consents and other evidences of authority,
with respect to such Subsidiary's ratification of, and assumption of all
obligations of an obligor under, the Subsidiary Guaranty and the Security
Agreement, as the Administrative Agent shall reasonably request.
SECTION 7.
NEGATIVE COVENANTS
So long as any Obligations remain unpaid or unperformed, or any portion
of the Commitments remains outstanding, Holdings shall not, nor shall it permit
any of its Subsidiaries to, directly or indirectly:
7.01 INDEBTEDNESS. Create, incur, assume or suffer to exist any
Indebtedness, EXCEPT:
(a) Indebtedness outstanding on the date hereof and listed on
SCHEDULE 7.01 and any refinancings, refundings, renewals or extensions thereof,
PROVIDED that the amount of such Indebtedness is not increased at the time of
such refinancing, refunding, renewal or extension except by an amount equal to
the premium or other amount paid, and fees and expenses incurred, in connection
with such refinancing and by an amount equal to any utilized commitments
thereunder; and
(b) Ordinary Course Indebtedness;
(c) Unsecured Indebtedness and Indebtedness secured by Liens
permitted pursuant to SECTION 7.02(b) not exceeding $500,000 in the aggregate at
any time.
7.02 LIENS AND NEGATIVE PLEDGES. Incur, assume or suffer to exist,
any Lien or Negative Pledge upon any of its property, assets or revenues,
whether now owned or hereafter acquired, EXCEPT:
(a) Liens and Negative Pledges existing on the date hereof and
listed on SCHEDULE 7.01 and any renewals or extensions thereof, PROVIDED that
the property covered thereby is not increased and any renewal or extension of
the obligations secured or benefitted thereby is permitted by SECTION 7.01(a);
(b) purchase money security interests on any property acquired or
held by Holdings or its Subsidiaries, securing Indebtedness incurred or assumed
for the purpose of financing all or any part of the cost of acquiring such
property; provided that (i) any such Lien attaches to such property concurrently
with or within 20 days after the acquisition thereof, (ii) such Lien attaches
solely to the property so acquired in such transaction and (iii) the principal
amount of debt secured thereby does not exceed 100% of the cost of such
property; and
(c) Ordinary Course Liens.
7.03 FUNDAMENTAL CHANGES. Merge or consolidate with or into any
Person or liquidate, wind-up or dissolve itself, or permit or suffer any
liquidation or dissolution or sell all
53
or substantially all of its assets, except, that so long as no Default or Event
of Default exists or would result therefrom:
(a) any Subsidiary of Holdings may merge with (i) Holdings
provided that Holdings shall be the continuing or surviving corporation, (ii)
with any one or more Subsidiaries of Holdings, and (iii) with any joint
ventures, partnerships and other Persons, so long as such joint ventures,
partnerships and other Persons will, as a result of making such merger and all
other contemporaneous related transactions, become a Subsidiary of Holdings;
PROVIDED that when any wholly-owned Subsidiary of Holdings is merging into
another Subsidiary of Holdings, the wholly-owned Subsidiary of Holdings shall be
the continuing or surviving Person;
(b) any Subsidiary of Holdings may sell all or substantially all
of its assets (upon voluntary liquidation or otherwise), to Holdings or any of
its Subsidiaries; PROVIDED that when any wholly-owned Subsidiary of Holdings is
selling all or substantially all of its assets to another Subsidiary of
Holdings, the Subsidiary acquiring such assets shall be a wholly-owned
Subsidiary of Holdings; and
(c) Permitted Acquisitions and Investments.
7.04 DISPOSITIONS. Make any Dispositions, EXCEPT:
(a) Ordinary Course Dispositions;
(b) Dispositions permitted by SECTION 7.03; and
(c) other Dispositions PROVIDED that the Borrowers' comply with,
and the proceeds thereof are applied in accordance with, the provisions of
SECTION 2.04(c).
7.05 INVESTMENTS. Make any Investments, EXCEPT:
(a) Investments existing on the date hereof;
(b) Ordinary Course Investments; and
(c) Investments permitted by SECTION 7.03 (including, without
limitation, Permitted Acquisitions and Investments).
7.06 LEASE OBLIGATIONS. Create or suffer to exist any obligations
for the payment of rent for any property under lease or agreement to lease,
EXCEPT:
(a) leases in existence on the date hereof and any renewal,
extension or refinancing thereof; and
(b) leases (other than capital leases) entered into or assumed by
Holdings or any of its Subsidiaries after the date hereof in the ordinary course
of business.
7.07 RESTRICTED PAYMENTS. Make any Restricted Payments, EXCEPT for
Permitted Stock Repurchases.
7.08 ERISA. At any time engage in a transaction which could be
subject to Sections 4069 or 4212(c) of ERISA, or permit any Pension Plan to (a)
engage in any non-exempt "prohibited transaction" (as defined in Section 4975 of
the Code); (b) fail to comply with ERISA or any other applicable Laws; or (c)
incur any material "accumulated funding deficiency" (as defined in Section 302
of ERISA), which, with respect to each event listed above, has a Material
Adverse Effect.
54
7.09 CHANGE IN NATURE OF BUSINESS. Engage in lines of business
except as conducted as of the date hereof.
7.10 TRANSACTIONS WITH AFFILIATES. Enter into any transaction of
any kind with any Affiliate of Holdings in excess of $50,000 other than
arm's-length transactions with Affiliates or transactions that are otherwise
permitted hereunder.
7.11 LIMITATIONS ON UPSTREAMING. Agree to any restriction or
limitation on the making of Restricted Payments or transferring of assets from
any Subsidiary of Holdings to Holdings or from any Subsidiary of BDUSA to BDUSA.
7.12 FINANCIAL COVENANTS.
(a) Minimum EBIT. Permit Consolidated EBIT for any fiscal quarter
to be less than the amount specified below for such fiscal quarter:
Each Fiscal Quarter Minimum Quarterly
Ended EBIT
-------------------------- -----------
March 31 -$5,000,000
June 30 $1
September 30 $2,000,000
December 31 $3,000,000
(b) Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio as of the end of any fiscal quarter of Holdings to be less than the ratio
set forth below opposite such fiscal quarter:
Fiscal Quarters Ending Minimum Fixed
Charge overage Ratio
--------------------------------------------------------------------------
September 30, 2000 1.05:1
December 31, 2000 1.10:1
March 31, 2001 1.10:1
June 30, 2001 1.10:1
September 30, 2001 1.10:1
December 31, 2001 and thereafter 1:25:1
(c) Leverage Ratio. Permit the Leverage Ratio as of the end of any
fiscal quarter of Holdings to be greater than the ratio set forth below opposite
such fiscal quarter:
Fiscal Quarters Ending Maximum
Leverage Ratio
--------------------------------------------------------------------------
September 30, 2000 2.50:1
December 31, 2000 0.60:1
March 31, 2001 2.00:1
June 30, 2001 1.75:1
55
September 30, 2001 1.75:1
December 31, 2001 0.25:1
March 31, 2002 1.50:1
June 30, 2002 1.25:1
September 30, 2002 1.25:1
December 31, 2002 0.25:1
March 31, 2003 and thereafter 1.25:1
7.13 CHANGE IN AUDITORS. Change the certified public accountants
auditing the books of Holdings without the consent of Requisite Lenders.
SECTION 8.
EVENTS OF DEFAULT AND REMEDIES
8.01 EVENTS OF DEFAULT. Any one or more of the following events
shall constitute an Event of Default:
(a) A Borrower fails to pay any principal on any Outstanding
Obligation (other than fees) as and on the date when due; or
(b) A Borrower fails to pay any interest on any Outstanding
Obligation, or any commitment fees due hereunder within three days after the
date when due; or fails to pay any other fees or amount payable to
Administrative Agent or any Lender under any Loan Document within five days
after the date due; or
(c) Any default occurs in the observance or performance of any
agreement contained in SECTIONS 6.01, 6.02, 6.08 or 7 (other than 7.12) and such
default continues for 10 days; or any default occurs in the observance or
performance of any agreement contained in SECTION 7.12; or
(d) The occurrence of an Event of Default (as such term is or may
hereafter be specifically defined in any other Loan Document) under any other
Loan Document; or any Borrower Party fails to perform or observe any other
covenant or agreement (not specified in subsections (a), (b) or (c) above)
contained in any Loan Document on its part to be performed or observed and such
failure continues for 30 days; or
(e) Any representation or warranty in any Loan Document or in any
certificate, agreement, instrument or other document made or delivered by any
Borrower Party pursuant to or in connection with any Loan Document proves to
have been incorrect in any material respect when made or deemed made; or
(f) Any Borrower Party (x) defaults in any payment when due of
principal of or interest on any Indebtedness (other than Indebtedness hereunder)
having an aggregate principal amount in excess of the Threshold Amount or (y)
defaults in the observance or performance of any other agreement or condition
relating to any Indebtedness (other than Indebtedness
56
hereunder) or contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event shall occur, the effect of which default or
other event is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders or beneficiary or
beneficiaries) to cause, with the giving of notice if required, Indebtedness
having an aggregate principal amount in excess of the Threshold Amount to be
demanded or become due (automatically or otherwise) prior to its stated
maturity, or any Guaranty Obligation in such amount to become payable or cash
collateral in respect thereof to be demanded, or any Borrower Party is unable or
admits in writing its inability to pay its debts as they mature; or
(g) Any Loan Document, at any time after its execution and
delivery and for any reason other than the agreement of all Lenders or
satisfaction in full of all the Obligations, ceases to be in full force and
effect or is declared by a court of competent jurisdiction to be null and void,
invalid or unenforceable in any respect; or any Borrower Party denies that it
has any or further liability or obligation under any Loan Document, or purports
to revoke, terminate or rescind any Loan Document; or
(h) A final judgment against any Borrower Party is entered for the
payment of money in excess of the Threshold Amount that is not covered by third
party insurance, or any non-monetary final judgment is entered against any
Borrower Party which has a Material Adverse Effect and, in each case if such
judgment remains unsatisfied without procurement of a stay of execution within
30 calendar days after the date of entry of judgment or, if earlier, five days
prior to the date of any proposed sale, or any writ or warrant of attachment or
execution or similar process is issued or levied against all or any material
part of the property of any such Person and is not released, vacated or fully
bonded within 30 calendar days after its issue or levy; or
(i) Any Borrower Party institutes or consents to the institution
of any proceeding under Debtor Relief Laws, or makes an assignment for the
benefit of creditors; or applies for or consents to the appointment of any
receiver, trustee, custodian, conservator, liquidator, rehabilitator or similar
officer for it or for all or any material part of its property; or any receiver,
trustee, custodian, conservator, liquidator, rehabilitator or similar officer is
appointed without the application or consent of that Person and the appointment
continues undischarged or unstayed for 60 calendar days; or any proceeding under
Debtor Relief Laws relating to any such Person or to all or any part of its
property is instituted without the consent of that Person and continues
undismissed or unstayed for 60 calendar days, or an order for relief is entered
in any such proceeding; or
(j) (i) An ERISA Event occurs with respect to a Pension Plan or
Multiemployer Plan which has resulted or could reasonably be expected to result
in liability of a Borrower under Title IV of ERISA to the Pension Plan,
Multiemployer Plan or the PBGC in an aggregate amount in excess of the Threshold
Amount; (ii) the aggregate amount of Unfunded Pension Liability among all
Pension Plans at any time exceeds the Threshold Amount; or (iii) a Borrower or
any ERISA Affiliate fails to pay when due, after the expiration of any
applicable grace period, any
57
installment payment with respect to its withdrawal liability under Section 4201
of ERISA under a Multiemployer Plan in an aggregate amount in excess of the
Threshold Amount; or
(k) There occurs any Change of Control.
8.02 REMEDIES UPON EVENT OF DEFAULT. Without limiting any other
rights or remedies of Administrative Agent or Lenders provided for elsewhere in
this Agreement, or the other Loan Documents, or by applicable Law, or in equity,
or otherwise:
(a) Upon the occurrence, and during the continuance, of any Event
of Default OTHER THAN an Event of Default described in SECTION 8.01(i):
(i) Requisite Lenders may request Administrative Agent
to, and Administrative Agent thereupon shall, terminate the Commitments
and/or declare all or any part of the unpaid principal of all Loans,
all interest accrued and unpaid thereon and all other amounts payable
under the Loan Documents to be immediately due and payable, whereupon
the same shall become and be immediately due and payable, without
protest, presentment, notice of dishonor, demand or further notice of
any kind, all of which are expressly waived by Borrowers; and
(ii) Issuing Lender may, with the approval of
Administrative Agent on behalf of Requisite Lenders, demand immediate
payment by Borrowers of an amount equal to the aggregate amount of all
outstanding Letters of Credit Usage to be held in a Letter of Credit
Cash Collateral Account.
(b) Upon the occurrence of any Event of Default described in
SECTION 8.01(i):
(i) the Commitments and all other obligations of
Administrative Agent or Lenders shall automatically terminate without
notice to or demand upon Borrowers, which are expressly waived by
Borrowers;
(ii) the unpaid principal of all Loans, all interest
accrued and unpaid thereon and all other amounts payable under the Loan
Documents shall be immediately due and payable, without protest,
presentment, notice of dishonor, demand or further notice of any kind,
all of which are expressly waived by Borrowers; and
(iii) an amount equal to the aggregate amount of all
outstanding Letters of Credit Usage shall be immediately due and
payable to Issuing Lender without notice to or demand upon Borrowers,
which are expressly waived by Borrowers, to be held in a Letter of
Credit Cash Collateral Account.
(c) Upon the occurrence of any Event of Default, Lenders and
Administrative Agent, or any of them, without notice to (except as expressly
provided for in any Loan Document) or demand upon Borrowers, which are expressly
waived by Borrowers (except as to notices expressly provided for in any Loan
Document), may proceed to (but only with the consent of Requisite Lenders)
protect, exercise and enforce their rights and remedies under the Loan Documents
against any Borrower Party and such other rights and remedies as are provided by
Law or equity.
(d) Except as permitted by SECTION 10.05, no Lender may exercise
any rights or
58
remedies with respect to the Obligations without the consent of Requisite
Lenders in their sole and absolute discretion. The order and manner in which
Administrative Agent's and Lenders' rights and remedies are to be exercised
shall be determined by Requisite Lenders in their sole and absolute discretion.
Regardless of how a Lender may treat payments for the purpose of its own
accounting, for the purpose of computing the Obligations hereunder, payments
shall be applied FIRST, to costs and expenses (including Attorney Costs)
incurred by Administrative Agent and each Lender, SECOND, to the payment of
accrued and unpaid interest on the Loans to and including the date of such
application, THIRD, to the payment of the unpaid principal of the Loans, and
FOURTH, to the payment of all other amounts (including fees) then owing to
Administrative Agent and Lenders under the Loan Documents, in each case paid pro
rata to each Lender in the same proportions that the aggregate Obligations owed
to each Lender under the Loan Documents bear to the aggregate Obligations owed
under the Loan Documents to all Lenders, without priority or preference among
Lenders. No application of payments will cure any Event of Default, or prevent
acceleration, or continued acceleration, of amounts payable under the Loan
Documents, or prevent the exercise, or continued exercise, of rights or remedies
of Administrative Agent and Lenders hereunder or thereunder or at Law or in
equity.
SECTION 9.
ADMINISTRATIVE AGENT
9.01 APPOINTMENT AND AUTHORIZATION OF ADMINISTRATIVE AGENT.
(a) Each Lender hereby irrevocably (subject to SECTION 9.09)
appoints, designates and authorizes Administrative Agent to take such action on
its behalf under the provisions of this Agreement and each other Loan Document
and to exercise such powers and perform such duties as are expressly delegated
to it by the terms of this Agreement or any other Loan Document, together with
such powers as are reasonably incidental thereto. Notwithstanding any provision
to the contrary contained elsewhere in this Agreement or in any other Loan
Document, Administrative Agent shall not have any duties or responsibilities,
except those expressly set forth herein, nor shall Administrative Agent have or
be deemed to have any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or any other Loan Document or otherwise exist
against Administrative Agent. Without limiting the generality of the foregoing
sentence, the use of the term "agent" in this Agreement with reference to
Administrative Agent is not intended to connote any fiduciary or other implied
(or express) obligations arising under agency doctrine of any applicable law.
Instead, such term is used merely as a matter of market custom, and is intended
to create or reflect only an administrative relationship between independent
contracting parties.
(b) Issuing Lender shall act on behalf of Lenders with respect to
any Letters of Credit issued by it and the documents associated therewith until
such time and except for so long as Administrative Agent may agree at the
request of Requisite Lenders to act for such Issuing Lender with respect
thereto; PROVIDED, HOWEVER, that Issuing Lender shall have all of the benefits
59
and immunities (i) provided to Administrative Agent in this SECTION 9 with
respect to any acts taken or omissions suffered by Issuing Lender in connection
with Letters of Credit issued by it or proposed to be issued by it and the
application and agreements for letters of credit pertaining to the Letters of
Credit as fully as if the term "Administrative Agent" as used in this SECTION 9
included Issuing Lender with respect to such acts or omissions, and (ii) as
additionally provided in this Agreement with respect to Issuing Lender.
9.02 DELEGATION OF DUTIES. Administrative Agent may execute any of
its duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. Administrative Agent shall not
be responsible for the negligence or misconduct of any agent or attorney-in-fact
that it selects with reasonable care.
9.03 LIABILITY OF ADMINISTRATIVE AGENT. None of Administrative
Agent-Related Persons shall (i) be liable for any action taken or omitted to be
taken by any of them under or in connection with this Agreement or any other
Loan Document or the transactions contemplated hereby (except for its own gross
negligence or willful misconduct), or (ii) be responsible in any manner to any
of Lenders for any recital, statement, representation or warranty made by
Borrowers or any Subsidiary or Affiliate of Borrowers, or any officer thereof,
contained in this Agreement or in any other Loan Document, or in any
certificate, report, statement or other document referred to or provided for in,
or received by Administrative Agent under or in connection with, this Agreement
or any other Loan Document, or the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document, or
for any failure of Borrowers or any other party to any Loan Document to perform
its obligations hereunder or thereunder. No Administrative Agent-Related Person
shall be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement or any other Loan Document, or to inspect the properties,
books or records of Holdings or any of Holdings' Subsidiaries or Affiliates.
9.04 RELIANCE BY ADMINISTRATIVE AGENT.
(a) Administrative Agent shall be entitled to rely, and shall be
fully protected in relying, upon any writing, resolution, representation,
notice, consent, certificate, affidavit, letter, telegram, facsimile, telex or
telephone message, statement or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons, and upon advice and statements of legal counsel (including
counsel to Borrowers), independent accountants and other experts selected by
Administrative Agent. Administrative Agent shall be fully justified in failing
or refusing to take any action under any other Loan Document unless it shall
first receive such advice or concurrence of Requisite Lenders as it deems
appropriate and, if it so requests, it shall first be indemnified to its
satisfaction by Lenders against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action.
Administrative Agent shall in all cases be
60
fully protected in acting, or in refraining from acting, under this Agreement or
any other Loan Document in accordance with a request or consent of Requisite
Lenders or all Lenders, if required hereunder, and such request and any action
taken or failure to act pursuant thereto shall be binding upon all of Lenders.
Where this Agreement expressly permits or prohibits an action unless Requisite
Lenders otherwise determine, and in all other instances, Administrative Agent
may, but shall not be required to, initiate any solicitation for the consent or
a vote of Lenders.
(b) For purposes of determining compliance with the conditions
specified in SECTIONS 4.01 AND 4.02, each Lender that has executed this
Agreement shall be deemed to have consented to, approved or accepted or to be
satisfied with, each document or other matter either sent by Administrative
Agent to such Lender for consent, approval, acceptance or satisfaction, or
required thereunder to be consented to or approved by or acceptable or
satisfactory to such Lender.
9.05 NOTICE OF DEFAULT. Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to Administrative Agent for the account of Lenders, unless
Administrative Agent shall have received written notice from a Lender or
Borrowers referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". Administrative
Agent will notify Lenders of its receipt of any such notice. Administrative
Agent shall take such action with respect to such Default or Event of Default as
may be directed by Requisite Lenders in accordance with SECTION 8; PROVIDED,
HOWEVER, that unless and until Administrative Agent has received any such
direction, Administrative Agent may (but shall not be obligated to) take such
action, or refrain from taking such action, with respect to such Default or
Event of Default as it shall deem advisable or in the best interest of Lenders.
9.06 CREDIT DECISION; DISCLOSURE OF INFORMATION BY ADMINISTRATIVE
AGENT. Each Lender acknowledges that none of Administrative Agent-Related
Persons has made any representation or warranty to it, and that no act by
Administrative Agent hereinafter taken, including any consent to and acceptance
of any assignment or review of the affairs of Holdings and its Subsidiaries,
shall be deemed to constitute any representation or warranty by any
Administrative Agent-Related Person to any Lender as to any matter, including
whether Administrative Agent-Related Persons have disclosed material information
in their possession. Each Lender, including any Lender by assignment, represents
to Administrative Agent that it has, independently and without reliance upon any
Administrative Agent-Related Person and based on such documents and information
as it has deemed appropriate, made its own appraisal of and investigation into
the business, prospects, operations, property, financial and other condition and
creditworthiness of Holdings and its Subsidiaries, and all applicable bank
regulatory laws relating to the transactions contemplated hereby, and made its
own decision to enter into this Agreement and to extend credit to Borrowers
hereunder. Each Lender also represents that it will, independently and without
reliance upon any Administrative Agent-Related Person and based on
61
such documents and information as it shall deem appropriate at the time,
continue to make its own credit analysis, appraisals and decisions in taking or
not taking action under this Agreement and the other Loan Documents, and to make
such investigations as it deems necessary to inform itself as to the business,
prospects, operations, property, financial and other condition and
creditworthiness of Borrowers. Except for notices, reports and other documents
expressly required to be furnished to Lenders by Administrative Agent herein,
Administrative Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, prospects,
operations, property, financial and other condition or creditworthiness of
Holdings or any of its Subsidiaries which may come into the possession of any of
Administrative Agent-Related Persons.
9.07 INDEMNIFICATION OF ADMINISTRATIVE AGENT. Whether or not the
transactions contemplated hereby are consummated, Lenders shall indemnify upon
demand each Administrative Agent-Related Person (to the extent not reimbursed by
or on behalf of Borrowers and without limiting the obligation of Borrowers to do
so), pro rata, and hold harmless each Administrative Agent-Related Person from
and against any and all Indemnified Liabilities incurred by it; PROVIDED,
HOWEVER, that no Lender shall be liable for the payment to any Administrative
Agent-Related Person of any portion of such Indemnified Liabilities resulting
from such Person's gross negligence or willful misconduct; PROVIDED, HOWEVER,
that no action taken in accordance with the directions of not less than two
Lenders constituting Requisite Lenders shall be deemed to constitute gross
negligence or willful misconduct for purposes of this Section. Without
limitation of the foregoing, each Lender shall reimburse Administrative Agent
upon demand for its ratable share of any costs or out-of-pocket expenses
(including Attorney Costs) incurred by Administrative Agent in connection with
the preparation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any other Loan Document, or any document contemplated by or referred to herein,
to the extent that Administrative Agent is not reimbursed for such expenses by
or on behalf of Borrowers. The undertaking in this Section shall survive the
payment of all Obligations hereunder and the resignation or replacement of
Administrative Agent.
9.08 ADMINISTRATIVE AGENT IN INDIVIDUAL CAPACITY. Bank of America
and its Affiliates may make loans to, issue letters of credit for the account
of, accept deposits from, acquire equity interests in and generally engage in
any kind of banking, trust, financial advisory, underwriting or other business
with Holdings and its Subsidiaries and Affiliates as though Bank of America were
not Administrative Agent or Issuing Lender hereunder and without notice to or
consent of Lenders. Lenders acknowledge that, pursuant to such activities, Bank
of America or its Affiliates may receive information regarding Holdings or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of Holdings or such Affiliate) and acknowledge that
Administrative Agent shall be under no obligation to provide such information to
them. With respect to its Loans, Bank of America shall have the same rights and
powers
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under this Agreement as any other Lender and may exercise the same as though it
were not Administrative Agent or Issuing Lender.
9.09 SUCCESSOR ADMINISTRATIVE AGENT. Administrative Agent may, and
at the request of Requisite Lenders shall, resign as Administrative Agent upon
30 days' notice to Lenders. If Administrative Agent resigns under this
Agreement, Requisite Lenders shall appoint from among Lenders a successor
administrative agent for Lenders which successor administrative agent shall be
approved by Borrowers. If no successor administrative agent is appointed prior
to the effective date of the resignation of Administrative Agent, Administrative
Agent may appoint, after consulting with Lenders and Borrowers, a successor
administrative agent from among Lenders. Upon the acceptance of its appointment
as successor administrative agent hereunder, such successor administrative agent
shall succeed to all the rights, powers and duties of the retiring
Administrative Agent and the term "Administrative Agent" shall mean such
successor administrative agent and the retiring Administrative Agent's
appointment, powers and duties as Administrative Agent shall be terminated.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this SECTION 9 and SECTIONS 10.03 and
10.11 shall inure to its benefit as to any actions taken or omitted to be taken
by it while it was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent by the
date which is 30 days following a retiring Administrative Agent's notice of
resignation, the retiring Administrative Agent's resignation shall nevertheless
thereupon become effective and Lenders shall perform all of the duties of
Administrative Agent hereunder until such time, if any, as Requisite Lenders
appoint a successor agent as provided for above. Notwithstanding the foregoing,
however, Bank of America may not be removed as Administrative Agent at the
request of Requisite Lenders unless Bank of America shall also simultaneously be
replaced as "Issuing Lender" hereunder pursuant to documentation in form and
substance reasonably satisfactory to Bank of America.
SECTION 10.
MISCELLANEOUS
10.01 AMENDMENTS; CONSENTS. No amendment, modification, supplement,
extension, termination or waiver of any provision of this Agreement or any other
Loan Document, no approval or consent thereunder, and no consent to any
departure by any Borrower Party therefrom shall be effective unless in writing
signed by Requisite Lenders and acknowledged by Administrative Agent, and each
such waiver or consent shall be effective only in the specific instance and for
the specific purpose for which given. Except as otherwise expressly provided
herein, without the approval in writing of Administrative Agent and all Lenders,
no amendment, modification, supplement, termination, waiver or consent may be
effective:
(a) To reduce the amount of principal, principal prepayments or
the rate of interest payable on, any Loan, or the amount of any fee or other
amount payable to any Lender under the Loan Documents (unless such modification
is consented to by each Lender entitled to receive such fee ) or to waive an
Event of Default consisting of the failure of Borrowers to pay when due
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principal, interest or any commitment fee;
(b) To postpone any date fixed for any payment of principal of,
prepayment of principal of, or any installment of interest on, any Loan or any
installment of any commitment fee, to extend the term of, or increase the amount
of, any Lender's Commitment (it being understood that a waiver of an Event of
Default shall not constitute an extension or increase in the Commitment of any
Lender) or modify the Pro Rata Share of any Lender;
(c) To amend the provisions of the definition of "REQUISITE
LENDERS", SECTION 9, this SECTION 10.01 or SECTION 10.06; or
(d) To amend any provision of this Agreement that expressly
requires the consent or approval of all Lenders;
PROVIDED, HOWEVER, that (i) no amendment, waiver or consent shall, unless in
writing and signed by Issuing Lender in addition to Requisite Lenders or all
Lenders, as the case may be, affect the rights or duties of Issuing Lender, (ii)
no amendment, waiver or consent shall, unless in writing and signed by
Administrative Agent in addition to Requisite Lenders or all Lenders, as the
case may be, affect the rights or duties of Administrative Agent, and (iii) the
fee letters may be amended, or rights or privileges thereunder waived, in a
writing executed by the parties thereto. Any amendment, modification,
supplement, termination, waiver or consent pursuant to this Section shall apply
equally to, and shall be binding upon, all Lenders and Administrative Agent.
10.02 TRANSMISSION AND EFFECTIVENESS OF COMMUNICATIONS AND
SIGNATURES.
(a) MODES OF DELIVERY. Except as otherwise provided in any Loan
Document, notices, requests, demands, directions, agreements and documents
delivered in connection with the Loan Documents (collectively, "COMMUNICATIONS")
shall be transmitted by Requisite Notice to the number and address set forth on
SCHEDULE 10.02, may be delivered by the following modes of delivery, and shall
be effective as follows:
MODE OF DELIVERY EFFECTIVE ON EARLIER OF ACTUAL RECEIPT AND:
----------------------------------------------------------------------------------
Courier Scheduled delivery date
Facsimile When transmission in legible form complete
Mail Fourth Business Day after deposit
in U.S. mail first class postage pre-paid
Personal delivery When received
Telephone When conversation completed
PROVIDED, HOWEVER, that communications delivered to Administrative Agent
pursuant to SECTION 2 shall not be effective until actually received by
Administrative Agent.
(b) RELIANCE BY ADMINISTRATIVE AGENT AND LENDERS. Administrative
Agent and Lenders shall be entitled to rely and act on any communications
purportedly given by or on
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behalf of any Borrower Party even if such communications (i) were not made in a
manner specified herein, (ii) were incomplete, (iii) were not preceded or
followed by any other notice specified herein, or (iv) the terms thereof, as
understood by the recipient, varied from any subsequent related communications
provided for herein. Borrowers shall indemnify Administrative Agent and Lenders
from any loss, cost, expense or liability as a result of relying on any
communications permitted herein.
(c) EFFECTIVENESS OF FACSIMILE DOCUMENTS AND SIGNATURES.
Documents and signatures on communications may be transmitted by facsimile
only with the consent of Administrative Agent in its sole and absolute
discretion in each instance. The effectiveness of any such signatures
accepted by Administrative Agent shall, subject to applicable Law, have the
same force and effect as manual signatures and shall be binding on all
Borrower Parties and Administrative Agent and Lenders. Administrative Agent
may also require that any such signature be confirmed by a manually-signed
hardcopy thereof; PROVIDED, HOWEVER, that the failure to deliver or request
any such manually-signed hardcopy confirmation shall not affect the
effectiveness of any facsimile signatures.
10.03 ATTORNEY COSTS, EXPENSES AND TAXES. Borrowers agree (a) to pay
or reimburse Administrative Agent for all costs and expenses incurred in
connection with the development, preparation, negotiation and execution of the
Loan Documents, and the development, preparation, negotiation and execution of
any amendment, waiver, consent, supplement or modification to, any Loan
Documents, and any other documents prepared in connection herewith or therewith,
and the consummation and administration of the transactions contemplated hereby
and thereby, including all reasonable Attorney Costs, and (b) to pay or
reimburse Administrative Agent and each Lender for all costs and expenses
incurred in connection with any refinancing, restructuring, reorganization
(including a bankruptcy reorganization) and enforcement or attempted
enforcement, or preservation of any rights under any Loan Documents, and any
other documents prepared in connection herewith or therewith, or in connection
with any refinancing, or restructuring of any such documents in the nature of a
"workout" or of any insolvency or bankruptcy proceeding, including reasonable
Attorney Costs. The foregoing costs and expenses shall include all search,
filing, recording, title insurance and appraisal charges and fees and taxes
related thereto, and other out-of-pocket expenses incurred by Administrative
Agent and the cost of independent public accountants and other outside experts
retained by Administrative Agent or any Lender. Such costs and expenses shall
also include administrative costs of Administrative Agent reasonably
attributable to the administration of the Loan Documents. Any amount payable by
Borrowers under this Section shall bear interest from the second Business Day
following the date of demand for payment at the Default Rate, unless waived by
Administrative Agent. The agreements in this Section shall survive repayment of
all Obligations.
10.04 BINDING EFFECT; ASSIGNMENT.
(a) This Agreement and the other Loan Documents to which Borrowers
are a party will be binding upon and inure to the benefit of Borrowers,
Administrative Agent, Lenders and
65
their respective successors and assigns, except that, Borrowers may not assign
their rights hereunder or thereunder or any interest herein or therein without
the prior written consent of all Lenders and any such attempted assignment shall
be void. Any Lender may at any time pledge its Note or any other instrument
evidencing its rights as a Lender under this Agreement to a Federal Reserve
Lender, but no such pledge shall release that Lender from its obligations
hereunder or grant to such Federal Reserve Lender the rights of a Lender
hereunder absent foreclosure of such pledge.
(b) From time to time following the Closing Date, each Lender may
assign to one or more Eligible Assignees all or any portion of its Pro Rata
Share of its Commitment and/or Extensions of Credit; PROVIDED that (i) such
assignment, if not to a Lender or an Affiliate of the assigning Lender, shall be
consented to by Borrowers at all times other than during the existence of a
Default or Event of Default and Administrative Agent and Issuing Lender (which
approval of Borrowers shall not be unreasonably withheld or delayed), (ii) a
copy of a duly signed and completed Notice of Assignment and Acceptance shall be
delivered to Administrative Agent, (iii) except in the case of an assignment to
an Affiliate of the assigning Lender, to another Lender or of the entire
remaining Commitment of the assigning Lender, the assignment shall not assign a
Pro Rata Share equivalent to less than the Minimum Amount therefor, and (iv) the
effective date of any such assignment shall be as specified in the Notice of
Assignment and Acceptance, but not earlier than the date which is five Business
Days after the date Administrative Agent has received the Notice of Assignment
and Acceptance. Upon acceptance by Administrative Agent of such Notice
Assignment and Acceptance and consent thereto by Administrative Agent and
Issuing Lender and payment of the requisite fee described below, the Eligible
Assignee named therein shall be a Lender for all purposes of this Agreement,
with the Pro Rata Share therein set forth and, to the extent of such Pro Rata
Share, the assigning Lender shall be released from its further obligations under
this Agreement. Borrowers agree that they shall execute and deliver upon request
(against delivery by the assigning Lender to Borrowers of any Note) to such
assignee Lender, one or more Notes evidencing that assignee Lender's Pro Rata
Share, and to the assigning Lender if requested, one or more Notes evidencing
the remaining balance Pro Rata Share retained by the assigning Lender.
Administrative Agent's consent to and acceptance of any assignment shall not be
deemed to constitute any representation or warranty by any Administrative
Agent-Related Person as to any matter.
(c) After receipt of a completed Notice of Assignment and
Acceptance, and receipt of an assignment fee of $3,500 from such Eligible
Assignee (including Affiliates of assigning Lenders), Administrative Agent
shall, promptly following the effective date thereof, provide to Borrowers and
Lenders a revised SCHEDULE 10.02 giving effect thereto.
(d) Each Lender may from time to time, without the consent of any
other Person, grant participations to one or more other Person (including
another Lender) all or any portion of its Pro Rata Share of its Commitment
and/or Extensions of Credit; PROVIDED, HOWEVER, that (i) such Lender's
obligations under this Agreement shall remain unchanged, (ii) such Lender
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shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) the participating banks or other financial
institutions shall not be a Lender hereunder for any purpose except, if the
participation agreement so provides, for the purposes of SECTION 3 (but only to
the extent that the cost of such benefits to Borrowers does not exceed the cost
which Borrowers would have incurred in respect of such Lender absent the
participation) and subject to SECTIONS 10.05 AND 10.06, (iv) Borrowers,
Administrative Agent and the other Lenders shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Agreement, (v) the participation shall not restrict an
increase in the Commitment or in granting Lender's Pro Rata Share, so long as
the amount of the participation interest is not affected thereby, and (vi) the
consent of the holder of such participation interest shall not be required for
amendments or waivers of provisions of the Loan Documents; PROVIDED, HOWEVER,
that the assigning Lender may, in any agreement with a participant, give such
participant the right to consent to any matter which (A) extends the Maturity
Date as to such participant or any other date upon which any payment of money is
due to such participant, (B) reduces the rate of interest owing to such
participant, any fee or any other monetary amount owing to such participant, or
(C) reduces the amount of any installment of principal owing to such
participant.
10.05 SET-OFF. In addition to any rights and remedies of
Administrative Agent and Lenders or any assignee or participant of Lenders or
any Affiliates thereof (each, a "PROCEEDING PARTY") provided by law, upon the
occurrence and during the continuance of any Event of Default, each Proceeding
Party is authorized at any time and from time to time, without prior notice to
Borrowers, any such notice being waived by Borrowers to the fullest extent
permitted by law, to proceed directly, by right of set-off, banker's lien, or
otherwise, against any assets of the Borrower Parties which may be in the hands
of such Proceeding Party (including all general or special, time or demand,
provisional or other deposits and other indebtedness owing by such Proceeding
Party to or for the credit or the account of Borrowers) and apply such assets
against the Obligations, irrespective of whether such Proceeding Party shall
have made any demand therefor and although such Obligations may be unmatured.
Each Lender agrees promptly to notify Borrowers and Administrative Agent after
any such set-off and application made by such Lender; provided, however, that
the failure to give such notice shall not affect the validity of such set-off
and application.
10.06 SHARING OF PAYMENTS. Each Lender severally agrees that if it,
through the exercise of any right of setoff, banker's lien or counterclaim
against a Borrower, or otherwise, receives payment of the Obligations held by it
that is ratably more than any other Lender, through any means, receives in
payment of the Obligations held by that Lender, then, subject to applicable
Laws: (a) Lender exercising the right of setoff, banker's lien or counterclaim
or otherwise receiving such payment shall purchase, and shall be deemed to have
simultaneously purchased, from the other Lender a participation in the
Obligations held by the other Lender and
67
shall pay to the other Lender a purchase price in an amount so that the share of
the Obligations held by each Lender after the exercise of the right of setoff,
banker's lien or counterclaim or receipt of payment shall be in the same
proportion that existed prior to the exercise of the right of setoff, banker's
lien or counterclaim or receipt of payment; and (b) such other adjustments and
purchases of participations shall be made from time to time as shall be
equitable to ensure that all of Lenders share any payment obtained in respect of
the Obligations ratably in accordance with each Lender's share of the
Obligations immediately prior to, and without taking into account, the payment;
PROVIDED that, if all or any portion of a disproportionate payment obtained as a
result of the exercise of the right of setoff, banker's lien, counterclaim or
otherwise is thereafter recovered from the purchasing Lender by a Borrower or
any Person claiming through or succeeding to the rights of a Borrower, the
purchase of a participation shall be rescinded and the purchase price thereof
shall be restored to the extent of the recovery, but without interest. Each
Lender that purchases a participation in the Obligations pursuant to this
Section shall from and after the purchase have the right to give all notices,
requests, demands, directions and other communications under this Agreement with
respect to the portion of the Obligations purchased to the same extent as though
the purchasing Lender were the original owner of the Obligations purchased. Each
Borrower expressly consents to the foregoing arrangements and agrees that any
Lender holding a participation in an Obligation so purchased may exercise any
and all rights of setoff, banker's lien or counterclaim with respect to the
participation as fully as if Lender were the original owner of the Obligation
purchased.
10.07 NO WAIVER; CUMULATIVE REMEDIES.
(a) No failure by any Lender or Administrative Agent to exercise,
and no delay by any Lender or Administrative Agent in exercising, any right,
remedy, power or privilege hereunder, shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, remedy, power or privilege
under any Loan Document preclude any other or further exercise thereof or the
exercise of any other right, remedy, power or privilege.
(b) The rights, remedies, powers and privileges herein or therein
provided are cumulative and not exclusive of any rights, remedies, powers and
privileges provided by Law. Any decision by Administrative Agent or any Lender
not to require payment of any interest (including Default Interest), fee, cost
or other amount payable under any Loan Document or to calculate any amount
payable by a particular method on any occasion shall in no way limit or be
deemed a waiver of Administrative Agent's or such Lender's right to require full
payment thereof, or to calculate an amount payable by another method that is not
inconsistent with this Agreement, on any other or subsequent occasion.
(c) The terms and conditions of SECTION 9 are inserted for the
sole benefit of Administrative Agent and Lenders; the same may be waived in
whole or in part, with or without terms or conditions, in respect of any
Extension of Credit without prejudicing Administrative Agent's or Lenders'
rights to assert them in whole or in part in respect of any other Loan.
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10.08 USURY. Notwithstanding anything to the contrary contained in
any Loan Document, the interest and fees paid or agreed to be paid under the
Loan Documents shall not exceed the maximum rate of non-usurious interest
permitted by applicable Law (the "MAXIMUM RATE"). If Administrative Agent or any
Lender shall receive interest or a fee in an amount that exceeds the Maximum
Rate, the excessive interest or fee shall be applied to the principal of the
Outstanding Obligations or, if it exceeds the unpaid principal, refunded to
Borrowers. In determining whether the interest or a fee contracted for, charged,
or received by Administrative Agent or a Lender exceeds the Maximum Rate, such
Person may, to the extent permitted by applicable Law, (a) characterize any
payment that is not principal as an expense, fee, or premium rather than
interest, (b) exclude voluntary prepayments and the effects thereof, and (c)
amortize, prorate, allocate, and spread in equal or unequal parts the total
amount of interest throughout the contemplated term of the Obligations.
10.09 COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.
10.10 INTEGRATION. This Agreement, together with the other Loan
Documents and any letter agreements referred to herein, comprises the complete
and integrated agreement of the parties on the subject matter hereof and
supersedes all prior agreements, written or oral, on the subject matter hereof.
In the event of any conflict between the provisions of this Agreement and those
of any other Loan Document, the provisions of this Agreement shall control and
govern; PROVIDED that the inclusion of supplemental rights or remedies in favor
of Administrative Agent or Lenders in any other Loan Document shall not be
deemed a conflict with this Agreement. Each Loan Document was drafted with the
joint participation of the respective parties thereto and shall be construed
neither against nor in favor of any party, but rather in accordance with the
fair meaning thereof.
10.11 NATURE OF LENDERS' OBLIGATIONS. The obligations of Lenders
hereunder are several and not joint or joint and several. Nothing contained in
this Agreement or any other Loan Document and no action taken by Administrative
Agent or Lenders or any of them pursuant hereto or thereto may, or may be deemed
to, make Lenders a partnership, an association, a joint venture or other entity,
either among themselves or with Borrowers or any Affiliate of Borrowers. Each
Lender's obligation to make any Loan pursuant hereto is several and not joint or
joint and several, and in the case of the initial Loan only is conditioned upon
the performance by all other Lenders of their obligations to make initial Loans.
A default by any Lender will not increase the Pro Rata Share attributable to any
other Lender.
10.12 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties made hereunder and in any Loan Document,
certificate or statement delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery thereof but shall
terminate the later of (a) when the Commitments are terminated and (b) when no
Obligations remain outstanding under any Loan Document. Such representations
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and warranties have been or will be relied upon by Administrative Agent and each
Lender, notwithstanding any investigation made by Administrative Agent or any
Lender or on their behalf.
10.13 INDEMNITY BY BORROWERS. Each Borrower agrees to indemnify,
save and hold harmless each Administrative Agent-Related Person and each Lender
and their respective Affiliates, directors, officers, agents, attorneys and
employees (collectively the "INDEMNITEES") from and against: (a) any and all
claims, demands, actions or causes of action that are asserted against any
Indemnitee by any Person (other than Administrative Agent or any Lender)
relating directly or indirectly to a claim, demand, action or cause of action
that such Person asserts or may assert against any Borrower Party, any of their
Affiliates or any of their officers or directors; (b) any and all claims,
demands, actions or causes of action arising out of or relating to, the Loan
Documents, any predecessor loan documents, the Commitments, the use or
contemplated use of the proceeds of any Loan, or the relationship of any
Borrower Party, Administrative Agent and Lenders under this Agreement; (c) any
administrative or investigative proceeding by any Governmental Authority arising
out of or related to a claim, demand, action or cause of action described in
subsection (a) or (b) above; and (d) any and all liabilities, losses, costs or
expenses (including Attorney Costs) that any Indemnitee suffers or incurs as a
result of the assertion of any foregoing claim, demand, action, cause of action
or proceeding, or as a result of the preparation of any defense in connection
with any foregoing claim, demand, action, cause of action or proceeding, in all
cases, whether or not an Indemnitee is a party to such claim, demand, action,
cause of action or proceeding, including those liabilities caused by an
Indemnitee's own negligence (all the foregoing, collectively, the "INDEMNIFIED
LIABILITIES"); PROVIDED that no Indemnitee shall be entitled to indemnification
for any loss caused by its own gross negligence or willful misconduct or for any
loss asserted against it by another Indemnitee.
10.14 NONLIABILITY OF LENDERS.
Each Borrower acknowledges and agrees that:
(a) Any inspections of any property of Borrowers made by or
through Administrative Agent or Lenders are for purposes of administration of
the Loan Documents only, and Borrowers are not entitled to rely upon the same
(whether or not such inspections are at the expense of Borrowers);
(b) By accepting or approving anything required to be observed,
performed, fulfilled or given to Administrative Agent or Lenders pursuant to the
Loan Documents, neither Administrative Agent nor Lenders shall be deemed to have
warranted or represented the sufficiency, legality, effectiveness or legal
effect of the same, or of any term, provision or condition thereof, and such
acceptance or approval thereof shall not constitute a warranty or representation
to anyone with respect thereto by Administrative Agent or Lenders;
(c) The relationship between Borrowers and Administrative Agent
and Lenders is, and shall at all times remain, solely that of borrowers and
lenders; neither Administrative Agent
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nor Lenders shall under any circumstance be construed to be partners or joint
venturers of Borrowers or their Affiliates; neither Administrative Agent nor
Lenders shall under any circumstance be deemed to be in a relationship of
confidence or trust or a fiduciary relationship with Borrowers or their
Affiliates, or to owe any fiduciary duty to Borrowers or their Affiliates;
neither Administrative Agent nor Lenders undertake or assume any responsibility
or duty to Borrowers or their Affiliates to select, review, inspect, supervise,
pass judgment upon or inform Borrowers or their Affiliates of any matter in
connection with their property or the operations of Borrowers or their
Affiliates; Borrowers and their Affiliates shall rely entirely upon their own
judgment with respect to such matters; and any review, inspection, supervision,
exercise of judgment or supply of information undertaken or assumed by
Administrative Agent or Lenders in connection with such matters is solely for
the protection of Administrative Agent and Lenders and neither Borrowers nor any
other Person is entitled to rely thereon; and
(d) Administrative Agent and Lenders shall not be responsible or
liable to any Person for any loss, damage, liability or claim of any kind
relating to injury or death to Persons or damage to property caused by the
actions, inaction or negligence of Borrowers and/or their Affiliates and
Borrowers hereby indemnify and hold Administrative Agent and Lenders harmless
from any such loss, damage, liability or claim.
10.15 NO THIRD PARTIES BENEFITTED. This Agreement is made for the
purpose of defining and setting forth certain obligations, rights and duties of
Borrowers, Administrative Agent and Lenders in connection with the Loans, and is
made for the sole benefit of Borrowers, Administrative Agent and Lenders, and
Administrative Agent's and Lenders' successors and assigns. Except as provided
in SECTIONS 10.04 and 10.13, no other Person shall have any rights of any nature
hereunder or by reason hereof.
10.16 SEVERABILITY. Any provision of the Loan Documents that is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.
10.17 CONFIDENTIALITY. Administrative Agent and each Lender shall
use any confidential non-public information concerning the Borrower Parties and
their Subsidiaries that is furnished to Administrative Agent or such Lender by
or on behalf of the Borrower Parties and their Subsidiaries in connection with
the Loan Documents (collectively, "CONFIDENTIAL INFORMATION") solely for the
purpose of evaluating and providing products and services to them and
administering and enforcing the Loan Documents, and it will hold the
Confidential Information in confidence. Notwithstanding the foregoing,
Administrative Agent and each Lender may disclose Confidential Information (a)
to their affiliates or any of their or their affiliates' directors, officers,
employees, advisors, or representatives (collectively, the "REPRESENTATIVES")
whom it determines need to know such information for the purposes set forth in
this Section; (b) to any bank or financial institution or other entity to which
such Lender has
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assigned or desires to assign an interest or participation in the Loan Documents
or the Obligations, PROVIDED that any such foregoing recipient of such
Confidential Information agrees to keep such Confidential Information
confidential as specified herein; (c) to any governmental agency or regulatory
body having or claiming to have authority to regulate or oversee any aspect of
Administrative Agent's or such Lender's business or that of their
Representatives in connection with the exercise of such authority or claimed
authority; (d) to the extent necessary or appropriate to effect or preserve
Administrative Agent's or such Lender's or any of their Affiliates' security (if
any) for any Obligation or to enforce any right or remedy or in connection with
any claims asserted by or against Administrative Agent or such Lender or any of
their Representatives; and (e) pursuant to any subpoena or any similar legal
process. For purposes hereof, the term "Confidential Information" shall not
include information that (x) is in Administrative Agent's or a Lender's
possession prior to its being provided by or on behalf of the Borrower Parties,
PROVIDED that such information is not known by Administrative Agent or such
Lender to be subject to another confidentiality agreement with, or other legal
or contractual obligation of confidentiality to, a Borrower Party, (y) is or
becomes publicly available (other than through a breach hereof by Administrative
Agent or such Lender), or (z) becomes available to Administrative Agent or such
Lender on a nonconfidential basis, PROVIDED that the source of such information
was not known by Administrative Agent or such Lender to be bound by a
confidentiality agreement or other legal or contractual obligation of
confidentiality with respect to such information.
10.18 FURTHER ASSURANCES. Holdings and its Subsidiaries shall, at
their expense and without expense to Lenders or Administrative Agent, do,
execute and deliver such further acts and documents as any Lender or
Administrative Agent from time to time reasonably requires for the assuring and
confirming unto Lenders or Administrative Agent of the rights hereby created or
intended now or hereafter so to be, or for carrying out the intention or
facilitating the performance of the terms of any Loan Document.
10.19 HEADINGS. Section headings in this Agreement and the other
Loan Documents are included for convenience of reference only and are not part
of this Agreement or the other Loan Documents for any other purpose.
10.20 TIME OF THE ESSENCE. Time is of the essence of the Loan
Documents.
10.21 FOREIGN LENDERS AND PARTICIPANTS. Each Lender, and each holder
of a participation interest herein, that is a "foreign corporation, partnership
or trust" within the meaning of the Code shall deliver to Administrative Agent,
prior to receipt of any payment subject to withholding (or after accepting an
assignment or receiving a participation interest herein), two duly signed
completed copies of either Form W-8BEN or any successor thereto (relating to
such Person and entitling it to a complete exemption from withholding on all
payments to be made to such Person by Borrowers pursuant to this Agreement) or
Form W-8ECI or any successor thereto (relating to all payments to be made to
such Person by Borrowers pursuant to this Agreement) of the United States
Internal Revenue Service or such other evidence
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satisfactory to Borrowers and Administrative Agent that no withholding under the
federal income tax laws is required with respect to such Person. Thereafter and
from time to time, each such Person shall (a) promptly submit to Administrative
Agent such additional duly completed and signed copies of one of such forms (or
such successor forms as shall be adopted from time to time by the relevant
United States taxing authorities) as may then be available under then current
United States laws and regulations to avoid, or such evidence as is satisfactory
to Borrowers and Administrative Agent of any available exemption from, United
States withholding taxes in respect of all payments to be made to such Person by
Borrowers pursuant to this Agreement, and (b) take such steps as shall not be
materially disadvantageous to it, in the reasonable judgment of such Lender, and
as may be reasonably necessary (including the re-designation of its Lending
Office, if any) to avoid any requirement of applicable Laws that Borrowers make
any deduction or withholding for taxes from amounts payable to such Person. If
such Persons fails to deliver the above forms or other documentation, then
Administrative Agent may withhold from any interest payment to such Person an
amount equivalent to the applicable withholding tax imposed by Sections 1441 and
1442 of the Code, without reduction. If any Governmental Authority asserts that
Administrative Agent did not properly withhold any tax or other amount from
payments made in respect of such Person, such Person shall indemnify
Administrative Agent therefor, including all penalties and interest and costs
and expenses (including Attorney Costs) of Administrative Agent. The obligation
of Lenders under this subsection shall survive the payment of all Obligations
and the resignation or replacement of Administrative Agent.
10.22 GOVERNING LAW.
(a) THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAW OF THE GOVERNING STATE APPLICABLE TO AGREEMENTS MADE
AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE; PROVIDED THAT ADMINISTRATIVE
AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS ARISING UNDER FEDERAL LAW.
(b) ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF THE
GOVERNING STATE OR OF THE UNITED STATES FOR THE CENTRAL DISTRICT OF THE
GOVERNING STATE, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH BORROWER
PARTY, ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF THOSE COURTS. EACH
BORROWER PARTY, ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY
OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE
GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
BRINGING OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY
LOAN DOCUMENT OR OTHER DOCUMENT RELATED HERETO. EACH BORROWER PARTY,
73
ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS PERMITTED BY
THE LAW OF THE GOVERNING STATE.
10.23 WAIVER OF RIGHT TO TRIAL BY JURY. EACH PARTY TO THIS AGREEMENT
HEREBY EXPRESSLY WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION
OR CAUSE OF ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH
OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM
WITH RESPECT TO ANY LOAN DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH
CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT
OR TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE OF ACTION SHALL BE DECIDED BY COURT TRIAL WITHOUT
A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY FILE AN ORIGINAL COUNTERPART OR
A COPY OF THIS SECTION WITH ANY COURT AS WRITTEN EVIDENCE OF THE CONSENT OF THE
SIGNATORIES HERETO TO THE WAIVER OF THEIR RIGHT TO TRIAL BY JURY.
10.24 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY
EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR SUBSEQUENT ORAL AGREEMENTS OF THE
PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed as of the date first above written.
BIG DOG HOLDINGS, INC.
By: /s/ XXXXXX XXXXXXXX
------------------------
Name: Xxxxxx Xxxxxxxx
------------------------
Title: Chief Executive Officer
------------------------
BIG DOG USA, INC.
By: /s/ XXXXXX XXXXXXXX
------------------------
Name: Xxxxxx Xxxxxxxx
------------------------
Title: Chief Executive Officer
------------------------
75
BANK OF AMERICA, N.A.,
as Administrative Agent
By: /s/ XXXX X. XXXXX
--------------------------------
Name: Xxxx X. Xxxxx
--------------------------------
Title: Vice President
--------------------------------
BANK OF AMERICA, N.A., as Issuing
Lender and a Lender
By: /s/ XXXX X. XXXXXX
--------------------------------
Name: Xxxx X. Xxxxxx
--------------------------------
Title: Vice President
--------------------------------
76
ISRAEL DISCOUNT BANK, LTD.
By: /s/ XXXXXXXX XXXXXXX
--------------------------------
Name: Xxxxxxxx Xxxxxxx
--------------------------------
Title: Vice President
--------------------------------
77
SANTA XXXXXXX BANK & TRUST
By: /s/ XXXXX CABLE
--------------------------------
Name: Xxxxx Cable
--------------------------------
Title: Vice President
--------------------------------
78
EXHIBIT A
FORM OF REQUEST FOR EXTENSION OF CREDIT
Date: ,
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of July 28,
2000 between Big Dog Holdings, Inc., a Delaware corporation and Big Dog USA,
Inc., a California corporation ("BORROWERs"), Lenders from time to time party
thereto, Bank of America, N.A., as Administrative Agent and Issuing Lender (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "AGREEMENT;" the terms defined therein being used herein as
therein defined).
The undersigned hereby requests (select one):
/ / A Borrowing of Loans / / A Conversion or Continuation of Loans
1. On .
2. In the amount of $ .
3. Comprised of .
[type of Loan requested]
4. If applicable: with an Interest Period of months.
The foregoing request complies with the requirements of SECTION 2.01 of
the Agreement. The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the above date, before and
after giving effect and to the application of the proceeds therefrom:
(a) The representations and warranties made by Borrowers in the
Agreement, or which are contained in any certificate, document or financial
or other statement furnished at any time under or in connection therewith,
are and will be correct on and as of the date of this Extension of Credit in
all material respects, except to the extent that such representations and
warranties specifically refer to any earlier date; and
A-1
(b) no Default or Event of Default has occurred and is continuing
on the date hereof or after giving effect to this Extension of Credit.
BIG DOG HOLDINGS, INC.
By:
Name:
Title:
BIG DOG USA, INC.
By:
Name:
Title:
A-2
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
Financial Statement Date: ,
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of July 28,
2000 among Big Dog Holdings, Inc., a Delaware corporation, Big Dog USA, Inc., a
California corporation (collectively, the "BORROWERS"), Lenders from time to
time party thereto, Bank of America, N.A., as Administrative Agent and Issuing
Lender (as amended, restated, extended, supplemented or otherwise modified in
writing from time to time, the "AGREEMENT;" the terms defined therein being used
herein as therein defined).
The undersigned Responsible Officer hereby certifies as of the date
hereof that he is the of Holdings and that, as such, he is authorized to
execute and deliver this Certificate to Administrative
Agent on the behalf of Holdings, and that:
[USE FOLLOWING FOR FISCAL YEAR-END FINANCIAL STATEMENTS]
1. Attached hereto as SCHEDULE 1 are the year-end audited
financial statements required by SECTION 6.01(A) of the Agreement for the fiscal
year of Holdings ended as of the above date, together with the report and
opinion of an independent certified public accountant required by such section.
[USE FOLLOWING FOR FISCAL QUARTER-END FINANCIAL STATEMENTS]
2. Attached hereto as SCHEDULE 1 are the unaudited financial
statements required by SECTION 6.01(B) of the Agreement for the fiscal quarter
of Holdings ended as of the above date. Such financial statements fairly present
the financial condition, results of operations and changes in financial position
of Holdings and its Subsidiaries in accordance with GAAP as at such date and for
such periods, subject only to normal year-end audit adjustments and the absence
of footnotes.
3. The undersigned has reviewed and is familiar with the terms of
the Agreement
B-1
and has made, or has caused to be made under his supervision, a detailed review
of the transactions and conditions (financial or otherwise) of Holdings during
the accounting period covered by the attached financial statements.
4. A review of the activities of the Borrower Parties during such
fiscal period has been made under my supervision with a view to determining
whether during such fiscal period the Borrower Parties performed and observed
all their respective Obligations under the Loan Documents, and
[SELECT ONE:]
[to the best knowledge of the undersigned during such fiscal period,
Holdings performed and observed each covenant and condition of the Loan
Documents applicable to it.]
--OR--
[the following covenants or conditions have not been performed or
observed and the following is a list of all such Defaults and its nature and
status:]
5. The following financial covenant analyses and information set
forth on SCHEDULE 2 attached hereto are true and accurate on and as of the date
of this Certificate.
IN WITNESS WHEREOF, the undersigned has executed this Certificate as of
, .
BIG DOG HOLDINGS, INC.
By:
Name:
Title:
B-2
For the Quarter/Year ended ___________________("STATEMENT DATE")
SCHEDULE 2
to the Compliance Certificate
($ in 000's)
I. SECTION 7.12(a) - MINIMUM EBIT.
A. Actual EBIT at Statement Date: $
----------
B. Minimum EBIT for each Statement Date
FISCAL QUARTER ENDED MINIMUM QUARTERLY EBIT
March 31 ($5,000,000)
June 30 $1.00
September 30 $2,000,000
December 31 $3,000,000
C. Is line IA greater than line IB?: YES/NO
II. SECTION 7.12(b) - FIXED CHARGE COVERAGE RATIO.
A. EBITDA on Statement Date ("SUBJECT PERIOD"): $
----------
B. Rental expense for Subject Period: $
----------
C. Sum of line IIA and IIB $
----------
D. Interest expense for Subject Period: $
----------
E. Sum of line IIB and IIC $
----------
F. Fixed Charge Coverage Ratio (Line IIC) +
(Line IIE): to 1
----------
MINIMUM REQUIRED:
B-3
Minimum Interest
Fiscal Quarters Ending Coverage Ratio
---------------------------------------------------------------
September 30, 2000 1.05:1
December 31, 2000 1.10:1
March 31, 2001 1.10:1
June 30, 2001 1.10:1
September 30, 2001 1.10:1
December 31, 2001 and thereafter 1.25:1
III. SECTION 7.12(c) - LEVERAGE RATIO.
A. EBITDA for Subject Period: $
--------------
B. Funded Indebtedness at Statement Date: $
--------------
C. Leverage Ratio (Line IIIA DIVIDED BY
Line IIIB): to 1
--------------
MAXIMUM PERMITTED:
Maximum
Fiscal Quarters Ending Leverage Ratio
---------------------------------------------------------------
September 30, 2000 2.50:1
December 31, 2000 0.60:1
March 31, 2001 2.00:1
June 30, 2001 1.75:1
September 30, 2001 1.75:1
December 31, 2001 0.25:1
March 31, 2002 1.50:1
June 30, 2002 1.25:1
September 30, 2002 1.25:1
December 31, 2002 0.25:1
March 31, 2003 and thereafter 1.25:1
B-4
EXHIBIT C
FORM OF NOTE
$
-----------------------
FOR VALUE RECEIVED, the undersigned (the "BORROWERS"), jointly and
severally, hereby promise to pay to the order of _____________________________
(the "LENDER"), on the Maturity Date (as defined in the Credit Agreement
referred to below) the principal amount of _____________________(Dollars
$[____________]), or such lesser principal amount of Loans (as defined in the
Credit Agreement referred to below) payable by Borrowers to Lender on such
Maturity Date under that certain Credit Agreement dated as of July 28, 2000
among Borrowers, Lenders from time to time party thereto Bank of America, N.A.,
as Administrative Agent and Issuing Lender (as amended, restated, extended,
supplemented or otherwise modified in writing from time to time, the
"AGREEMENT;" the terms defined therein being used herein as therein defined).
Borrowers promise to pay interest on the unpaid principal amount of
each Loan from the date of such Loan until such principal amount is paid in
full, at such interest rates, and payable at such times as are specified in the
Credit Agreement.
All payments of principal and interest shall be made to Administrative
Agent for the account of Lender in United States dollars in immediately
available funds at Administrative Agent's Payment office.
If any amount is not paid in full when due hereunder, such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof
until the date of actual payment (and before as well as after judgment) computed
at the per annum rate set forth in the Credit Agreement.
This Note is one of the "NOTES" referred to in the Credit Agreement.
Reference is hereby made to the Credit Agreement for rights and obligations of
payment and prepayment, events of default and the right of Lender to accelerate
the maturity hereof upon the occurrence of such events. Loans made by Lender
shall be evidenced by one or more loan accounts or records maintained by Lender
in the ordinary course of business. Lender may also attach schedules to this
Note and endorse thereon the date, amount and maturity of its Loans and payments
with respect thereto.
C-1
Borrowers, for themselves, their successors and assigns, hereby waive
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Note.
C-2
Borrowers agree to pay all collection expenses, court costs and
Attorney Costs (whether or not litigation is commenced) which may be incurred by
Lender in connection with the collection or enforcement of this Note.
THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF CALIFORNIA.
BIG DOG HOLDINGS, INC.
By:
Name:
Title:
BIG DOG USA, INC.
By:
Name:
Title:
C-3
LOANS AND PAYMENTS WITH RESPECT THERETO
AMOUNT OF
END OF PRINCIPAL OR OUTSTANDING
TYPE OF LOAN AMOUNT OF LOAN INTEREST INTEREST PAID PRINCIPAL NOTATION MADE
DATE MADE MADE PERIOD THIS DATE BALANCE THIS DATE BY
__ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
__ __ __ __ __ __ __
C-4
EXHIBIT D
FORM OF NOTICE OF ASSIGNMENT AND ACCEPTANCE
________ , _____
To: Bank of America, N.A., as Administrative Agent
Ladies and Gentlemen:
Reference is made to that certain Credit Agreement dated as of July 28,
2000 among Big Dog Holdings, Inc., a Delaware corporation, Big Dog USA, Inc., a
California corporation ("BORROWERS"), Lenders from time to time party thereto,
and Bank of America, N.A., as Administrative Agent and Issuing Lender (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "AGREEMENT;" the terms defined therein being used herein as
therein defined).
(1) We hereby give you notice of, and request your consent to, the
assignment by (the "ASSIGNOR") to (the "ASSIGNEE") of % of the right, title and
interest of the Assignor in and to the Loan Documents, including the right,
title and interest of the Assignor in and to the Commitment of the Assignor, all
outstanding Loans made by the Assignor and outstanding Letter of Credit Usage.
Before giving effect to such assignment:
(a) the aggregate amount of the Assignor's Commitment is
$ ;
(b) the aggregate principal amount of its outstanding Loans is
$ ; and
(c) the aggregate face amount of Letter of Credit Usage is
$ .
(2) The Assignee hereby represents and warrants that it is an
Eligible Assignee and has complied with the requirements of SECTION 10.04 of the
Agreement in connection with this assignment and acknowledges and agrees that:
(a) other than the representation and warranty that it is the legal and
beneficial owner of the Pro Rata Share being assigned thereby free and clear of
any adverse claim, the Assignor has made no representation or warranty and
assumes no responsibility with respect to any statements, warranties or
representations made in or in connection with the Agreement or the execution,
legality, validity, enforceability, genuineness or sufficiency of the Agreement
or any other Loan Document; (b) the Assignor has made no representation or
warranty and assumes no responsibility with respect to the financial condition
of Borrowers or the performance by Borrowers of the Obligations; (c) it has
received a copy of the
D-1
Agreement, together with copies of the most recent financial statements
delivered pursuant to SECTION 6.1 thereof and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Acceptance; (d) it will,
independently and without reliance upon Administrative Agent or any Lender and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Agreement; (e) it appoints and authorizes Administrative Agent to take
such action and to exercise such powers under the Agreement and the other Loan
Documents as are delegated to Administrative Agent by the Agreement and such
other Loan Documents; and (f) it will perform in accordance with their terms all
of the obligations which by the terms of the Agreement are required to be
performed by it as a Lender.
(3) The Assignee agrees that, upon receiving your consent to such
assignment and from and after , the Assignee will be bound by
the terms of the Loan Documents, with respect to the interest in the Loan
Documents assigned to it as specified above, as fully and to the same extent as
if the Assignee were Lender originally holding such interest in the Loan
Documents.
(4) The following administrative details apply to the Assignee:
(a) Offshore Lending Office:
Assignee name:
Address:
Attention:
Telephone: (__)
Telecopier:(__)
(b) Domestic Lending Office:
Assignee name:
Address:
Attention:
Telephone: (__)
Telecopier:(__)
(c) Notice Address:
D-2
Assignee name:
Address:
Attention:
Telephone: (__)
Telecopier:(__)
(d) Payment Instructions: Account No.:
Account No.
Attention:
Reference:
D-3
IN WITNESS WHEREOF, the Assignor and the Assignee have caused this
Notice of Assignment and Acceptance to be executed by their respective duly
authorized officials, officers or agents as of the date first above mentioned.
Very truly yours,
[ASSIGNOR]
By:
Name:
Title:
[ASSIGNEE]
By:
Name:
Title:
WE HEREBY CONSENT TO THE
FOREGOING ASSIGNMENT.
BIG DOG HOLDINGS, INC.
By:
Name:
Title:
BIG DOG USA, INC.
By:
Name:
D-4
Title:
BANK OF AMERICA, N.A.,
as Administrative Agent
By:
Name:
Title:
D-5
EXHIBIT E
1. Each Borrower Party has been duly incorporated, and is validly
existing and in good standing under the laws of its respective jurisdiction of
incorporation. Each Borrower Party has the corporate power and authority to own
its properties and assets and to carry on its business as presently conducted.
2. Each Borrower Party has the corporate power and authority to
enter into each Loan Document to which it is a party and to perform its
respective obligations thereunder. Each of the Loan Documents has been duly
authorized by all necessary corporate action on the part of each Borrower Party
which is a party thereto and has been duly executed and delivered by each such
Borrower Party.
3. Each of the Loan Documents constitutes the legal, valid and
binding obligation of each Borrower Party which is a party to such Loan
Document, enforceable against it is accordance with its terms, except as the
enforceability thereof may be subject to or limited by (a) bankruptcy,
insolvency, reorganization, arrangement, moratorium or other similar laws
relating to or affecting rights of creditors and (b) general equitable
principles, regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law.
4. The execution, delivery and performance of each of the Loan
Documents by each Borrower Party which is a party thereto will not (a) breach or
result in a violation of such Borrower Party's Organization Documents or any
judgment, order or decree, known to us, of any court or arbitrator to which such
Borrower Party is a party or is subject, (b) violate or be in conflict with any
federal, Delaware or California statute or regulation or (c) violate or be in
conflict with or constitute a default under, or result in the termination of,
accelerate the performance required by or result in the creation of any Lien
upon any of the assets or properties of any Borrower Party under, any term or
provision of any material contract, indenture or other agreement or instrument
by which such Borrower Party is bound or to which it is a party.
5. No consent, approval or authorization of, or designation,
declaration or filing with, any Governmental Authority is required in connection
with the valid execution, delivery and performance by each Borrower Party of the
Loan Documents to which it is a party, other than such consents, approvals,
authorizations, designations, or filings as have been made or obtained on or
before the date hereof.
E-1
6. To our knowledge, there is no action, suit, claim or
proceeding pending or threatened against any Borrower Party (i) with respect to
any Loan Document or (ii) which might materially adversely affect the ability of
any Borrower Party to perform its obligations under the Loan Documents to which
it is a party.
7. The provisions of the Security Agreement are sufficient to
create a security interest which has attached to the right, title and interest
of each Borrower Party in those items and types of property owned by such
Borrower Party in which a security interest may attach under Division 9 of the
California Uniform Commercial Code.
8. Each financing statement attached hereto as Exhibit 1 (a
"FINANCING STATEMENT") is in adequate and legally sufficient form to perfect a
security interest in favor of the Administrative Agent in the right, title and
interest of each such Borrower Party that is a party to such Financing Statement
to the collateral which is described in each such Financing Statement and the
Security Agreement to which it relates, and for which perfection may occur by
the filing of a UCC-1 Financing Statement with Secretary of State of the State
of California. Assuming that such Financing Statements are duly filed with the
Secretary of State of the State of California in accordance with the provisions
of Section 9403(1) of the California Uniform Commercial Code, a security
interest will be perfected in such collateral.
9. The authorized and, to our knowledge, issued and outstanding
capital stock of each of the Subsidiaries of Holdings is as set forth on Exhibit
2 attached hereto. There are, to our knowledge, (a) no outstanding
subscriptions, warrants, options, calls, claims, commitments, convertible
securities or other agreements or arrangements under which any Subsidiary is or
may be obligated to issue shares of its capital stock and (b) no preemptive or
similar rights to subscribe for or to purchase capital stock of any Subsidiary.
10. Assuming that the Administrative Agent has received the shares
pledged under the Security Agreement (the "Pledged Shares") in good faith and
without notice of any adverse claim (as defined in Section 8102(a)(1) of the
California Uniform Commercial Code) and so long as the Administrative Agent
continues to maintain the Pledged Shares in its possession, the Administrative
Agent will have a perfected security interest in and upon the Pledged Shares for
the benefit of the Lenders.
11. Neither Borrower is an "investment company" or a company
"controlled" by an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
12. Neither Borrower is subject to regulation as a "holding
company" or "affiliate" of a "holding company" within the meaning of the Public
Utilities Holding Company Act of 1935,
E-2
as amended.
Additional opinions for Effective Date:
13. No consent, approval or authorization of, or designation,
declaration or filing with, any Governmental Authority is required in connection
with the valid execution, delivery and performance by Holdings of the Tender
Offer documentation, other than such consents, approvals or authorizations, or
designations, declarations or filings as have been made or obtained on or before
the Effective Date.
14. All corporate actions, including all directors' and
stockholders' actions, on the part of Holdings necessary to consummate the
transactions contemplated by the Tender Offer in accordance with the definitive
Schedule TO filed with Securities and Exchange Commission have been taken.
E-3
SCHEDULE 2.01
COMMITMENTS
AND PRO RATA SHARES
LENDER CLOSING DATE PRO RATA SHARE
COMMITMENT
-----------------------------------------------------------------------------------------
Bank of America, N.A. $20,000,000 66.0000000000%
Israel Discount Bank, Ltd. $8,000,000 26.0000000000%
Santa Xxxxxxx Bank and Trust $2,000,000 6.666666667%
Total $30,000,000 100.000000000%
SCHEDULE 7.01
EXISTING INDEBTEDNESS, LIENS AND NEGATIVE PLEDGES
SCHEDULE 10.02
OFFSHORE AND DOMESTIC LENDING OFFICES,
ADDRESSES FOR NOTICES
BIG DOG HOLDINGS, INC.
BIG DOG USA, INC.
000 Xxxx Xxxxxx
Xxxxx Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxx
Chief Financial Officer
Telephone: 000-000-0000 (ext. 1264)
Facsimile: 000-000-0000
ADMINISTRATIVE AGENT'S OFFICE:
NOTICES (OTHER THAN REQUESTS FOR EXTENSIONS OF CREDIT):
BANK OF AMERICA, N.A.
Commercial Agency Services
Mail Code: WA1-102-16-20
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxx
Vice President
Telephone: 000-000-0000
Facsimile: 000-000-0000
REQUESTS FOR EXTENSIONS OF CREDIT:
BANK OF AMERICA, N.A.
Credit Services
Mail Code: CA4-706-05-09
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Account No.:
Ref: Big Dog Holdings/Big Dog USA
DOMESTIC AND OFFSHORE LENDING OFFICE:
BANK OF AMERICA, N.A.
Credit Services
Mail Code: CA4-706-05-09
0000 Xxxxxxx Xxxxxxxxx
Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
BANK OF AMERICA, N.A., AS ISSUING LENDER
Trade Operations-Los Angeles #226521
000 X. Xxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code: CA9-703-19-23
Xxx Xxxxxxx, XX 00000-0000
BANK OF AMERICA, N.A., AS LENDER
DOMESTIC AND OFFSHORE LENDING OFFICE:
-------------------------------------------
-------------------------------------------
Mail Code:
-------------------------
-------------------------------------
Attn:
------------------------
Telephone:
Facsimile:
NOTICES (OTHER THAN REQUESTS FOR EXTENSIONS OF CREDIT):
-------------------------------------------
-------------------------------------------
Mail Code:
-------------------------
-------------------------------------
Attn:
------------------------
Telephone:
Facsimile:
[LENDERS]
