CREDIT AGREEMENT
among
UNIVERSAL COMPRESSION HOLDINGS, INC.,
TW ACQUISITION CORPORATION (WHICH WILL BE MERGED WITH AND INTO
TIDEWATER COMPRESSION SERVICE, INC. WHICH IN TURN WILL CHANGE ITS
NAME TO UNIVERSAL COMPRESSION, INC.),
VARIOUS BANKS
and
BANKERS TRUST COMPANY,
as AGENT
----------------------------------
Dated as of February 20, 1998
----------------------------------
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit 1
1.01 The Commitments 1
1.02 Minimum Amount of Each Borrowing 3
1.03 Notice of Borrowing 3
1.04 Disbursement of Funds 3
1.05 Notes 4
1.06 Conversions 5
1.07 Pro Rata Borrowings 5
1.08 Interest 5
1.09 Interest Periods 6
1.10 Increased Costs, Illegality, etc. 7
1.11 Compensation 8
1.12 Change of Lending Office 9
1.13 Replacement of Banks 9
SECTION 2. Letters of Credit 10
2.01 Letters of Credit 10
2.02 Minimum Stated Amount 11
2.03 Letter of Credit Requests 11
2.04 Letter of Credit Participations 11
2.05 Agreement to Repay Letter of Credit Drawings 13
2.06 Increased Costs 13
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment. 14
3.01 Fees 14
3.02 Voluntary Termination of Unutilized Commitments 15
3.03 Mandatory Reduction of Commitments 15
SECTION 4. Prepayments; Payments; Taxes 16
4.01 Voluntary Prepayments 16
4.02 Mandatory Repayments and Commitment Reductions 17
4.03 Method and Place of Payment 20
4.04 Net Payments 20
SECTION 5. Conditions Precedent to Initial Credit Events 22
5.01 Execution of Agreement; Notes 22
5.02 Officer's Certificate 22
5.03 Opinions of Counsel 22
5.04 Corporate Documents; Proceedings; etc. 22
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining
Agreements; Employment Agreements; Debt Agreements 23
5.06 Financings 23
5.07 Consummation of the Acquisition 24
5.08 Refinancing 24
5.09 Pledge Agreement 25
5.10 Security Agreement 25
5.11 Consent Letter 25
5.12 Adverse Change, etc. 26
5.13 Litigation 26
5.14 Fees, etc. 26
5.15 Solvency Letter; Environmental Analyses; Insurance
Certificate 26
5.16 Financial Statements; Pro Forma Financial
Statements; Financial Projections 27
SECTION 6. Conditions Precedent to All Credit Events 27
6.01 No Default; Representations and Warranties 27
6.02 Notice of Borrowing; Letter of Credit Request 27
SECTION 7. Representations, Warranties and Agreements 27
7.01 Corporate and Other Status 28
7.02 Corporate and Other Power and Authority 28
7.03 No Violation 28
7.04 Governmental Approvals 28
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc. 28
7.06 Litigation 30
7.07 True and Complete Disclosure 30
7.08 Use of Proceeds; Margin Regulations 30
7.09 Tax Returns and Payments 30
7.10 Compliance with ERISA 31
7.11 The Security Documents 32
7.12 Representations and Warranties in Documents 32
7.13 Properties 32
7.14 Capitalization 32
7.15 Subsidiaries 33
7.16 Compliance with Statutes, etc. 33
7.17 Investment Company Act 33
7.18 Public Utility Holding Company Act 33
7.19 Environmental Matters 33
7.20 Labor Relations 34
7.21 Patents, Licenses, Franchises and Formulas 34
7.22 Indebtedness 34
7.23 Transaction 34
7.24 Insurance 34
SECTION 8. Affirmative Covenants 35
8.01 Information Covenants 35
8.02 Books, Records and Inspections 37
8.03 Maintenance of Property; Insurance 37
8.04 Corporate Franchises 38
8.05 Compliance with Statutes, etc. 38
8.06 Compliance with Environmental Laws 38
8.07 ERISA 39
8.08 End of Fiscal Years; Fiscal Quarters 40
8.09 Performance of Obligations 40
8.10 Payment of Taxes 40
8.11 Additional Security; Further Assurances 40
8.12 Foreign Subsidiaries Security 41
8.13 Merger 42
SECTION 9. Negative Covenants 42
9.01 Liens 42
9.02 Consolidation, Merger, Purchase or Sale of Assets,
etc. 43
9.03 Dividends 47
9.04 Indebtedness 47
9.05 Advances, Investments and Loans 49
9.06 Transactions with Affiliates 50
9.07 Capital Expenditures 51
9.08 Consolidated Adjusted EBITDA to Total Interest
Expense 52
9.09 Maximum Adjusted Leverage Ratio 52
9.10 Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other
Agreements; etc. 54
9.11 Limitation on Certain Restrictions on Subsidiaries 55
9.12 Limitation on Issuance of Capital Stock 55
9.13 Business 55
9.14 Limitation on Creation of Subsidiaries and
Entering into Partnerships and Joint Ventures 55
9.15 Special Purpose Corporation 55
SECTION 10. Events of Default 56
10.01 Payments. 56
10.02 Representations, etc. 56
10.03 Covenants 56
10.04 Default Under Other Agreements 56
10.05 Bankruptcy, etc. 56
10.06 ERISA 57
10.07 Security Documents 57
10.08 Subsidiary Guaranty 58
10.09 Judgments 58
10.10 Change of Control 58
SECTION 11. Definitions and Accounting Terms 58
11.01 Defined Terms 58
SECTION 12. The Agent 79
12.01 Appointment 79
12.02 Nature of Duties 79
12.03 Lack of Reliance on the Agent 80
12.04 Certain Rights of the Agent 80
12.05 Reliance 80
12.06 Indemnification 80
12.07 The Agent in its Individual Capacity 80
12.08 Holders 81
12.09 Resignation by the Agent 81
SECTION 13. Miscellaneous 81
13.01 Payment of Expenses, etc 81
13.02 Right of Setoff 82
13.03 Notices 83
13.04 Benefit of Agreement; Assignments; Participations 83
13.05 No Waiver; Remedies Cumulative 84
13.06 Payments Pro Rata 84
13.07 Calculations; Computations; Accounting Terms 85
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL 85
13.09 Counterparts 86
13.10 Effectiveness 86
13.12 Amendment or Waiver 87
13.13 Survival 88
13.14 Domicile of Loans 88
13.15 Limitation on Additional Amounts, Etc. 88
13.16 Register 88
13.17 Confidentiality 89
SECTION 14. Holdings Guaranty 89
14.01 Guaranty 89
14.02 Bankruptcy 90
14.03 Nature of Liability 90
14.04 Independent Obligation 90
SCHEDULE I Commitments
SCHEDULE II ERISA
SCHEDULE III Existing Indebtedness
SCHEDULE IV Insurance
SCHEDULE V Existing Liens
SCHEDULE VI Indebtedness to be Refinanced
SCHEDULE VII Bank Addresses
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Term Note
EXHIBIT B-2 Form of Revolving Note
EXHIBIT B-3 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of Xxxxxxx Xxxx & Xxxxx LLP,
counsel to each Credit Party
EXHIBIT F Form of Officer's Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Form of Subsidiaries Guaranty
EXHIBIT J Form of Consent Letter
EXHIBIT K Form of Assignment and Assumption Agreement
EXHIBIT L Form of Acknowledgment and Joinder Agreement
EXHIBIT M Form of Intercompany Note
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit 1
1.01 The Commitments 1
1.02 Minimum Amount of Each Borrowing 3
1.03 Notice of Borrowing 3
1.04 Disbursement of Funds 3
1.05 Notes 4
1.06 Conversions 5
1.07 Pro Rata Borrowings 5
1.08 Interest 5
1.09 Interest Periods 6
1.10 Increased Costs, Illegality, etc. 7
1.11 Compensation 8
1.12 Change of Lending Office 9
1.13 Replacement of Banks 9
SECTION 2. Letters of Credit 10
2.01 Letters of Credit 10
2.02 Minimum Stated Amount 11
2.03 Letter of Credit Requests 11
2.04 Letter of Credit Participations 11
2.05 Agreement to Repay Letter of Credit Drawings 13
2.06 Increased Costs 13
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment. 14
3.01 Fees 14
3.02 Voluntary Termination of Unutilized Commitments 15
3.03 Mandatory Reduction of Commitments 15
SECTION 4. Prepayments; Payments; Taxes 16
4.01 Voluntary Prepayments 16
4.02 Mandatory Repayments and Commitment Reductions 17
4.03 Method and Place of Payment 20
4.04 Net Payments 20
SECTION 5. Conditions Precedent to Initial Credit Events 22
5.01 Execution of Agreement; Notes 22
5.02 Officer's Certificate 22
5.03 Opinions of Counsel 22
5.04 Corporate Documents; Proceedings; etc. 22
5.05 Employee Benefit Plans; Shareholders' Agreements;
Management Agreements; Collective Bargaining
Agreements; Employment Agreements; Debt Agreements 23
5.06 Financings 23
5.07 Consummation of the Acquisition 24
5.08 Refinancing 24
5.09 Pledge Agreement 25
5.10 Security Agreement 25
5.11 Consent Letter 25
5.12 Adverse Change, etc. 26
5.13 Litigation 26
5.14 Fees, etc. 26
5.15 Solvency Letter; Environmental Analyses; Insurance
Certificate 26
5.16 Financial Statements; Pro Forma Financial
Statements; Financial Projections 27
SECTION 6. Conditions Precedent to All Credit Events 27
6.01 No Default; Representations and Warranties 27
6.02 Notice of Borrowing; Letter of Credit Request 27
SECTION 7. Representations, Warranties and Agreements 27
7.01 Corporate and Other Status 28
7.02 Corporate and Other Power and Authority 28
7.03 No Violation 28
7.04 Governmental Approvals 28
7.05 Financial Statements; Financial Condition;
Undisclosed Liabilities; Projections; etc. 28
7.06 Litigation 30
7.07 True and Complete Disclosure 30
7.08 Use of Proceeds; Margin Regulations 30
7.09 Tax Returns and Payments 30
7.10 Compliance with ERISA 31
7.11 The Security Documents 32
7.12 Representations and Warranties in Documents 32
7.13 Properties 32
7.14 Capitalization 32
7.15 Subsidiaries 33
7.16 Compliance with Statutes, etc. 33
7.17 Investment Company Act 33
7.18 Public Utility Holding Company Act 33
7.19 Environmental Matters 33
7.20 Labor Relations 34
7.21 Patents, Licenses, Franchises and Formulas 34
7.22 Indebtedness 34
7.23 Transaction 34
7.24 Insurance 34
SECTION 8. Affirmative Covenants 35
8.01 Information Covenants 35
8.02 Books, Records and Inspections 37
8.03 Maintenance of Property; Insurance 37
8.04 Corporate Franchises 38
8.05 Compliance with Statutes, etc. 38
8.06 Compliance with Environmental Laws 38
8.07 ERISA 39
8.08 End of Fiscal Years; Fiscal Quarters 40
8.09 Performance of Obligations 40
8.10 Payment of Taxes 40
8.11 Additional Security; Further Assurances 40
8.12 Foreign Subsidiaries Security 41
8.13 Merger 42
SECTION 9. Negative Covenants 42
9.01 Liens 42
9.02 Consolidation, Merger, Purchase or Sale of Assets,
etc. 43
9.03 Dividends 47
9.04 Indebtedness 47
9.05 Advances, Investments and Loans 49
9.06 Transactions with Affiliates 50
9.07 Capital Expenditures 51
9.08 Consolidated Adjusted EBITDA to Total Interest
Expense 52
9.09 Maximum Adjusted Leverage Ratio 52
9.10 Limitation on Voluntary Payments and Modifications
of Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Other
Agreements; etc. 54
9.11 Limitation on Certain Restrictions on Subsidiaries 55
9.12 Limitation on Issuance of Capital Stock 55
9.13 Business 55
9.14 Limitation on Creation of Subsidiaries and
Entering into Partnerships and Joint Ventures 55
9.15 Special Purpose Corporation 55
SECTION 10. Events of Default 56
10.01 Payments. 56
10.02 Representations, etc. 56
10.03 Covenants 56
10.04 Default Under Other Agreements 56
10.05 Bankruptcy, etc. 56
10.06 ERISA 57
10.07 Security Documents 57
10.08 Subsidiary Guaranty 58
10.09 Judgments 58
10.10 Change of Control 58
SECTION 11. Definitions and Accounting Terms 58
11.01 Defined Terms 58
SECTION 12. The Agent 79
12.01 Appointment 79
12.02 Nature of Duties 79
12.03 Lack of Reliance on the Agent 80
12.04 Certain Rights of the Agent 80
12.05 Reliance 80
12.06 Indemnification 80
12.07 The Agent in its Individual Capacity 80
12.08 Holders 81
12.09 Resignation by the Agent 81
SECTION 13. Miscellaneous 81
13.01 Payment of Expenses, etc 81
13.02 Right of Setoff 82
13.03 Notices 83
13.04 Benefit of Agreement; Assignments; Participations 83
13.05 No Waiver; Remedies Cumulative 84
13.06 Payments Pro Rata 84
13.07 Calculations; Computations; Accounting Terms 85
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL 85
13.09 Counterparts 86
13.10 Effectiveness 86
13.12 Amendment or Waiver 87
13.13 Survival 88
13.14 Domicile of Loans 88
13.15 Limitation on Additional Amounts, Etc. 88
13.16 Register 88
13.17 Confidentiality 89
SECTION 14. Holdings Guaranty 89
14.01 Guaranty 89
14.02 Bankruptcy 90
14.03 Nature of Liability 90
14.04 Independent Obligation 90
CREDIT AGREEMENT, dated as of February 20, 1998, among UNIVERSAL
COMPRESSION HOLDINGS, INC., a Delaware corporation ("Holdings"), TW
ACQUISITION CORPORATION, a Delaware corporation ("Acquisition Corp.", which
will be merged with and into Tidewater Compression Service, Inc. which in turn
will change its name to Universal Compression, Inc.), the Banks party hereto
from time to time, and BANKERS TRUST COMPANY, as Agent (all capitalized terms
used herein and defined in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with a Term Loan Commitment severally
agrees to make, on the Initial Borrowing Date, a term loan or term loans
(each, a "Term Loan" and, collectively, the "Term Loans") to the Borrower,
which Term Loans (i) shall be made and initially maintained as a single
Borrowing of Base Rate Loans (subject to the option to convert such Term Loans
pursuant to Section 1.06) and (ii) shall not exceed for any Bank, in initial
aggregate principal amount, that amount which equals the Term Loan Commitment
of such Bank on any such date (before giving effect to any reductions thereto
on such date pursuant to Section 3.03(b)(i) but after giving effect to any
reductions thereto prior to such date pursuant to Section 3.03(b)(i) or on or
prior to such date pursuant to Section 3.03(b)(ii)). Once repaid, Term Loans
incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a revolving loan or revolving loans
(each, a "Revolving Loan" and, collectively, the "Revolving Loans") to the
Borrower, which Revolving Loans (i) shall, at the option of the Borrower, be
Base Rate Loans or Eurodollar Loans, provided that except as otherwise
specifically provided in Section 1.10(b), all Revolving Loans comprising the
same Borrowing shall at all times be of the same Type, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, (iii) shall not exceed
for any Bank at any time outstanding that aggregate principal amount which,
when added to the product of (x) such Bank's Adjusted Percentage and (y) the
sum of (I) the aggregate amount of all Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) at such time and (II) the aggregate principal amount of all Swingline
Loans (exclusive of Swingline Loans which are repaid with the proceeds of, and
simultaneously with the incurrence of, the respective incurrence of Revolving
Loans) then outstanding, equals the Revolving Loan Commitment of such Bank at
such time and (iv) shall not exceed for all Banks at any time outstanding that
aggregate principal amount which, when added to (x) the amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (y) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously
with the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Total Revolving Loan Commitment at such time.
(c) Subject to and upon the terms and conditions herein set forth,
BTCo in its individual capacity agrees to make at any time and from time to
time on and after the Initial Borrowing Date and prior to the Swingline Expiry
Date, a revolving loan or revolving loans (each, a "Swingline Loan" and,
collectively, the "Swingline Loans") to the Borrower, which Swingline Loans
(i) shall be made and maintained as Base Rate Loans, (ii) may be repaid and
reborrowed in accordance with the provisions hereof, (iii) shall not exceed in
aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Banks
then outstanding and the Letter of Credit Outstandings at such time, an amount
equal to the Adjusted Total Revolving Loan Commitment at such time (after
giving effect to any reductions to the Adjusted Total Revolving Loan
Commitment on such date) and (iv) shall not exceed in aggregate principal
amount at any time outstanding the Maximum Swingline Amount.
(d) On any Business Day, BTCo may, in its sole discretion, give
notice to the Banks that its outstanding Swingline Loans shall be funded with
a Borrowing of Revolving Loans (provided that such notice shall be deemed to
have been automatically given upon the occurrence of a Default or an Event of
Default under Section 10.05 or upon the exercise of any of the remedies
provided in the last paragraph of Section 10), in which case a Borrowing of
Revolving Loans constituting Base Rate Loans (each such Borrowing, a
"Mandatory Borrowing") shall be made on the immediately succeeding Business
Day by all Banks with a Revolving Loan Commitment (without giving effect to
any termination thereof pursuant to the last paragraph of Section 10) pro rata
based on each Bank's Adjusted Percentage (determined before giving effect to
any termination of the Revolving Loan Commitments pursuant to the last
paragraph of Section 10) and the proceeds thereof shall be applied directly to
BTCo to repay BTCo for such outstanding Swingline Loans. Each such Bank hereby
irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by BTCo
notwithstanding (i) the amount of the Mandatory Borrowing may not comply with
the minimum amount for Borrowings otherwise required hereunder, (ii) whether
any conditions specified in Section 6 are then satisfied, (iii) whether a
Default or an Event of Default then exists, (iv) the date of such Mandatory
Borrowing and (v) the amount of the Total Revolving Loan Commitment or the
Adjusted Total Revolving Loan Commitment at such time. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise
required above (including, without limitation, as a result of the commencement
of a proceeding under the Bankruptcy Code with respect to the Borrower), then
each such Bank hereby agrees that it shall forthwith purchase (as of the date
the Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower on or after such date and prior to such
purchase) from BTCo such participations in the outstanding Swingline Loans as
shall be necessary to cause such Banks to share in such Swingline Loans
ratably based upon their respective Adjusted Percentages (determined before
giving effect to any termination of the Revolving Loan Commitments pursuant to
the last paragraph of Section 10), provided that (x) all interest payable on
the Swingline Loans shall be for the account of BTCo until the date as of
which the respective participation is required to be purchased and, to the
extent attributable to the purchased participation, shall be payable to the
participant from and after such date and (y) at the time any purchase of
participations pursuant to this sentence is actually made, the purchasing Bank
shall be required to pay BTCo interest on the principal amount of
participation purchased for each day from and including the day upon which the
Mandatory Borrowing would otherwise have occurred to but excluding the date of
payment for such participation, at the overnight Federal Funds Rate for the
first three days and at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter.
-2-
1.02 Minimum Amount of Each Borrowing. The aggregate principal
amount of each Borrowing of Term Loans shall not be less than $3,000,000 and,
if greater, shall be in an integral multiple of $100,000. The aggregate
principal amount of each Borrowing of Revolving Loans shall not be less than
$1,000,000 and, if greater, shall be in an integral multiple of $100,000;
provided that Mandatory Borrowings shall be made in the amounts required by
Section 1.01(d). The aggregate principal amount of each Borrowing of Swingline
Loans shall not be less than $100,000 and, if greater, shall be in an integral
multiple of $50,000. More than one Borrowing may occur on the same date, but
at no time shall there be outstanding more than ten Borrowings of Eurodollar
Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make
a Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Agent at its Notice Office at least one
Business Day's prior notice of each Base Rate Loan and at least three Business
Days' prior notice of each Eurodollar Loan to be made hereunder, provided that
any such notice shall be deemed to have been given on a certain day only if
given before 12:00 Noon (New York time) on such day. Each such notice (each a
"Notice of Borrowing"), except as otherwise expressly provided in Section
1.10, shall be irrevocable and shall be given by the Borrower in writing, or
by telephone promptly confirmed in writing, in the form of Exhibit A,
appropriately completed to specify the aggregate principal amount of the Loans
to be made pursuant to such Borrowing, the date of such Borrowing (which shall
be a Business Day), whether the Loans being made pursuant to such Borrowing
shall constitute Term Loans or Revolving Loans and whether the Loans being
made pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or Eurodollar Loans and, if Eurodollar Loans, the initial Interest
Period to be applicable thereto. The Agent shall promptly give each Bank which
is required to make Loans of the Tranche specified in the respective Notice of
Borrowing, notice of such proposed Borrowing, of such Bank's proportionate
share thereof and of the other matters required by the immediately preceding
sentence to be specified in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give BTCo not later than 12:00 Noon (New
York time) on the date that a Swingline Loan is to be made, written notice or
telephonic notice confirmed in writing of each Swingline Loan to be made
hereunder. Each such notice shall be irrevocable and specify in each case (A)
the date of Borrowing (which shall be a Business Day) and (B) the aggregate
principal amount of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of such Borrowing of Loans, BTCo may
act without liability upon the basis of telephonic notice of such Borrowing,
believed by BTCo in good faith to be from the President, any Vice President or
the Treasurer of the Borrower, or from any other authorized officer of the
Borrower designated by the Borrower to the Agent, prior to receipt of written
confirmation. In each such case, the Borrower hereby waives the right to
dispute BTCo's record of the terms of such telephonic notice of such Borrowing
of Loans.
1.04 Disbursement of Funds. Except as otherwise specifically
provided in the immediately succeeding sentence, no later than 12:00 Noon (New
York time) on the date specified in each Notice of Borrowing (or (x) in the
case of Swingline Loans, not later than 2:00 P.M. (New York time) on the date
specified pursuant to Section 1.03(b)(i) or (y) in the case of Mandatory
Borrowings, not later than 12:00
-3-
Noon (New York time) on the date specified in Section 1.01(d)), each Bank with
a Commitment of the respective Tranche will make available its pro rata
portion of each such Borrowing requested to be made on such date (or in the
case of Swingline Loans, BTCo shall make available the full amount thereof).
All such amounts shall be made available in Dollars and in immediately
available funds at the Payment Office of the Agent, and the Agent will make
available to the Borrower at the Payment Office the aggregate of the amounts
so made available by the Banks. Unless the Agent shall have been notified by
any Bank prior to the date of Borrowing that such Bank does not intend to make
available to the Agent such Bank's portion of any Borrowing to be made on such
date, the Agent may assume that such Bank has made such amount available to
the Agent on such date of Borrowing and the Agent may, in reliance upon such
assumption, make available to the Borrower a corresponding amount. If such
corresponding amount is not in fact made available to the Agent by such Bank,
the Agent shall be entitled to recover such corresponding amount on demand
from such Bank. If such Bank does not pay such corresponding amount forthwith
upon the Agent's demand therefor, the Agent shall promptly notify the Borrower
and the Borrower shall immediately pay such corresponding amount to the Agent.
The Agent shall also be entitled to recover on demand from such Bank or the
Borrower, as the case may be, interest on such corresponding amount in respect
of each day from the date such corresponding amount was made available by the
Agent to the Borrower until the date such corresponding amount is recovered by
the Agent, at a rate per annum equal to (i) if recovered from such Bank, at
the overnight Federal Funds Rate and (ii) if recovered from the Borrower, the
rate of interest applicable to the respective Borrowing, as determined
pursuant to Section 1.08. Nothing in this Section 1.04 shall be deemed to
relieve any Bank from its obligation to make Loans hereunder or to prejudice
any rights which the Borrower may have against any Bank as a result of any
failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Bank shall be evidenced (i) if Term
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed
in conformity herewith (each, a "Term Note" and, collectively, the "Term
Notes"), (ii) if Revolving Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B-2, with
blanks appropriately completed in conformity herewith (each, a "Revolving
Note" and, collectively, the "Revolving Notes") and (iii) if Swingline Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-3, with blanks appropriately completed in conformity
herewith (the "Swingline Note").
(b) The Term Note issued to each Bank shall (i) be executed by the
Borrower, (ii) be payable to the order of such Bank and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Term Loans
made by such Bank and be payable in the principal amount of Term Loans
evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of
the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to mandatory repayment as provided in Section 4.02
and (vii) be entitled to the benefits of this Agreement and the other Credit
Documents.
(c) The Revolving Note issued to each Bank shall (i) be executed by
the Borrower, (ii) be payable to the order of such Bank and be dated the
Initial Borrowing Date, (iii) be in a stated principal amount equal to the
Revolving Loan Commitment of such Bank and be payable in the principal amount
of the Revolving Loans evidenced thereby, (iv) mature on the Revolving Loan
Maturity Date, (v) bear interest as provided in the appropriate clause of
Section 1.08 in respect of the Base Rate Loans and Eurodollar Loans, as the
case may be, evidenced thereby, (vi) be subject to mandatory repayment as
provided in Section 4.02 and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
-4-
(d) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo and be dated the Initial
Borrowing Date, (iii) be in a stated principal amount equal to the Maximum
Swingline Amount and be payable in the principal amount of the outstanding
Swingline Loans evidenced thereby from time to time, (iv) mature on the
Swingline Expiry Date, (v) bear interest as provided in the appropriate clause
of Section 1.08 in respect of the Base Rate Loans evidenced thereby and (vi)
be entitled to the benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation shall not affect the Borrower's obligations in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to convert, on
any Business Day occurring on or after the Initial Borrowing Date, all or a
portion equal to at least $3,000,000 in the case of a Borrowing of Term Loans
and equal to at least $1,000,000 in the case of a Borrowing of Revolving Loans
of the outstanding principal amount of such Loans made pursuant to one or more
Borrowings (so long as of the same Tranche) of one or more Types of Loans into
a Borrowing (of the same Tranche) of another Type of Loan, provided that (i)
except as otherwise provided in Section 1.10(b), Eurodollar Loans may be
converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Loans being converted and no such partial conversion of
Eurodollar Loans shall reduce the outstanding principal amount of such
Eurodollar Loans made pursuant to a single Borrowing to less than $3,000,000
in the case of a Borrowing of Term Loans and to less than $1,000,000 in the
case of a Borrowing of Revolving Loans, (ii) Base Rate Loans may only be
converted into Eurodollar Loans if no Default or Event of Default is in
existence on the date of the conversion, (iii) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings than is permitted
under Section 1.02 and (iv) Swingline Loans may not be converted pursuant to
this Section 1.06. Each such conversion shall be effected by the Borrower by
giving the Agent at its Notice Office prior to 12:00 Noon (New York time) at
least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing(s) pursuant to which
such Loans were made and, if to be converted into Eurodollar Loans, the
Interest Period to be initially applicable thereto. The Agent shall give each
Bank prompt notice of any such proposed conversion affecting any of its Loans.
Upon any such conversion the proceeds thereof will be deemed to be applied
directly on the day of such conversion to prepay the outstanding principal
amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving
Loans under this Agreement shall be incurred from the Banks pro rata on the
basis of their Term Loan Commitments or Revolving Loan Commitments, as the
case may be; provided that all Borrowings of Revolving Loans made pursuant to
a Mandatory Borrowing shall be incurred from the Banks pro rata on the basis
of their Adjusted Percentages. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans provided to
be made by it hereunder, regardless of the failure of any other Bank to make
its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per annum which shall be equal to the
sum of the Applicable Base Rate Margin plus the Base Rate in effect from time
to time.
-5-
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof
are made available to the Borrower until the maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall, during each
Interest Period applicable thereto, be equal to the sum of the Applicable
Eurodollar Rate Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to 2%
per annum in excess of the rate otherwise applicable to Base Rate Loans of the
respective Tranche of Loans from time to time.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on
any repayment or prepayment (on the amount repaid or prepaid), at maturity
(whether by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall determine
the Eurodollar Rate for each Interest Period applicable to Eurodollar Loans
and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and
binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing
or Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Agent notice thereof, the interest period (each an "Interest Period")
applicable to such Eurodollar Loan, which Interest Period shall, at the option
of the Borrower, be a one, two, three or six-month period or, to the extent
then available to all Banks, a nine or twelve-month period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
for a Eurodollar Loan would otherwise expire on a day which is not a
Business Day but is a day of the month after which no further Business
Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
-6-
(v) no Interest Period may be selected at any time when a Default or
Event of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any Tranche of
Loans shall be selected which extends beyond the respective Maturity Date
for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a mandatory
repayment of such Term Loans will be required to be made under Section
4.02(b), if the aggregate principal amount of Term Loans which have
Interest Periods which will expire after such date will be in excess of
the aggregate principal amount of Term Loans then outstanding less the
aggregate amount of such required prepayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to
convert such Eurodollar Loans into Base Rate Loans effective as of the
expiration date of such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any
Bank shall have determined (which determination shall, absent manifest error,
be final and conclusive and binding upon all parties hereto but, with respect
to clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction
of any new law or governmental rule, regulation, order, guideline or
request, such as, for example, but not limited to: (A) a change in the
basis of taxation of payment to any Bank of the principal of or interest
on the Notes or any other amounts payable hereunder (except for changes
in the rate of tax on, or determined by reference to, the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which it
is organized or in which its principal office or applicable lending
office is located or any subdivision thereof or therein) or (B) a change
in official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation of
the Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting such Bank or the interbank Eurodollar market or the
position of such Bank in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good
faith with any governmental request (whether or not having force of law)
or (z) impracticable as a result of a contingency occurring after the
date of this Agreement which materially and adversely affects the
interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause
(i) above) shall promptly give notice (by telephone promptly confirmed in
writing) to the Borrower and, except in the case of clause (i)
-7-
above, to the Agent of such determination (which notice the Agent shall
promptly transmit to each of the other Banks). Thereafter (x) in the case of
clause (i) above, Eurodollar Loans shall no longer be available until such
time as the Agent notifies the Borrower and the Banks that the circumstances
giving rise to such notice by the Agent no longer exist, and any Notice of
Borrowing or Notice of Conversion given by the Borrower with respect to
Eurodollar Loans which have not yet been incurred (including by way of
conversion) shall be deemed rescinded by the Borrower, (y) in the case of
clause (ii) above, the Borrower shall pay to such Bank, within 15 days of such
Bank's written request therefor, such additional amounts (in the form of an
increased rate of, or a different method of calculating, interest or otherwise
as such Bank reasonably shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder as set forth in such written request as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any
event, within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Agent
telephonic notice (confirmed in writing) on the same date that the Borrower
was notified by the affected Bank or the Agent pursuant to Section 1.10(a)(ii)
or (iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' written notice to the Agent, require the affected
Bank to convert such Eurodollar Loan into a Base Rate Loan, provided that, if
more than one Bank is affected at any time, then all affected Banks must be
treated the same pursuant to this Section 1.10(b).
(c) If at any time after the date of this Agreement any Bank
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority,
central bank or comparable agency, will have the effect of increasing the
amount of capital required or expected to be maintained by such Bank or any
corporation controlling such Bank based on the existence of such Bank's
Commitments hereunder or its obligations hereunder, then the Borrower shall
pay to such Bank, upon its written demand therefor, such additional amounts as
shall be required to compensate such Bank or such other corporation for the
increased cost to such Bank or such other corporation or the reduction in the
rate of return to such Bank or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Bank will
act reasonably and in good faith and will use averaging and attribution
methods which are reasonable, provided that such Bank's determination of
compensation owing under this Section 1.10(c) shall, absent manifest error, be
final and conclusive and binding on all the parties hereto. Each Bank, upon
determining that any additional amounts will be payable pursuant to this
Section 1.10(c), will give prompt written notice thereof to the Borrower,
which notice shall show in reasonable detail the basis for calculation of such
additional amounts.
(d) The provisions of this Section 1.10 are subject to Section 13.15
(to the extent same is applicable in accordance with the terms thereof).
1.11 Compensation. The Borrower shall compensate each Bank, within
15 days of its written request (which request shall set forth in reasonable
detail the basis for requesting such compensation), for all reasonable losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such
-8-
Bank to fund its Eurodollar Loans but excluding loss of anticipated profits)
which such Bank may sustain: (i) if for any reason (other than a default by
such Bank or the Agent) a Borrowing of, or conversion from or into, Eurodollar
Loans does not occur on a date specified therefor in a Notice of Borrowing or
Notice of Conversion (whether or not withdrawn by the Borrower or deemed
withdrawn pursuant to Section 1.10(a)); (ii) if any repayment (including any
repayment made pursuant to Section 4.02 or as a result of an acceleration of
the Loans pursuant to Section 10) or conversion of any of its Eurodollar Loans
occurs on a date which is not the last day of an Interest Period with respect
thereto; (iii) if any prepayment of any of its Eurodollar Loans is not made on
any date specified in a notice of prepayment given by the Borrower; or (iv) as
a consequence of (x) any other default by the Borrower to repay its Loans when
required by the terms of this Agreement or any Note held by such Bank or (y)
any election made pursuant to Section 1.10(b). Calculation of all amounts
payable to each Bank under clause (ii) of the immediately preceding sentence
shall be made as if such Bank (x) had actually funded its relevant Eurodollar
Loan through the purchase of a Eurodollar deposit bearing interest at the
Eurodollar Rate in an amount equal to the amount of that Loan, having a
maturity comparable to the relevant Interest Period and (y) is actually
required to terminate such deposit on the date of the respective repayment or
conversion and pay the customary breakage charges in connection therewith;
provided, however, that each Bank may fund each of its Eurodollar Loans in any
manner it sees fit and the foregoing assumption shall be utilized only for the
calculation of amounts payable under clause (ii) of the first sentence of this
Section 1.11.
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06 or Section 4.04 with respect to such
Bank, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Bank) to designate another lending
office for any Loans or Letters of Credit affected by such event, provided
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object
of avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Sections
1.10, 2.06 and 4.04.
1.13 Replacement of Banks. If (x) any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or fund Unpaid
Drawings, (y) upon the occurrence of an event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04
with respect to any Bank which results in such Bank charging to the Borrower
increased costs in excess of those being generally charged by the Banks or (z)
as provided in Section 13.12(b) in the case of certain refusals by a Bank to
consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks, the
Borrower shall have the right, if no Default or Event of Default then exists,
to either (1) replace such Bank (the "Replaced Bank") with one or more other
Eligible Transferee or Transferees, none of whom shall constitute a Defaulting
Bank at the time of such replacement (collectively, the "Replacement Bank")
reasonably acceptable to the Agent or (2) at the option of the Borrower,
replace only the Revolving Loan Commitment (and outstandings pursuant thereto)
of the Replaced Bank with an identical Revolving Loan Commitment provided by
the Replacement Bank, provided that (i) at the time of any replacement
pursuant to this Section 1.13, the Replacement Bank shall enter into one or
more Assignment and Assumption Agreements pursuant to Section 13.04(b) (and
with all fees payable pursuant to said Section 13.04(b) to be paid by the
Replacement Bank) pursuant to which the Replacement Bank shall acquire all of
the Commitments and outstanding Loans (or, in the case of the replacement of
only the Revolving Loan Commitment, the Revolving Loan Commitment and
outstanding Revolving Loans) of, and in each case participations in Letters of
Credit by, the Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the sum of (A) an
amount equal to the principal of, and all accrued interest on, all outstanding
Loans (or, in the case of the replacement of only the Revolving Loan
Commitment, the outstanding Revolving Loans) of
-9-
the Replaced Bank, (B) an amount equal to all Unpaid Drawings that have been
funded by (and not reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time and (C) an amount equal to
all accrued, but theretofore unpaid, Fees owing to the Replaced Bank pursuant
to Section 3.01 and (y) BTCo an amount equal to such Replaced Bank's Adjusted
Percentage (for this purpose, determined as if the adjustment described in
clause (y) of the immediately succeeding sentence had been made with respect
to such Replaced Bank) of any Unpaid Drawing (which at such time remains an
Unpaid Drawing) to the extent such amount was not theretofore funded by such
Replaced Bank, and (ii) all obligations of the Borrower owing to the Replaced
Bank (other than those specifically described in clause (i) above in respect
of which the assignment purchase price has been, or is concurrently being,
paid) shall be paid in full to such Replaced Bank concurrently with such
replacement. Upon the execution of the respective Assignment and Assumption
Agreements, the payment of amounts referred to in clauses (i) and (ii) above
and, if so requested by the Replacement Bank, delivery to the Replacement Bank
of the appropriate Note or Notes executed by the Borrower, (x) the Replacement
Bank shall become a Bank hereunder and, unless the respective Replaced Bank
continues to have outstanding Term Loans hereunder, the Replaced Bank shall
cease to constitute a Bank hereunder, except with respect to indemnification
provisions under this Agreement, which shall survive as to such Replaced Bank
and (y) the Adjusted Percentages of the Banks shall be automatically adjusted
at such time to give effect to such replacement (and to give effect to the
replacement of a Defaulting Bank with one or more Non-Defaulting Banks).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that BTCo issue, at any
time and from time to time on and after the Initial Borrowing Date and prior
to the Revolving Loan Maturity Date, (x) for the account of the Borrower and
for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Obligations of the
Borrower or any of its Subsidiaries, an irrevocable sight standby letter of
credit in Dollars and in a form customarily used by BTCo or in such other form
as has been approved by BTCo (each such standby letter of credit, a "Standby
Letter of Credit") in support of such L/C Supportable Obligations and (y) for
the account of the Borrower, an irrevocable sight documentary letter of credit
in Dollars and in a form customarily used by BTCo or in such other form as has
been approved by BTCo (each such documentary letter of credit, a "Trade Letter
of Credit", and each such Trade Letter of Credit and each Standby Letter of
Credit, a "Letter of Credit") in support of customary commercial transactions
of the Borrower and its Subsidiaries.
(b) BTCo hereby agrees that it will, at any time and from time to
time on or after the Initial Borrowing Date and prior to the Revolving Loan
Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower one or more Letters of Credit
(x) in the case of Standby Letters of Credit, in support of such L/C
Supportable Obligations of the Borrower or any of its Subsidiaries as are
permitted to remain outstanding without giving rise to a Default or Event of
Default hereunder and (y) in the case of Trade Letters of Credit, in support
of sellers of goods as referenced in Section 2.01(a), provided that BTCo shall
be under no obligation to issue any Letter of Credit of the types described
above if at the time of such issuance.
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain BTCo from
issuing such Letter of Credit or any requirement of law applicable to
BTCo or any request or directive (whether or not having the force of law)
from any governmental authority with jurisdiction over BTCo shall
prohibit, or request that BTCo refrain from, the issuance of letters of
credit generally or such Letter of Credit in particular or shall impose
upon BTCo with respect to such Letter of Credit any restriction or
reserve or capital
-10-
requirement (for which BTCo is not otherwise compensated) not in effect
on the date hereof, or any unreimbursed loss, cost or expense which was
not applicable, in effect or known to BTCo as of the date hereof and
which BTCo reasonably and in good xxxxx xxxxx material to it; or
(ii) BTCo shall have received notice from any Bank prior to the
issuance of such Letter of Credit of the type described in the second
sentence of Section 2.03(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of,
and prior to the issuance of, the respective Letter of Credit) at such time
would exceed either (x) $10,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans made by Non-Defaulting Banks and
Swingline Loans then outstanding, an amount equal to the Adjusted Total
Revolving Loan Commitment at such time and (ii) each Letter of Credit shall by
its terms terminate on or before the earlier of (x) (A) in the case of Standby
Letters of Credit, the date which occurs 12 months after the date of the
issuance thereof (although any such Standby Letter of Credit may be extendible
for successive periods of up to 12 months, but not beyond the date which is
five Business Days prior to the Revolving Loan Maturity Date, on terms
acceptable to BTCo) and (B) in the case of Trade Letters of Credit, the date
which occurs 12 months after the date of issuance thereof and (y) the date
which is 30 days prior to the Revolving Loan Maturity Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of
Credit shall be not less than $20,000 or such lesser amount as is acceptable
to BTCo.
2.03 Letter of Credit Requests. (a) Whenever the Borrower desires
that a Letter of Credit be issued for its account, the Borrower shall give the
Agent and BTCo at least three Business Days' (or two Business Days' in the
case of Trade Letters of Credit after the time at which BTCo and the Borrower
agree on a standard form of Trade Letter of Credit to be issued hereunder, or,
in each case such shorter period as is acceptable to BTCo in any given case)
written notice thereof. Each notice shall be in the form of Exhibit C (each a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that such Letter of Credit
may be issued in accordance with, and will not violate the requirements of,
Section 2.01(c). Unless BTCo has received notice from the Required Banks
before it issues a Letter of Credit that one or more of the conditions
specified in Section 5 are not satisfied on the Initial Borrowing Date or
Section 6 are not then satisfied, or that the issuance of such Letter of
Credit would violate Section 2.01(c), then BTCo may issue the requested Letter
of Credit for the account of the Borrower in accordance with BTCo's usual and
customary practices. Upon its issuance of any Letter of Credit, BTCo shall
promptly notify each Bank of such issuance, which notice shall be accompanied
by a copy of the Letter of Credit actually issued.
2.04 Letter of Credit Participations. (a) Immediately upon the
issuance by BTCo of any Letter of Credit, BTCo shall be deemed to have sold
and transferred to each Bank with a Revolving Loan Commitment, other than BTCo
(each such Bank, in its capacity under this Section 2.04, a "Participant"),
and each such Participant shall be deemed irrevocably and unconditionally to
have purchased and received from BTCo, without recourse or warranty, an
undivided interest and participation, to the extent of such Participant's
Adjusted Percentage in such Letter of Credit, each drawing made thereunder and
the obligations of the Borrower under this Agreement with respect thereto, and
any security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments or Adjusted Percentages of the Banks pursuant to
Section 1.13 or 13.04 or as a result of a Bank Default, it is hereby agreed
that, with
-11-
respect to all outstanding Letters of Credit and Unpaid Drawings, there shall
be an automatic adjustment to the participations pursuant to this Section 2.04
to reflect the new Adjusted Percentages of the assignor and assignee Bank or
of all Banks with Revolving Loan Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, BTCo
shall have no obligation relative to the other Banks other than to confirm
that any documents required to be delivered under such Letter of Credit appear
to have been delivered and that they appear to substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or
omitted to be taken by BTCo under or in connection with any Letter of Credit
if taken or omitted in the absence of gross negligence or willful misconduct
(as determined by a court of competent jurisdiction) shall not create for BTCo
any resulting liability to the Borrower or any Bank.
(c) In the event that BTCo makes any payment under any Letter of
Credit and the Borrower shall not have reimbursed such amount in full to BTCo
pursuant to Section 2.05(a), BTCo shall promptly notify the Agent, which shall
promptly notify each Participant of such failure, and each Participant shall
promptly and unconditionally pay to BTCo the amount of such Participant's
Adjusted Percentage of such unreimbursed payment in Dollars and in same day
funds. If BTCo so notifies, prior to 11:00 A.M. (New York time) on any
Business Day, any Participant required to fund a payment under a Letter of
Credit, such Participant shall make available to BTCo in Dollars such
Participant's Adjusted Percentage of the amount of such payment on such
Business Day in same day funds. If and to the extent such Participant shall
not have so made its Adjusted Percentage of the amount of such payment
available to BTCo, such Participant agrees to pay to BTCo, forthwith on demand
such amount, together with interest thereon, for each day from such date until
the date such amount is paid to BTCo at the overnight Federal Funds Rate for
the first three days and at the rate applicable to Revolving Loans maintained
as Base Rate Loans hereunder for each day thereafter. The failure of any
Participant to make available to BTCo its Adjusted Percentage of any payment
under any Letter of Credit shall not relieve any other Participant of its
obligation hereunder to make available to BTCo its Adjusted Percentage of any
Letter of Credit on the date required, as specified above, but no Participant
shall be responsible for the failure of any other Participant to make
available to BTCo such other Participant's Adjusted Percentage of any such
payment.
(d) Whenever BTCo receives a payment of a reimbursement obligation
as to which it has received any payments from the Participants pursuant to
clause (c) above, BTCo shall pay to each Participant which has paid its
Adjusted Percentage thereof, in Dollars and in same day funds, an amount equal
to such Participant's share (based upon the proportionate aggregate amount
originally funded by such Participant to the aggregate amount funded by all
Participants) of the principal amount of such reimbursement obligation and
interest thereon accruing after the purchase of the respective participations.
(e) Upon the request of any Participant, BTCo shall furnish to such
Participant copies of any Letter of Credit issued by it and such other
documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to BTCo
with respect to Letters of Credit issued by it shall be irrevocable and not
subject to any qualification or exception whatsoever and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
-12-
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Agent, any Participant, or any other Person, whether in connection with
this Agreement, any Letter of Credit, the transactions contemplated
herein or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse BTCo, by making payment to BTCo in immediately
available funds at the Payment Office, for any payment or disbursement made by
BTCo under any Letter of Credit (each such amount, so paid until reimbursed,
an "Unpaid Drawing"), upon receipt of notice by BTCo of such payment or
disbursement prior to 11:00 A.M. (New York time) on the date of, such payment
or disbursement, with interest on the amount so paid or disbursed by BTCo, to
the extent not reimbursed prior to 12:00 Noon (New York time) on the date of
such payment or disbursement, from and including the date paid or disbursed to
but excluding the date BTCo was reimbursed by the Borrower therefor at a rate
per annum which shall be the Base Rate in effect from time to time plus the
Applicable Base Rate Margin for Revolving Loans, provided, however, to the
extent such amounts are not reimbursed prior to 12:00 Noon (New York time) on
the third Business Day following the receipt by the Borrower of notice of such
payment or disbursement or the occurrence of a Default under Section 10.05,
interest shall thereafter accrue on the amounts so paid or disbursed by BTCo
(and until reimbursed by the Borrower) at a rate per annum which shall be the
Base Rate in effect from time to time plus the Applicable Base Rate Margin for
Revolving Loans plus 2%, in each such case, with interest to be payable on
demand. BTCo shall give the Borrower prompt written notice of each Drawing
under any Letter of Credit, provided that the failure to give any such notice
shall in no way affect, impair or diminish the Borrower's obligations
hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse BTCo with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Bank (including in
its capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse BTCo for any wrongful payment made by BTCo under a
Letter of Credit as a result of acts or omissions constituting willful
misconduct or gross negligence on the part of BTCo.
2.06 Increased Costs. (a) If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration
-13-
thereof, or compliance by BTCo or any Participant with any request or
directive by any such authority (whether or not having the force of law),
shall either (i) impose, modify or make applicable any reserve, deposit,
capital adequacy or similar requirement against letters of credit issued by
BTCo or participated in by any Participant, or (ii) impose on BTCo or any
Participant any other conditions relating, directly or indirectly, to this
Agreement; and the result of any of the foregoing is to increase the cost to
BTCo or any Participant of issuing, maintaining or participating in any Letter
of Credit, or reduce the amount of any sum received or receivable by BTCo or
any Participant hereunder or reduce the rate of return on its capital with
respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of BTCo or such
Participant pursuant to the laws of the jurisdiction in which it is organized
or in which its principal office or applicable lending office is located or
any subdivision thereof or therein), then, within 15 days of the delivery of
the certificate referred to below to the Borrower by BTCo or any Participant
(a copy of which certificate shall be sent by BTCo or such Participant to the
Agent), the Borrower shall pay to BTCo or such Participant such additional
amount or amounts as will compensate such Bank for such increased cost or
reduction in the amount receivable or reduction on the rate of return on its
capital. BTCo or any Participant, upon determining that any additional amounts
will be payable pursuant to this Section 2.06, will give prompt written notice
thereof to the Borrower, which notice shall include a certificate submitted to
the Borrower by BTCo or such Participant (a copy of which certifi cate shall
be sent by BTCo or such Participant to the Agent), setting forth in reasonable
detail the basis for the calculation of such additional amount or amounts
necessary to compensate BTCo or such Participant. The certificate required to
be delivered pursuant to this Section 2.06 shall, absent manifest error, be
final and conclusive and binding on the Borrower.
(b) The provisions of this Section 2.06 are subject to Section 13.15
(to the extent same is applicable in accordance with the terms thereof).
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Agent for
distribution to each Non-Defaulting Bank with a Revolving Loan Commitment a
commitment commission (the "Commitment Commission") for the period from the
Initial Borrowing Date to and including the Revolving Loan Maturity Date (or
such earlier date as the Total Revolving Loan Commitment shall have been
terminated), computed at a rate for each day equal to 1/2 of 1% per annum on
the daily average Unutilized Revolving Loan Commitment of such Non-Defaulting
Bank. Accrued Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Revolving Loan Maturity Date
or such earlier date upon which the Total Revolving Loan Commitment is
terminated.
(b) The Borrower agrees to pay to the Agent for distribution to each
Non-Defaulting Bank with a Revolving Loan Commitment (based on their
respective Adjusted Percentages) a fee in respect of each Letter of Credit
issued hereunder (the "Letter of Credit Fee") in the case of each Letter of
Credit, for the period from and including the date of issuance of such Letter
of Credit to and including the termination of such Letter of Credit (or, in
the case of a Trade Letter of Credit, the date of the stated expiration
thereof), computed at a rate per annum equal to the Applicable Eurodollar Rate
Margin for Revolving Loans on the daily average Stated Amount of such Letter
of Credit (or, in the case of a Trade Letter of Credit, on the initial Stated
Amount of such Letter of Credit). Accrued Letter of Credit Fees payable with
respect to Standby Letters of Credit shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the first day after the
termination of the Total Revolving Loan Commitment upon which no Standby
Letters of Credit remain outstanding and all Letter of Credit Fees payable
with respect to each Trade Letter of Credit shall be due and payable on the
date of issuance of such Trade Letter of Credit.
-14-
(c) The Borrower agrees to pay to BTCo, for its own account, a
facing fee in respect of each Letter of Credit issued for its account
hereunder (the "Facing Fee") (x) in the case of each Standby Letter of Credit,
for the period from and including the date of issuance of such Standby Letter
of Credit to and including the termination of such Standby Letter of Credit,
computed at a rate equal to 1/4 of 1% per annum of the daily average Stated
Amount of such Standby Letter of Credit, provided, that in any event the
minimum amount of the Facing Fee payable in any 12 month period for each
Standby Letter of Credit shall be $500 (it being agreed that, on each
anniversary of the issuance of any Standby Letter of Credit or upon any
earlier termination or expiration of a Standby Letter of Credit, if $500
exceeds the amount of Facing Fees theretofore paid or then accrued with
respect to such Standby Letter of Credit, in either case after the date of the
issuance thereof or, if later, after the date of the last anniversary of the
issuance thereof (but excluding any amounts paid after such anniversary with
respect to periods ending on or prior to such anniversary, including, without
limitation, as a result of the operation of this parenthetical), the amount of
such excess shall be payable on the next date upon which accrued Facing Fees
are otherwise payable with respect to Standby Letters of Credit as provided in
the following sentence), and (y) in the case of each Trade Letter of Credit,
in an amount equal to the greater of (A) the Applicable Eurodollar Rate Margin
for Revolving Loans maintained as Eurodollar Loans multiplied by the Stated
Amount of such Trade Letter of Credit as of the date of issuance thereof and
(B) $500. Except as otherwise provided in the proviso to the immediately
preceding sentence, accrued Facing Fees payable with respect to Standby
Letters of Credit shall be due and payable quarterly in arrears on each
Quarterly Payment Date and upon the first day after the termination of the
Total Revolving Loan Commitment upon which no Standby Letters of Credit remain
outstanding and all Facing Fees payable with respect to each Trade Letter of
Credit shall be due and payable on the date of issuance of such Trade Letter
of Credit.
(d) The Borrower shall pay, upon each drawing under, issuance of, or
amendment to, any Letter of Credit, such amount as shall at the time of such
event be the administrative charge and reasonable out-of-pocket expenses which
BTCo is generally imposing in connection with such occurrence with respect to
letters of credit.
(e) The Borrower shall pay to the Agent, for its own account, such
other fees as have been agreed to in writing by the Borrower and the Agent.
3.02 Voluntary Termination of Unutilized Commitments. Upon at least
two Business Days' prior notice to the Agent at its Notice Office (which
notice the Agent shall promptly transmit to each of the Banks), the Borrower
shall have the right, at any time or from time to time, without premium or
penalty, to terminate the Total Unutilized Revolving Loan Commitment, in whole
or in part, in integral multiples of $1,000,000 in the case of partial
reductions to the Total Unutilized Revolving Loan Commitment, provided that
(i) each such reduction shall apply proportionately to permanently reduce the
Revolving Loan Commitment of each Bank with such a Commitment and (ii) the
reduction to the Total Unutilized Revolving Loan Commitment shall in no case
be in an amount which would cause the Revolving Loan Commitment of any Bank to
be reduced (as required by preceding clause (i)) by an amount which exceeds
the remainder of (x) the Unutilized Revolving Loan Commitment of such Bank as
in effect immediately before giving effect to such reduction minus (y) such
Bank's Adjusted Percentage of the aggregate principal amount of Swingline
Loans then outstanding.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment
(and the Term Loan Commitment and the Revolving Loan Commitment of each Bank)
shall terminate in its entirety on March 31, 1998 unless the Initial Borrowing
Date has occurred on or before such date.
-15-
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Term Loan Commitment (and the Term
Loan Commitment of each Bank) shall (i) terminate in its entirety on the
Initial Borrowing Date (after giving effect to the making of Term Loans on
such date) and (ii) prior to the termination of the Total Term Loan Commitment
as provided in clause (i) above, be reduced from time to time to the extent
required by Section 4.02.
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Initial Borrowing Date
upon which a mandatory repayment of Term Loans or a mandatory reduction to the
Total Term Loan Commitment pursuant to any of Sections 4.02(d) through (g),
inclusive, is required (and exceeds in amount the aggregate principal amount
of Term Loans then outstanding) or would be required if Term Loans were then
outstanding, the Total Revolving Loan Commitment shall be permanently reduced
by the amount, if any, by which the amount required to be applied pursuant to
said Sections (determined as if an unlimited amount of Term Loans were
actually outstanding) exceeds the aggregate principal amount of Term Loans
then outstanding, provided that, so long as (i) such excess arises from a
mandatory repayment or commitment reduction pursuant to Section 4.02(c), (d),
(f) or (g), (ii) no Default or Event of Default then exists and (iii) any
Holdings Senior Discount Notes or Borrower Senior Discount Notes remain
outstanding, such excess shall not give rise to a reduction to the Total
Revolving Loan Commitment to the extent such excess is used to pay outstanding
Holdings Senior Discount Notes or Borrower Senior Discount Notes.
(e) Each reduction to the Total Term Loan Commitment, and the Total
Revolving Loan Commitment pursuant to this Section 3.03 (or pursuant to
Section 4.02) shall be applied proportionately to reduce the Term Loan
Commitment or the Revolving Loan Commitment, as the case may be, of each Bank
with such a Commitment.
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the right to
prepay the Loans, without premium or penalty, in whole or in part at any time
and from time to time on the following terms and conditions: (i) the Borrower
shall give the Agent prior to 12:00 Noon (New York time) at its Notice Office
(x) at least one Business Day's prior written notice (or telephonic notice
promptly confirmed in writing) of its intent to prepay Base Rate Loans (or
same day notice in the case of Swingline Loans provided such notice is given
prior to 12:00 Noon (New York time) on such Business Day) and (y) at least
three Business Days' prior written notice (or telephonic notice promptly
confirmed in writing) of its intent to prepay Eurodollar Loans, whether Term
Loans, Revolving Loans or Swingline Loans shall be prepaid, the amount of such
prepayment and the Types of Loans to be prepaid and, in the case of Eurodollar
Loans, the specific Borrowing or Borrowings pursuant to which made, which
notice the Agent shall promptly transmit to each of the Banks; (ii) each
prepayment shall be in an aggregate principal amount of at least $100,000,
provided that if any partial prepayment of Eurodollar Loans made pursuant to
any Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than $3,000,000 in the case of a Borrowing of
Term Loans or $1,000,000 in the case of a Borrowing of Revolving Loans, then
such Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower
shall have no force or effect; (iii) prepayments of Eurodollar Loans made
pursuant to this Section 4.01 may only be made on the last day of an Interest
Period applicable thereto; (iv) each prepayment in respect of any Loans made
pursuant to a
-16-
Borrowing shall, except as provided in clause (vi) below, be applied pro rata
among such Loans; (v) each voluntary prepayment of Term Loans pursuant to this
Section 4.01 shall be applied to reduce the then remaining Term Loan Scheduled
Repayments on a pro rata basis (based upon the then remaining number of Term
Loan Scheduled Repayments after giving effect to all prior reductions
thereto); provided that if the amount to be applied to any Term Loan Scheduled
Repayment would exceed the then remaining amount of such Term Loan Scheduled
Repayment, then an amount equal to such excess shall be applied to reduce the
other then remaining Term Loan Scheduled Repayments pro rata based upon the
then remaining number of such Term Loan Scheduled Repayments after giving
effect to all reductions thereto; and (vi) at the Borrower's election in
connection with any prepayment of Revolving Loans pursuant to this Section
4.01, such prepayment shall not be applied to any Revolving Loan of a
Defaulting Bank.
4.02 Mandatory Repayments and Commitment Reductions. (a)(i) On any
day on which the sum of the aggregate outstanding principal amount of the
Revolving Loans made by Non-Defaulting Banks, Swingline Loans and the Letter
of Credit Outstandings exceeds the Adjusted Total Revolving Loan Commitment as
then in effect, the Borrower shall prepay principal of Swingline Loans and,
after the Swingline Loans have been repaid in full, Revolving Loans of
Non-Defaulting Banks in an amount equal to such excess. If, after giving
effect to the prepayment of all outstanding Swingline Loans and Revolving
Loans of Non-Defaulting Banks, the aggregate amount of the Letter of Credit
Outstandings exceeds the Adjusted Total Revolving Loan Commitment as then in
effect, the Borrower shall pay to the Agent at the Payment Office on such date
an amount of cash or Cash Equivalents equal to the amount of such excess (up
to a maximum amount equal to the Letter of Credit Outstandings at such time),
such cash or Cash Equivalents to be held as security for all obligations of
the Borrower to Non-Defaulting Banks hereunder in a cash collateral account to
be established by the Agent.
(ii) On any day on which the aggregate outstanding principal amount
of the Revolving Loans made by any Defaulting Bank exceeds the Revolving Loan
Commitment of such Defaulting Bank, the Borrower shall prepay principal of
Revolving Loans of such Defaulting Bank in an amount equal to such excess.
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date set forth below, the
Borrower shall be required to repay that principal amount of Term Loans, to
the extent then outstanding, as is set forth opposite such date (each such
repayment, as the same may be reduced as provided in Sections 4.01 and 4.02(d)
through (g), inclusive, a "Term Loan Scheduled Repayment," and each such date,
a "Term Loan Scheduled Repayment Date"):
Term Loan
Scheduled Repayment Date Amount
Each Quarterly Payment Date
occurring in 1998 $187,500
Each Quarterly Payment Date
occurring in 1999 $187,500
Each Quarterly Payment Date
occurring in 2000 $187,500
Each Quarterly Payment Date
occurring in 2001 $187,500
Each Quarterly Payment Date
occurring in 2002 $187,500
Each Quarterly Payment Date
-17-
Term Loan
Scheduled Repayment Date Amount
occurring in 2003 $6,562,500
Each Quarterly Payment Date
occurring in 2004 $11,250,000
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on the Business Day after each date
after the Effective Date upon which Holdings or any of its Subsidiaries
receives any cash proceeds from any Securities Issuance (other than (i)
proceeds received on the Initial Borrowing Date pursuant to the Equity
Financing, (ii) so long as no Default or Event of Default then exists or would
result therefrom, proceeds received from the sale or issuance of shares of
Holdings' common stock or Qualified Preferred Stock to be used to make
principal, premium, interest, purchase price or defeasance payments on the
Holdings Senior Discount Notes, (iii) so long as no Default or Event of
Default then exists or would result therefrom, proceeds received from the sale
or issuance of Holdings' common stock or Qualified Preferred Stock in
connection with repurchase and issuance transactions of Holdings' common stock
or Qualified Preferred Stock involving Permitted Investors and (iv) so long as
no Default or Event of Default then exists, proceeds received from the
issuance by Holdings of shares of its common stock as a result of (A) the
exercise of any options to purchase its common stock by officers, directors
and employees of Holdings and its Subsidiaries which are outstanding on the
Initial Borrowing Date and which, in any event, do not exceed $1,800,000 and
(B) the exercise of any options to purchase its common stock by officers,
directors and employees of Holdings and its Subsidiaries in an aggregate
amount not to exceed $750,000 in any fiscal year of Holdings), an amount equal
to 50% of the cash proceeds of such Securities Issuance (net of underwriting
discounts and commissions and other reasonable costs associated therewith)
shall be applied as a mandatory repayment of principal of outstanding Term
Loans (or, if the Initial Borrowing Date has not yet occurred, as a mandatory
reduction to the Total Term Loan Commitment) in accordance with the
requirements of Sections 4.02(h) and (i).
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on the Business Day after each date
after the Effective Date upon which Holdings or any of its Subsidiaries
receives any proceeds from any incurrence by Holdings or any of its
Subsidiaries of Indebt edness for borrowed money (other than Indebtedness for
borrowed money permitted to be incurred pursuant to Section 9.04 as such
Section is in effect on the Effective Date), an amount equal to the cash
proceeds of the respective incurrence of Indebtedness (net of underwriting or
placement discounts and commissions and other reasonable costs associated
therewith) shall be applied as a mandatory repayment of principal of
outstanding Term Loans (or, if the Initial Borrowing Date has not yet
occurred, as a mandatory reduction to the Total Term Loan Commitment) in
accordance with the requirements of Sections 4.02(h) and (i).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on the Business Day after each date
after the Effective Date upon which Holdings or any of its Subsidiaries
receives Net Sale Proceeds from any Asset Sale, an amount equal to 100% of the
Net Sale Proceeds therefrom shall be applied as a mandatory repayment of
principal of outstanding Term Loans (or, if the Initial Borrowing Date has not
yet occurred, as a mandatory reduction to the Total Term Loan Commitment) in
accordance with the requirements of Sections 4.02(h) and (i), provided that
Net Sale Proceeds received by Holdings or any of its Subsidiaries in
connection with any Asset Sale shall not be required to be so applied on such
date so long as no Default or Event of Default then exists and such Net Sale
Proceeds are used to purchase replacement assets within 18 months following
the date of such Asset Sale, and provided further, that if all or any portion
of such Net Sale Proceeds not required to be applied to the repayment of
outstanding Term Loans (or to reduce the Total Term Loan Commitment, as the
case may
-18-
be) are not so reinvested in replacement assets within such 18 month period,
such remaining portion shall be applied on the last day of such period as a
mandatory repayment of principal of outstanding Term Loans as provided above
in this Section 4.02(e) without regard to the immediately preceding proviso.
(f) In addition to any other mandatory repayments pursuant to this
Section 4.02, on each Excess Cash Payment Date, an amount equal to 50% of the
Excess Cash Flow for the relevant Excess Cash Payment Period shall be applied
as a mandatory repayment of principal of outstanding Term Loans in accordance
with the requirements of Sections 4.02(h) and (i).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, within 10 days following each date
after the Effective Date on which Holdings or any of its Subsidiaries receives
any proceeds from any Recovery Event, an amount equal to 100% of the proceeds
of such Recovery Event (net of reasonable costs and taxes incurred in
connection with such Recovery Event) shall be applied as a mandatory repayment
of principal of outstanding Term Loans (or, if the Initial Borrowing Date has
not yet occurred, such amounts shall be applied as a mandatory reduction to
the Total Term Loan Commitment) in accordance with the requirements of
Sections 4.02(h) and (i), provided that (x) so long as no Default or Event of
Default then exists and such proceeds do not exceed $5,000,000, such proceeds
shall not be required to be so applied on such date to the extent that the
Borrower has delivered a certificate to the Agent on or prior to such date
stating that such proceeds shall be used to replace or restore any properties
or assets in respect of which such proceeds were paid within 18 months
following the date of such Recovery Event (which certificate shall set forth
the estimates of the proceeds to be so expended) and (y) so long as no Default
or Event of Default then exists and if (a) the amount of such proceeds exceeds
$5,000,000, (b) the amount of such proceeds together with other amounts
available to Holdings and its Subsidiaries is at least equal to 100% of the
cost of replacement or restoration of the properties or assets in respect of
which such proceeds were paid as determined by the Borrower and as supported
by such estimates or bids from contractors or subcontractors or such other
supporting information as the Agent may reasonably request, (c) the Borrower
has delivered to the Agent a certificate on or prior to the date the
application would otherwise be required pursuant to this Section 4.02(g) in
the form described in clause (x) above and also certifying its determination
as required by preceding clause (b) and certifying the sufficiency of business
interruption insurance as required by succeeding clause (d), and (d) the
Borrower has delivered to the Agent such evidence as the Agent may reasonably
request in form and substance satisfactory to the Agent establishing that the
Borrower has sufficient business interruption insurance and that the Borrower
will be receiving regular payments thereunder in such amounts and at such
times as are necessary to satisfy all obligations and expenses of the Borrower
(including, without limitation, all debt service requirements, including
pursuant to this Agreement) without any delay or extension thereof, for the
period from the date of the respective casualty, condemnation or other event
giving rise to the Recovery Event and continuing through the completion of the
replacement or restoration of the respective properties or assets, then the
entire amount and not just the portion in excess of $5,000,000 shall be
deposited with the Agent pursuant to a cash collateral arrangement
satisfactory to the Agent whereby such proceeds together with other amounts
available to Holdings and its Subsidiaries shall be disbursed to the Borrower
from time to time as needed to pay actual costs incurred by it in connection
with the replacement or restoration of the respective properties or assets
(pursuant to such certification requirements as may reasonably be established
by the Agent), provided further that at any time while an Event of Default has
occurred and is continuing, the Required Banks may direct the Agent (in which
case the Agent shall, and is hereby authorized by the Borrower to, follow said
directions) to apply any or all proceeds then on deposit in such collateral
account to the repayment of Obligations hereunder in the same manner as
proceeds would be applied pursuant to the Security Agreement, and provided
further, that if all or any portion of such proceeds not required to be
applied to the repayment of Term Loans pursuant to the second preceding
proviso (whether pursuant to clause (x) or (y) thereof) are not so used within
18 months after the date of
-19-
the respective Recovery Event, such remaining portion shall be applied on the
date which is 18 months after the date of the respective Recovery Event as a
mandatory repayment of principal of outstanding Term Loans in accordance with
the requirements of Section 4.02(h) and (i).
(h) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans of the respective Tranche
which are to be repaid and, in the case of Eurodollar Loans, the specific
Borrowing or Borrowings of the respective Tranche pursuant to which made,
provided that: (i) repayments of Eurodollar Loans pursuant to this Section
4.02 may only be made on the last day of an Interest Period applicable thereto
unless all Eurodollar Loans of the respective Tranche with Interest Periods
ending on such date of required repayment and all Base Rate Loans of the
respective Tranche have been paid in full; (ii) if any repayment of Eurodollar
Loans made pursuant to a single Borrowing shall reduce the outstanding
Eurodollar Loans made pursuant to such Borrowing to an amount less than
$3,000,000 in the case of a Borrowing of Term Loans or $1,000,000 in the case
of a Borrowing of Revolving Loans, such Borrowing shall be converted at the
end of the then current Interest Period into a Borrowing of Base Rate Loans;
and (iii) each repayment of any Loans made pursuant to a Borrowing shall be
applied pro rata among such Loans. In the absence of a designation by the
Borrower as described in the preceding sentence, the Agent shall, subject to
the above, make such designation in its sole discretion.
(i) Each amount required to be applied to Term Loans (or to the
Total Term Loan Commitment) pursuant to Sections 4.02(c), (d), (e), (f) and
(g) shall be applied to reduce the then remaining Term Loan Scheduled
Repayments pro rata based upon the then remaining amount of each Term Loan
Scheduled Repayment after giving effect to all prior reductions thereto.
(j) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in
full on the Swingline Expiry Date and (ii) all other then outstanding Loans of
any Tranche shall be repaid in full on the respective Maturity Date for such
Tranche of Loans.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made
to the Agent for the account of the Bank or Banks entitled thereto not later
than 12:00 Noon (New York time) on the date when due and shall be made in
Dollars in immediately available funds at the Payment Office of the Agent.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding any tax imposed on or measured by the net income or
net profits of a Bank pursuant to the laws of the jurisdiction in which it is
organized or in which the principal office or applicable lending office of
such Bank is located or any subdivision thereof or therein) and all interest,
penalties or similar liabilities with respect thereto (all such non-excluded
taxes, levies, imposts, duties, fees, assessments or other charges being
referred to collectively, as "Taxes"). If any Taxes are so levied or imposed,
the Borrower agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under
this Agreement or under any Note, after
-20-
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. The Borrower will furnish to
the Agent within 45 days after the date the payment of any Taxes is due
pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower or, if the relevant taxing authority does not issue
such receipts, such other evidence of payment as may be reasonably
satisfactory to the Agent. The Borrower agrees to indemnify and hold harmless
each Bank, and reimburse such Bank upon its written request, for the amount of
any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Agent on or prior to the
Effective Date, or in the case of a Bank that is an assignee or transferee of
an interest under this Agreement pursuant to Section 1.13 or 13.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer) on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Note or (ii) if the Bank is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form 1001 or 4224 pursuant to clause (i) above, (x) a certificate
substantially in the form of Exhibit D (any such certificate, a "Section
4.04(b)(ii) Certificate") and (y) two accurate and complete original signed
copies of Internal Revenue Service Form W-8 (or successor form) certifying to
such Bank's entitlement on the date of such certificate to a complete
exemption from United States withholding tax with respect to payments of
interest to be made under this Agreement and under any Note. In addition, each
Bank agrees that from time to time after the Effective Date, when a lapse in
time or change in circumstances renders the previous certification obsolete or
inaccurate in any material respect, it will deliver to the Borrower and the
Agent two new accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001, or Form W-8 and a Section 4.04(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to
confirm or establish the entitlement of such Bank to a continued exemption
from or reduction in United States withholding tax with respect to payments
under this Agreement and any Note, or it shall immediately notify the Borrower
and the Agent of its inability to deliver any such Form or Certificate. Such
Bank shall not be required to deliver any such Form or Certificate pursuant to
this Section 4.04(b) if such inability results from a change after the
Effective Date (or, in the case of a Bank that is not a Bank hereunder on the
Effective Date, a change after the date such Bank became an assignee or a
transferee of an interest hereunder) in any applicable law, treaty,
governmental rule, regulation, guideline or order, or in the interpretation
thereof. Notwithstanding anything to the contrary contained in Section
4.04(a), but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to
do so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, Fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes to the extent that such Bank has not provided to the Borrower U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding and (y) the Borrower shall not be obligated pursuant
to Section 4.04(a) hereof to gross-up payments to be made to a Bank in respect
of income or similar taxes imposed by the United States if (I) such Bank has
not provided to the Borrower the Internal Revenue Service Forms required to be
provided to the Borrower pursuant to this Section 4.04(b) or (II) in the case
of a payment, other than interest, to a Bank described in clause (ii) above,
to the extent that such Forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained
in the preceding sentence or elsewhere in this Section 4.04 and except as set
forth in Section 13.04(b), the Borrower agrees to pay any additional amounts
and to indemnify each Bank in the
-21-
manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence
as a result of any change on or after the Effective Date in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such
Taxes.
(c) If the Borrower pays any additional amount under this Section
4.04 to a Bank and such Bank determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
Bank shall pay to the Borrower an amount that the Bank shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was
obtained by the Bank in such year as a consequence of such Tax Benefit;
provided, however, that (i) any Bank may determine, in its sole discretion
consistent with the policies of such Bank, whether to seek a Tax Benefit; (ii)
any Taxes that are imposed on a Bank as a result of a disallowance or
reduction (including through the expiration of any tax credit carryover or
carryback of such Bank that otherwise would not have expired) of any Tax
Benefit with respect to which such Bank has made a payment to the Borrower
pursuant to this Section 4.04(c) shall be treated as a Tax for which the
Borrower is obligated to indemnify such Bank pursuant to this Section 4.04
without any exclusions or defenses; and (iii) nothing in this Section 4.04(c)
shall require the Bank to disclose any confidential information to the
Borrower (including, without limitation, its tax returns).
SECTION 5. Conditions Precedent to Initial Credit Events. The
obligation of each Bank to make Loans, and the obligation of BTCo to issue
Letters of Credit, on the Initial Borrowing Date, is subject at the time of
the making of such Loans or the issuance of such Letters of Credit to the
satisfaction of the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent for the account of each of the Banks the
appropriate Term Note and Revolving Note executed by the Borrower, and to BTCo
the Swingline Note executed by the Borrower, in each case in the amount,
maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the Agent
shall have received a certificate dated the Initial Borrowing Date signed on
behalf of the Borrower by the President or any Vice President of the Borrower
stating that all of the conditions in Sections 5.06, 5.07, 5.08, 5.12, 5.13
and 6.01 have been satisfied on such date (except to the extent that any such
condition is required to be satisfactory to the Agent or any Bank).
5.03 Opinions of Counsel. On the Initial Borrowing Date, the Agent
shall have received (i) from Xxxxxxx Xxxx & Xxxxx LLP, counsel to each Credit
Party, an opinion addressed to the Agent and each of the Banks and dated the
Initial Borrowing Date covering the matters set forth in Exhibit E and such
other matters incident to the transaction contemplated herein as the Agent may
request and (ii) from local counsel to the Borrower satisfactory to the Agent,
opinions each of which shall be in form and substance satisfactory to the
Agent and the Required Banks and shall cover the perfection of the security
interests granted pursuant to the Security Documents and such other matters
incident to the transactions contemplated herein as the Agent may reasonably
request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial
Borrowing Date, the Agent shall have received a certificate, dated the Initial
Borrowing Date, signed by the President or any
-22-
Vice President of each Credit Party, and attested to by the Secretary or any
Assistant Secretary of such Credit Party, in the form of Exhibit F with
appropriate insertions, together with copies of the Certificate of
Incorporation and By-Laws of such Credit Party and the resolutions of such
Credit Party referred to in such certificate, and the foregoing shall be
reasonably acceptable to the Agent.
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements in connection with the
transactions contemplated by this Agreement and the other Documents shall be
satisfactory in form and substance to the Agent and the Required Banks, and
the Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals,
good standing certificates and bring-down telegrams, if any, which the Agent
reasonably may have requested in connection therewith, such documents and
papers where appro priate to be certified by proper corporate or governmental
authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Employment Agreements; Debt
Agreements. On the Initial Borrowing Date, there shall have been delivered to
the Agent true and correct copies, certified as true and complete by an
appropriate officer of the relevant Credit Party of (i) all Plans that are
subject to Title IV of ERISA (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500- series, a copy of the
most recent such report (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan that
is a "single- employer plan," as defined in Section 4001(a)(15) of ERISA, the
most recently prepared actuarial valuation therefor) (provided that the
foregoing shall apply in the case of any multiemployer plan, as defined in
4001(a)(3) of ERISA, only to the extent that any document described therein is
in the possession of Holdings or any Subsidiary of Holdings or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of any
such plan) (collectively, the "Employee Benefit Plans"), (ii) all agreements
entered into by such Credit Party or any of its Subsidiaries governing the
terms and relative rights of its capital stock and any agreements entered into
by shareholders relating to any such entity with respect to its capital stock
(collectively, the "Shareholders' Agreements"), (iii) all agreements with
members of, or with respect to, the management of such Credit Party
(collectively, the "Management Agreements"), (iv) all collective bargaining
agreements applying or relating to any employee of such Credit Party or any of
its Subsidiaries (collectively, the "Collective Bargaining Agreements"), (v)
all material employment agreements entered into by Holdings or any of its
Subsidiaries (collectively, the "Employment Agreements") and (vi) all
agreements evidencing or relating to Indebtedness of such Credit Party or any
of its Subsidiaries which is to remain outstanding after giving effect to the
incurrence of Loans on the Initial Borrowing Date (collectively, the "Debt
Agreements"); all of which Employee Benefit Plans, Shareholders' Agreements,
Management Agreements, Collective Bargaining Agreements, Employment Agreements
and Debt Agreements shall be in form and substance reasonably satisfactory to
the Agent and the Required Banks and shall be in full force and effect on the
Initial Borrowing Date.
5.06 Financings. (a) On or prior to the Initial Borrowing Date, (i)
Holdings shall have received gross cash proceeds of at least $81,000,000 from
the Equity Financing (of which no more than [$64,800,000] may be received from
the issuance of Holdings Preferred Stock), (ii) Holdings shall have received
gross cash proceeds in an aggregate principal amount of at least $25,000,000
from the issuance by it of the Holdings Senior Discount Notes, (iii) Holdings
shall have contributed the full amount of the gross cash proceeds received by
it from the Equity Financing and the issuance of the Holdings Senior Discount
Notes to the capital of the Borrower as a common equity contribution in
exchange for 100% of the issued and outstanding shares of common stock of the
Borrower and (iv) the Borrower shall have utilized the full amount of such
cash contributions to make payments owing in connection with the Transaction
prior to utilizing any proceeds of Loans for such purpose.
-23-
(b) On or prior to the Initial Borrowing Date, the Borrower shall
have received gross cash proceeds in an aggregate principal amount of at least
$150,000,000 from the issuance by it of the Borrower Senior Discount Notes.
(c) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Agent true and correct copies of the Equity Financing
Documents, the Holdings Senior Note Documents and the Borrower Senior Note
Documents, and all of the terms and conditions of the Equity Financing
Documents, the Holdings Senior Note Documents and the Borrower Senior Note
Documents shall be reasonably satisfactory in form and substance to the Agent
and the Required Banks. All conditions precedent to the consummation of the
Equity Financing, the issuance of the Holdings Senior Discount Notes and the
issuance of the Borrower Senior Discount Notes as set forth in the Equity
Financing Documents, the Holdings Senior Note Documents and the Borrower
Senior Note Documents, respectively, shall have been satisfied, and not waived
unless consented to by the Agent and the Required Banks (which consent shall
not be unreasonably withheld or delayed), to the reasonable satisfaction of
the Agent and the Required Banks. The Equity Financing, the issuance of the
Holdings Senior Discount Notes and the issuance of the Borrower Senior
Discount Notes shall have been consummated, in each case in all material
respects in accordance with the terms and conditions of the applicable
Documents therefor and all applicable laws.
5.07 Consummation of the Acquisition . (a) On the Initial Borrowing
Date, the Acquisition shall have been consummated in all material respects in
accordance with the Acquisition Documents and all applicable laws, and each of
the conditions precedent to the consummation of the Acquisition shall have
been satisfied and not waived in any material respect except with the consent
of the Agent and the Required Banks (which consent shall not be unreasonably
withheld).
(b) On or prior to the Initial Borrowing Date, there shall have been
delivered to the Agent true and correct copies of the Acquisition Documents
and the Merger Documents, and all of the terms and conditions of the
Acquisition Documents and the Merger Documents shall be reasonably
satisfactory in form and substance to the Agent and the Required Banks.
5.08 Refinancing. (a) On or prior to the Initial Borrowing Date, the
total commitments in respect of the Indebtedness to be Refinanced shall have
been terminated, and all loans and notes with respect thereto shall have been
repaid in full, together with interest thereon, all letters of credit issued
thereunder shall have been terminated and all other amounts (including
premiums) owing pursuant to the Indebtedness to be Refinanced shall have been
repaid in full and all documents in respect of the Indebtedness to be
Refinanced and all guarantees with respect thereto shall have been terminated
(except as to indemnification provisions which may survive to the extent
provided therein) and be of no further force and effect.
(b) On or prior to the Initial Borrowing Date, the creditors in
respect of the Indebtedness to be Refinanced shall have terminated and
released any and all security interests and Liens on the assets owned by
Holdings and its Subsidiaries. The Agent shall have received such releases of
security interests in and Liens on the assets owned by Holdings and its
Subsidiaries as may have been reasonably requested by the Agent, which
releases shall be in form and substance reasonably satisfactory to the Agent.
Without limiting the foregoing, there shall have been delivered (i) proper
termination statements (Form UCC-3 or the appropriate equivalent) for filing
under the UCC of each jurisdiction where a financing statement (Form UCC-1 or
the appropriate equivalent) was filed with respect to Holdings or any of its
Subsidiaries in connection with the security interests created with respect to
the Indebtedness to be Refinanced and the documentation related thereto, (ii)
termination or reassignment of any security interest in, or Lien on, any
patents, trademarks, copyrights, or similar interests of Holdings or any of
its Subsidiaries on which filings
-24-
have been made, (iii) terminations of all mortgages, leasehold mortgages,
deeds of trust and leasehold deeds of trust created with respect to property
of Holdings or any of its Subsidiaries, in each case, to secure the
obligations in respect of the Indebtedness to be Refinanced, all of which
shall be in form and substance reasonably satisfactory to the Agent, and (iv)
all collateral owned by Holdings and its Subsidiaries in the possession of any
of the creditors in respect of the Indebtedness to be Refinanced or any
collateral agent or trustee under any related security document shall have
been returned to Holdings or its respective Subsidiary, as the case may be.
(c) The Agent shall have received evidence, in form and substance
reasonably satisfactory to it, that the matters set forth in this Section 5.08
have been satisfied as of the Initial Borrowing Date.
5.09 Pledge Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Pledge Agreement
in the form of Exhibit G (as amended, modified or supplemented from time to
time, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as pledgee thereunder, all of the Pledged Securities, if any, referred
to therein and owned by such Credit Party, (x) endorsed in blank in the case
of promissory notes constituting Pledged Securities and (y) together with
executed and undated stock powers in the case of capital stock constituting
Pledged Securities.
5.10 Security Agreement. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered the Security
Agreement in the form of Exhibit H (as modified, supplemented or amended from
time to time, the "Security Agreement") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of
the Collateral Agent, desirable to perfect the security interests
purported to be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing
statements that name any Credit Party or any of its Subsidiaries as
debtor and that are filed in the jurisdictions referred to in clause (i)
above, together with copies of such other financing statements that name
any Credit Party or any of its Subsidiaries as debtor (none of which
shall cover the Collateral except to the extent evidencing Permitted
Liens or in respect of which the Collateral Agent shall have received
termination statements (Form UCC-3 or the equivalent) as shall be
required by local law fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable to perfect the
security interests intended to be created by the Security Agreement; and
(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken.
5.11 Consent Letter. On the Initial Borrowing Date, the Agent shall
have received a letter from CT Corporation System, presently located at 0000
Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000, substantially in the form of Exhibit J,
indicating its consent to its appointment by each Credit Party as such Credit
Party's agent to receive service of process as specified in Section 13.08.
-25-
5.12 Adverse Change, etc. (a) On the Initial Borrowing Date, nothing
shall have occurred since September 30, 1997 (and the Banks shall not have
become aware of any facts or conditions not previously known) which the Agent
or the Required Banks shall determine has, or could reasonably be expected to
have, a material adverse effect on the rights or remedies of the Agent or the
Banks, or on the ability of any Credit Party to perform its Obligations to the
Agent and the Banks or which has, or could reasonably be expected to have, a
materially adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and
its Subsidiaries taken as a whole.
(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and material third party approvals in
connection with the Transaction and the transactions contemplated by the
Credit Documents and otherwise referred to herein or therein shall have been
obtained and remain in effect, and all applicable waiting periods shall have
expired without any action being taken by any competent governmental authority
which restrains, prevents or imposes materially adverse conditions upon the
consummation of the Transaction or the other transactions contemplated by the
Credit Documents and otherwise referred to herein or therein. Additionally,
there shall not exist any judgment, order, injunction or other restraint of
any governmental authority issued or filed or a hearing seeking injunctive
relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the consummation of the Transaction, the
other transactions contemplated by the Credit Documents or the making of the
Loans.
(c) On the Initial Borrowing Date, there shall not have occurred and
be continuing any material adverse change to the syndication market for credit
facilities similar in nature to this Agreement and there shall not have
occurred and be continuing a material disruption or a material adverse change
in financial, banking or capital markets that would have a material adverse
effect on the syndication, in each case as determined by the Agent in its
reasonable discretion.
5.13 Litigation. On the Initial Borrowing Date, no litigation by any
entity (private or governmental) shall be pending or threatened in writing
against any Credit Party with respect to this Agreement or any documentation
executed in connection herewith or the transactions contemplated hereby, or
with respect to the Transaction or which the Agent or the Required Banks shall
determine could reasonably be expected to have a materially adverse effect on
the Transaction or on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
5.14 Fees, etc. On the Initial Borrowing Date, the Borrower shall
have paid to the Agent and the Banks all costs, fees and expenses (including,
without limitation, the reasonable legal fees and expenses of the Agent's
counsel and local counsel) payable to the Agent and the Banks to the extent
then due.
5.15 Solvency Letter; Environmental Analyses; Insurance Certificate.
On the Initial Borrowing Date, the Borrower shall cause to be delivered to the
Agent (i) a solvency letter from Valuation Research, Inc., in form and
substance satisfactory to the Required Banks, setting forth the conclusion
that, after giving effect to the Transaction and the incurrence of all
financings contemplated herein, the Borrower and its Subsidiaries, taken as a
whole, are not insolvent and will not be rendered insolvent by the
indebtedness incurred in connection herewith, will not be left with
unreasonably small capital with which to engage in their businesses and will
not have incurred debts beyond their ability to pay such debts as they mature,
(ii) environmental and hazardous material assessments and analysis in scope
and in form and substance reasonably satisfactory to the Agent and the
Required Banks, and (iii) evidence of insurance complying with the
requirements of Section 8.03 for the business and properties of the Borrower
and its Subsidiaries, in scope, form and substance satisfactory to the Agent
and the Required Banks and naming the Collateral
-26-
Agent as an additional insured and/or loss payee where appropriate, and
stating that such insurance shall not be canceled or revised without 30 days'
prior written notice by the insurer to the Agent.
5.16 Financial Statements; Pro Forma Financial Statements; Financial
Projections. On or prior to the Initial Borrowing Date, the Agent shall have
received true and correct copies of the historical financial statements, the
pro forma financial statements and the Projections referred to in Sections
7.05(a) and (d), which historical financial statements, pro forma financial
statements and projections shall be in form and substance reasonably
satisfactory to the Agent and the Required Banks.
SECTION 6. Conditions Precedent to All Credit Events. The obligation
of each Bank to make Loans (including Loans made on the Initial Borrowing
Date, but excluding Mandatory Borrowings made thereafter, which shall be made
as provided in Section 1.01(d)), and the obligation of BTCo to issue any
Letter of Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist
no Default or Event of Default and (ii) all representations and warranties
contained herein shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on the
date of the making of such Credit Event (it being understood and agreed that
any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (excluding Swingline Loans), the Agent shall have received
a Notice of Borrowing meeting the requirements of Section 1.03(a). Prior to
the making of any Swingline Loan, BTCo shall have received the notice required
by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Agent and
BTCo shall have received a Letter of Credit Request meeting the requirements
of Section 2.03.
The acceptance of the proceeds of each Credit Event (occurring on
the Initial Borrowing Date and thereafter) shall constitute a representation
and warranty by Holdings and the Borrower to the Agent and each of the Banks
that all the conditions specified in Section 5 (with respect to Credit Events
on the Initial Borrowing Date) and in this Section 6 (with respect to Credit
Events on and after the Initial Borrowing Date) and applicable to such Credit
Event exist as of that time. All of the Notes, certificates, legal opinions
and other documents and papers referred to in Section 5 and in this Section 6,
unless otherwise specified, shall be delivered to the Agent at the Notice
Office for the account of each of the Banks and, except for the Notes, in
sufficient counterparts or copies for each of the Banks and shall be in form
and substance reasonably satisfactory to the Agent and the Required Banks.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, each of Holdings
and the Borrower makes the following representations, warranties and
agreements, in each case after giving effect to the Transaction, all of which
shall survive the execution and delivery of this Agreement and the Notes and
the making of the Loans and issuance of the Letters of Credit, with the
occurrence of each Credit Event on or after the Initial Borrowing Date being
deemed to constitute a representation and warranty that the matters specified
in this Section 7 are true and correct on and as of the Initial Borrowing Date
and in all material respects on the date of each such Credit Event (it being
-27-
understood and agreed that any representation or warranty which by its terms
is made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
7.01 Corporate and Other Status. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in each
jurisdiction where the ownership, leasing or operation of its property or the
conduct of its business requires such qualifications except for failures to be
so qualified which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit Party has
the corporate power and authority to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and per
formance by it of each of such Documents. Each Credit Party has duly executed
and delivered each of the Documents to which it is party, and each of such
Documents constitutes its legal, valid and binding obligation enforceable in
accordance with its terms, except to the extent that the enforceability
thereof may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium or other similar laws generally affecting creditors' rights and by
equitable principles (regardless of whether enforcement is sought in equity or
at law).
7.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of
any law, statute, rule or regulation or any order, writ, injunction or decree
of any court or governmental instrumentality, (ii) will, after giving effect
to any waivers, conflict with or result in any material breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Security Documents) upon any of the
property or assets of Holdings or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to which
Holdings or any of its Subsidiaries of Holdings is a party or by which it or
any of its property or assets is bound or to which it may be subject or (iii)
will violate any provision of the Certificate of Incorporation or By-Laws of
Holdings or any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with
(other than the filing of the Financing Statements relating to the Security
Agreement and except as have otherwise been obtained or made on or prior to
the Initial Borrowing Date), or exemption by, any governmental or public body
or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance of
any Document or (ii) the legality, validity, binding effect or enforceability
of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (i) The balance sheets of Universal as at
September 30, 1997 and the related statements of income, cash flows and
shareholders' equity of Universal for the fiscal six month period ended on
such date, copies of which have been furnished to the Banks prior to the
Effective Date and (ii) the audited balance sheets of Universal for the fiscal
years ended in March 31, 1995, March 31, 1996 and March 31, 1997 and the
-28-
related statements of income, cash flows and shareholders' equity of Universal
for the fiscal years ended on such dates, which annual financial statements
have been examined by KPMG Peat Marwick LLP, certified public accountants, who
delivered an unqualified opinion with respect thereto and copies of which have
heretofore been delivered to each Bank, present fairly in all material
respects the financial position of Universal at the date of such balance
sheets and the results of the operations of Universal for the periods covered
thereby. Subject to year end audit adjustments and footnote disclosures
required by GAAP in the case of clause (i), all of the foregoing historical
financial statements have been prepared in accordance with generally accepted
accounting principles consistently applied. The pro forma consolidated
financial statements of Holdings and its Subsidiaries as of December 31, 1997,
in each case after giving effect to the Transaction and the financing
therefor, copies of which have been furnished to the Banks prior to the
Initial Borrowing Date, present fairly in all material respects the pro forma
consolidated financial position of Holdings and its Subsidiaries as of
December 31, 1997. After giving effect to the Transaction (but for this
purpose assuming that the Transaction and the related financing had occurred
prior to March 31, 1997), since September 30, 1997, there has been no material
adverse change in the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the Borrower or of Holdings
and its Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date and after giving effect
to the Transaction and to all Indebtedness (including any Loans) being
incurred or assumed and Liens created by the Credit Parties in connection
therewith (i) the sum of the assets, at a fair valuation, of each of the
Borrower on a stand-alone basis and of Holdings and its Subsidiaries taken as
a whole will exceed its debts; (ii) each of the Borrower on a stand-alone
basis and Holdings and its Subsidiaries taken as a whole has not incurred and
does not intend to incur, and does not believe that it will incur, debts
beyond its ability to pay such debts as such debts mature; and (iii) each of
the Borrower on a stand alone basis and Holdings and its Subsidiaries taken as
a whole will have sufficient capital with which to conduct its business. For
purposes of this Section 7.05(b), "debt" means any liability on a claim, and
"claim" means (A) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (B) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be
computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can reasonably be expected
to become an actual or matured liability.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) or the Documents, there are as of the Initial
Borrowing Date no liabil ities or obligations with respect to Holdings or any
of its Subsidiaries of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) which, either in dividually or
in aggregate, could reasonably be expected to be material to the Borrower or
to Holdings and its Subsidiaries taken as a whole. As of the Initial Borrowing
Date, neither Holdings nor the Borrower knows of any basis for the assertion
against it or any of its Subsidiaries of any liability or obli gation of any
nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) or the Documents which, either
individually or in the aggregate, could reasonably be expected to be material
to the Borrower or to Holdings and its Subsidiaries taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections
delivered to the Agent and the Banks prior to the Initial Borrowing Date have
been prepared in good faith and are based on reasonable assumptions, and there
are no statements or conclusions in the Projections which are based upon or
include information known to Holdings or the Borrower to be misleading in any
material respect or which fail to
-29-
take into account material information known to Holdings or the Borrower
regarding the matters reported therein. On the Initial Borrowing Date,
Holdings and the Borrower believe that the Projections are reasonable and
attainable, it being recognized by the Banks, however, that projections as to
future events are not to be viewed as facts and that the actual results during
the period or periods covered by the Projections may differ from the projected
results and that the differences may be material.
7.06 Litigation. There are no actions, suits or proceedings pending
or, to the best knowledge of Holdings and the Borrower, threatened (i) with
respect to the Transaction or any Document, or (ii) that could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as
a whole) furnished by any Credit Party in writing to the Agent (including,
without limitation, all information contained in the Documents) for purposes
of or in connection with this Agreement, the other Credit Documents or any
transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by any Credit Party in
writing to the Agent or any Bank will be, true and accurate in all material
respects on the date as of which such information is dated or certified and
not incomplete by omitting to state any fact necessary to make such
information (taken as a whole) not misleading in any material respect at such
time in light of the circumstances under which such information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Term Loans shall be used by the Borrower (i) to effect the Transaction and
(ii) to pay fees and expenses related to the Transaction.
(b)(i) Up to $38,000,000 of Revolving Loans may be used for the
purposes described in Section 7.08(a) and (ii) proceeds of all other Revolving
Loans and all Swingline Loans shall be used for the Borrower's general
corporate and working capital purposes.
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or
be inconsistent with the provisions of Regulation G, T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 Tax Returns and Payments. Holdings and each of its Subsidiaries
have timely filed or caused to be timely filed with the appropriate taxing
authority, all Federal, state and other returns, statements, forms and reports
for taxes, domestic and foreign (the "Returns") required to be filed by or
with respect to the income, properties or operations of Holdings and/or any of
its Subsidiaries. The Returns accurately reflect all material liability for
taxes of Holdings and its Subsidiaries for the periods covered thereby.
Holdings and each of its Subsidiaries have paid all taxes payable by them
other than taxes contested in good faith and for which adequate reserves have
been established in accordance with generally accepted accounting principles.
Except as disclosed in the financial statements referred to in Section
7.05(a), as of the Initial Borrowing Date, there is no action, suit,
proceeding, investigation, audit, or claim now pending or, to the knowledge of
Holdings and the Borrower, threatened by any authority regarding any taxes
relating to Holdings or any of its Subsidiaries. As of the Initial Borrowing
Date, neither Holdings nor any of its Subsidiaries has entered into an
agreement or waiver or been requested to enter into an agreement or waiver
extending any statute of limitations relating to the payment or collection of
U.S. Federal income taxes of Holdings or any of its Subsidiaries or is aware
of any agreement or waiver
-30-
extending any statute of limitations relating to the payment or collection of
other taxes of Holdings or any of its Subsidiaries. None of Holdings or any of
its Subsidiaries has provided, with respect to itself or property held by it,
any consent under Section 341 of the Code.
7.10 Compliance with ERISA. (a) Except as set forth on Schedule II;
each Plan (and each related trust, insurance contract or fund) is in
substantial compliance with its terms and with all applicable laws, including,
without limitation, ERISA and the Code; each Plan (and each related trust, if
any) which is intended to be qualified under Section 401(a) of the Code has
received a determination letter from the Internal Revenue Service to the
effect that it meets the requirements of Sections 401(a) and 501(a) of the
Code; no Reportable Event has occurred; to the best knowledge of Holdings and
the Borrower, each Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is in substantial compliance with its terms and with all
applicable laws, including, without limitation, ERISA and the Code; no Plan
which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is
insolvent or in reorganization; no Plan which is subject to Title IV of ERISA
has an Unfunded Current Liability; no Plan which is subject to Section 412 of
the Code or Section 302 of ERISA has an accumulated funding deficiency, within
the meaning of such sections of the Code or ERISA, or has applied for or
received a waiver of an accumulated funding deficiency or an extension of any
amortization period, within the meaning of Section 412 of the Code or Section
303 or 304 of ERISA; to the best knowledge of Holdings and the Borrower, no
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
has an Unfunded Current Liability; all contributions required to be made with
respect to a Plan have been timely made, neither Holdings nor any Subsidiary
of Holdings nor any ERISA Affiliate has incurred any material liability
(including any indirect, contingent or secondary liability) to or on account
of a Plan pursuant to Section 409, 502(i), 502(l), 515, 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the
Code or expects to incur any such liability under any of the foregoing
sections with respect to any Plan; no condition exists which presents a
material risk to Holdings or any Subsidiary of Holdings or any ERISA Affiliate
of incurring a liability to or on account of a Plan pursuant to the foregoing
provisions of ERISA and the Code; no proceedings have been instituted to
terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment
of assets of any Plan (other than routine claims for benefits) is pending, to
the best knowledge of Holdings and the Borrower, expected or threatened; to
the best knowledge of Holdings, using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title IV of ERISA, the
aggregate liabilities of Holdings and its Subsidiaries and its ERISA
Affiliates to all Plans which are multiemployer plans (as defined in Section
4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as of
the close of the most recent fiscal year of each such Plan ended prior to the
date of the most recent Credit Event, would not exceed $50,000; no lien
imposed under the Code or ERISA on the assets of Holdings or any Subsidiary of
Holdings or any ERISA Affiliate exists or is likely to arise on account of any
Plan; and Holdings and its Subsidiaries may cease contributions to or
terminate any employee benefit plan maintained by any of them without
incurring any material liability.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Holdings nor any of its Subsidiaries has incurred
any obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of Holdings' most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
-31-
7.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the
Security Agreement Collateral described therein, and the Security Agreement
creates a perfected lien on, and security interest in, all right, title and
interest of the Credit Parties, in all of the Security Agreement Collateral
described therein, subject to no other Liens other than Permitted Liens. The
recordation of the Assignment of Security Interest in U.S. Patents and
Trademarks in the form attached to the Security Agreement in the United States
Patent and Trademark Office together with filings on Form UCC-1 made pursuant
to the Security Agreement will be effective, under federal law, to perfect the
security interest granted to the Collateral Agent in the trademarks and
patents covered by the Security Agreement and the recordation of the
Assignment of Security Interest in U.S. Copyrights in the form attached to the
Security Agreement with the United States Copyright Office together with
filings on Form UCC-1 made pursuant to the Security Agreement will be
effective under federal law to perfect the security interest granted to the
Collateral Agent in the copyrights covered by the Security Agreement. The
Credit Parties have good and marketable title to all Security Agreement
Collateral, free and clear of all Liens except those described above in this
clause (a).
(b) The security interests created in favor of the Collateral Agent,
as pledge, for the benefit of the Secured Creditors, under the Pledge
Agreement constitute first priority perfected security interests in the
Pledged Securities described in the Pledge Agreement, subject to no security
interests of any other Person. No filings or recordings are required to
perfect (or maintain the perfection or priority of) the security interest
created in the Pledged Securities under the Pledge Agreement.
7.12 Representations and Warranties in Documents. All
representations and warranties of the Credit Parties (or their predecessors in
interest) set forth in the other Documents were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made) and shall be true and correct in all material
respects as of the Initial Borrowing Date if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
7.13 Properties. Holdings and each of its Subsidiaries have good and
marketable title to all material properties owned by them, including all
property owned by them, including all property reflected in the balance sheets
referred to in Section 7.05(a) (except as sold or otherwise disposed of since
the date of such balance sheet in the ordinary course of business), free and
clear of all Liens, other than (i) as referred to in the balance sheet or in
the notes thereto or (ii) Liens otherwise permitted by Section 9.01.
7.14 Capitalization. On the Initial Borrowing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, (i)
the authorized capital stock of Holdings shall consist of (a) 1,000,000 shares
of common stock, $.01 par value per share, of which 325,000 shares shall be
issued and outstanding and (b) 5,000,000 shares of preferred stock, of which
2,000,000 have been designated Series A Preferred Stock, of which 1,300,000
shall be issued and outstanding and (ii) the authorized capital stock of the
Borrower shall consist of 5,000 shares of common stock, $10 par value per
share, of which 4,900 shall be issued and outstanding, all of the shares of
which shall be issued and outstanding and owned by Holdings. All such
outstanding shares of common stock have been duly and validly issued, are
fully paid and nonassessable and are free of preemptive rights. No Credit
Party has outstanding any securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or
any options for the purchase of, or any agreements providing for the
-32-
issuance (contingent or otherwise) of, or any calls, commitments or claims of
any character relating to, its capital stock.
7.15 Subsidiaries. As of the Initial Borrowing Date, Holdings has no
Subsidiaries other than the Borrower and the Borrower has no Subsidiaries.
7.16 Compliance with Statutes, etc. Each of Holdings and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property (including applicable statutes, regulations, orders
and restrictions relating to environmental standards and controls), except
such noncompliances as could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
7.17 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
7.18 Public Utility Holding Company Act. Neither Holdings nor any of
its Subsidiaries 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, as amended.
7.19 Environmental Matters. (a) Holdings and each of its
Subsidiaries have complied in all material respects with, and on the date of
such Credit Event are in compliance in all material respects with, all
applicable Environmental Laws and the requirements of any permits issued under
such Environmental Laws. There are no pending, past or threatened
Environmental Claims against Holdings or any of its Subsidiaries (including
any such claim arising out of the ownership or operation by Holdings or any of
its Subsidiaries of any Real Property no longer owned by Holdings or any of
its Subsidiaries) or any Real Property owned or operated by Holdings or any of
its Subsidiaries. There are no facts, circumstances, conditions or occurrences
with respect to any Real Property owned or operated by Holdings or any of its
Subsidiaries or any business or operations of Holdings or any of its
Subsidiaries (including any Real Property formerly owned or operated by
Holdings or any of its Subsidiaries but no longer owned by Holdings or any of
its Subsidiaries or any business or operations thereof) or any property
adjoining or in the vicinity of any such Real Property that could reasonably
be expected (i) to form the basis of an Environmental Claim against Holdings
or any of its Subsidiaries or any Real Property owned or operated by Holdings
or any of its Subsidiaries, or (ii) to cause any Real Property owned or
operated by Holdings or any of its Subsidiaries to be subject to any
restrictions on the ownership, occupancy or transferability of such Real
Property by Holdings or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings or any of its Subsidiaries except in a manner so as not
to give rise to an Environmental Claim. Hazardous Materials have not at any
time been Released on or from any Real Property owned or operated by Holdings
or any of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.19,
the representations made in this Section 7.19 shall not be untrue unless the
aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could reasonably be expected to
have
-33-
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and
its Subsidiaries taken as a whole.
7.20 Labor Relations. Neither Holdings nor any of its Subsidiaries
is engaged in any unfair labor practice that could reasonably be expected to
have a material adverse effect on Holdings and its Subsidiaries taken as a
whole. There is (i) no unfair labor practice complaint pending against
Holdings or any of its Subsidiaries or, to the best knowledge of Holdings or
the Borrower, threatened against any of them, before the National Labor
Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against Holdings or any of its Subsidiaries or, to the best knowledge
of Holdings or the Borrower, threatened against any of them, (ii) no strike,
labor dispute, slowdown or stoppage pending against Holdings or any of its
Subsidiaries or, to the best knowledge of Holdings or the Borrower, threatened
against Holdings or any of its Subsidiaries and (iii) to the best knowledge of
Holdings or the Borrower, no union representation question existing with
respect to the employees of Holdings or any of its Subsidiaries, except (with
respect to any matter specified in clause (i), (ii) or (iii) above, either
individually or in the aggregate) such as could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and
its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of Holdings
and its Subsidiaries owns all the patents, trademarks, permits, service marks,
trade names, copyrights, licenses, franchises and formulas, or rights with
respect to the foregoing, and has obtained assignments of all leases and other
rights of whatever nature, necessary for the present conduct of its business,
without any known conflict with the rights of others which, or the failure to
obtain which, as the case may be, would result in a material adverse effect on
the business, operations, property, assets, liabilities, condition (financial
or otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule III sets forth a true and complete list
of all Indebtedness (including Contingent Obligations) of Holdings and its
Subsidiaries as of the Initial Borrowing Date and which is to remain
outstanding after giving effect to the Transaction, (excluding the Loans, the
Letters of Credit, the Holdings Senior Discount Notes and the Borrower Senior
Discount Notes, the "Existing Indebtedness"), in each case showing the
aggregate principal amount thereof and the name of the respective borrower and
any other entity which directly or indirectly guaranteed such debt.
7.23 Transaction. At the time of consummation thereof, all material
consents and approvals of, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transaction to
the extent then required have been obtained, given, filed or taken and are or
will be in full force and effect (or effective judicial relief with respect
thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without,
in all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the
Transaction. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Transaction, or the occurrence of any Credit Event or the performance by each
Credit Party of its obligations under the respective Documents. All actions
taken by each Credit Party pursuant to or in furtherance of the Transaction
have been taken in compliance with the Documents and all applicable laws
except to the extent consented to by the Agent pursuant to Section 6.01.
7.24 Insurance. Schedule IV sets forth a true and complete listing
of all insurance maintained by Holdings and its Subsidiaries as of the Initial
Borrowing Date, and with the amounts insured (and any deductibles) set forth
therein.
-34-
SECTION 8. Affirmative Covenants. Each of Holdings and the Borrower
covenants and agrees with respect to itself and its Subsidiaries that on and
after the Effective Date and until the Total Commitments and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations (other than indemnities described in
Section 13.13) incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. Holdings will furnish to each Bank:
(a) Monthly Reports. Within 45 days after the end of each fiscal
month of Holdings, the consolidated balance sheets of Holdings and its
Subsidiaries on a consolidated basis and the Borrower and its Consolidated
Subsidiaries on a stand-alone basis as at the end of such month and the
related consolidated statements of income and retained earnings and statement
of cash flows for such month and for the elapsed portion of the fiscal year
ended with the last day of such month, in each case accompanied by an
abbreviated discussion of the operating results in such preceding fiscal
month.
(b) Quarterly Financial Statements. Within 45 days after the close
of the first three quarterly accounting periods in each fiscal year of
Holdings, the consolidated balance sheets of Holdings and its Subsidiaries on
a consolidated basis and the Borrower and its Consolidated Subsidiaries on a
stand-alone basis as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and statement
of cash flows for such quarterly accounting period and for the elapsed portion
of the fiscal year ended with the last day of such quarterly accounting
period, in each case setting forth comparative figures for the related periods
in the prior fiscal year, all of which shall be certified by the chief
financial officer of Holdings, subject to normal year-end audit adjustments.
(c) Annual Financial Statements. Within 90 days after the close of
each fiscal year of Holdings, the consolidated balance sheets of Holdings and
its Subsidiaries on a consolidated basis and the Borrower and its Consolidated
Subsidiaries on a stand-alone basis as at the end of such fiscal year and the
related consolidated statements of income and retained earnings and of cash
flows for such fiscal year setting forth comparative figures for the preceding
fiscal year and certified, in the case of the consolidated financial
statements of Holdings, by Deloitte & Touche LLP or such other independent
certified public accountants of recognized national standing reasonably
acceptable to the Agent, and in the case of the other financial statements,
certified by the chief financial officer of Holdings, together with a report
of such accounting firm stating that in the course of its regular audit of the
financial statements of Holdings and its Subsidiaries, which audit was
conducted in accordance with generally accepted auditing standards, such
accounting firm obtained no knowledge of any Default or Event of Default which
has occurred and is continuing or, if in the opinion of such accounting firm
such a Default or Event of Default has occurred and is continuing, a statement
as to the nature thereof.
(d) Management Letters. Promptly after Holdings' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" addressed to
the board of directors of Holdings or such Subsidiary from its certified
public accountants and any internal control memoranda relating thereto.
(e) Budgets. No later than the first day of each fiscal year of
Holdings, a budget in form satisfactory to the Required Banks (including
budgeted statements of income and sources and uses of cash and balance sheets)
prepared by Holdings for (x) each of the twelve months of such fiscal year
prepared in detail and (y) each of the five years immediately following such
fiscal year prepared in summary form, in each case, of Holdings and its
Subsidiaries, accompanied by the statement of the chief financial officer of
Holdings to the effect that, to the best of his knowledge, the budget is a
reasonable estimate for the period covered thereby.
-35-
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Section 8.01(b) and (c), a certificate of
the President or any Vice President of Holdings to the effect that, to the
best of such officer's knowledge, no Default or Event of Default has occurred
and is continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
(x) set forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the provisions of Sections 4.02(e)
and (f) (but with respect to Section 4.02(g) only to the extent delivered with
the financial statements required by Section 8.01(c)), 9.04 and 9.07 through
9.09 (but with respect to Section 9.07 only to the extent delivered with the
financial statements required by Section 8.01(c)), inclusive, at the end of
such fiscal quarter or year, as the case may be and (y) if delivered with the
financial statements required by Section 8.01(c), set forth the amount of
Excess Cash Flow for the respective Excess Cash Payment Period and the amount,
if any, of the Available Retained Cash Flow Amount at such time.
(g) Notice of Default or Litigation. Promptly, and in any event
within three Business Days after a senior officer of Holdings or the Borrower
obtains knowledge thereof, notice of (i) the occurrence of any event which
constitutes a Default or Event of Default and (ii) any litigation or
governmental investigation or proceeding pending (x) against Holdings or any
of its Subsidiaries which could reasonably be expected to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings or any of its
Subsidiaries or (y) with respect to the Transaction or any Document.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and reports, if any, which Holdings or any of its
Subsidiaries shall publicly file with the Securities and Exchange Commission
or any successor thereto (the "SEC") and all material financial information
delivered to holders of its Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within
ten Business Days after, an officer of any Credit Party obtains knowledge
thereof, notice of one or more of the following environmental matters, unless
such environmental matters could not, individually or when aggregated with all
other such environmental matters, be reasonably expected to materially and
adversely affect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole: (i) any pending or threatened Environmental
Claim against Holdings or any of its Subsidiaries or any Real Property owned
or operated by Holdings or any of its Subsidiaries; (ii) any condition or
occurrence on or arising from any Real Property owned or operated by Holdings
or any of its Subsidiaries that (a) results in noncompliance by Holdings or
any of its Subsidiaries with any applicable Environmental Law or (b) could
reasonably be expected to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries or any such Real Property; (iii) any
condition or occurrence on any Real Property owned or operated by Holdings or
any of its Subsidiaries that could reasonably be expected to cause such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability by Holdings or any of its Subsidiaries of such Real Property
under any Environmental Law; and (iv) the taking of any removal or remedial
action in response to the actual or alleged presence of any Hazardous Material
on any Real Property owned or operated by Holdings or any of its Subsidiaries
as required by any Environmental Law or any governmental or other
administrative agency; provided, that in any event Holdings shall deliver to
the Agent all notices received by Holdings or any of its Subsidiaries from any
government or governmental agency under, or pursuant to, CERCLA which identify
Holdings or any of its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify Holdings or any of its
Subsidiaries of potential liability under CERCLA. All such notices shall
describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action
-36-
and Holdings' or such Subsidiary's response thereto. In addition, Holdings
will provide the Agent with copies of all material communications between
Holdings or any of its Subsidiaries and any government or governmental agency
relating to Environmental Laws which could reasonably be expected to
materially and adversely effect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and
its Subsidiaries taken as a whole, all notice of any Environmental Claims, and
such detailed reports of any Environmental Claim as may reasonably be
requested by the Banks.
(j) Annual Meetings with Banks. At a date to be mutually agreed upon
between the Agent and the Borrower, Holdings shall hold a meeting with all of
the Banks at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of Holdings and its
Subsidiaries and the budgets presented for the current fiscal year of
Holdings.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings or its
Subsidiaries as any Bank may reasonably request.
8.02 Books, Records and Inspections. Holdings will, and will cause
each of its Subsidiaries to, keep proper books of record and account in which
full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Holdings
will, and will cause each of its Subsidiaries to, permit upon two Business
Days' prior notice officers and designated representatives of the Agent or the
Required Banks to visit and inspect, under guidance of officers of Holdings or
such Subsidi ary, any of the properties of Holdings or such Subsidiary, and to
examine the books of account of Holdings or such Subsidiary and discuss the
affairs, finances and accounts of Holdings or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all at such reasonable times and intervals and to such reasonable extent as
the Agent or the Required Banks may reasonably request, all such inspections
to be subject to any binding confidentiality agreement for the benefit of a
third party that prohibits the foregoing. Holdings will, and will cause each
of its Subsidiaries to, permit officers and designated representatives of the
Agent to conduct, at Holdings' expense, an annual audit of the accounts
receivable and inventories of Holdings and its Subsidiaries.
8.03 Maintenance of Property; Insurance. (a) Holdings will, and will
cause each of its Subsidiaries to, (i) keep all property necessary to the
business of Holdings and its Subsidiaries taken as a whole in reasonably good
working order and condition, (ii) maintain insurance on all such property in
at least such amounts and against at least such risks as is consistent and in
accordance with industry practice, and (iii) furnish to the Agent or the
Required Banks, upon written request, full information as to the insurance
carried. At any time that Holdings or any Subsidiary of Holdings fails to
maintain insurance (other than property or business interruption insurance) at
the levels maintained on the Initial Borrowing Date, Holdings will, or will
cause one of its Subsidiaries to, notify the Agent and the Required Banks in
writing within three Business Days thereof and, if thereafter notified by the
Required Banks to do so, Holdings or any such Subsidiary, as the case may be,
shall obtain such insurance at such levels to the extent such insurance is
reasonably available. In addition to the requirements of the immediately
preceding sentence, Holdings and the Borrower will at all times cause property
and business interruption insurance of the type maintained on the Initial
Borrowing to be maintained (with the same scope of coverage as on the Initial
Borrowing Date) at levels which are at least as great as the respective
amounts maintained on the Initial Borrowing Date.
(b) Holdings will, and will cause its Subsidiaries to, at all times
keep its insured property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to such
insurance (and any other insurance maintained by Holdings and/or its
Subsidiaries) (i)
-37-
shall be endorsed to the Collateral Agent's reasonable satisfaction for the
benefit of the Collateral Agent (including, without limitation, by naming the
Collateral Agent as loss payee and/or additional insured), (ii) shall state
that such insurance policies shall not be canceled or revised without 30 days'
prior written notice thereof by the respective insurer to the Collateral
Agent, (iii) shall provide that the respective insurers irrevocably waive any
and all rights of subrogation with respect to the Collateral Agent and the
Secured Creditors, (iv) shall, except in the case of public liability
insurance, workers' compensation and cargo insurance, provide that any losses
shall be payable notwithstanding (A) any act or neglect of Holdings or any of
its Subsidiaries, (B) the occupation or use of the properties for purposes
more hazardous than those permitted by the terms of the respective policy if
such coverage is obtainable at commercially reasonable rates and is of the
kind from time to time customarily insured against by Persons owning or using
similar property and in such amounts as are customary, (C) any foreclosure or
other proceeding relating to the insured properties or (D) any change in the
title to or ownership or possession of the insured properties and (v) shall be
deposited with the Collateral Agent. If Holdings or any of its Subsidiar ies
shall fail to insure its property in accordance with this Section 8.03, or if
Holdings or any of its Subsidiaries shall fail to so endorse and deposit all
policies or certificates with respect thereto, the Collateral Agent shall have
the right (but shall be under no obligation), upon ten Business Days' prior
notice to the Borrower, to procure such insurance and the Borrower agrees to
reimburse the Collateral Agent for all costs and expenses of procuring such
insurance.
8.04 Corporate Franchises. Holdings will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights,
franchises, licenses and patents; provided, however, that nothing in this
Section 8.04 shall prevent (i) transactions in accordance with Section 9.02 or
(ii) the withdrawal by Holdings or any of its Subsidiaries of its
qualification as a foreign corporation in any jurisdiction where such
withdrawal could not reasonably be expected to have a material adverse effect
on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken
as a whole.
8.05 Compliance with Statutes, etc. Holdings will, and will cause
each of its Subsidiaries to, comply with all applicable statutes, regulations
and orders of, and all applicable restrictions imposed by, all governmental
bodies, domestic or foreign, in respect of the conduct of its business and the
ownership of its property, except such noncompliances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Holdings will comply,
and will cause each of its Subsidiaries to comply, in all material respects
with all Environmental Laws applicable to the ownership or use of its Real
Property now or hereafter owned or operated by Holdings or any of its
Subsidiaries (except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole) ,
will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such
Real Property free and clear of any Liens imposed pursuant to such
Environmental Laws. Neither Holdings nor any of its Subsidiaries will
generate, use, treat, store, release or dispose of, or permit the generation,
use, treatment, storage, release or disposal of Hazardous Materials on any
Real Property now or hereafter owned or operated by Holdings or any of its
Subsidiaries, or transport or permit the transportation of Hazardous Materials
to or from any such Real Property, except for Hazardous Materials generated,
used, treated, stored, released or disposed of at any such Real Properties in
compliance in all material respects with all applicable Environmental Laws and
reasonably
-38-
required in connection with the operation, use and maintenance of the business
or operations of Holdings or any of its Subsidiaries.
(b) At the written request of the Agent or the Required Banks, which
request shall specify in reasonable detail the basis therefor, at any time and
from time to time, Holdings will provide, at Holdings' sole cost and expense,
an environmental site assessment report concerning any Real Property owned or
operated by Holdings and its Subsidiaries, prepared by an environmental
consulting firm reasonably satisfactory to the Agent, indicating the presence
or absence of Hazardous Materials and the potential cost of any removal or
remedial action in connection with any Hazardous Materials on such Real
Property, provided that in no event shall such request be made more often that
once every three years for any particular Real Property unless (i) the
Obligations have been declared due and payable pursuant to Section 10; (ii)
the Banks receive notice under Section 8.01(i) of any event for which notice
is required to be delivered for any such Real Property or any business or
operations of Holdings or any of its Subsidiaries; or (iii) a Default or an
Event of Default then exists. If Holdings or the Borrower fails to provide the
same within ninety days after such request was made, the Agent may order the
same, the cost of which shall be borne by the Borrower, and Holdings and the
Borrower shall grant and hereby grant to the Agent and the Banks and their
agents access to such Real Property and specifically grant the Agent and the
Banks an irrevocable non-exclusive license to under take such an assessment,
all at Holdings' expense.
8.07 ERISA. As soon as possible and, in any event, within ten (10)
business days after Holdings, any Subsidiary of Holdings or any ERISA
Affiliate knows or has reason to know of the occurrence of any of the
following, Holdings will deliver to each of the Banks a certificate of the
chief financial officer of Holdings setting forth the full details as to such
occurrence and the action, if any, that Holdings, such Subsidiary or such
ERISA Affiliate is required or proposes to take, together with any notices
required or proposed to be given to or filed with or by Holdings, the
Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or the Plan
administrator with respect thereto: (i) that a Reportable Event has occurred
(except to the extent that Holdings has previously delivered to the Banks a
certificate and notices (if any) concerning such event pursuant to the next
clause hereof); (ii) that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without
regard to subparagraph (b)(1) thereof), and an event described in subsection
.62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is rea
sonably expected to occur with respect to such Plan within the following 30
days; (iii) that an accumulated funding deficiency, within the meaning of
Section 412 of the Code or Section 302 of ERISA, has been incurred or an
application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; (iv) that any contribution
required to be made with respect to a Plan or Foreign Pension Plan has not
been timely made; (v) that a Plan which is subject to Title IV of ERISA has
been or may be terminated, reorganized, partitioned or declared insolvent
under Title IV of ERISA; (vi) that a Plan has an Unfunded Current Liability;
(vii) that proceedings may be or have been instituted to terminate or appoint
a trustee to administer a Plan which is subject to Title IV of ERISA; (viii)
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; (ix) that Holdings or any
Subsidiary of Holdings will or may incur any liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan under Section 4062, 4063, 4064, 4069,
4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
(x) that Holdings or any Subsidiary of Holdings may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than
-39-
as required by Section 601 of ERISA) or any Plan or any Foreign Pension Plan
in addition to the liability that existed on the Initial Borrowing Date
pursuant to any such plan or plans. Holdings will deliver to each of the Banks
copies of any records, documents or other information that must be furnished
to the PBGC with respect to any Plan pursuant to Section 4010 of ERISA.
Holdings will also deliver to each of the Banks a complete copy of the annual
report (on Internal Revenue Service Form 5500- series) of each Plan which is
subject to Title IV of ERISA (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information) required to be filed
with the Internal Revenue Service. In addition to any certificates or notices
delivered to the Banks pursuant to the first sentence hereof, copies of annual
reports and any records, documents or other information required to be
furnished to the PBGC, and any material notices received by Holdings, any
Subsidiary of Holdings or any ERISA Affiliate with respect to any Plan or
Foreign Pension Plan shall be delivered to the Banks no later than twenty (20)
days after the date such annual report has been filed with the Internal
Revenue Service or such records, documents and/or information has been
furnished to the PBGC or such notice has been received by Holdings, the
Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings shall cause (i)
each of its, and each of its Subsidiaries', fiscal years and fourth fiscal
quarter to end on March 31 of each year, and (ii) each of its, and each of its
Subsidiaries', first three fiscal quarters to end on June 30, September 30 and
December 31 of each year.
8.09 Performance of Obligations. Holdings will, and will cause each
of its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it
is bound, except such non-performances as could not, individually or in the
aggre gate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. Holdings will pay and discharge or cause to
be paid and discharged, and will cause each of its Subsidiaries to pay and
discharge, all lawful claims, taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, in each case on a timely basis; provided that neither
Holdings nor any of its Subsidiaries shall be required to pay any such tax,
assessment, charge, levy or claim which is being contested in good faith and
by proper proceedings if it has maintained adequate reserves with respect
thereto in accordance with generally accepted accounting principles.
8.11 Additional Security; Further Assurances. (a) Holdings will, and
will cause each of its Domestic Subsidiaries (and subject to Section 8.12,
each of its Foreign Subsidiaries) to, grant to the Collateral Agent security
interests in such assets and properties of Holdings and its Subsidiaries as
are not covered by the original Security Documents, and as may be reasonably
requested from time to time by the Agent or the Required Banks (collectively,
the "Additional Security Documents"). All such security interests shall be
granted pursuant to documentation reasonably satisfactory in form and
substance to the Agent and shall constitute valid and enforceable perfected
security interests superior to and prior to the rights of all third Persons
and subject to no other Liens except for Permitted Liens. The Additional
Security Documents or instruments related thereto shall have been duly
recorded or filed in such manner and in such places as are required by law to
establish, perfect, preserve and protect the Liens in favor of the Collateral
Agent required to be granted pursuant to the Additional Security Documents and
all taxes, fees and other charges payable in connection therewith shall have
been paid in full.
-40-
(b) Holdings will, and will cause each of its Subsidiaries to, at
the expense of Holdings and the Borrower, make, execute, endorse, acknowledge,
file and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing state
ments, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent
may reasonably require to obtain the benefits intended to be conferred to the
Agent and the Banks pursuant to the Security Documents. Furthermore, Holdings
and the Borrower will cause to be delivered to the Collateral Agent such
opinions of counsel, title insurance and other related documents as may be
reasonably requested by the Agent to assure itself that this Section 8.11 has
been complied with.
(c) Holdings and the Borrower agree that each action required above
by this Section 8.11 shall be completed as soon as possible, but in no event
later than 90 days after such action is either requested to be taken by the
Agent or the Required Banks or required to be taken by Holdings and/or its
Subsidiaries pursuant to the terms of this Section 8.11; provided that, in no
event will Holdings or any of its Subsidiaries be required to take any action,
other than using its reasonable best efforts, to obtain consents from third
parties with respect to its compliance with this Section 8.11.
8.12 Foreign Subsidiaries Security. If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for
the Borrower acceptable to the Agent and the Required Banks does not within
120 days after a request from the Agent or the Required Banks deliver
evidence, in form and substance satisfactory to the Agent and the Required
Banks, with respect to any Foreign Subsidiary which has not already had all of
its stock pledged pursuant to the Pledge Agreement that (i) a pledge (x) of
66-2/3% or more of the total combined voting power of all classes of capital
stock of such Foreign Subsidiary entitled to vote, and (y) of any promissory
note issued by such Foreign Subsidiary to Holdings or any of its Domestic
Subsidiaries, (ii) the entering into by such Foreign Subsidiary of a security
agreement in substantially the form of the Security Agreement and (iii) the
entering into by such Foreign Subsidiary of a guaranty in substantially the
form of the Subsidiary Guaranty, in any such case would cause the undistrib
uted earnings of such Foreign Subsidiary as determined for Federal income tax
purposes to be treated as a deemed dividend to such Foreign Subsidiary's
United States parent for Federal income tax purposes, then in the case of a
failure to deliver the evidence described in clause (i) above, that portion of
such Foreign Subsidiary's outstanding capital stock or any promissory notes so
issued by such Foreign Subsidiary, in each case not theretofore pledged
pursuant to the Pledge Agreement shall be pledged to the Collateral Agent for
the benefit of the Secured Creditors pursuant to the Pledge Agreement (or
another pledge agreement in substantially similar form, if needed), and in the
case of a failure to deliver the evidence described in clause (ii) above, such
Foreign Subsidiary shall execute and deliver the Security Agreement (or
another security agreement in substantially similar form, if needed), granting
the Secured Creditors a security interest in all of such Foreign Subsidiary's
assets and securing the Obligations of the Borrower under the Credit Documents
and under any Interest Rate Protection Agreement or Other Hedging Agreement
and, in the event the Subsidiary Guaranty shall have been executed by such
Foreign Subsidiary, the obligations of such Foreign Subsidiary thereunder, and
in the case of a failure to deliver the evidence described in clause (iii)
above, such Foreign Subsidiary shall execute and deliver the Subsidiary
Guaranty (or another guaranty in substantially similar form, if needed),
guaranteeing the Obligations of the Borrower under the Credit Documents and
under any Interest Rate Protection Agreement or Other Hedging Agreement, in
each case to the extent that the entering into such Security Agreement or
Subsidiary Guaranty is permitted by the laws of the respective foreign
jurisdiction and with all documents delivered pursuant to this Section 8.12 to
be in form and substance reasonably satisfactory to the Agent and the Required
Banks.
-41-
8.13 Merger Immediately after the Acquisition, but in any event on
the Initial Borrowing Date, Acquisition Corp. and Universal will consummate
the Merger in accordance with the Merger Documents and all applicable laws,
and Universal, as the surviving corporation of the Merger, will execute and
deliver an Acknowledgment and Joinder Agreement in the form of Exhibit L and
new Notes in replacement of the Notes which were delivered pursuant to Section
5.01. After giving effect to the Merger, Universal shall succeed to all rights
and obligations of Acquisition Corp. as were existing immediately prior to
such Merger (including, without limitation, all obligations under this
Agreement and the other Credit Documents to which Acquisition Corp. is a
party). On the Initial Borrowing Date, the Agent shall have received evidence
in form and substance satisfactory to it, that the matters set forth in this
Section 8.13 have been satisfied.
SECTION 9. Negative Covenants. Each of Holdings and the Borrower
covenants and agrees with respect to itself and its Subsidiaries that on and
after the Effective Date and until the Total Commitments and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and thereunder,
are paid in full:
9.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
Holdings or any of its Subsidiaries), or assign any right to receive income or
permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute; provided
that the provisions of this Section 9.01 shall not prevent the creation,
incurrence, assumption or existence of the following (Liens described below
are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental
charges or levies being contested in good faith and by appropriate
proceedings for which adequate reserves have been established in
accordance with generally accepted accounting principles;
(ii) Liens in respect of property or assets of Holdings or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course
of business and do not secure Indebt edness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which
do not in the aggregate materially detract from the value of Holdings' or
such Subsidiary's property or assets or materially impair the use thereof
in the operation of the business of Holdings' or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale of the
property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Schedule V, but only to the
respective date, if any, set forth in such Schedule V for the removal and
termination of any such Liens, plus renewals and extensions of such Liens
to the extent set forth on Schedule V, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does
not increase from that amount outstanding at the time of any such renewal
or extension and (y) any such renewal or extension does not encumber any
additional assets or properties of Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
-42-
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Holdings and its
Subsidiaries taken as a whole;
(vii) Liens upon assets of the Borrower or its Subsidiaries subject to
Capitalized Lease Obligations to the extent permitted by Section 9.04(v),
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the
Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of Holdings or any
Subsidiary of Holdings;
(viii) Liens placed upon any property acquired or held by the Borrower or
any of its Subsidiaries in the ordinary course of business to secure
Indebtedness incurred to finance the acquisition, construction or
improvements thereof provided that (x) the aggregate outstanding
principal amount of all Indebtedness secured by Liens permitted by this
clause (viii) shall not at any time exceed $5,000,000 and (y) in all
events, the Lien encumbering the property so acquired does not encumber
any other asset of the Borrower or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each
case not securing Indebtedness and not materially interfering with the
conduct of the business of Holdings and its Subsidiaries taken as a
whole;
(x) Liens arising from precautionary UCC financing statement filings
regarding operating leases permitted under Section 9.04;
(xi) Liens arising out of judgments or awards in respect of which
Holdings or any of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review in respect of which there shall have
been secured a subsisting stay of execution pending such appeal or
proceedings, provided that the aggregate amount of all such judgments or
awards (and any cash and the fair market value of any property subject to
such Liens) does not exceed $1,000,000 at any time outstanding;
(xii) statutory and common law landlords' liens under leases to which
Holdings or any of its Subsidiaries is a party;
(xiii) Liens incurred in the ordinary course of business in connection
with workers compensation claims, unemployment insurance and social
security benefits and Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, provided that
the aggregate outstanding amount of obligations secured by Liens
permitted by this clause (xiii) (and the value of all cash and property
encumbered by Liens permitted pursuant to this clause (xiii)) shall not
at any time exceed $2,000,000;
(xiv) Liens placed upon inventory and receivables owned by Holdings and
its Subsidiaries to secure a replacement working capital facility as
provided in Section 9.04(xiii); and
(xv) Liens securing indebtedness permitted pursuant to Section
9.04(xiv).
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
Holdings will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of (or agree to do
any of the fore-
-43-
going at any future time) all or any part of its property or assets, or enter
into any sale-leaseback transactions, or purchase or otherwise acquire (in one
or a series of related transactions) any part of the property or assets (other
than purchases or other acquisitions of inventory, materials and equipment in
the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may in the ordinary
course of business sell or otherwise dispose of any assets which, in the
reasonable judgment of such Person, are obsolete, worn out or otherwise
no longer useful in the conduct of such Person's business, provided that
the proceeds of all assets subject to sales or other dispositions
pursuant to this clause (ii) shall not exceed $5,000,000 in any fiscal
year of the Borrower;
(iii) investments may be made to the extent permitted by Section 9.05;
(iv) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property to the extent permitted by Section 9.04 (so
long as any such lease does not create a Capitalized Lease Obligation
except to the extent permitted by Section 9.04(v));
(v) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(vi) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower or any other Wholly- Owned Domestic Subsidiary of
the Borrower or be liquidated, wound up or dissolved, or all or
substantially all of its business, property or assets may be conveyed,
sold, leased, transferred or otherwise disposed of, in one transaction or
a series of transactions, to the Borrower or any other Wholly-Owned
Domestic Subsidiary of the Borrower;
(vii) the Acquisition and the Merger shall be permitted;
(viii) each of the Borrower and its Subsidiaries may acquire all or
substantially all of the assets of the any Person (or all or
substantially all of the assets of a product line or division of any
Person) or 100% of the capital stock of any Person (any such acquisition
permitted by this clause (viii), a "Permitted Section 9.02(viii)
Acquisition"), so long as (i) no Default of Event of Default then exists
or would result therefrom, (ii) each of the representations and
warranties contained in Section 7 shall be true and correct in all
material respects both before and after giving effect to such Permitted
Section 9.02(viii) Acquisition, (iii) any Liens or Indebtedness assumed
or issued in connection with such acquisition are otherwise permitted
under Section 9.01 or 9.04, as the case may be, (iv) the only
consideration paid by the Borrower or any Subsidiary in connection with
any Permitted Section 9.02(viii) Acquisition consists solely of cash,
common stock of Holdings and/or Qualified Preferred Stock of Holdings,
(v) at least 10 Business Days prior to the consummation of any Permitted
Section 9.02(viii) Acquisition, the Borrower shall have delivered to the
Agent and each of the Banks a certificate of Holdings' Chief Financial
Officer certifying (and showing the calculations therefor in reasonable
detail) that Holdings and its Subsidiaries would have been in compliance
with the financial covenants set forth in Section 9.07 through 9.09,
inclusive, for the Test Period then most recently ended prior to the date
of the consummation of such Permitted Section 9.02(viii) Acquisition, in
each case with such financial covenants to be determined on a pro forma
basis (subject to the methodology to give effect to such pro forma
adjustments being
-44-
satisfactory to the Agent) as if such Permitted Section 9.02(viii)
Acquisition had been consummated on the first day of such Test Period
(and assuming that any Indebtedness incurred, issued or assumed in
connection therewith had been incurred, issued or assumed on the first
day of, and had remained outstanding through out, such Test Period), (vi)
the sum of (A) the aggregate cash consideration paid in connection with
all Permitted Section 9.02(viii) Acquisitions (including, without
limitation, any earn-out, non-compete or deferred compen sation
arrangements, the aggregate principal amount of any Indebtedness assumed
in connection therewith and the fair market value of any capital stock of
Holdings issued in connection therewith) and (B) the aggregate
consideration paid in connection with sale and leaseback transactions
permitted pursuant to Section 9.02(xii)(C) and treated as Permitted
Section 9.02(viii) Acquisitions does not exceed $200,000,000 in the
aggregate, (vii) after giving effect to any Permitted Section 9.02(viii)
Acquisition, the Unutilized Revolving Loan Commitment is at least
$5,000,000 and (viii) the assets acquired pursuant to each such Permitted
Section 9.02(viii) Acquisition are employed in a business permitted by
Section 9.13;
(ix) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any
Wholly-Owned Foreign Subsidiary so long as (i) such Wholly-Owned Foreign
Subsidiary is the surviving corporation of any such merger, dissolution
or liquidation and (ii) in each case at least 65% of the total combined
voting power of all classes of capital stock of all first-tier Foreign
Subsidiaries are pledged pursuant to the Pledge Agreement;
(x) the assets of any Foreign Subsidiary may be transferred to the
Borrower or any of its Wholly-Owned Domestic Subsidiaries and any Foreign
Subsidiary may be merged with and into, or be dissolved or liquidated
into, the Borrower or any of its Wholly-Owned Domestic Subsidiaries so
long as the Borrower or such Wholly-Owned Domestic Subsidiary is the
surviving corporation of any such merger, dissolution or liquidation;
(xi) the Borrower or any of its Wholly-Owned Domestic Subsidiaries may
transfer to one or more Wholly-Owned Foreign Subsidiaries those assets
theretofore transferred to the Borrower or such Wholly-Owned Domestic
Subsidiary by a Foreign Subsidiary (whether by merger, liquidation,
dissolution or otherwise) pursuant to clause (x) of this Section 9.02;
(xii) each of the Borrower and its Subsidiaries may enter into sale and
leaseback transactions with respect to their equipment and Real Property,
so long as (A) in sale and leaseback transactions in which the Borrower
or any of its Subsidiaries acts as seller of the equipment and Real
Property that is the subject of the transaction, (u) no Default or Event
of Default then exists or would result therefrom, (v) each such sale and
leaseback transaction is in an arm's-length transaction and the Borrower
or the respective Subsidiary receives at least fair market value (as
determined in good faith by the Borrower or such Subsidiary, as the case
may be), (w) the total consideration received by the Borrower or such
Subsidiary is cash and is paid at the time of the closing of such sale,
(x) the Net Sale Proceeds therefrom are applied and/or reinvested as (and
to the extent) required by Section 4.02(e), (y) the aggregate amount of
proceeds received from all sale and leaseback transactions pursuant to
this clause (xii)(A) shall not exceed $5,000,000 in any fiscal year of
the Borrower and (z) to the extent that any such sale and leaseback
transaction results in a Capitalized Lease obligation, such Capitalized
Lease Obligation is permitted under Section 9.04(v), (B) in sale and
leaseback transactions in which the Borrower or any of its Subsidiaries
acts as buyer of the equipment and Real Property that is the subject of
such transaction and the purchase price of such equipment and Real
Property is less than $5,000,000, (x) no Default or Event of Default then
exists or would result therefrom and (y) the aggregate
-45-
consideration paid by the Borrower and its Subsidiaries in all sale and
leaseback transactions pursuant to this clause (xii)(B) shall not exceed
$25,000,000 in any fiscal year of the Borrower and (C) in sale and
leaseback transactions in which the Borrower or any of its Subsidiaries
acts as buyer of the equipment and Real Property that is the subject of
such transaction and the purchase price of such equipment and Real
Property equals or exceeds $5,000,000, (x) no Default or Event of Default
then exists or would result therefrom and (y) (1) if the Borrower elects
to treat such sale and leaseback transaction as a Permitted Section
9.02(viii) Acquisition, the sum of (i) the aggregate consideration paid
by the Borrower and its Subsidiaries in all sale and leaseback
transactions permitted pursuant to this clause (xii)(C) and treated as
Permitted Section 9.02(viii) Acquisitions and (ii) the aggregate
consideration paid in connection with other Permitted Section 9.02(viii)
Acquisitions shall not exceed $200,000,000 or (2) if the Borrower elects
to treat such sale and leaseback transaction as a Capital Expenditure,
such Capital Expenditure is permitted under Section 9.07;
(xiii) so long as (x) no Default or Event of Default then exists or would
result therefrom and (y) the Borrower shall be in compliance with the
financial covenants contained in Sections 9.07 through 9.09, inclusive,
with such covenants to be calculated on a pro forma basis, the Borrower
may, and may permit its Subsidiaries to, simultaneously exchange (for
reasonably equivalent value, a portion thereof which may include cash)
any equipment and other assets (each such transaction an "Asset Swap"),
provided that the sum of (A) the total value of all assets to be swapped
in any fiscal year of the Borrower and (B) the total value of assets sold
in accordance with Section 9.02(xiv) in such fiscal year shall not exceed
in the aggregate 10% of the total value of all assets of the Borrower and
its Subsidiaries as of the end of the most recently ended fiscal year,
provided further, that any such cash proceeds received by the Borrower or
any of its Subsidiaries in connection with any such Asset Swap shall be
applied and/or reinvested as (and to the extent) required by Section
4.02(e);
(xiv) each of the Borrower and its Subsidiaries may sell assets (other
than the capital stock of any Subsidiary Guarantor), so long as (v) no
Default or Event of Default then exists or would result therefrom, (w)
each sale is in an arm's length transaction and the Borrower or the
respective Subsidiary receives at least fair market value (as determined
in good faith by the Borrower or such Subsidiary, as the case may be),
(x) the total consideration received by the Borrower or such Subsidiary
is at least 75% cash and is paid at the time of the closing of such sale,
(y) the Net Sale Proceeds therefrom are applied and/or reinvested as (and
to the extent) required by Section 4.02(e) and (z) the aggregate amount
of the proceeds received from all assets sold pursuant to this clause
(xiv) plus the total value of the assets swapped pursuant to Section
9.02(xiii) in any fiscal year of the Borrower does not exceed 10% of the
total value of all assets of the Borrower and its Subsidiaries as of the
end of the most recently ended fiscal year of the Borrower; and
(xv) any of Holdings and its Subsidiaries may enter into agreements to
effectuate any transaction otherwise prohibited by this Section 9.02 so
long as the consummation of any such agreement is conditioned upon
obtaining the consent of the Required Banks or repaying the Obligations
in full (other than indemnification obligations under Section 1.10, 1.11,
2.06, 4.04 and 13.01) and terminating the Commitments.
To the extent the Required Banks waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold to a
Person other than Holdings or a Subsidiary of Holdings as permitted by this
Section 9.02, such Collateral shall be sold free and clear of the Liens
created by the Security
-46-
Documents, and the Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
9.03 Dividends. Holdings shall not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to
the Borrower or any Wholly-Owned Subsidiary of the Borrower;
(ii) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof) the Borrower may
pay cash Dividends to Holdings, so long as such proceeds are promptly
used by Holdings to pay (x) corporate overhead costs, directors' fees and
other expenses (including, without limitation, the fees and expenses
permitted pursuant to Section 9.06(vi)), provided that the aggregate
amount of cash Dividends paid during the respective fiscal year pursuant
to this clause (ii), together with the amount of any outstanding loans
and advances made during the respective fiscal year by the Borrower
pursuant to Section 9.05(vi) (without reduction for any writedowns or
write-offs thereof), shall at no time during any fiscal year of the
Borrower exceed $1,000,000 or (y) franchise taxes and federal, state and
local income taxes and interest and penalties with respect thereto, if
any, payable by Holdings (provided that any refund shall be promptly
returned by Holdings to the Borrower);
(iii) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof) the Borrower may
pay cash Dividends to Holdings so long as the proceeds thereof are
immediately used by Holdings to purchase shares of common stock or
options to purchase shares of common stock of Holdings held by former
employees of the Borrower following the termination of their employment
by the Borrower or any of its Subsidiaries, provided that the aggregate
amount of cash Dividends paid pursuant to this clause (iii) shall (x) be
funded with life insurance proceeds received by the Borrower under life
insurance policies maintained with respect to such employee or (y) to the
extent not funded as described in preceding clause (x), at no time during
any fiscal year of the Borrower exceed $1,000,000; and
(iv) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof) the Borrower may
pay cash Dividends to Holdings so long as the proceeds thereof are
promptly used by Holdings to pay interest, when and as due, on the
Holdings Senior Discount Notes in accordance with the terms of the
Holdings Senior Note Documents; provided that any payments of Dividends
to Holdings by the Borrower pursuant to this Section 9.03(iv) shall not
be made until the fifth year after the Effective Date.
9.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness outstanding on the Effective Date and
listed on Schedule III, without giving effect to any subsequent
extensions, renewal or refinancing thereof except to the extent set forth
on Schedule III, provided that the aggregate principal amount of
Indebtedness to be extended, renewed or refinanced does not increase from
that amount outstanding at the time of any such extension, renewal or
refinancing;
-47-
(iii) Indebtedness with respect to surety bonds, appeal bonds or
customs bonds required in the ordinary course of business or in
connection with the enforcement of rights or claims of the Borrower or
any of its Subsidiaries or in connection with judgments that do not
result in a Default or an Event of Default, provided that the aggregate
outstanding amount of all such surety bonds, appeal bonds and customs
bonds permitted by this clause (iii) shall not at any time exceed
$2,000,000;
(iv) Indebtedness under Interest Rate Protection Agreements which the
Borrower may enter into with respect to the Loans, on terms acceptable to
the Agent, and with respect to other obligations, on terms acceptable to
the Agent and the Required Banks;
(v) Indebtedness evidenced by Capitalized Lease Obligations to the
extent permitted pursuant to Section 9.07, provided that in no event
shall the aggregate principal amount of Capitalized Lease Obligations
permitted by this clause (v) exceed $5,000,000 at any time outstanding;
(vi) Indebtedness subject to Liens permitted under Section 9.01(viii);
(vii) Indebtedness of Holdings and the Subsidiary Guarantors evidenced
by the Holdings Senior Discount Notes (and guarantees thereof) not to
exceed $25,000,000 in aggregate principal amount;
(viii) Indebtedness of the Borrower and the Subsidiary Guarantors
evidenced by the Borrower Senior Discount Notes (and guarantees thereof)
not to exceed $150,000,000 in aggregate principal amount;
(ix) accrued expenses and current trade accounts payable incurred in
the ordinary course of business and unsecured guarantees of the Borrower
or any of its Subsidiaries of such trade accounts payable, and
obligations under trade letters of credit incurred by the Borrower or
such Subsidiary in the ordinary course of business, which are to be
repaid in full not more than one year after the date on which such
Indebtedness is originally incurred to finance the purchase of goods by
the Borrower or such Subsidiary;
(x) Indebtedness of the Borrower under any Other Hedging Agreement
which is entered into to protect the Borrower against fluctuations in
currency values so long as the aggregate Net Hedging Exposure Amount
under all such Other Hedging Agreements does not exceed $3,000,000 at any
time outstanding;
(xi) Indebtedness of the Borrower not to exceed $3,000,000 at any time
outstanding and secured by insurance cancellation premiums relating to
insurance maintained by the Borrower in the ordinary course of business;
(xii) intercompany Indebtedness among the Borrower and the Subsidiary
Guarantors to the extent permitted by Section 9.05;
(xiii) Indebtedness of the Borrower under a working capital facility to
replace the Total Revolving Loan Commitment so long as (A) such
Indebtedness is only incurred after the earlier of (x) the Revolving Loan
Maturity Date and (y) the termination of the Total Revolving Loan
Commitment pursuant to Section 3.03(d), (B) no Default or Event of
Default then exists or would result therefrom and (C) all of the terms
and conditions of such working capital facility are in form and substance
reasonably satisfactory to the Required Banks (it being understood that
Holdings
-48-
and its Subsidiaries may grant a first priority perfected lien on all
inventory and receivables owned by them to the creditors under such
replacement working capital facility);
(xiv) Indebtedness of any Foreign Subsidiary of the Borrower the
proceeds of which indebtedness are used for such Foreign Subsidiary's
working capital and general corporate purposes, provided that the
aggregate principal amount of all such Indebtedness incurred pursuant to
this clause (xiv), shall not exceed $25,000,000 (or the Dollar Equivalent
thereof in the case of Indebtedness incurred in a currency other than
Dollars) at any time outstanding (the "Foreign Subsidiary Indebtedness");
(xv) Indebtedness of a Subsidiary acquired pursuant to a Permitted
Section 9.02(viii) Acquisition (or Indebtedness assumed at the time of a
Permitted Section 9.02(viii) Acquisition of an Asset securing such
Indebtedness), provided that (x) such Indebtedness was not incurred in
connection with, or in anticipation or contemplation of, such Permitted
Section 9.02(viii) Acquisition and (y) such Indebtedness does not
constitute debt for borrowed money, it being understood and agreed that
Capitalized Lease Obligations and purchase money Indebtedness shall not
constitute debt for borrowed money for purposes of this clause (xv);
(xvi) Indebtedness of the Borrower and its Subsidiaries consisting of
letters of credit and reimbursement obligations with respect thereto,
including renewals or extensions thereof, so long as the aggregate stated
amount of such letters of credit at any time outstanding does not exceed
$2,500,000; and
(xvii) Indebtedness of the Borrower and its Subsidiaries to the extent
not permitted by the foregoing clauses of this Section 9.04 not to exceed
$10,000,000 in aggregate principal amount at any time outstanding.
9.05 Advances, Investments and Loans. Holdings will not, and will
not permit any of its Subsidiaries to, directly or indirectly, lend money or
credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents, except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivables, trade receivables, prepaid expenses and similar items owing
to any of them, if created or acquired in the ordinary course of
business;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents, provided that during any time that Revolving Loans of
Non-Defaulting Banks or Swingline Loans are outstanding the aggregate
amount of cash and Cash Equivalents permitted to be held by the Borrower
and its Domestic Subsidiaries shall not exceed for any period of five
consecutive days $5,000,000 less any amount delivered to the Agent and
held in a blocked account or other similar arrangement satisfactory to
the Agent;
(iii) non-cash consideration received by Holdings or any of its
Subsidiaries in connection with any asset sale to the extent permitted by
Section 9.02;
-49-
(iv) the Borrower and its Subsidiaries may receive and hold
investments in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of,
and other disputes with, customers and suppliers arising in the ordinary
course of business;
(v) the Borrower and its Subsidiaries may make payroll advances in
the ordinary course of business;
(vi) so long as no Default or Event of Default then exists (both before
and after giving effect to the payment thereof), the Borrower may make
loans to Holdings to enable Holdings to pay the amounts described in
Section 9.03(ii), 9.03(iii) and 9.03(iv), in an aggregate amount not to
exceed in any fiscal year $1,000,000 less any amounts paid pursuant to
Sections 9.03(ii), 9.03(iii) and 9.03(iv) during such fiscal year;
(vii) the Borrower and its Subsidiaries may hold the investments held
by them on the Effective Date;
(viii) the Borrower and its Subsidiaries may enter into, invest in and
make loans and advances to (x) corporations, associations, partnerships,
business trusts and other business entities which would not, after the
respective investment, be a Subsidiary of Holdings (each a "Joint
Venture") and (y) Foreign Subsidiaries, provided that (i) neither
Holdings nor any of its Subsidiaries is liable for any Indebtedness or
other obligations of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) of any such Joint Venture
or Foreign Subsidiary and (ii) the aggregate amount of all such
investments and loans in Joint Ventures and Foreign Subsidiaries shall at
no time exceed $30,000,000;
(ix) Holdings and its Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $500,000;
(x) the Borrower may enter into Interest Protection Agreements or
Other Hedging Agreements to the extent permitted by Section 9.04(iv) and
(x); and
(xi) the Borrower and the Subsidiary Guarantors may make intercompany
loans and advances between or among one another (collectively,
"Intercompany Loans") or equity investments, so long as no such
Intercompany Loan shall be evidenced by a promissory note or other
instrument except an Intercompany Note that is pledged to the Collateral
Agent pursuant to the Pledge Agreement.
9.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than in the
ordinary course of business and on terms and conditions substantially as
favorable to Holdings or such Subsidiary as would reasonably be obtained by
Holdings or such Subsidiary at that time in a comparable arm's- length
transaction with a Person other than an Affiliate, except that (i) Dividends
may be paid to the extent provided in Section 9.03, (ii) loans may be made and
other transactions may be entered into by Holdings and its Subsidiaries to the
extent permitted by Section 9.05, (iii) customary fees may be paid to
directors of Holdings and its Subsidiaries, (iv) options to purchase common
stock of Holdings may be granted to
-50-
officers and directors of Holdings and its Subsidiaries in the ordinary course
of business, (v) Holdings and its Subsidiaries may enter into employment
arrangements with their respective officers in the ordinary course of
business, (vi) so long as there shall exist no Event of Default under Section
10.01 (both before and after giving effect to the payment thereof), Holdings
or any of its Subsidiaries may pay management fees to Xxxxxx Xxxxxx in
accordance with the terms of the CH Management Agreement, (vii) payments may
be made to the directors of Holdings and its Subsidiaries pursuant to
arrangements which have been entered into on or prior to the Initial Borrowing
Date and which have been disclosed in the Documents and (viii) Holdings or its
Subsidiaries may pay directors' fees to the directors of Holdings or any of
its Subsidiaries in an aggregate amount for all such Persons not to exceed
$500,000 per year. Except as specifically provided above, no management or
similar fees shall be paid or payable by Holdings or any of its Subsidiaries
to any Person other than customary investment banking, financing and similar
fees arising in connection with transactions after the date hereof.
9.07 Capital Expenditures. (a) Holdings will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any fiscal year set forth below (taken as one accounting period) the
Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of such Capital Expenditures does not exceed (x) for the
period commencing on the Initial Borrowing Date and ending on March 31, 1998,
20,000,000 and (y) thereafter, in any fiscal year, the amount set forth
opposite such fiscal year below:
Fiscal Year Ending Amount
March 31, 1999 $55,000,000
March 31, 2000 $65,000,000
March 31, 2001 $60,000,000
March 31, 2002 $55,000,000
March 31, 2003 $55,000,000
March 31, 2004 $45,000,000
March 31, 2005 $45,000,000
(b) In addition to the foregoing, to the extent that the amount of
Capital Expenditures made by the Borrower and its Subsidiaries during any
fiscal year of the Borrower (exclusive, however, of Capital Expenditures made
pursuant to Section 9.07(c), (d), (e) and (f)) is less than the amount
applicable to the respective fiscal year as set forth in the table in clause
(a)(y) of this Section 9.07 (and without increasing any such amount set forth
in such table by the amount of any additional amounts permitted to be spent in
such fiscal year pursuant to this sentence), such amount may be carried
forward and utilized to make Capital Expenditures in excess of the amount
permitted in clause (a)(y) above in the following fiscal year; provided that
the aggregate amount expended on Capital Expenditures in any fiscal year shall
not exceed 125% of the amount permitted to be made in such fiscal year as set
forth in clause (a) of this Section 9.07.
(c) In addition to the foregoing, the amount of Net Sale Proceeds
received by the Borrower or any of its Subsidiaries from any Asset Sale may be
reinvested in replacement assets within 18 months following the date of such
Asset Sale to the extent such Net Sale Proceeds are not required to be applied
pursuant to Section 4.02(e), and, to the extent so applied, shall not count as
Capital Expenditures for purposes of determining compliance with clauses (a)
and (b) of this Section 9.07.
(d) In addition to the foregoing, the amount of insurance proceeds
received by Holdings or any of its Subsidiaries from any Recovery Event may be
used to replace or restore any
-51-
properties or assets in respect of which such proceeds were paid within 18
months following the date of such Recovery Event (in each case to the extent
such proceeds are not required to be applied pursuant to Section 4.02(g)) and,
to the extent so applied, shall not count as Capital Expenditures for purposes
of determining compliance with clauses (a) and (b) of this Section 9.07.
(e) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures consisting of Section 9.02(viii) Acquisitions
and Sale and Leaseback transactions permitted pursuant to Section
9.02(xii)(C).
(f) In addition to the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures in the amount of Net Sale Proceeds received by
the Borrower or any of its Subsidiaries from any sale of assets permitted
pursuant to Section 9.02(ii).
9.08 Consolidated Adjusted EBITDA to Total Interest Expense.
Holdings will not permit the ratio of (i) Consolidated Adjusted EBITDA to (ii)
Total Interest Expense for any Test Period ending on the last day of a fiscal
quarter set forth below to be less than the ratio set forth opposite such
fiscal quarter below:
Period Ratio
June 30, 1998 1.30:1.00
September 30, 1998 1.30:1.00
December 31, 1998 1.30:1.00
March 31, 1999 1.30:1.00
June 30, 1999 1.30:1.00
September 30, 1999 1.30:1.00
December 31, 1999 1.35:1.00
March 31, 2000 1.35:1.00
June 30, 2000 1.40:1.00
September 30, 2000 1.40:1.00
December 31, 2000 1.40:1.00
March 31, 2001 1.40:1.00
June 30, 2001 1.50:1.00
September 30, 2001 1.50:1.00
December 31, 2001 1.50:1.00
March 31, 2002 1.50:1.00
June 30, 2002 and the last 1.60:1.00
day of each fiscal quarter
thereafter
9.09 Maximum Adjusted Leverage Ratio. Holdings will not permit the
Adjusted Leverage Ratio at any time during a period set forth below to be
greater than the ratio set forth opposite such period below:
Period Ratio
Initial Borrowing Date 3.50:1.00
Through and including June 30, 1998
-52-
Period Ratio
July 1, 1998 3.50:1.00
Through and including September 30, 1998
October 1, 1998 3.50:1.00
Through and including December 31, 1998
January 1, 1999 3.50:1.00
Through and including March 31, 1999
April 1, 1999 3.50:1.00
Through and including June 30, 1999
July 1, 1999 3.50:1.00
Through and including September 30, 1999
October 1, 1999 3.50:1.00
Through and including December 31, 1999
January 1, 2000 3.50:1.00
Through and including March 31, 2000
April 1, 2000 3.25:1.00
Through and including June 30, 2000
July 1, 2000 3.25:1.00
Through and including September 30, 2000
October 1, 2000 3.25:1.00
Through and including December 31, 2000
January 1, 2001 3.25:1.00
Through and including March 31, 2001
April 1, 2001 3.00:1.00
Through and including June 30, 2001
July 1, 2001 3.00:1.00
Through and including September 30, 2001
October 1, 2001 3.00:1.00
Through and including December 31, 2001
January 1, 2002 3.00:1.00
Through and including March 31, 2002
April 1, 2002 2.50:1.00
Through and including June 30, 2002
-53-
Period Ratio
July 1, 2002 2.50:1.00
Through and including September 30, 2002
October 1, 2002 2.50:1.00
Through and including December 31, 2002
January 1, 2003 2.50:1.00
Through and including March 31, 2003
April 1, 2003 2.25:1.00
Through and including June 30, 2003
July 1, 2003 2.25:1.00
Through and including September 30, 2003
October 1, 2003 2.25:1.00
Through and including December 31, 2003
January 1, 2004 2.25:1.00
Through and including March 31, 2004
Thereafter 2.00:1.00
9.10 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and
Certain Other Agreements; etc. Holdings will not, and will not permit any of
its Subsidiaries to, (i) make (or give any notice in respect of) any voluntary
or optional payment or prepayment on or redemption or acquisition for value of
any Holdings Senior Discount Notes or any Borrower Senior Discount Notes,
provided that (A) so long as no Default or Event of Default then exists
(before and after giving effect to such payment), the Borrower may prepay,
redeem or otherwise acquire for value Holdings Senior Discount Notes or
Borrower Senior Discount Notes, as the case may be, so long as the total
amount payable in connection therewith shall not exceed the then Available
Retained Cash Flow Amount (after giving effect to all reductions to such
amount occurring prior to, or on the date of, such payment) and (B) so long as
no Default or Event of Default then exist or would result therefrom, Holdings
may use the proceeds from an issuance of its Qualified Preferred Stock or
common stock to prepay, redeem or otherwise acquire for value Holdings Senior
Discount Notes, (ii) amend or modify, or permit the amendment or modification
of, any provision of the Existing Indebtedness or the Holdings Senior Discount
Notes or Borrower Senior Discount Notes (it being understood, however, that
Holdings and its Subsidiaries may amend or modify the Holdings Senior Discount
Notes or the Borrower Senior Discount Notes, as the case may be, to the extent
the trustee of the respective note can approve such amendment or modification
without obtaining the consent of the holders of such note) or of any agreement
(including, without limitation, any purchase agreement, indenture, loan
agreement or security agreement) relating thereto, or the CH Management
Agreement or the Equity Financing Documents or (iii) amend, modify or change
its Certificate of Incorporation (including, without limitation, by the filing
or modification of any certificate of designation) or By-Laws or any agreement
entered into by it, with respect to its capital stock (including any
Shareholders' Agreement), or enter into any new agreement with respect to its
capital stock unless such amendment, modification, change or other action
contemplated by this clause (iii) could not reasonably be determined to be
adverse to the Banks.
-54-
9.11 Limitation on Certain Restrictions on Subsidiaries. Holdings
will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
any encumbrance or restriction on the ability of any such Subsidiary to (a)
pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by the Borrower or any
Subsidiary of the Borrower, or pay any Indebtedness owed to the Borrower or a
Subsidiary of the Borrower, (b) make loans or advances to the Borrower or any
of the Borrower's Subsidiaries or (c) transfer any of its properties or assets
to the Borrower, except for such encumbrances or restrictions existing under
or by reason of (i) applicable law, (ii) this Agreement and the other Credit
Documents, (iii) customary provisions restricting subletting or assignment of
any lease governing a leasehold interest of the Borrower or a Subsidiary of
the Borrower, (iv) customary provisions restricting assignment of any
licensing agreement entered into by the Borrower or a Subsidiary of the
Borrower in the ordinary course of business, (v) the Holdings Senior Note
Documents, the Borrower Senior Note Documents and agreements evidencing
Existing Indebtedness and (vi) Foreign Subsidiary Indebtedness.
9.12 Limitation on Issuance of Capital Stock. (a) Holdings will not,
and will not permit any of its Subsidiaries to, issue (i) any preferred stock
other than Qualified Preferred Stock of Holdings or (ii) any redeemable common
stock other than common stock that is redeemable at the sole option of
Holdings or such Subsidiary.
(b) Holdings shall not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital
stock, (ii) for stock splits, stock dividends and similar issuances which do
not decrease the percentage ownership of Holdings or any of its Subsidiaries
in any class of the capital stock of such Subsidiary, (iii) to qualify
directors to the extent required by applicable law and (iv) capital stock
issued by newly created or acquired Subsidiaries, in accordance with the other
requirements of this Agreement.
9.13 Business. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than
the business in which the Borrower is engaged on the Effective Date and
reasonable extensions thereof.
9.14 Limitation on Creation of Subsidiaries and Entering into
Partnerships and Joint Ventures. (a) Holdings shall not establish, create or
acquire any additional Subsidiaries without the prior written consent of the
Required Banks. In connection with any establishment, creation or acquisition
of any Subsidiary, it is understood that the Required Banks may require that
any such new Subsidiary (other than a Foreign Subsidiary but subject to
Section 8.12) (x) execute and deliver to the Agent a counterpart of the
Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, (y)
take all actions required pursuant to Section 8.11, and/or (z) execute and
deliver, or cause to be executed and delivered, to the Agent all other
relevant documentation of the type described in Section 5 as such Subsidiary
would have to deliver if such new Subsidiary were a Credit Party on the
Initial Borrowing Date.
(b) Holdings will not, and will not permit any of its Subsidiaries
to, enter into any partnerships or joint ventures, except to the extent
permitted under Section 9.05(viii).
9.15 Special Purpose Corporation. (a) Holdings shall not engage in
any business activities other than the ownership of the capital stock of the
Borrower, the issuance of Qualified Preferred Stock, and the execution,
delivery and performance of the Documents. In no event shall Holdings be
permitted to incur or suffer to exist any Indebtedness on, or create or suffer
to exist any Liens on, its assets; provided that Holdings may engage in any
necessary activity with respect to (i) the maintenance of its
-55-
corporate or trust existence and compliance with applicable law, (ii)
accounting, legal, public relations, investor relations, financial or
management activities (including the employment of employees, counsel,
accountants, consultants, bankers, advisors or other professionals in
connection with any of the foregoing activities), and (iii) entering into,
performing its obligations and exercising its rights under the Documents to
which it is a party.
(b) Holdings shall have no Subsidiaries other than the Borrower and
its Subsidiaries.
SECTION 10. Events of Default. Upon the occurrence of
any of the following specified events (each an "Event of
Default"):
10.01 Payments. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note, (ii) default, and such default
shall continue unremedied for three or more Business Days, in the payment when
due of any interest on any Loan or Note, any Unpaid Drawing (to the extent the
Borrower has knowledge that such Unpaid Drawings are past due) or any Fees or
(iii) default, and such default shall continue unremedied for ten or more
Business Days, in the payment of any other amounts owing hereunder or
thereunder; or
10.02 Representations, etc. Any representation or warranty made by
any Credit Party herein or in any other Credit Document or in any certificate
delivered to the Agent or any Bank pursuant hereto or thereto shall prove to
be untrue in any material respect on the date as of which made or deemed made
as provided in Section 7; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained
in Section 8.01(g)(i) or 8.08 or Section 9 or (ii) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement (other than those set forth in Sections 10.01 and
10.02) and such default shall continue unremedied for a period of 30 days
after written notice thereof to the Borrower by the Agent or the Required
Banks; or
10.04 Default Under Other Agreements. Holdings or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Notes) beyond the period of grace, if any, provided in the instrument or
agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition 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) to cause
(determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (iii) any
Indebtedness (other than the Notes) of Holdings or any of its Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment, prior to the stated maturity
thereof, provided that it shall not be a Default or Event of Default under
this Section 10.04 unless the aggregate principal amount of all Indebtedness
as described in preceding clauses (i) through (iii), inclusive, is at least
$2,500,000; or
10.05 Bankruptcy, etc. Holdings or any of its Significant
Subsidiaries shall commence a voluntary case concerning itself under Title 11
of the United States Code entitled "Bankruptcy," as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code"); or an involuntary
case is commenced against Holdings or any of its Significant Subsidiaries, and
the petition is not controverted within 10 days, or is not dismissed within 60
days, after commencement of the case; or a custodian (as defined in the
-56-
Bankruptcy Code) is appointed for, or takes charge of, all or substantially
all of the property of Holdings or any of its Significant Subsidiaries, or
Holdings or any of its Significant Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of debtors,
dissolution, insolvency or liquidation or similar law of any jurisdiction
whether now or hereafter in effect relating to Holdings or any of its
Significant Subsidiaries, or there is commenced against Holdings or any of its
Significant Subsidiaries any such proceeding which remains undismissed for a
period of 60 days, or Holdings or any of its Significant Subsidiaries is
adjudicated insolvent or bankrupt; or any order of relief or other order
approving any such case or proceeding is entered; or Holdings or any of its
Significant Subsidiaries suffers any appointment of any custodian or the like
for it or any substantial part of its property to continue undischarged or
unstayed for a period of 60 days; or Holdings or any of its Significant
Subsidiaries makes a general assignment for the benefit of creditors; or any
corporate action is taken by Holdings or any of its Significant Subsidiaries
for the purpose of effecting any of the foregoing; or
10.06 ERISA. (a) (i) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, (ii) a Reportable Event shall have occurred,
(iii) a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a
Plan subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to
occur with respect to such Plan within the following 30 days, (iv) any Plan
which is subject to Title IV of ERISA shall have had or is likely to have a
trustee appointed to administer such Plan, (v) any Plan which is subject to
Title IV of ERISA is, shall have been or is likely to be terminated or to be
the subject of termination proceedings under ERISA, (vi) any Plan shall have
an Unfunded Current Liability, (vii) a contribution required to be made with
respect to a Plan or a Foreign Pension Plan has not been timely made, (viii)
Holdings or any Subsidiary of Holdings or any ERISA Affiliate has incurred or
is likely to incur any liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 401(a)(29), 4971 or 4975 of the Code or (ix) on account of a group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of
the Code) under Section 4980B of the Code, or (ix) Holdings or any Subsidiary
of Holdings has incurred or is likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA) that
provide benefits to retired employees or other former employees (other than as
required by Section 601 of ERISA) or Plans or Foreign Pension Plans; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of
incurring a liability; and (c) such lien, security interest or liability,
individually, and/or in the aggregate, in the opinion of the Required Banks,
has had, or could reasonably be expected to have, a material adverse effect
upon the business, operations, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole; or
10.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full
force and effect, or shall cease to give the Collateral Agent for the benefit
of the Secured Creditors the Liens, rights, powers and privileges purported to
be created thereby (including, without limitation, a perfected security
interest in, and Lien on, all of the Collateral (other than Collateral with a
value not to exceed $1,000,000), in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons (except as permitted by Section
9.01), and subject to no other Liens (except as permitted by Section 9.01), or
Holdings or any of its Subsidiaries shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any of the Security Documents and such default, other
than with respect to Sections 2.4 and 2.5 of the Security Agreement (in which
case an Event of Default shall immediately exist without the giving
-57-
of any notice), shall continue unremedied for a period of 30 days after
written notice thereof to the Borrower from the Agent or the Required Banks;
or
10.08 Subsidiary Guaranty. At any time after the execution and
delivery thereof, (x) any Subsidiary Guaranty or any provision thereof shall
cease to be in full force or effect as to any Subsidiary Guarantor, (y) if any
Subsidiary Guarantor or Person acting by or on behalf of any Subsidiary
Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations
under the respective Subsidiary Guaranty, or (z) any Subsidiary Guarantor
shall default in the due performance or observance of any term, covenant or
agreement on its part to be performed or observed pursuant to the respective
Subsidiary Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against Holdings or any Subsidiary of Holdings involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or
stayed or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments exceeds $2,500,000; or
10.10 Change of Control. A Change of Control shall
occur;
then, and in any such event, and at any time thereafter, if any
Event of Default shall then be continuing, the Agent, upon the written request
of the Required Banks, shall by written notice to the Borrower, take any or
all of the following actions, without prejudice to the rights of the Agent,
any Bank or the holder of any Note to enforce its claims against the Borrower
(provided, that, if an Event of Default specified in Section 10.05 shall occur
with respect to the Borrower, the result which would occur upon the giving of
written notice by the Agent to the Borrower as specified in clauses (i) and
(ii) below shall occur automatically without the giving of any such notice):
(i) declare the Total Commitments terminated, whereupon all Commitments of
each Bank shall forthwith terminate immediately and any Commitment Commission
shall forthwith become due and payable without any other notice of any kind;
(ii) declare the principal of and any accrued interest in respect of all Loans
and the Notes and all Obligations owing hereunder and thereunder to be,
whereupon the same shall become, forthwith due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Credit Party; (iii) terminate any Letter of Credit which
may be terminated, in accordance with its terms; (iv) direct the Borrower to
pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to
the Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash, to be held as security by the Collateral Agent, as
is equal to the aggregate Stated Amount of all Letters of Credit issued for
the account of the Borrower and then outstanding; (v) enforce, as Collateral
Agent, all of the Liens and security interests created pursuant to the
Security Documents and (vi) apply any cash collateral held by the Agent
pursuant to Section 4.02 to the repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Acquisition" shall mean the acquisition by the Borrower of all of
the outstanding shares of capital stock of TCSI pursuant to, and in accordance
with the terms of, the Acquisition Agreement.
-58-
"Acquisition Agreement" shall mean the Stock Purchase Agreement,
dated as of December 18, 1997, by and between Tidewater and Acquisition Corp.
"Acquisition Documents" shall mean the Acquisition Agreement and all
other agreements and documents relating to the Acquisition.
"Additional Security Documents" shall have the meaning
provided in Section 8.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the
sum (rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing
(x) the most recent weekly average dealer offering rate for negotiable
certificates of deposit with a three-month maturity in the secondary market as
published in the most recent Federal Reserve System publication entitled
"Select Interest Rates," published weekly on Form H.15 as of the date hereof,
or if such publication or a substitute containing the foregoing rate
information shall not be published by the Federal Reserve System for any week,
the weekly average offering rate determined by the Agent on the basis of
quotations for such certificates received by it from three certificate of
deposit dealers in New York of recognized standing or, if such quotations are
unavailable, then on the basis of other sources reasonably selected by the
Agent, by (y) a percentage equal to 100% minus the stated maximum rate of all
reserve requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily
net annual assessment rate as estimated by the Agent for determining the
current annual assessment payable by the Agent to the Federal Deposit
Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest
expense) and net non-cash losses which were included in arriving at
Consolidated Net Income for such period less the sum of the amount of all net
non-cash gains (exclusive of items reflected in Adjusted Working Capital)
included in arriving at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Adjusted Leverage Ratio" shall mean, at any time, the ratio of
Secured Consolidated Debt at such time to Consolidated EBITDA for the Test
Period then most recently ended.
"Adjusted Percentage" shall mean (x) at a time when no Bank Default
exists, for each Bank, such Bank's Percentage and (y) at a time when a Bank
Default exists (i) for each Bank that is a Defaulting Bank, zero and (ii) for
each Bank that is a Non- Defaulting Bank, the percentage determined by
dividing such Bank's Revolving Loan Commitment at such time by the Adjusted
Total Revolving Loan Commitment at such time, it being understood that all
references herein to Revolving Loan Commitments and the Adjusted Total
Revolving Loan Commitment at a time when the Total Revolving Loan Commitment
or Adjusted Total Revolving Loan Commitment, as the case may be, has been
terminated shall be references to the Revolving Loan Commitments or Adjusted
Total Revolving Loan Commitment, as the case may be, in effect immediately
prior to such termination, provided that (A) no Bank's Adjusted Percentage
shall change upon the occurrence of a Bank Default from that in effect
immediately prior to such Bank Default if after giving effect to such Bank
Default, and any repayment of Revolving Loans and Swingline Loans at such time
pursuant to Section 4.02(a) or otherwise, the sum of (i) the aggregate
outstanding principal amount of Revolving Loans of all Non-Defaulting Banks
plus (ii) the aggregate outstanding principal amount of Swingline Loans plus
(iii) the Letter of Credit Outstandings, exceed the Adjusted Total Revolving
Loan Commitment; (B) the changes to the Adjusted Percentage that would have
become effective upon the occurrence of a Bank Default but that did not become
effective as a result of the preceding clause (A) shall become effective on
the first date after the occurrence of the relevant Bank Default on which the
sum of (i) the aggregate
-59-
outstanding principal amount of the Revolving Loans of all Non-Defaulting
Banks plus (ii) the aggregate outstanding principal amount of the Swingline
Loans plus (iii) the Letter of Credit Outstandings is equal to or less than
the Adjusted Total Revolving Loan Commitment; and (C) if (i) a Non-Defaulting
Bank's Adjusted Percentage is changed pursuant to the preceding clause (B) and
(ii) any repayment of such Bank's Revolving Loans, or of Unpaid Drawings with
respect to Letters of Credit or of Swingline Loans, that were made during the
period commencing after the date of the relevant Bank Default and ending on
the date of such change to its Adjusted Percentage must be returned to the
Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Bank's
Adjusted Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted
Percentage if (x) such repayments had not been made and (y) the maximum change
to its Adjusted Percentage would have resulted in the sum of the outstanding
principal of Revolving Loans made by such Bank plus such Bank's new Adjusted
Percentage of the outstanding principal amount of Swingline Loans and of
Letter of Credit Outstandings equaling such Bank's Revolving Loan Commitment
at such time.
"Adjusted Total Revolving Loan Commitment" shall mean at any time
the Total Revolving Loan Commitment less the aggregate Revolving Loan
Commitments of all Defaulting Banks.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided, however, that for purposes of
Section 9.06, an Affiliate of Holdings shall include any Person that directly
or indirectly owns more than 5% of any class of the capital stock of Holdings
and any officer or director of Holdings or the Borrower. A Person shall be
deemed to control another Person if such Person possesses, directly or
indirectly, the power to direct or cause the direction of the management and
policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agent" shall mean Bankers Trust Company, in its capacity as Agent
for the Banks hereunder, and shall include any successor to the Agent
appointed pursuant to Section 12.09.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"Applicable Base Rate Margin" shall mean (i) for the period from the
Initial Borrowing Date through but not including the first Start Date, after
the Initial Borrowing Date (x) in the case of Term Loans which are maintained
as Base Rate Loans, 1.50% and (y) in the case of Revolving Loans which are
maintained as Base Rate Loans, 1.25% and (ii) from and after any Start Date to
an including the corresponding End Date, the respective percentage per annum
set forth in clause (A), (B), (C) or (D) below if, but only if, as of the Test
Date for such Start Date the applicable condition set forth in clause (A),
(B), (C) or (D) below, as the case may be, is met:
(A) 1.50% in the case of Term Loans which are maintained as Base
Rate Loans and 1.25% in the case of Revolving Loans which are maintained as
Base Rate Loans, in each case if, but only if, as of the Test Date of such
Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be greater than or equal to 5.00:1.00;
-60-
(B) 1.25% in the case of Term Loans which are maintained as Base
Rate Loans and 1.00% in the case of Revolving Loans which are maintained as
Base Rate Loans, in each case if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 5.00:1.00 and greater than or equal to 4.50:1.00;
(C) 1.00% in the case of Term Loans which are maintained as Base
Rate Loans and 0.75% in the case of Revolving Loans which are maintained as
Base Rate Loans, in each case if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 4.50:1.00 and greater than or equal to 4.00:1.00; and
(D) 0.75% in the case of Term Loans which are maintained as Base
Rate Loans and 0.50% in the case of Revolving Loans which are maintained as
Base Rate Loans, in each case if, but only if, as of the Test Date for such
Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 4.00:1.00.
Notwithstanding anything to the contrary above in this definition,
the Applicable Base Rate Margin shall be, in the case of Term Loans which are
maintained as Base Rate Loans, 1.50%, and, in the case of Revolving Loans
which we maintained as Base Rate Loans, 1.25% at all times when a Default or
an Event of Default shall exist.
"Applicable Eurodollar Rate Margin" shall mean (i) for the period
from the Initial Borrowing Date through but not including the first Start Date
after the Initial Borrowing Date, (x) in the case of Term Loans which are
maintained as Eurodollar Loans, 2.50% and (y) in the case of Revolving Loans
which are maintained as Eurodollar Loans, 2.25%, and (ii) from and after any
Start Date to and including the corresponding End Date, the respective
percentage per annum set forth in clause (A), (B), (C) or (D) below if, but
only if, as of the Test Date for such Start Date the applicable condition set
forth in clause (A), (B), (C) or (D) below, as the case may be, is met:
(A) 2.50% in the case of Term Loans which are maintained as
Eurodollar Loans and 2.25% in the case of Revolving Loans which are maintained
as Eurodollar Loans, in each case if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be greater than or equal to 5.00:1.00;
(B) 2.25% in the case of Term Loans which are maintained as
Eurodollar Loans and 2.00% in the case of Revolving Loans which are maintained
as Eurodollar Loans, in each case if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 5.00:1.00 and greater than or equal to 4.50:1.00;
(C) 2.00% in the case of Term Loans which are maintained as
Eurodollar Loans and 1.75% in the case of Revolving Loans which are maintained
as Eurodollar Loans, in each case if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 4.50:1.00 and greater than or equal to 4.00:1.00; and
(D) 1.75% in the case of Term Loans which are maintained as
Eurodollar Loans and 1.50% in the case of Revolving Loans which are maintained
as Eurodollar Loans, in each case if, but only if, as of the Test Date for
such Start Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 4.00:1.00.
-61-
Notwithstanding anything to the contrary above in this definition, the
Applicable Eurodollar Rate Margin shall be, in the case of Term Loans which
are maintained as Eurodollar Loans, 2.50%, and, in the case of Revolving Loans
which we maintained as Eurodollar Loans, 2.25% at all times when a Default or
an Event of Default shall exist.
"Applicable Margin Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 8.01(b) or (c), as the case may be, and which shall end on the earlier
of (i) the date of the actual delivery of the next financial statements
pursuant to Section 8.01(b) or (c), as the case may be, and (ii) the latest
date on which the next financial statements are required to be delivered
pursuant to Section 8.01(b) or (c), as the case may be, provided that the
first Applicable Margin Period shall commence with the delivery of Holdings'
financial statements for the Test Period ending on June 30, 1998.
" Asset Sale" shall mean any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to Holdings or a Wholly-Owned Subsidiary
of Holdings of any asset (including, without limitation, any capital stock or
other securities of, or equity interests in, another Person) other than (i)
sales of assets pursuant to Sections 9.02(ii), (v) and (xii)(A) and (ii) sales
of assets which individually, or together with related sales, do not exceed
$50,000 per sale.
"Asset Swap" shall have the meaning provided in Section
9.02(xiii).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Available Retained Cash Flow Amount" shall be an amount equal to
zero, plus an amount equal to the 50% of Excess Cash Flow permitted to be
retained by the Borrower (determined on a cumulative basis, but including only
those Excess Cash Payment Periods ended after the Initial Borrowing Date where
the respective Excess Cash Payment Date has occurred and any required
repayment pursuant to Section 4.02(f) has been made; provided that if Excess
Cash Flow is negative for any Excess Cash Payment Period, 100% of such
negative amount shall be included in determining the Borrower's cumulative
retained share of Excess Cash Flow (it being understood, however, that the
cumulative retained share of Excess Cash Flow shall, under no circumstances be
reduced below zero at any time) and not required to be utilized to repay Term
Loans pursuant to Section 4.02(f), minus (ii) any amounts utilized to make
prepayments of Holdings Senior Discount Notes or Borrower Senior Discount
Notes, as the case may be, pursuant to clause (A) of the proviso to Section
9.10(i).
"Bank" shall mean each financial institution listed on Schedule I,
as well as any Person which becomes a "Bank" hereunder pursuant to Section
1.13 or 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Bank having notified in writing the Borrower
and/or the Agent that it does not intend to comply with its obligations under
Section 1.01(b) or 1.01(d) or Section 2, in the case of either clause (i) or
(ii) as a result of any takeover of such Bank by any regulatory authority or
agency.
"Bankruptcy Code" shall have the meaning provided in
Section 10.05.
-62-
"Base Rate" at any time shall mean the higher of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate, (ii) the Prime Lending
Rate and (iii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) any
other Loan designated or deemed designated as such by the Borrower at the time
of the incurrence thereof or conversion thereto.
"Borrower" shall mean (i) prior to the Merger,
Acquisition Corp. and (ii) from and after the consummation of the
Merger, Universal.
"Borrower Senior Discount Note Indenture" shall mean the Indenture,
dated as of February 20, 0000 xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx Trust
Company of New York, as trustee.
"Borrower Senior Discount Note Purchase Agreement" shall mean the
Purchase Agreement, dated February 20, 1998, among the Borrower and the
initial purchasers of Borrower Senior Discount Notes.
"Borrower Senior Discount Notes" shall mean the Borrower's 9 7/8%
Senior Discount Notes due 2008, which will be issued pursuant to the Borrower
Senior Discount Note Indenture.
"Borrower Senior Note Documents" shall mean (i) the Borrower Senior
Discount Notes, (ii) the Borrower Senior Discount Note Indenture, (iii) the
Borrower Senior Discount Note Purchase Agreement and (iv) all other
agreements, documents and instruments effectuating the foregoing and all
amendments and exhibits to any of the foregoing.
"Borrowing" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments of the respective Tranche (or
from BTCo in the case of Swingline Loans) on a given date (or resulting from a
conversion or conversions on such date) having in the case of Eurodollar Loans
the same Interest Period, provided that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of the related Borrowing of
Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company in its
individual capacity.
"Business Day" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall
be in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii)
with respect to all notices and determinations in connection with, and
payments of principal and interest on, Eurodollar Loans, any day which is a
Business Day described in clause (i) above and which is also a day for trading
by and between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
without duplication, all expenditures by such Person which are capitalized in
accordance with generally accepted accounting principles and the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken
at the amount thereof accounted for as indebtedness in accordance with such
principles.
-63-
"Cash Equivalents" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank having, or which is the
principal banking subsidiary of a bank holding company having, a long-term
unsecured debt rating of at least "A" or the equivalent thereof from Standard
& Poor's Ratings Services, a division of McGraw Hill, Inc. Corporation or "A2"
or the equivalent thereof from Xxxxx'x Investors Service, Inc. with maturities
of not more than six months from the date of acquisition by such Person, (iii)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any
bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated
at least A-1 or the equivalent thereof by Standard & Poor's Ratings Services,
a division of McGraw Hill, Inc. or at least P-1 or the equivalent thereof by
Xxxxx'x Investors Service, Inc. and in each case maturing not more than six
months after the date of acquisition by such Person, (v) Eurodollar
certificates of deposit maturing within six months after the date of
acquisition thereof issued by any commercial bank organized under the laws of
the United States of America or any State thereof or the District of Columbia
or by any foreign bank, which is a Bank, or United States branches of foreign
banks, and in any case having a combined capital and surplus of not less than
$100,000,000, (vi) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (v) above and (vi) investments made by Foreign Subsidiaries in local
currencies in instruments issued by or with entities of such jurisdiction
having correlative attributes to the foregoing.
"Xxxxxx Xxxxxx" shall mean Xxxxxx Xxxxxx, Inc., a
Delaware corporation.
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as the same
may be amended from time to time, 42 U.S.C. 9601 et seq.
"CH Management Agreement" shall mean the Management Agreement, dated
as of February 20, 1998, between Xxxxxx Xxxxxx, Holdings and Universal.
"Change of Control" means (a) (i) prior to a Qualified Public Equity
Offering, the Permitted Investors shall cease to own on a fully diluted basis
in the aggregate at least 51% of the economic and voting interest in the
capital stock of Holdings or shall cease to have the right to elect a majority
of the directors of Holdings and (ii) on and after the consummation of a
Qualified Public Equity Offering, the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of
which is that any "person" (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or group or
related persons, together with Affiliates thereof (other than the Permitted
Investors), becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of more
than 35% of the Voting Stock of Holdings (as determined on a fully diluted
basis and measured by voting power rather than number of shares) provided that
the Permitted Investors "beneficially own" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, in the
aggregate a lesser percentage of the Voting Stock of Holdings than such other
"person" or group of related persons and do not have the right or ability by
voting, contract or otherwise to elect or designate for election a majority of
the Board of Directors of Holdings or (b) the Borrower shall cease to be a
direct Wholly-Owned Subsidiary of Holdings or (c) a "Change of Control" or
similar event shall occur under the Holdings Senior Note Documents or the
Borrower Senior Note Documents.
"CHP-III" shall mean Xxxxxx Xxxxxx Partners III, L.P., a Delaware
limited partnership.
-64-
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued
thereunder. Section references to the Code are to the Code, as in effect at
the date of this Agreement, and to any subsequent provision of the Code,
amendatory thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Security Agreement Collateral, and all cash and Cash Equivalents delivered as
collateral pursuant to Section 4.02 or 10 hereof.
"Collateral Agent" shall mean the Agent acting as collateral agent
for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the
meaning provided in Section 5.05.
"Commitment" shall mean any of the commitments of any Bank, i.e.,
whether the Term Loan Commitment or Revolving Loan Commitment.
"Commitment Commission" shall have the meaning provided
in Section 3.01(a).
"Consolidated Adjusted EBITDA" shall mean Consolidated EBITDA, for
any period, adjusted by subtracting therefrom any management fees attributable
to such period pursuant to the CH Management Agreement.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Consolidated Subsidiaries.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Consolidated Subsidiaries
at such time, but excluding the current portion of and accrued but unpaid
interest on any Indebtedness under this Agreement and any other long-term
Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, the sum of the
aggregate outstanding principal amount of all Indebtedness for borrowed money,
the amount of any unreimbursed drawings under any letter of credit (which have
been unreimbursed for three or more days) and the principal component of
Capitalized Lease Obligations of Holdings and its Consolidated Subsidiaries.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of Holdings and its Consolidated Subsidiaries, before Consolidated Net
Interest Expense and provision for taxes and without giving effect to any
extraordinary gains or losses or gains or losses from sales of assets other
than inventory sold in the ordinary course of business or any extraordinary or
non-recurring charges relating to the Transaction and adding back the
management fees attributable to such period pursuant to the CH Management
Agreement.
"Consolidated EBITDA" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated EBIT for such
period.
"Consolidated Net Income" shall mean, for any period, net after tax
income of Holdings and its Consolidated Subsidiaries.
-65-
"Consolidated Net Interest Expense" shall mean, for any period, the
total consolidated interest expense of Holdings and its Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of Holdings and its Consolidated Subsidiaries representing
the interest factor for such period, in each case net of the total
consolidated cash interest income of Holdings and its Consolidated
Subsidiaries for such period.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with generally accepted accounting
principles in the United States.
"Contingent Obligation" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person
(the "primary obligor") in any manner, whether directly or indirectly,
including, without limitation, any obligation of such Person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (x) for the purchase or payment of any such primary obligation or (y) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to
purchase property, securities or services primarily for the purpose of
assuring the owner of any such primary obligation of the ability of the
primary obligor to make payment of such primary obligation or (iv) otherwise
to assure or hold harmless the holder of such primary obligation against loss
in respect thereof; provided, however, that the term Contingent Obligation
shall not include endorsements of instruments for deposit or collection in the
ordinary course of business. The amount of any Contingent Obligation shall be
deemed to be an amount equal to the stated or determinable amount of the
primary obligation in respect of which such Contingent Obligation is made or,
if not stated or determinable, the maximum reasonably anticipated liability in
respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note and each Security Document and the Subsidiary Guaranty.
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and
each Subsidiary Guarantor.
"Debt Agreements" shall have the meaning provided in
Section 5.05.
"Default" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a Bank
Default is in effect.
"Dividend" with respect to any Person shall mean that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than common stock of such Person) or cash to its
stockholders as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set
aside any funds for any of the
-66-
foregoing purposes, or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of
the capital stock of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock). Without limiting the foregoing, "Dividends" with respect to any Person
shall also include all payments made or required to be made by such Person
with respect to any stock appreciation rights, plans, equity incentive or
achievement plans or any similar plans or setting aside of any funds for the
foregoing purposes.
"Documents" shall mean the Credit Documents, the Acquisition
Documents, the Merger Documents, the Equity Financing Documents, the
Refinancing Documents, the Holdings Senior Note Documents and the Borrower
Senior Note Documents.
"Dollar Equivalent" shall mean, at any time of determination
thereof, the amount of Dollars which could be purchased with the amount of
currency involved in such computation at the spot exchange rate therefor as
published in the New York edition of The Wall Street Journal on the date one
Business Day prior to the date of any determination thereof, provided that if
the New York edition of The Wall Street Journal is not published on such date,
reference shall be made to such rate as set forth in the most recently
published New York edition of The Wall Street Journal, and provided further,
that if at any time the New York edition of The Wall Street Journal ceases to
publish such exchange rates, the Dollar Equivalent shall be the amount of
Dollars which could be purchased with the amount of currency involved in such
computation at the spot rate therefor as quoted by the Agent at approximately
11:00 a.m. (London time) on the date two Business Days prior to the date of
any determination thereof for purchase on such date.
"Dollars" and the sign "$" shall each mean freely transferable
lawful money of the United States.
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower
which is not a Foreign Subsidiary.
"Drawing" shall have the meaning provided in Section
2.05(b).
"Effective Date" shall have the meaning provided in
Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation
D of the Securities Act).
"Employee Benefit Plans" shall have the meaning
provided in Section 5.05.
"Employment Agreements" shall have the meaning provided
in Section 5.05.
"End Date" shall mean, for any Applicable Margin Period, the last
day of such Applicable Margin Period.
"Environmental Claims" means any and all administrative, regulatory
or judicial actions, suits, demands, demand letters, directives, claims,
liens, notices of noncompliance or violation, investigations or proceedings
relating in any way to any Environmental Law or any permit issued, or any
approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial
or other actions or damages pursuant to any applicable Environmental Law, and
(b) any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or
-67-
injunctive relief in connection with alleged injury or threat of injury to
health, safety or the environment due to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment, relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. 2601 et seq.;
the Clean Air Act, 42 U.S.C. 7401 et seq.; the Safe Drinking Water Act, 42
U.S.C. 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C.
2701 et seq.; the Emergency Planning and the Community Right-to- Know Act of
1986, 42 U.S.C. 11001 et seq., the Hazardous Material Transportation Act, 49
U.S.C. 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C. 651
et seq. ; and any state and local or foreign counterparts or equivalents, in
each case as amended from time to time.
"Equity Financing" shall mean the issuance by Holdings of (x)
Holdings Preferred Stock and (y) shares of its common stock, in each case to
the Permitted Investors and pursuant to the Equity Financing Documents and as
part of the Transaction.
"Equity Financing Documents" shall mean each of the documents and
agreements entered into in connection with the consummation of the Equity
Financing.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c),
(m) or (o) of the Code.
"Eurodollar Loan" shall mean each Loan (excluding Swingline Loans)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for
Dollar deposits of amounts in immediately available funds comparable to the
outstanding principal amount of the Eurodollar Loan of BTCo with maturities
comparable to the Interest Period applicable to such Eurodollar Loan
commencing two Business Days thereafter as of 10:00 A.M. (New York time) on
the date which is two Business Days prior to the commencement of such Interest
Period, divided (and rounded off to the nearest 1/16 of 1%) by (b) a
percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves required by applicable law) applicable
to any member bank of the Federal Reserve System in respect of Eurocurrency
funding or liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in
Section 10.
"Excess Cash Flow" shall mean, for any period, the remainder of (i)
the sum of (a) Adjusted Consolidated Net Income for such period, (b) the
aggregate amount of all Net Sale Proceeds
-68-
received during such period (excluding any Net Sale Proceeds received from
sales of assets permitted by Section 9.02(v)), (c) the decrease, if any, in
Adjusted Consolidated Working Capital from the first day to the last day of
such period and (d) the aggregate amount of taxes accrued in such period but
not paid as a result of deferral options available under the Code, minus (ii)
the sum of (a) the amount of Capital Expenditures (but excluding Capital
Expenditures (x) financed with Indebtedness or (y) made with insurance
proceeds) made by the Borrower and its Subsidiaries on a consolidated basis
during such period in accordance with Section 9.07, (b) the aggregate
principal amount of permanent principal payments of Indebtedness for borrowed
money of the Borrower (other than repayments pursuant to the Refinancings,
repayments of the Holdings Senior Discount Notes or the Borrower Senior
Discount Notes and repayments of Loans, provided that repayments of Loans
shall be deducted in determining Excess Cash Flow if such repayments were (x)
required as a result of a Term Loan Scheduled Repayment under Section 4.02(b)
or repayments required by Section 4.02(e) or (y) made as a voluntary
prepayment with internally generated funds (but in the case of a voluntary
prepayment of Revolving Loans, only to the extent accompanied by a voluntary
reduction to the Total Revolving Loan Commitment)) during such period, (c) the
increase, if any, in Adjusted Consolidated Working Capital from the first day
to the last day of such period and (d) the aggregate amount, if any, paid in
such period in connection with taxes previously deferred.
"Excess Cash Payment Date" shall mean the date occurring 90 days
after the last day of each fiscal year of the Borrower (beginning with its
fiscal year ended closest to March 31, 1999).
"Excess Cash Payment Period" shall mean with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower.
"Existing Indebtedness" shall have the meaning provided
in Section 7.22.
"Facing Fee" shall have the meaning provided in Section
3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day
(or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such
day on such transactions received by the Agent from three Federal Funds
brokers of recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or
referred to in Section 3.01.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or more
of its Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States of America, which plan, fund
or other similar program provides, or results in, retirement income, a
deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that
is incorporated under the laws of any jurisdiction other than the United
States of America, any State thereof, or any territory thereof.
-69-
"Foreign Subsidiary Indebtedness" shall have the
meaning provided in Section 9.04(xiv).
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and Loans made to, the Borrower
under this Agreement and all reimbursement obligations and Unpaid Drawings
with respect to Letters of Credit, together with all the other obligations
(including obligations which, but for the automatic stay under Section 362(a)
of the Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of the Borrower to the
Banks, the Agent, the Issuing Bank and the Collateral Agent now existing or
hereafter incurred under, arising out of or in connection with this Agreement
or any other Credit Document and (ii) the full and prompt payment when due
(whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) of the Borrower owing
under any Interest Rate Protection Agreement or Other Hedging Agreement
entered into by the Borrower with any Bank or any affiliate thereof (even if
such Bank subsequently ceases to be a Bank under this Agreement for any
reason) so long as such Bank or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent assigns,
if any, whether now in existence or hereafter arising, and the due performance
and compliance with all terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary
Guarantor.
"Guaranty" shall mean and include the Holdings Guaranty
and the Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment
that contain dielectric fluid containing levels of polychlorinated biphenyls,
and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or
"pollutants," or words of similar import, under any applicable Environmental
Law; and (c) any other chemical, material or substance, the Release of which
is prohibited, limited or regulated by any governmental authority.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
"Holdings Guaranty" shall mean the guaranty of Holdings
pursuant to Section 14.
"Holdings Preferred Stock" shall mean the preferred stock of
Holdings issued to the Permitted Investors as part of the Equity Financing.
"Holdings Senior Discount Note Indenture" shall mean the Indenture,
dated as of February 20, 1998 between the Borrower and United States Trust of
New York, as trustee.
"Holdings Senior Discount Note Purchase Agreement" shall mean the
Purchase Agreement, dated February 20, 1998, among the Borrower and the
initial purchasers of Holdings Senior Discount Notes.
"Holdings Senior Discount Notes" shall mean Holdings 11 3/8% Senior
Discount Notes due 2009, which will be issued pursuant to the Holdings Senior
Discount Note Indenture.
-70-
"Holdings Senior Note Documents" shall mean (i) the Holdings Senior
Discount Notes, (ii) the Holdings Senior Discount Note Indenture, (iii) the
Holdings Senior Discount Note Purchase Agreement and (iv) all other
agreements, documents and instruments effectuating the foregoing and all
amendments and exhibits to any of the foregoing.
"Indebtedness" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in
respect of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (provided, that, if the Person
has not assumed or otherwise become liable in respect of such Indebtedness,
such Indebtedness shall be deemed to be in an amount equal to the lesser of
the fair market value of the property to which such Lien relates as determined
in good faith by such Person and the stated amount of such Indebtedness), (iv)
the aggregate amount required to be capitalized under leases under which such
Person is the lessee, (v) all obligations of such person to pay a specified
purchase price for goods or services, whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vi) all Contingent Obligations of
such Person and (vii) all obligations under any Interest Rate Protection
Agreement or Other Hedging Agreement or under any similar type of agreement.
Notwithstanding the foregoing, Indebtedness shall not include trade payables
and accrued expenses incurred by any Person in accordance with customary
practices and in the ordinary course of business of such Person.
"Indebtedness to be Refinanced" shall mean all
indebtedness set forth in Schedule VIII.
"Initial Borrowing Date" shall mean the date occurring on or after
the Effective Date on which the initial Borrowing hereunder occurs.
"Insignificant Foreign Subsidiary" shall mean, as to any Person, any
Foreign Subsidiary whose assets represent less than 10% of the total value of
all assets owned by such Person and its Subsidiaries.
"Intercompany Loan" shall have the meaning provided in
Section 9.05(xi).
"Intercompany Note" shall mean a promissory note, in the form of
Exhibit M, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in
Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate
swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Joint Venture" shall have the meaning provided in
Section 9.05(viii).
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business with
respect to workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of the Borrower or any of its
-71-
Subsidiaries as are reasonably acceptable to BTCo and otherwise permitted to
exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in
Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided
in Section 3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning
provided in Section 2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of Consolidated
Debt at such time to Consolidated EBITDA for the Test Period then most
recently ended.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan
and each Swingline Loan.
"Management Agreements" shall have the meaning provided
in Section 5.05.
"Mandatory Borrowing" shall have the meaning provided
in Section 1.01(d).
"Margin Stock" shall have the meaning provided in
Regulation U.
"Maturity Date" shall mean, with respect to any Tranche of Loans,
the Term Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline
Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $10,000,000.
"Merger" shall mean the merger of Acquisition Corp.
with and into Universal pursuant to the Merger Documents, with
Universal as the surviving corporation of such merger.
"Merger Documents" shall mean and include (i) the Agreement and Plan
of Merger, dated as of February 20, 1998, among Holdings, the Borrower and
TCSI, as the same may be amended, modified or supplemented from time to time
pursuant to the terms hereof and thereof and (ii) all other agreements and
documents, governing, or relating to, the Merger.
"Net Hedging Exposure Amount" shall mean at any time, the net
exposure amount determined on a xxxx-to-market basis at such time, of the
Borrower under any Other Hedging Agreement.
"Net Sale Proceeds" shall mean for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but
-72-
only as and when received) received from such sale of assets, net of the
reasonable costs of such sale (including payments of unassumed liabilities
relating to the assets sold and required payments of any Indebtedness (other
than Indebtedness secured pursuant to the Security Documents) which is secured
by the respective assets which were sold), and the taxes paid or payable by
Holdings' consolidated group as a result of such sale and appropriate amounts
to be provided by Holdings or any of its Subsidiaries, as the case may be, as
a reserve, in accordance with GAAP, against any liabilities associated with
such Asset Sale and retained by Holdings or any of its Subsidiaries, after
such Asset Sale, including without limitation, pension and other
post-employment benefit liabilities, liabilities related to environmental
matters and liabilities under any indemnification obligations with such Asset
Sale (it being understood, however, that, to the extent such reserves are
released or reduced, an amount equal to such release or reduction shall be
required to be applied as a mandatory repayment or mandatory commitment
reduction in accordance with Sections 3.03 and 4.02).
"Non-Defaulting Bank" shall mean and include each Bank other than a
Defaulting Bank.
"Note" shall mean each Term Note, each Revolving Note
and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided
in Section 1.03.
"Notice of Conversion" shall have the meaning provided
in Section 1.06.
"Notice Office" shall mean the office of the Agent located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx, or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"Other Hedging Agreement" shall mean any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in
Section 2.04(a).
"Payment Office" shall mean the office of the Agent located at Xxx
Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other office as the
Agent may hereafter designate in writing as such to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the Percentage of any
Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Agent in its reasonable discretion.
-73-
"Permitted Investors" shall mean (x) Xxxxxx Xxxxxx Partners III
L.P., Xxxxxx Xxxxxx, Inc. and employees, management and directors of, and
persons owning accounts managed by, any of the foregoing and their respective
Affiliates (including, without limitation, Holdings and the Borrower) and (y)
other investors reasonably satisfactory to the Agent and the Required Banks.
"Permitted Liens" shall have the meaning provided in
Section 9.01.
"Permitted Section 9.02(viii) Acquisition" shall have the meaning
provided in Section 9.02(viii).
"Person" shall mean any individual, partnership, joint venture,
firm, corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following
the latest date on which Holdings, or a Subsidiary of Holdings or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to
such plan.
"Pledge Agreement" shall have the meaning provided in
Section 5.09.
"Pledge Agreement Collateral" shall mean all
"Collateral" as defined in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged
Securities" as defined in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from
time to time as its prime lending rate, the Prime Lending Rate to change when
and as such prime lending rate changes. The Prime Lending Rate is a reference
rate and does not necessarily represent the lowest or best rate actually
charged to any customer. BTCo may make commercial loans or other loans at
rates of interest at, above or below the Prime Lending Rate.
"Projections" shall mean the projections prepared by the Borrower in
connection with the Transaction, dated January 28, 1998 and furnished to the
Banks prior to the Initial Borrowing Date.
"Qualified Preferred Stock" shall mean the Holdings Preferred Stock
and any other preferred stock of Holdings so long as the terms of any such
preferred stock (i) do not contain any mandatory put, redemption, repayment,
sinking fund or other similar provision occurring before February __, 2006
other than any such provision which is comparable to a provision in the
Holdings Preferred Stock, (ii) do not require the cash payment of dividends
before February __, 2006, (iii) do not contain any covenants other than those
covenants of the type (but no more restrictive than those) set forth in the
Holdings Preferred Stock and (iv) are otherwise reasonably satisfactory to the
Agent.
"Qualified Public Equity Offering" means a bona fide underwritten
sale to the public of common stock of Holdings pursuant to a registration
statement filed with the SEC in accordance with the Securities Act.
-74-
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December occurring after the Initial Borrowing
Date.
"RCRA" shall mean the Resource Conservation and
Recovery Act, as the same may be amended from time to time, 42
U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by the Holdings or any of
its Subsidiaries of any cash insurance proceeds or condemnation award payable
(i) by reason of theft, loss, physical destruction or damage or any other
similar event with respect to any property or assets of Holdings or any of its
Subsidiaries and (ii) under any policy of insurance required to be maintained
by Holdings and its Subsidiaries under Section 8.03.
"Refinancing Documents" shall mean all agreements and
documents related to the Refinancing.
"Refinancings" shall mean the repayment in full by the
Borrower of the Indebtedness to be Refinanced.
"Regulations D, G, T, U and X" shall mean Regulations D, G, T, U and
X of the Board of Governors of the Federal Reserve System as from time to time
in effect and any successors to all or a portion thereof.
"Release" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, pouring or
migrating, into or upon any land or water or air, or otherwise entering into
the environment.
"Replaced Bank" shall have the meaning provided in
Section 1.13.
"Replacement Bank" shall have the meaning provided in
Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other
than those events as to which the 30- day notice period is waived under PBGC
Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks, the sum of whose
outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term Loan
Commitments) and Revolving Loan Commitments (or after the termination thereof,
outstanding Revolving Loans and Adjusted Percentage of outstanding Swingline
Loans and Letter of Credit Outstandings) represent an amount greater than
fifty percent of the sum of all outstanding Term Loans (or, if prior to the
Initial Borrowing Date, the Term Loan Commitments) of Non-Defaulting Banks and
the Adjusted Total Revolving Loan Commitment (or after the termination
thereof, the sum of the then total outstanding Revolving Loans of Non-
Defaulting Banks, and the aggregate Adjusted Percentages of all Non-Defaulting
Banks of the total outstanding Swingline Loans and Letter of Credit
Outstandings at such time).
"Returns" shall have the meaning provided in Section
7.09.
"Revolving Loan" shall have the meaning provided in
Section 1.01(b)
-75-
"Revolving Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I hereto directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03, 4.02 and/or 10 or (y) adjusted
from time to time as a result of assignments to or from such Bank pursuant to
Section 1.13 or 13.04(b).
"Revolving Loan Maturity Date" shall mean February 20,
2003.
"Revolving Note" shall have the meaning provided in
Section 1.05(a).
"SEC" shall have the meaning provided in Section
8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the
meaning provided in Section 4.04(b).
"Secured Consolidated Debt" shall mean, at any time, all
Consolidated Debt (including any Foreign Subsidiary Indebtedness) which is
secured by any of the assets of Holdings and its Subsidiaries.
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Securities Issuance" shall mean any issuance or sale by Holdings or
any of its Subsidiaries of any of its equity securities after the Initial
Borrowing Date other than (i) grants or sales of common stock or options or
other rights to acquire common stock of Holdings or any of its Subsidiaries to
directors, management or employees of Holdings or any of its Subsidiaries
under any employee stock option or stock purchase plan or other employee
compensation arrangements and (ii) issuances or sales of any such equity
securities by any Subsidiary of the Borrower to a Wholly-Owned Subsidiary of
the Borrower or to the Borrower or by the Borrower to any of its Wholly-Owned
Subsidiaries, so long as the aggregate cash proceeds (net of reasonable costs
associated therewith) to Holdings and its Subsidiaries from all issuances and
sales pursuant to preceding clause (i) do not exceed $10,000,000 in any fiscal
year of Holdings.
"Security Agreement" shall have the meaning provided in
Section 5.10.
"Security Agreement Collateral" shall mean all
"Collateral" as defined in the Security Agreement.
"Security Document" shall mean and include each of the Security
Agreement, the Pledge Agreement and, after the execution and delivery thereof,
each Additional Security Document.
"Sellers" shall mean Tidewater.
"Shareholders' Agreements" shall have the meaning
provided in Section 5.05.
-76-
"Significant Subsidiary" shall mean, as to any Person, all
Subsidiaries of such Person other than its Insignificant Foreign Subsidiaries.
"Standby Letter of Credit" shall have the meaning
provided in Section 2.01(a).
"Start Date" shall mean, with respect to any Applicable Margin
Period, the first day of such Applicable Margin Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean
the maximum amount available to be drawn thereunder (in each case determined
without regard to whether any conditions to drawing could then be met).
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one
or more Subsidiaries of such Person and (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
Subsidiaries of such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
(other than a Foreign Subsidiary except to the extent otherwise provided in
Section 8.12) that is or becomes a party to the Subsidiary Guaranty.
"Subsidiaries Guaranty" shall mean the Subsidiaries Guaranty
substantially in the form of Exhibit I.
"Supermajority Banks" shall mean those Non-Defaulting Banks which
would constitute the Required Banks under, and as defined in, this Agreement
if (x) all outstanding Obligations in respect of the Revolving Loan Commitment
were repaid in full and the Total Revolving Loan Commitment was terminated and
(y) the percentage "50%" contained therein were changed to "66-2/3%."
"Swingline Expiry Date" shall mean, at any time, the date which is
two Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in
Section 1.01(c).
"Swingline Note" shall have the meaning provided in
Section 1.05(a).
"Syndication Date" shall have the meaning provided in
Section 1.01(a).
"Taxes" shall have the meaning provided in Section
4.04(a).
"TCSI" shall mean Tidewater Compression Service, Inc.,
a Texas corporation.
"Term Loan" shall have the meaning provided in Section
1.01(a).
"Term Loan Commitment" shall mean, for each Bank, the amount set
forth opposite such Bank's name in Schedule I hereto directly below the column
entitled "Term Loan Commitment", as same
-77-
may be (x) reduced from time to time pursuant to Sections 3.03, 4.02 and/or 10
or (y) adjusted from time to time as a result of assignments to or from such
Bank pursuant to Section 1.13 or 13.04.
"Term Loan Maturity Date" shall mean February 20, 2005.
"Term Loan Scheduled Repayment" shall have the meaning provided in
Section 4.02(b).
"Term Loan Scheduled Repayment Date" shall have the meaning provided
in Section 4.02(b).
"Term Note" shall have the meaning provided in Section
1.05(a).
"Test Date" shall mean, with respect to any Start Date, the last day
of the most recent fiscal quarter of Holdings ended immediately prior to such
date.
"Test Period" shall mean each period of four consecutive fiscal
quarters of Holdings then last ended (in each case taken as one accounting
period).
"Tidewater" shall mean Tidewater, Inc., a Delaware
corporation.
"Total Commitments" shall mean, at any time, the sum of
the Commitments of each of the Banks.
"Total Interest Expense" shall mean, for any period, the total
consolidated interest expense (net of interest income) of Holdings and its
Consolidated Subsidiaries for such period (including, without limitation, the
interest expense associated with Capitalized Lease Obligations), provided that
(x) the amortization or write-off of debt issuance costs, commissions, fees
and expenses, (y) the amortization of original issue discounts and (z) any
interest on the Holdings Senior Discount Notes which is not payable in cash
shall (in each case) be excluded from Total Interest Expense to the extent
same would otherwise have been included therein.
"Total Revolving Loan Commitment" shall mean, at any time, the sum
of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
"Trade Letter of Credit" shall have the meaning
provided in Section 2.01(a).
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being three separate Tranches,
i.e., Term Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation of the
Acquisition, (ii) the issuance of the Holdings Senior Discount Notes, (iii)
the issuance of the Borrower Senior Discount Notes, (iv) the consummation of
the Equity Financing, (v) the consummation of the Refinancing, (vi) the
entering into of the Credit Documents and (vii) the payment of fees and
expenses in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
-78-
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the value of the accumulated plan benefits under the Plan
determined on a plan termination basis in accordance with actuarial
assumptions at such time consistent with those prescribed by the PBGC for
purposes of Section 4044 of ERISA, exceeds the fair market value of all plan
assets allocable to such liabilities under Title IV of ERISA (excluding any
accrued but unpaid contributions).
"United States" and "U.S." shall each mean the United
States of America.
"Universal" shall mean (i) prior to the Merger, TCSI and (ii) from
and after the consummation of the Merger, Universal Compression, Inc.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Revolving Loan Commitment" with respect to any Bank, at
any time, shall mean such Bank's Revolving Loan Commitment at such time less
the sum of (i) the aggregate outstanding principal amount of Revolving Loans
made by such Bank and (ii) such Bank's Adjusted Percentage of the Letter of
Credit Outstandings.
"Voting Stock" of any Person as of any date means the capital stock
of such Person that is at the time entitled to vote in the election of the
Board of Directors of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Agent.
12.01 Appointment. The Banks hereby designate Bankers Trust Company
as Agent (for purposes of this Section 12, the term "Agent" shall include
Bankers Trust Company in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Credit
Documents. Each Bank hereby irrevocably authorizes, and each holder of any
Note by the acceptance of such Note shall be deemed irrevocably to authorize,
the Agent to take such action on its behalf under the provisions of this
Agreement, the other Credit Documents and any other instruments and agreements
referred to herein or therein and to exercise such powers and to perform such
duties hereunder and thereunder as are specifically delegated to or required
of the Agent by the terms hereof and thereof and such other powers as are
reasonably incidental thereto. The Agent may perform any of its duties
hereunder by or through its respective officers, directors, agents, employees
or affiliates.
12.02 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents. Neither the Agent nor any of its respective officers,
directors, agents, employees or affiliates shall be liable for any action
taken or omitted by it or them hereunder or under any other Credit Document or
in connection herewith or therewith, unless caused by its or their gross
negligence or willful misconduct. The duties of the Agent shall be mechanical
and administrative in nature; the Agent shall not have by reason of this
Agreement or any other Credit Document a fiduciary relationship in respect of
any Bank or the holder of any Note; and nothing in
-79-
this Agreement or any other Credit Document, expressed or implied, is intended
to or shall be so construed as to impose upon the Agent any obligations in
respect of this Agreement or any other Credit Document except as expressly set
forth herein or therein.
12.03 Lack of Reliance on the Agent. Independently and without
reliance upon the Agent, each Bank and the holder of each Note, to the extent
it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of Holdings
and its Subsidiaries in connection with the making and the continuance of the
Loans and the taking or not taking of any action in connection herewith and
(ii) its own appraisal of the creditworthiness of the Credit Parties and their
Subsidiaries and, except as expressly provided in this Agreement, the Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Bank or the holder of any Note with any credit or other
information with respect thereto, whether coming into its possession before
the making of the Loans or at any time or times thereafter. The Agent shall
not be responsible to any Bank or the holder of any Note for any recitals,
statements, information, representations or warranties herein or in any
document, certificate or other writing delivered in connection herewith or for
the execution, effectiveness, genuineness, validity, enforceability,
perfection, collectibility, priority or sufficiency of this Agreement or any
other Credit Document or the financial condition of Holdings and its
Subsidiaries or be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of
this Agreement or any other Credit Document, or the financial condition of
Holdings and its Subsidiaries or the existence or possible existence of any
Default or Event of Default.
12.04 Certain Rights of the Agent. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other
Credit Document, the Agent shall be entitled to refrain from such act or
taking such action unless and until the Agent shall have received instructions
from the Required Banks; and the Agent shall not incur liability to any Person
by reason of so refraining. Without limiting the foregoing, no Bank or the
holder of any Note shall have any right of action whatsoever against the Agent
as a result of the Agent acting or refraining from acting hereunder or under
any other Credit Document in accordance with the instructions of the Required
Banks.
12.05 Reliance. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made
by any Person that the Agent believed to be the proper Person, and, with
respect to all legal matters pertaining to this Agreement and any other Credit
Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Agent.
12.06 Indemnification. To the extent the Agent is not reimbursed and
indemnified by the Parties the Banks will reimburse and indemnify the Agent,
in proportion to their respective "percentages" as used in determining the
Required Banks, for and against any and all liabilities, obligations, losses,
damages, penalties, claims, actions, judgments, costs, expenses or
disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by the Agent in performing its respective duties hereunder
or under any other Credit Document, in any way relating to or arising out of
this Agreement or any other Credit Document; provided that no Bank shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements
resulting from the Agent's gross negligence or willful misconduct.
12.07 The Agent in its Individual Capacity. With respect to its
obligation to make Loans, or issue or participate in Letters of Credit, under
this Agreement, the Agent shall have the rights and
-80-
powers specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Banks," "Required Banks," "Supermajority Banks," "holders of Notes" or
any similar terms shall, unless the context clearly otherwise indicates,
include the Agent in its individual capacity. The Agent may accept deposits
from, lend money to, and generally engage in any kind of banking, trust or
other business with any Credit Party or any Affiliate of any Credit Party as
if it were not performing the duties specified herein, and may accept fees and
other consideration from the Borrower or any other Credit Party for services
in connection with this Agreement and otherwise without having to account for
the same to the Banks.
12.08 Holders. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall
have been filed with the Agent. Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of
such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice
to the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial
bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that any Non- Defaulting Bank is deemed to be acceptable
to the Borrower).
(c) If a successor Agent shall not have been so appointed within
such 15 Business Day period, the Agent, with the consent of the Borrower,
shall then appoint a successor Agent who shall serve as Agent hereunder or
thereunder until such time, if any, as the Banks appoint a successor Agent as
provided above.
(d) If no successor Agent has been appointed pursuant to clause (b)
or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Required Banks shall thereafter perform all the duties of
the Agent hereunder and/or under any other Credit Document until such time, if
any, as the Required Banks appoint a successor Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or
not the transactions herein contemplated are consummated, pay within 15 days
following written demand by the Agent (other than any payments due on the
Initial Borrowing Date, which the Borrower shall pay on such date) all
reasonable out-of-pocket costs and expenses of the Agent (including, without
limitation, the reasonable fees and disbursements of White & Case LLP and the
Agent's local counsel) in connection with the preparation, execution and
delivery of this Agreement and the other Credit Documents and the documents
and instruments referred to herein and therein and any amendment, waiver or
consent relating hereto or thereto, of the Agent in connection with its
syndication efforts with respect to this Agreement and of the Agent and, after
the occurrence and during the continuance of an Event of Default, each of the
Banks in connection
-81-
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the Agent
and, after the occurrence and during the continuance of an Event of Default,
for each of the Banks); (ii) pay within 15 days following written demand by
the Agent (other than any payments due on the Initial Borrowing Date, which
the Borrower shall pay on such date) and hold each of the Banks harmless from
and against any and all present and future stamp, excise and other similar
taxes with respect to the foregoing matters and save each of the Banks
harmless from and against any and all liabilities with respect to or resulting
from any delay or omission (other than to the extent attributable to such
Bank) to pay such taxes; and (iii) indemnify the Agent and each Bank, and each
of their respective officers, directors, employees, representatives and agents
from and hold each of them harmless against any and all liabilities,
obligations (including removal or remedial actions), losses, damages,
penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a)
any investigation, litigation or other proceeding (whether or not the Agent or
any Bank is a party thereto) related to the entering into and/or performance
of this Agreement or any other Credit Document or the use of any Letter of
Credit or the proceeds of any Loans hereunder or the consummation of any
transactions contemplated herein (including, without limitation, the
Acquisition) or in any other Credit Document or the exercise of any of their
rights or remedies provided herein or in the other Credit Documents, or (b)
the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property
owned or at any time operated by Holdings or any of its Subsidiaries, the
generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by Holdings or any
of its Subsidiaries, the non-compliance of any Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim in connection with Holdings, any of its Subsidiaries or
their business or operations or any Real Property owned or at any time
operated by Holdings or any of its Subsidiaries, including, in each case,
without limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding any losses, liabilities, claims, damages or
expenses to the extent incurred by reason of the gross negligence or willful
misconduct of the Person to be indemnified). To the extent that the
undertaking to indemnify, pay or hold harmless the Agent or any Bank set forth
in the preceding sentence may be unenforceable because it is violative of any
law or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Bank is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person,
any such notice being hereby expressly waived, to set off and to appropriate
and apply any and all deposits (general or special) and any other Indebtedness
at any time held or owing by such Bank (including, without limitation, by
branches and agencies of such Bank wherever located) to or for the credit or
the account of any Credit Party against and on account of the Obligations and
liabilities of the Credit Parties to such Bank under this Agreement or under
any of the other Credit Documents, including, without limitation, all
interests in Obligations purchased by such Bank pursuant to Section 13.06(b),
and all other claims of any nature or description arising out of or connected
with this Agreement or any other Credit Document, irrespective of whether or
not such Bank shall have made any demand hereunder and although said
Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
-82-
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at such Credit Party's address specified opposite its signature below; if to
any Bank, at its address specified opposite its name on Schedule VII below;
and if to the Agent, at its Notice Office; or, as to any Credit Party or the
Agent, at such other address as shall be designated by such party in a written
notice to the other parties hereto and, as to each Bank, at such other address
as shall be designated by such Bank in a written notice to the Borrower and
the Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Agent and the
Borrower shall not be effective until received by the Agent or the Borrower,
as the case may be.
13.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights,
obligations or interest hereunder without the prior written consent of the
Banks and, provided further, that, although any Bank may transfer, assign or
grant participations in its rights hereunder, such Bank shall remain a "Bank"
for all purposes hereunder (and may not transfer or assign all or any portion
of its Commitments hereunder except as provided in Sections 1.13 and 13.04(b))
and the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless
such Letter of Credit is not extended beyond the Revolving Loan Maturity Date)
in which such participant is participating, or reduce the rate or extend the
time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the
participant's participation over the amount thereof then in effect (it being
understood that a waiver of any Default or Event of Default or of a mandatory
reduction in the Total Commitment shall not constitute a change in the terms
of such participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such
Bank in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) assign all or a portion of its
Commitments and related outstanding Obligations hereunder to (i) its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (ii) in the case of any
Bank that is a fund that invests in loans, any other fund that invests in
loans and is managed or advised by the same investment advisor of such Bank or
by an Affiliate of such investment advisor or (y) assign all, or if less than
all, a portion equal to at least $5,000,000 in the aggregate for the assigning
Bank or assigning Banks, of such Commitments and related outstanding
Obligations hereunder to one or more Eligible Transferees (treating any fund
that invests in loans and any other fund that invests in loans and is managed
or advised by the
-83-
same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee), each of which assignees shall become
a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that, (i) at such time Schedule I shall be
deemed modified to reflect the Commitments (or outstanding Term Loans, as the
case may be) of such new Bank and of the existing Banks, (ii) new Notes will
be issued, at the Borrower's expense, to such new Bank and to the assigning
Bank upon the request of such new Bank or assigning Bank, such new Notes to be
in conformity with the requirements of Section 1.05 (with appropriate
modifications) to the extent needed to reflect the revised Commitments (or
outstanding Term Loans, as the case may be), (iii) the consent of the Agent
and the Borrower shall be required in connection with any assignment to an
Eligible Transferee pursuant to clause (y) above (which consents shall not be
unreasonably withheld), provided that the consent of the Borrower shall not be
required at any time that an Event of Default has occurred and is continuing,
and the consent of BTCo shall be required in connection with any assignment of
all or a portion of any Revolving Loan Commitment, (iv) the Agent shall
receive at the time of each such assignment, from the assigning or assignee
Bank, the payment of a non-refundable assignment fee of $3,000 and (v)
promptly after such assignment, the Borrower shall have received from the
Agent notice of any such assignment, together with the copy of the Assignment
and Assumption Agreement relating thereto. To the extent of any assignment
pursuant to this Section 13.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitments. At the time of
each assignment pursuant to this Section 13.04(b) to a Person which is not
already a Bank hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax
purposes, the respective assignee Bank shall, to the extent legally entitled
to do so, provide to the Borrower in the case of a Bank described in clause
(ii) or (iv) of Section 4.04(b), the forms described in such clause (ii) or
(iv), as the case may be. To the extent that an assignment of all or any
portion of a Bank's Commitments and related outstanding Obligations pursuant
to Section 1.13 or this Section 13.04(b) would, at the time of such
assignment, result in increased costs under Section 1.10, 2.06 or 4.04 from
those being charged by the respective assigning Bank prior to such assignment,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Bank
from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the
part of the Agent or any Bank or any holder of any Note in exercising any
right, power or privilege hereunder or under any other Credit Document and no
course of dealing between Holdings or any other Credit Party and the Agent or
any Bank or the holder of any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any
other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Agent or any Bank or the holder of
any Note would otherwise have. No notice to or demand on any Credit Party in
any case shall entitle any Credit Party to any other or further notice or
demand in similar or other circumstances or constitute a waiver of the rights
of the Agent or any Bank or the holder of any Note to any other or further
action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Agent agrees that promptly after its receipt of each payment
from or on behalf of the Borrower in respect of any Obligations hereunder, it
shall distribute such payment to the Banks (other than any Bank that has
-84-
consented in writing to waive its pro rata share of any such payment) pro rata
based upon their respective percentages, if any, of the Obligations with
respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or
interest on, the Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation
then owed and due to such Bank bears to the total of such Obligation then owed
and due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Party to such Banks in such amount as shall result in a proportional
participation by all the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non- Defaulting Banks as opposed to Defaulting Banks.
13.07 Calculations; Computations; Accounting Terms. (a) The
financial statements to be furnished to the Banks pursuant hereto shall be
made and prepared in accordance with generally accepted accounting principles
in the United States consistently applied throughout the periods involved
(except as set forth in the notes thereto or as otherwise disclosed in writing
by the Borrower to the Banks); provided that, except as otherwise specifically
provided herein, all computations of Excess Cash Flow and Available Retained
Cash Flow Amount, and all computations and all definitions used in determining
compliance with Sections 9.07 through 9.09, inclusive, shall utilize
accounting principles and policies in conformity with those used to prepare
the historical financial statements (except that overhaul expenses will be
capitalized instead of expensed) delivered to the Banks pursuant to Section
7.05(a) (including, in any event, that all obligations in respect of the
Holdings Senior Discount Notes and the Borrower Senior Discount Notes shall be
treated as obligations in respect of Indebtedness and any recharacterization,
after the Initial Borrowing Date, of the prepayment penalties paid in
connection with the Refinancings as expenses shall be ignored for purposes of
such calculations).
(b) All computations of (i) interest on Eurodollar Loans, Commitment
Commission and other Fees hereunder shall be made on the basis of a year of
360 days (ii) interest on Base Rate Loans shall be made on the basis of a year
of 365 or 366 days, as the case may be, in each case for the actual number of
days (including the first day but excluding the last day, except that in the
case of Letter of Credit Fees, the last day shall be included) occurring in
the period for which such interest, Commitment Commission or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS
AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE XXXXX
-00-
XX XXX XXXX XX XX XXX XXXXXX XXXXXX FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH OF HOLDINGS AND THE
BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH
OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND
EMPOWERS CT CORPORATION SYSTEM, WITH OFFICES ON THE DATE HEREOF AT 0000
XXXXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS DESIGNEE, APPOINTEE AND AGENT TO
RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS
PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS, SUMMONS, NOTICES AND DOCUMENTS
WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY REASON SUCH
DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS SUCH, EACH
OF HOLDINGS AND THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND
AGENT IN NEW YORK CITY ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION
SATISFACTORY TO THE AGENT UNDER THIS AGREEMENT. EACH OF HOLDINGS AND THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ANY CREDIT
PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH SERVICE TO
BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING HEREIN SHALL AFFECT THE
RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO
SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with the
Borrower and the Agent.
13.10 Effectiveness. This Agreement shall become effective on the
date (the "Effective Date") on which Holdings, the Borrower, the Agent and
each of the Banks shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the Agent at its
Notice Office or, in the case of the Banks, shall have given to the Agent
telephonic (confirmed in writing),
-86-
written or telex notice (actually received) at such office that the same has
been signed and mailed to it. The Agent will give the Borrower and each Bank
prompt written notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.
13.12 Amendment or Waiver. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination
is in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Revolving Loan Maturity Date, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates), or reduce the principal amount thereof, (ii)
release all or substantially all of the Collateral (except as expressly
provided in the Security Documents) under all the Security Documents, (iii)
amend, modify or waive any provision of this Section 13.12, (iv) reduce the
percentage specified in the definition of Required Banks (it being understood
that, with the consent of the Required Banks, additional extensions of credit
pursuant to this Agreement may be included in the determination of the
Required Banks on substantially the same basis as the extensions of Term Loans
and Revolving Loan Commitments are included on the Effective Date) or (v)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; provided further, that no such change,
waiver, discharge or termination shall (v) increase the Commitments of any
Bank over the amount thereof then in effect without the consent of such Bank
(it being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any
Bank, and that an increase in the available portion of any Commitment of any
Bank shall not constitute an increase in the Commitment of such Bank), (w)
without the consent of BTCo, amend, modify or waive any provision of Section 2
or alter its rights or obligations with respect to Letters of Credit or
Swingline Loans, (x) without the consent of the Agent, amend, modify or waive
any provision of Section 12 as same applies to such Agent or any other
provision as same relates to the rights or obligations of such Agent, (y)
without the consent of the Collateral Agent, amend, modify or waive any
provision relating to the rights or obligations of the Collateral Agent or (z)
without the consent of the Supermajority Banks, amend the definition of
Supermajority Banks or Section 4.02(b) or alter the required application of
any prepayments or repayments (or commitment reductions), as between the
various Tranches, pursuant to Section 4.01 or 4.02 (although the Required
Banks may waive, in whole or in part, any such prepayment, repayment or
commitment reduction, except pursuant to Section 4.02(b), so long as the
application, as amongst the various Tranches, of any such prepayment,
repayment or commitment reduction which is still required to be made is not
altered).
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by
clause (a)(i) through (v), inclusive, of this Section 13.12, the consent of
the Required Banks is obtained but the consent of one or more of other Banks
whose consent is required is not obtained, then the Borrower shall have the
right to replace each such non-consenting Bank or Banks (so long as all
non-consenting Banks are so replaced) with one or more Replacement Banks
pursuant to Section 1.13 so long as at the time of such replacement, each such
Replacement Bank consents to the proposed change, waiver, discharge or
termination, provided that the Borrower shall not have the right to replace a
Bank solely as a result of the exercise of such Bank's rights
-87-
(and the withholding of any required consent by such Bank) pursuant to the
second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and
the making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that
a transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04
from those being charged by the respective Bank prior to such transfer, then
the Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, Etc. Notwithstanding
anything to the contrary contained in Sections 1.10 and 2.06 of this
Agreement, unless a Bank gives notice to the Borrower that it is obligated to
pay an amount under the respective such Section within 180 days after the
later of (x) the date the Bank incurs the respective increased costs,
reduction in amounts received or receivable or reduction in return on capital
or (y) the date such Bank has actual knowledge of its incurrence of the
respective increased costs, reductions in amounts received or receivable or
reduction in return on capital, then such Bank shall only be entitled to be
compensated for such amount by the Borrower pursuant to said Section 1.10 or
2.06, as the case may be, to the extent the costs, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
are incurred or suffered on or after the date which occurs 180 days prior to
such Bank giving notice to the Borrower that it is obligated to pay the
respective amounts pursuant to said Section 1.10 or 2.06, as the case may be.
Furthermore, no Bank shall be entitled to compensation for any increased costs
or reduction in amounts received or receivable or reduction in return on
capital under Section 1.10 or 2.06 unless at the time it is the policy or
general practice of such Bank to request compensation for comparable costs or
reductions, if any, in similar circumstances, if any, under comparable
provisions of other credit agreements for comparable customers (unless
specific facts or circumstances applicable to the Borrower or the transactions
contemplated by this Agreement would alter the application of such policy or
general practice). This Section 13.15 shall have no applicability to any
Section of this Agreement other than said Sections 1.10 and 2.06.
13.16 Register. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 13.16, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank.
Failure to make any such recordation, or any error in such recordation shall
not affect the Borrower's obligations in respect of such Loans. With respect
to any Bank, the transfer of the Commitments of such Bank and the rights to
the principal of, and interest on, any Loan made pursuant to such Commitments
shall not be effective until such transfer is recorded on the Register
maintained by the Agent with respect to ownership of such Commitments and
Loans and prior to such recordation all amounts owing to the transferor with
respect to such Commitments and Loans shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Commitments
and Loans shall be recorded by the Agent on the Register only upon the
acceptance by the Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 13.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the Agent for
acceptance and registration of assignment or transfer of all or part of a
Loan, or as soon thereafter as practicable, the assigning or transferor Bank
shall surrender the Note
-88-
evidencing such Loan, and thereupon one or more new Notes in the same
aggregate principal amount shall be issued to the assigning or transferor Bank
and/or the new Bank. The Borrower agrees to indemnify the Agent from and
against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the Agent in
performing its duties under this Section 13.16.
13.17 Confidentiality. (a) Subject to the provisions of clause (b)
of this Section 13.17, each Bank agrees that it will use its reasonable
efforts not to disclose without the prior consent of the Borrower (other than
to its employees, auditors, advisors or counsel or to another Bank if the Bank
or such Bank's holding or parent company in its sole discretion determines
that any such party should have access to such information, provided such
Persons shall be subject to the provisions of this Section 13.17 to the same
extent as such Bank) any information with respect to Holdings or any of its
Subsidiaries which is now or in the future furnished pursuant to this
Agreement or any other Credit Document and which is designated by the Borrower
to the Banks in writing as confidential, provided that any Bank may disclose
any such information (i) as has become generally available to the public other
than by virtue of a breach of this Section 13.17(a) by the respective Bank,
(ii) as may be required or appropriate in any report, statement or testimony
submitted to any municipal, state or Federal Reserve Board, the Federal
Deposit Insurance Corporation or similar organizations (whether in the United
States or elsewhere) or their successors, (iii) as may be required or
appropriate in respect to any summons or subpoena or in connection with any
litigation, (iv) in order to comply with any law, order, regulation or ruling
applicable to such Bank, (v) to the Agent or the Collateral Agent and (vi) to
any prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or
any interest therein by such Bank, provided that such prospective transferee
agrees to be bound by the confidentiality provisions contained in this Section
13.17.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Bank may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries), provided such Persons shall be subject to the provisions of
this Section 13.17 to the same extent as such Bank).
SECTION 14. Holdings Guaranty.
14.01 Guaranty. In order to induce the Agent, the Collateral Agent,
the Issuing Bank and the Banks to enter into this Agreement and to extend
credit hereunder, and to induce the other Guaranteed Creditors to enter into
Interest Rate Protection Agreements or Other Hedging Agreements, and in
recognition of the direct benefits to be received by Holdings from the
proceeds of the Loans, the issuance of the Letters of Credit and the entering
into of such Interest Rate Protection Agreements or Other Hedging Agreements,
Holdings hereby agrees with the Guaranteed Creditors as follows: Holdings
hereby unconditionally and irrevocably guarantees as primary obligor and not
merely as surety the full and prompt payment when due, whether upon maturity,
acceleration or otherwise, of any and all of the Guaranteed Obligations of the
Borrower to the Guaranteed Creditors. If any or all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors becomes due and
payable hereunder, Holdings unconditionally and irrevocably promises to pay
such indebtedness to the Agent and/or the other Guaranteed Creditors, or
order, on demand, together with any and all expenses which may be incurred by
the Agent or the other Guaranteed Creditors in collecting any of the
Guaranteed Obligations. If claim is ever made upon any Guaranteed Creditor for
repayment or recovery of any amount or amounts received in payment or on
account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
-89-
effected by such payee with any such claimant (including the Borrower), then
and in such event Holdings agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon Holdings, notwithstanding any
revocation of this Guaranty or other instrument evidencing any liability of
the Borrower, and Holdings shall be and remain liable to the aforesaid payees
hereunder for the amount so repaid or recovered to the same extent as if such
amount had never originally been received by any such payee.
14.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors whether or not due or
payable by the Borrower upon the occurrence of any of the events specified in
Section 10.05, and irrevocably and unconditionally promises to pay such
indebtedness to the Guaranteed Creditors, or order, on demand, in lawful money
of the United States.
14.03 Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder is
not affected or impaired by (a) any direction as to application of payment by
the Borrower or by any other party, or (b) any other continuing or other
guaranty, undertaking or maximum liability of a guarantor or of any other
party as to the Guaranteed Obligations of the Borrower, or (c) any payment on
or in reduction of any such other guaranty or undertaking, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to any Guaranteed Creditor on the Guaranteed
Obligations which any such Guaranteed Creditor repays to the Borrower pursuant
to court order in any bankruptcy, reorgani zation, arrangement, moratorium or
other debtor relief pro ceeding, and Holdings waives any right to the deferral
or modification of its obligations hereunder by reason of any such proceeding.
14.04 Independent Obligation. The obligations of Holdings hereunder
are independent of the obligations of any other guarantor, any other party or
the Borrower, and a separate action or actions may be brought and prosecuted
against Holdings whether or not action is brought against any other guarantor,
any other party or the Borrower and whether or not any other guarantor, any
other party or the Borrower be joined in any such action or actions. Holdings
waives, to the fullest extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower or other circumstance which operates to toll any
statute of limitations as to the Borrower shall operate to toll the statute of
limitations as to Holdings.
14.05 Authorization. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute
and cannot be waived), and without affecting or impairing its liability
hereunder, from time to time to:
(a) change the manner, place or terms of payment of, and/or change
or extend the time of payment of, renew, increase, accelerate or alter,
any of the Guaranteed Obligations (including any increase or decrease in
the rate of interest or fees thereon), any security therefor, or any
liability incurred directly or indirectly in respect there of, and the
Guaranty herein made shall apply to the Guaranteed Obligations as so
changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize upon
or otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
-90-
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain
from acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower, other Credit Parties or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its credi tors other
than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or lia bilities of the Borrower remain
unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document or
any of such other instruments or agreements; and/or
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
14.06 Reliance. It is not necessary for any Guaranteed Creditor to
inquire into the capacity or powers of Holdings or any of its Subsidiaries or
the officers, directors, partners or agents acting or purporting to act on
their behalf, and any Guaranteed Obligations made or created in reliance upon
the professed exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any indebtedness of the Borrower now or
hereafter owing to Holdings is hereby subordinated to the Guaranteed
Obligations of the Borrower owing to the Guaranteed Creditors; and if the
Agent so requests at a time when an Event of Default exists, all such
indebtedness of the Borrower to Holdings shall be collected, enforced and
received by Holdings for the benefit of the Guaranteed Creditors and be paid
over to the Agent on behalf of the Guaranteed Creditors on account of the
Guaranteed Obligations of the Borrower to the Guaranteed Creditors, but
without affecting or impairing in any manner the liability of Holdings under
the other provisions of this Guar anty. Prior to the transfer by Holdings of
any note or nego tiable instrument evidencing any such indebtedness of the
Borrower to Holdings, Holdings shall xxxx such note or negotiable instrument
with a legend that the same is subject to this sub ordination. Without
limiting the generality of the foregoing, Holdings hereby agrees with the
Guaranteed Creditors that it will not exercise any right of subrogation which
it may at any time otherwise have as a result of this Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until all
Guaranteed Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower,
any other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power
-91-
whatsoever. Holdings waives any defense based on or arising out of any defense
of the Borrower, any other guarantor or any other party, other than payment in
full of the Guaranteed Obligations, based on or arising out of the disability
of the Borrower, any other guarantor or any other party, or the validity,
legality or unenforceability of the Guaranteed Obligations or any part thereof
from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Guaranteed Obligations. The
Guaranteed Creditors may, at their election, foreclose on any security held by
the Agent, the Collateral Agent or any other Guaranteed Creditor by one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Guaranteed
Creditors may have against the Borrower or any other party, or any security,
without affecting or impairing in any way the liability of Holdings hereunder
except to the extent the Guaranteed Obligations have been paid. Holdings
waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extin guish any
right of reimbursement or subrogation or other right or remedy of Holdings
against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this
Guaranty, and notices of the existence, creation or incurring of new or
additional Guaranteed Obligations. Holdings assumes all responsibility for
being and keeping itself informed of the Borrower's financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks which
Holdings assumes and incurs hereunder, and agrees that the Agent and the Banks
shall have no duty to advise Holdings of information known to them re xxxxxxx
such circumstances or risks.
(c) Holdings hereby acknowledges and affirms that it understands
that to the extent the Guaranteed Obligations are secured by Real Property
located in California, Holdings shall be liable for the full amount of the
liability hereunder notwithstanding the foreclosure on such Real Property by
trustee sale or any other reason impairing Holdings' or any Guaranteed
Creditor's right to proceed against the Borrower or any other guarantor of the
Guaranteed Obligations. In accordance with Section 2856 of the California
Civil Code, Holdings hereby waives:
(i) all rights of subrogation, reimbursement, indemnification, and
contribution and any other rights and defenses that are or may become
available to Holdings by reason of Sections 2787 to 2855, inclusive, 2899
and 3433 of the California Civil Code;
(ii) all rights and defenses that Holdings may have because the
Guaranteed Obligations are secured by Real Property located in
California. This means, among other things: (A) the Guaranteed Creditors
may collect from Holdings without first foreclosing on any real or
personal property collateral pledged by the Borrower or any other Credit
Party; and (B) if the Guaranteed Creditors foreclose on any Real Property
collateral pledged by the Borrower or any other Credit Party, (1) the
amount of the Guaranteed Obligations may be reduced only by the price for
which that collateral is sold at the foreclosure sale, even if the
collateral is worth more than the sale price, and (2) the Guaranteed
Creditors may collect from Holdings even if the Guaranteed Creditors, by
foreclosing on the Real Property collateral, have destroyed any right
Holdings may have to collect from the Borrower. This is an unconditional
and irrevocable waiver of any rights and defenses Holdings may have
because the Guaranteed Obligations are secured by Real Property. These
rights and defenses include, but are not limited to, any rights or
defenses based upon Section 580a, 580b, 580d or 726 of the California
Code of Civil Procedure; and
-92-
(iii) all rights and defenses arising out of an election of remedies
by the Guaranteed Creditors, even though that election of remedies, such
as a nonjudicial foreclosure with respect to security for the Guaranteed
Obligations, has destroyed Holdings' rights of subrogation and
reimbursement against the Borrower by the operation of Section 580d of
the Code of Civil Procedure or otherwise.
Holdings warrants and agrees that each of the waivers set forth
above is made with full knowledge of its significance and consequences and
that if any of such waivers are determined to be contrary to any applicable
law or public policy, such waivers shall be effective only to the maximum
extent permitted by law.
14.09 Nature of Liability. It is the desire and intent of Holdings
and the Guaranteed Creditors that this Guaranty shall be enforced against
Holdings to the fullest extent permissible under the laws and public policies
applied in each jurisdiction in which enforcement is sought. If, however, and
to the extent that, the obligations of Holdings under this Guaranty shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of any applicable state or federal law relating to
fraudulent conveyances or transfers), then the amount of Holdings obligations
under this Guaranty shall be deemed to be reduced and Holdings shall pay the
maximum amount of the Guaranteed Obligations which would be permissible under
applicable law.
* * *
-93-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
4440 Brittmoore UNIVERSAL COMPRESSION HOLDINGS,
Xxxxxxx, Xxxxx 00000 INC.
Attn: President
Tel: (000) 000-0000
Fax: (000) 000-0000
By
-------------------------------
Title:
000 Xxxx 00xx Xxxxxx TW ACQUISITION CORPORATION
0000 Xxxxxxxxxx
Xxxxxxx, Xxxxx 00000
Attn: President By
Tel: (000) 000-0000 _______________________________
Fax: (000) 000-0000 Title:
000 Xxxxxxx Xxxxxx BANKERS TRUST COMPANY,
Xxx Xxxx, Xxx Xxxx 00000 Individually and as Agent
Telephone No.: 000-000-0000
Telecopier No.: 212-250-1530
Attention: Xxxxxx Xxxxxxxxxx By
-------------------------------
Title:
BANK OF SCOTLAND
By
-------------------------------
Title:
CREDIT LYONNAIS NEW YORK BRANCH
By
-------------------------------
Title:
FIRST NATIONAL BANK OF COMMERCE
By
-------------------------------
Title:
FIRST UNION NATIONAL BANK
By
-------------------------------
Title:
ABN AMRO BANK N.V.
By
-------------------------------
Title:
By
-------------------------------
Title:
BANQUE PARIBAS
By
-------------------------------
Title:
By
-------------------------------
Title:
XXXXX FARGO BANK (TEXAS)
NATIONAL ASSOCIATION
By
-------------------------------
Title:
UNION BANK OF CALIFORNIA, N.A.
By
-------------------------------
Title:
SOCIETE GENERALE,
SOUTHWEST AGENCY
By
-------------------------------
Title:
THE BANK OF NOVA SCOTIA
By
-------------------------------
Title:
BANKBOSTON, N.A.
By
-------------------------------
Title:
SCHEDULE I
COMMITMENTS
Revolving
Loan Term Loan
Bank Commitment Commitment
Bankers Trust Company 8,500,000 7,500,000
Credit Lyonnais New York 7,968,750 7,031,250
Branch
Union Bank of California, N.A. 7,968,750 7,031,250
First Union National Bank 7,968,750 7,031,250
Societe Generale, Southwest 7,968,750 7,031,250
Agency
ABN Amro Bank N.V. 6,375,000 5,625,000
BankBoston, N.A. 6,375,000 5,625,000
First National Bank of 6,375,000 5,625,000
Commerce
The Bank of Nova Scotia 6,375,000 5,625,000
Banque Paribas 6,375,000 5,625,000
Bank of Scotland 6,375,000 5,625,000
Xxxxx Fargo Bank (Texas) 6,375,000 5,625,000
National Association
------------------------- ------------ -----------
TOTAL: $85,000,000 $75,000,000
SCHEDULE II
EXISTING INDEBTEDNESS
SCHEDULE VII
Bank Addresses
Bank Addresses
Bankers Trust Company 000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attn: Xxxxxx Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
ABN Amro Bank X.X. Xxxxx Xxxxx Xxx - Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxxxxxx Xxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
The Bank of Nova Scotia 000 Xxxxxxxxx Xxxxxx X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000
Attn: Xxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
0000 Xxxxxxxxx Xxxxxx
Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Xxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank of Xxxxxxxx 0000 Two Xxxxx Center
0000 Xxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000-0000
Attn: Xxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Societe Generale, Southwest 0000 Xxxxx Xxxxxx
Xxxxxx Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attn: Thierry Namavroy
Tel: (000) 000-0000
Fax: (000) 000-0000
Schedule VII
Page 2
Union Bank of California, N.A. 00 Xxxxx Xxxx Xxxxxx
Xxxxx 000
Xxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Xxxxx Fargo Bank (Texas) 0000 Xxxxxxxxx Xxxxxx
National Association 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attn: Xxxxx Shageman
Tel: (000) 000-0000
Fax: (000) 000-0000
Credit Lyonnais 0000 Xxxxxxxxx Xxxxxx
Xxxxxxx, Xxxxx 00000
Attn: Page Dillehunt
Tel: (000) 000-0000
Fax: (000) 000-0000
First National Bank of Commerce 000 Xx. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxx 00000
Attn: Xxxxxxx Xxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
