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CREDIT AGREEMENT
dated as of February 5, 1999,
by and among
DE&S HOLDING CO.,
DOLLAR EXPRESS, INC.,
and the other Subsidiaries referred to herein,
as Borrowers,
the Lenders referred to herein,
FIRST UNION NATIONAL BANK,
as Administrative Agent, and
BANKBOSTON, N.A.
as Syndication Agent
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TABLE OF CONTENTS
ARTICLE I DEFINITIONS.....................................................................................1
SECTION 1.1 Definitions..................................................................................1
SECTION 1.2 General.....................................................................................15
SECTION 1.3 Other Definitions and Provisions............................................................16
ARTICLE II REVOLVING CREDIT FACILITY......................................................................16
SECTION 2.1 Revolving Credit Loans......................................................................16
SECTION 2.2 Procedure for Advances of Revolving Credit Loans............................................16
SECTION 2.3 Repayment of Revolving Credit Loans.........................................................17
SECTION 2.4 Revolving Credit Notes......................................................................18
SECTION 2.5 Permanent Reduction of the Revolving Credit Commitment......................................18
SECTION 2.6 Termination of Revolving Credit Facility....................................................19
ARTICLE III LETTER OF CREDIT FACILITY......................................................................19
SECTION 3.1 L/C Commitment..............................................................................19
SECTION 3.2 Procedure for Issuance of Letters of Credit.................................................19
SECTION 3.3 Commissions and Other Charges...............................................................20
SECTION 3.4 L/C Participations..........................................................................20
SECTION 3.5 Reimbursement Obligation of the Borrowers...................................................21
SECTION 3.6 Obligations Absolute........................................................................22
SECTION 3.7 Effect of Application.......................................................................22
ARTICLE IV TERM LOAN FACILITY.............................................................................22
SECTION 4.1 Term Loan...................................................................................22
SECTION 4.2 Procedure for Advance of Term Loan..........................................................23
SECTION 4.3 Repayment of Term Loan......................................................................23
SECTION 4.4 Prepayments of Term Loan....................................................................24
SECTION 4.5 Term Notes..................................................................................25
ARTICLE V GENERAL LOAN PROVISIONS... ....................................................................25
SECTION 5.1 Interest....................................................................................25
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans....................................28
SECTION 5.3 Fees........................................................................................28
SECTION 5.4 Manner of Payment; Allocation of Commitment Deductions......................................29
SECTION 5.5 Crediting of Payments and Proceeds..........................................................30
SECTION 5.6 Adjustments.................................................................................30
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of Credit; Assumption by the
Administrative Agent........................................................................30
SECTION 5.8 Changed Circumstances.......................................................................31
SECTION 5.9 Indemnity...................................................................................33
SECTION 5.10 Capital Requirements........................................................................33
SECTION 5.11 Taxes.......................................................................................33
SECTION 5.12 Use of Proceeds.............................................................................35
SECTION 5.13 Security....................................................................................35
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ARTICLE VI CLOSING; CONDITIONS OF CLOSING AND BORROWING...................................................35
SECTION 6.1 Closing.....................................................................................35
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit......................................35
SECTION 6.3 Conditions to All Extensions of Credit......................................................40
SECTION 6.4 Real Estate Post-Closing Covenants..........................................................41
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF THE BORROWERS................................................41
SECTION 7.1 Representations and Warranties..............................................................41
SECTION 7.2 Survival of Representations and Warranties, Etc.............................................48
ARTICLE VIII FINANCIAL INFORMATION AND NOTICES..............................................................49
SECTION 8.1 Financial Statements and Projections........................................................49
SECTION 8.2 Officer's Compliance Certificate............................................................50
SECTION 8.3 Accountants'Certificate.....................................................................50
SECTION 8.4 Other Reports...............................................................................50
SECTION 8.5 Notice of Litigation and Other Matters......................................................51
SECTION 8.6 Accuracy of Information.....................................................................52
ARTICLE IX AFFIRMATIVE COVENANTS..........................................................................52
SECTION 9.1 Preservation of Corporate Existence and Related Matters.....................................52
SECTION 9.2 Maintenance of Property.....................................................................52
SECTION 9.3 Insurance...................................................................................53
SECTION 9.4 Accounting Methods and Financial Records....................................................53
SECTION 9.5 Payment and Performance of Obligations......................................................53
SECTION 9.6 Compliance With Laws and Approvals..........................................................53
SECTION 9.7 Environmental Laws..........................................................................53
SECTION 9.8 Compliance with ERISA.......................................................................54
SECTION 9.9 Compliance With Agreements..................................................................54
SECTION 9.10 Conduct of Business.........................................................................54
SECTION 9.11 Visits and Inspections......................................................................54
SECTION 9.12 Additional Borrowers and Collateral.........................................................54
SECTION 9.13 Hedging Agreement...........................................................................55
SECTION 9.14 Year 2000 Compatibility.....................................................................55
SECTION 9.15 Further Assurances..........................................................................55
ARTICLE X FINANCIAL COVENANTS............................................................................56
SECTION 10.1 Leverage Ratio..............................................................................56
SECTION 10.2 Fixed Charge Coverage Ratio.................................................................56
SECTION 10.3. Minimum EBITDA..............................................................................57
ARTICLE XI NEGATIVE COVENANTS.............................................................................58
SECTION 11.1 Limitations on Debt.........................................................................58
SECTION 11.2 Limitations on Guaranty Obligations.........................................................58
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SECTION 11.3 Limitations on Liens........................................................................58
SECTION 11.4 Limitations on Loans, Advances, Investments and Acquisitions................................59
SECTION 11.5 Limitations on Mergers and Liquidation......................................................60
SECTION 11.6 Limitations on Sale of Assets...............................................................61
SECTION 11.7 Limitations on Dividends, Distributions and Redemptions.....................................61
SECTION 11.8 Limitations on Exchange and Issuance of Capital Stock.......................................61
SECTION 11.9 Transactions with Affiliates................................................................62
SECTION 11.10 Certain Accounting Changes..................................................................62
SECTION 11.11 Charter Documents; Capitalization...........................................................62
SECTION 11.12 Restrictive Agreements......................................................................62
ARTICLE XII DEFAULT AND REMEDIES........... ...............................................................62
SECTION 12.1 Events of Default...........................................................................62
SECTION 12.2 Remedies....................................................................................65
SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc.............................................66
ARTICLE XIII THE ADMINISTRATIVE AGENT.......................................................................66
SECTION 13.1 Appointment.................................................................................66
SECTION 13.2 Delegation of Duties........................................................................66
SECTION 13.3 Exculpatory Provisions......................................................................66
SECTION 13.4 Reliance by the Administrative Agent........................................................67
SECTION 13.5 Notice of Default...........................................................................67
SECTION 13.6 Non-Reliance on the Administrative Agent and Other Lenders..................................68
SECTION 13.7 Indemnification.............................................................................68
SECTION 13.8 The Administrative Agent in Its Individual Capacity.........................................69
SECTION 13.9 Resignation of the Administrative Agent; Successor Administrative Agent.....................69
SECTION 13.10 Syndication Agent...........................................................................69
ARTICLE XIV MISCELLANEOUS..................................................................................69
SECTION 14.1 Notices.....................................................................................69
SECTION 14.2 Expenses; Indemnity.........................................................................70
SECTION 14.3 Set-off.....................................................................................71
SECTION 14.4 Governing Law...............................................................................71
SECTION 14.5 Consent to Jurisdiction.....................................................................71
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial...................................................72
SECTION 14.7 Reversal of Payments........................................................................73
SECTION 14.8 Injunctive Relief; Punitive Damages.........................................................73
SECTION 14.9 Accounting Matters..........................................................................73
SECTION 14.10 Successors and Assigns; Participations......................................................74
SECTION 14.11 Amendments, Waivers and Consents............................................................77
SECTION 14.12 Performance of Duties.......................................................................78
SECTION 14.13 All Powers Coupled with Interest............................................................78
SECTION 14.14 Survival of Indemnities.....................................................................78
SECTION 14.15 Titles and Captions.........................................................................78
SECTION 14.16 Severability of Provisions..................................................................78
SECTION 14.17 Counterparts................................................................................78
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SECTION 14.18 Parent as Agent for Borrowers...............................................................78
SECTION 14.19 Obligations Joint and Several; Contribution.................................................79
SECTION 14.20 Inconsistencies with Other Documents; Independent Effect of Covenants.......................79
SECTION 14.21 Term of Agreement...........................................................................80
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EXHIBITS AND SCHEDULES
EXHIBITS
Exhibit A-1 - Form of Revolving Credit Note
Exhibit A-2 - Form of Term Note
Exhibit B-1 - Form of Notice of Revolving Credit Loan Borrowing
Exhibit B-2 - Form of Term Loan Borrowing
Exhibit C - Form of Notice of Account Designation
Exhibit D - Form of Notice of Prepayment
Exhibit E - Form of Notice of Conversion/Continuation
Exhibit F - Form of Officer's Compliance Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Security Agreement
Exhibit I-1 - Form of Investor Pledge Agreement
Exhibit I-2 - Form of Borrower Pledge Agreement
Exhibit J - Form of Joinder Agreement
SCHEDULES
Schedule 1.1(a) - Lenders and Commitments
Schedule 1.1(b) - Recapitalization Documents
Schedule 1.1(c) - Advent Purchasers
Schedule 5.12 - Sources and Uses of Recapitalization
Schedule 7.1(a) - Jurisdictions of Organization and Qualification
Schedule 7.1(b) - Subsidiaries and Capitalization
Schedule 7.1(g) - Intellectual Property Matters
Schedule 7.1(h) - Environmental Matters
Schedule 7.1(i) - ERISA Plans
Schedule 7.1(l) - Material Contracts
Schedule 7.1(m) - Labor and Collective Bargaining Agreements
Schedule 7.1(r) - List of Real Property
Schedule 7.1(t) - Debt and Guaranty Obligations
Schedule 7.1(u) - Litigation
Schedule 11.3 - Existing Liens
Schedule 11.4 - Existing Loans, Advances and Investments
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of the 5th day of February, 1999, by and
among DE&S HOLDING CO., a Pennsylvania corporation (the "Parent"), DOLLAR
EXPRESS, INC., a Pennsylvania corporation (the "Company"), and any other
Subsidiaries of the Parent joined to this Agreement (together with the Company,
the "Subsidiary Borrowers", and together with the Parent and the Company, the
"Borrowers"), the Lenders who are or may become a party to this Agreement (the
"Lenders"), FIRST UNION NATIONAL BANK, as Administrative Agent for the Lenders
(the "Administrative Agent"), and BANKBOSTON, N.A., as Syndication Agent for the
Lenders (the "Syndication Agent").
STATEMENT OF PURPOSE
The Borrowers have requested, and the Lenders have agreed, to extend
certain credit facilities to the Borrowers on the terms and conditions of this
Agreement.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, intending to
be legally bound hereby, such parties hereby agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.1 Definitions. The following terms when used in this
Agreement shall have the meanings assigned to them below:
"Administrative Agent" means First Union in its capacity as
Administrative Agent hereunder, and any successor thereto appointed pursuant to
Section 13.9.
"Administrative Agent's Office" means the office of the Administrative
Agent specified in or determined in accordance with the provisions of Section
14.1(c).
"Advent Purchasers" means the Affiliates of Advent International
Corporation purchasing the Preferred Stock on the Closing Date as listed on
Schedule 1.1(c).
"Affiliate" means, with respect to any Person, any other Person (other
than a Subsidiary) which directly or indirectly through one or more
intermediaries, controls, or is controlled by, or is under common control with,
such first Person or any of its Subsidiaries. The term "control" means (a) the
power to vote ten percent (10%) or more of the securities or other equity
interests of a Person having ordinary voting power, or (b) the possession,
directly or indirectly, of any other power to direct or cause the direction of
the management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Aggregate Commitment" means the aggregate amount of the Lenders'
Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be Forty Million Dollars ($40,000,000).
"Agreement" means this Credit Agreement, as amended, restated,
supplemented or otherwise modified.
"Applicable Law" means all applicable provisions of constitutions,
laws, statutes, ordinances, rules, treaties, regulations, permits, licenses,
approvals, interpretations and orders of courts or Governmental Authorities and
all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
5.1(c).
"Application" means an application, in the form specified by the
Issuing Lender from time to time, requesting the Issuing Lender to issue a
Letter of Credit.
"Articles of Incorporation" means the articles of incorporation of the
Parent as in effect on the Closing Date after giving affect to the Transactions.
"Assignment and Acceptance" shall have the meaning assigned thereto in
Section 14.10.
"Base Rate" means, at any time, the higher of (a) the Prime Rate and
(b) the sum of (i) the Federal Funds Rate plus (ii) 1/2 of 1%; each change in
the Base Rate shall take effect simultaneously with the corresponding change or
changes in the Prime Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon
the Base Rate as provided in Section 5.1(a).
"Borrowers" means the collective reference to the Parent and the
Subsidiary Borrowers in their capacity as Borrowers hereunder.
"Borrower Pledge Agreement" means the Pledge Agreement of even date
executed by the Parent, as pledgor, and the Company and any other issuer joined
thereto, as issuer, in favor of the Administrative Agent, for the ratable
benefit of itself and the Lenders, substantially in the form of Exhibit I-2, as
amended, restated, supplemented or otherwise modified.
"Business Day" means (a) for all purposes other than as set forth in
clause (b) below, any day other than a Saturday, Sunday or legal holiday on
which banks in Charlotte, North Carolina and New York, New York, are open for
the conduct of their commercial banking business, and (b) with respect to all
notices and determinations in connection with, and payments of principal and
interest on, any LIBOR Rate Loan, any day that is a Business Day described in
clause (a) and that is also a day for trading by and between banks in Dollar
deposits in the London interbank market.
2
"Capital Asset" means, with respect to the Parent and its Subsidiaries,
any asset that should, in accordance with GAAP, be classified and accounted for
as a capital asset on a Consolidated balance sheet of the Parent and its
Subsidiaries.
"Capital Expenditures" means, with respect to the Parent and its
Subsidiaries for any period, the aggregate cost of all Capital Assets acquired
by the Parent or any Subsidiary during such period, as determined in accordance
with GAAP.
"Capital Lease" means, with respect to the Parent and its Subsidiaries,
any lease of any property that should, in accordance with GAAP, be classified
and accounted for as a capital lease on a Consolidated balance sheet of the
Parent and its Subsidiaries.
"Capital Markets" means First Union Capital Markets Group, a division
of Wheat First Securities, Inc., and it successors.
"Change in Control" shall have the meaning assigned thereto in Section
12.1(i).
"Closing Date" means the date of this Agreement or such later Business
Day upon which each condition described in Sections 6.1 and 6.2 shall be
satisfied or waived in all respects in a manner acceptable to the Administrative
Agent, in its sole discretion.
"Code" means the Internal Revenue Code of 1986, and the rules and
regulations thereunder, each as amended, supplemented or otherwise modified.
"Collateral" shall mean the collateral security for the Obligations
pledged pursuant to Security Documents.
"Commitment" means, as to any Lender, the sum of such Lender's
Revolving Credit Commitment and Term Loan Commitment as set forth opposite such
Lender's name on Schedule 1.1(a) hereto, as the same may be reduced or modified
at any time or from time to time pursuant to the terms hereof.
"Commitment Percentage" means, as to any Lender at any time, the ratio
of (a) the amount of the Commitment of such Lender to (b) the Aggregate
Commitment of all of the Lenders.
"Company" means Dollar Express, Inc., a Pennsylvania corporation, and
its successors.
"Consolidated" means, when used with reference to financial statements
or financial statement items of the Parent and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Credit Facility" means the collective reference to the Revolving
Credit Facility, the Term Loan Facility and the L/C Facility.
3
"Debt" means, with respect to the Parent and its Subsidiaries at any
date and without duplication, the sum of the following calculated in accordance
with GAAP: (a) all liabilities, obligations and indebtedness for borrowed money,
including, but not limited to, obligations evidenced by bonds, debentures, notes
or other similar instruments of the Parent or any of its Subsidiaries, (b) all
obligations to pay the deferred purchase price of property or services of the
Parent or any of its Subsidiaries, except trade payables arising in the ordinary
course of business not more than ninety (90) days past due, (c) all obligations
of the Parent or any of its Subsidiaries as lessee under Capital Leases, (d) all
Debt of any Person other than the Parent or any of its Subsidiaries secured by a
Lien on any asset of the Parent or any of its Subsidiaries, (e) all Guaranty
Obligations of the Parent or any of its Subsidiaries, (f) all obligations,
contingent or otherwise, of the Parent or any of its Subsidiaries relative to
the face amount of letters of credit, whether or not drawn, including, without
limitation, any Reimbursement Obligation, and banker's acceptances issued for
the account of the Parent or any of its Subsidiaries, (g) all obligations of the
Parent or any of its Subsidiaries to redeem, repurchase, exchange, defease or
otherwise make payments in respect of capital stock or other securities of the
Parent or any of its Subsidiaries and (h) all termination payment obligations
incurred by the Parent or any of its Subsidiaries pursuant to Hedging
Agreements.
"Default" means any of the events specified in Section 12.1 which with
the passage of time, the giving of notice or any other condition, would
constitute an Event of Default.
"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
currency of the United States.
"EBITDA" means, for any period, the sum of the following determined on
a Consolidated basis, without duplication, for the Parent and its Subsidiaries
in accordance with GAAP: (a) Net Income for such period plus (b) the sum of the
following to the extent deducted in determining Net Income: (i) income and
franchise taxes, (ii) Interest Expense, (iii) amortization, depreciation and
other non-cash charges (including amortization of goodwill, covenants not to
compete and other intangible assets) less (c) interest income and any
extraordinary gains (and plus any extraordinary non-cash losses).
"Eligible Assignee" means, with respect to any assignment of the
rights, interest and obligations of a Lender hereunder, a Person that is at the
time of such assignment (a) a commercial bank organized under the laws of the
United States or any state thereof, having combined capital and surplus in
excess of $500,000,000, (b) a commercial bank organized under the laws of any
other country that is a member of the Organization of Economic Cooperation and
Development, or a political subdivision of any such country, having combined
capital and surplus in excess of $500,000,000, (c) a finance company, insurance
company or other financial institution which in the ordinary course of business
extends credit of the type extended hereunder and that has total assets in
excess of $1,000,000,000, (d) already a Lender hereunder (whether as an original
party to this Agreement or as the assignee of another Lender), (e) the successor
(whether by transfer of assets, merger or otherwise) to all or substantially all
of the commercial lending business of the assigning Lender, or (f) any other
Person that has been approved in writing as an Eligible Assignee by the
Borrowers and the Administrative Agent.
4
"Employee Benefit Plan" means any employee benefit plan within the
meaning of Section 3(3) of ERISA which (a) is maintained for employees of the
Parent or any ERISA Affiliate or (b) has at any time within the preceding six
years been maintained for the employees of any Borrower or any current or former
ERISA Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
"Equity Purchase" means the purchase in accordance with the Equity
Purchase Agreement by the Advent Purchasers and other applicable Investors of
the Preferred Stock and Warrants issued by the Parent.
"Equity Purchase Agreement" means the Securities Purchase and
Contribution Agreement dated as of February 5, 1999 by and among the Parent, the
Company, the Founders, the Advent Purchasers, and any other Investors party
thereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, and
the rules and regulations thereunder, each as amended, supplemented or otherwise
modified.
"ERISA Affiliate" means any Person who together with the Parent is
treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Percentage" means, for any day, the percentage
(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 12.1,
provided that any requirement for passage of time, giving of notice, or any
other condition, has been satisfied.
"Excess Proceeds" shall have the meaning assigned thereto in Section
2.5(b).
"Existing Facility" means that certain revolving credit facility
between the Company and PNC Bank, National Association.
"Existing Shareholders' Agreement" means the existing shareholders'
agreement executed by the Founders.
5
"Extensions of Credit" means, as to any Lender at any time, (a) an
amount equal to the sum of (i) the aggregate principal amount of all Revolving
Credit Loans made by such Lender then outstanding, (ii) such Lender's Commitment
Percentage of the L/C Obligations then outstanding and (iii) such Lender's
Commitment Percentage of the Term Loans then outstanding or (b) the making of
any Loan or issuance of or participation in any Letter of Credit by any Lender,
as the context requires.
"FDIC" means the Federal Deposit Insurance Corporation, or any
successor thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Administrative Agent and confirmed in
Federal Reserve Board Statistical Release H.15 (519) or any successor or
substitute publication selected by the Administrative Agent. If, for any reason,
such rate is not available, then "Federal Funds Rate" shall mean a daily rate
which is determined, in the opinion of the Administrative Agent, to be the rate
at which federal funds are being offered for sale in the national federal funds
market at 9:00 a.m. (Philadelphia time). Rates for weekends or holidays shall be
the same as the rate for the most immediate preceding Business Day.
"Fee Letter" means the separate fee letter agreement dated January 22,
1999 by and among the Parent, the Company, Advent International Corporation,
First Union and Capital Markets.
"First Union" means First Union National Bank, a national banking
association, and its successors.
"Fiscal Year" means the fiscal year of the Parent and its Subsidiaries
ending on December 31.
"Fixed Charges" means, for any period, the sum of the following
determined on a Consolidated basis, without duplication, for the Parent and its
Subsidiaries in accordance with GAAP: (a) scheduled principal and interest
payments with respect to Total Funded Debt, (b) Capital Expenditures, (c) taxes
paid or, without duplication, payable in cash and (d) dividends paid or, without
duplication, payable in cash.
"Founders" means the collective reference to Xxxxxxx Spain and Xxxxxx
Spain.
"GAAP" means generally accepted accounting principles, as recognized by
the American Institute of Certified Public Accountants and the Financial
Accounting Standards Board, consistently applied and maintained by the Parent
and its Subsidiaries on a consistent basis for the Parent and its Subsidiaries
throughout the period indicated and consistent with the prior financial practice
of the Parent and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
6
"Governmental Authority" means any nation, province, state or political
subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital ownership or otherwise, by any of the foregoing.
"Guaranty Obligation" means, with respect to the Parent and its
Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Guaranty
Obligation shall not include endorsements for collection or deposit in the
ordinary course of business.
"Hazardous Materials" means any substances or materials (a) which are
or become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Applicable Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Applicable Law, (d) the discharge or emission or release of which requires a
permit or license under any Applicable Law or other Governmental Approval, (e)
which are deemed to constitute a nuisance, a trespass or pose a health or safety
hazard to persons or neighboring properties, (f) which consist of underground or
aboveground storage tanks, whether empty, filled or partially filled with any
substance, or (g) which contain, without limitation, asbestos, polychlorinated
biphenyls, urea formaldehyde foam insulation, petroleum hydrocarbons, petroleum
derived substances or waste, crude oil, nuclear fuel, natural gas or synthetic
gas.
"Hedging Agreement" means any agreement with respect to an interest
rate swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of any Borrower, and any confirming letter
executed pursuant to such hedging agreement, all as amended, restated,
supplemented or otherwise modified.
"Insurance Proceeds" shall have the meaning assigned thereto in Section
4.4(b).
"Interest Expense" means, with respect to the Parent and its
Subsidiaries for any period, the total interest expense (including, without
limitation, interest expense attributable to Capital Leases and all net payment
obligations pursuant to Hedging Agreements, but excluding amortization of
financing fees) of such Persons, all determined for such period on a
Consolidated basis in accordance with GAAP.
7
"Interest Period" shall have the meaning assigned thereto in Section
5.1(b).
"Investor Pledge Agreement" means the Pledge Agreement of even date
executed by the Investors and any issuers thereunder in favor of the
Administrative Agent, for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit I-1, as amended, restated, supplemented or
otherwise modified.
"Investor Rights Agreement" means the Investor Rights Agreement by and
among the Parent, the Company and the Investors.
"Investors" means the collective reference to the Founders, the Advent
Purchasers and any other equity purchasers party to the Equity Purchase
Agreement.
"Issuing Lender" means (i) with respect to any standby Letter of
Credit, First Union, in its capacity as issuer of such standby Letter of Credit,
or any successor thereto, and (ii) with respect to any commercial Letter of
Credit, any Lender designated by the Borrowers with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld), in its
capacity as issuer of such Letter of Credit, or any successor thereto.
"Joinder Agreement" means any Joinder Agreement executed by a
Subsidiary of the Borrowers pursuant to Section 9.12 in favor of Administrative
Agent for the ratable benefit of itself and the Lenders and substantially in the
form of Exhibit J, as amended, restated, supplemented or otherwise modified.
"L/C Commitment" means the lesser of (a) Five Million Dollars
($5,000,000) and (b) the Revolving Credit Commitment.
"L/C Facility" means the letter of credit facility established pursuant
to Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a)
the aggregate undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit which
have not then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders
other than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set
forth on the signature pages hereto and each Person that hereafter becomes a
party to this Agreement as a Lender pursuant to Section 14.10.
"Lending Office" means, with respect to any Lender, the office of such
Lender maintaining such Lender's Commitment Percentage of the Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section
3.1.
8
"Leverage Ratio" shall have the meaning given thereto in Section 10.1.
"LIBOR" means the rate of interest per annum determined on the basis of
the rate for deposits in Dollars in minimum amounts of at least $5,000,000 for a
period equal to the applicable Interest Period which appears on the Telerate
Page 3750 (or any successor) at approximately 11:00 a.m. (London time) two (2)
Business Days prior to the first day of the applicable Interest Period. If, for
any reason, such rate does not appear on Telerate Page 3750 (or any successor),
then "LIBOR" shall be determined by the Administrative Agent to be the
arithmetic average of the rate per annum at which deposits in Dollars would be
offered by first class banks in the London interbank market to the
Administrative Agent approximately 11:00 a.m. (London time) two (2) Business
Days prior to the first day of the applicable Interest Period for a period equal
to such Interest Period and in an amount substantially equal to the amount of
the applicable Loan.
"LIBOR Rate" means a rate per annum (rounded upwards, if necessary, to
the next higher 1/100th of 1%) determined by the Administrative Agent pursuant
to the following formula:
LIBOR Rate = LIBOR
----------------------------------
1.00-Eurodollar Reserve Percentage
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon
the LIBOR Rate as provided in Section 5.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
charge, collateral assignment, security interest or encumbrance of any kind in
respect of such asset. For the purposes of this Agreement, a Person shall be
deemed to own subject to a Lien any asset which it has acquired or holds subject
to the interest of a vendor or lessor under any conditional sale agreement,
Capital Lease or other title retention agreement relating to such asset.
"Loans" means the collective reference to the Revolving Credit Loans
and the Term Loans and "Loan" means any of such Loans.
"Loan Documents" means, collectively, this Agreement, the Notes, the
Applications, any Hedging Agreement with any Lender (which Hedging Agreement is
permitted or required hereunder), the Security Documents and each other
document, instrument, certificate and agreement executed and delivered by any
Borrower, any Subsidiary thereof or their counsel in connection with this
Agreement or otherwise referred to herein or contemplated hereby, all as may be
amended, restated, supplemented or otherwise modified.
"Material Adverse Effect" means, with respect to the Parent or any of
its Subsidiaries, a material adverse effect on the properties, business,
prospects, operations or condition (financial or otherwise) of such Persons
taken as a whole or the ability of the Borrowers taken as a whole to perform
their payment obligations under the Loan Documents or the ability of any such
Person to perform its other material obligations under the Loan Documents to
which it is a party.
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"Material Contract" means (a) any contract or other agreement, written
or oral, of the Parent or any of its Subsidiaries involving monetary liability
of or to any such Person in an amount in excess of $250,000 per annum, or (b)
any other contract or agreement, written or oral, of the Parent or any of its
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which the Parent or any ERISA Affiliate is making, or is
accruing an obligation to make, contributions within the preceding six years.
"Net Cash Proceeds" means, as applicable, (a) with respect to any sale
or other disposition of assets, the gross cash proceeds received by the Parent
or any of its Subsidiaries from such sale less the sum of (i) all income taxes
and other taxes assessed by a Governmental Authority as a result of such sale
and any other fees and expenses incurred in connection therewith including,
without limitation, all legal, accounting and investment banking fees and
expenses and (ii) the principal amount of, premium, if any, and interest on any
Debt secured by a Lien on the asset (or a portion thereof) sold, which Debt is
required to be repaid in connection with such sale, (b) with respect to any
offering of capital stock or issuance of Debt, the gross cash proceeds received
by the Parent or any of its Subsidiaries therefrom less all legal, accounting,
underwriting, investment banking and other fees and expenses incurred in
connection therewith (excluding, without limitation, any dividends paid or
payable in connection with any such offering) and (c) with respect to any
payment under an insurance policy or in connection with a condemnation
proceeding, the amount of cash proceeds received by the Parent or its
Subsidiaries from an insurance company or Governmental Authority, as applicable,
net of all expenses of collection.
"Net Income" means, with respect to the Parent and its Subsidiaries for
any period, the net income (or loss) thereof for such period determined on a
Consolidated basis in accordance with GAAP; provided, that there shall be
excluded from net income (or loss) the income (or loss) of any Person (other
than a Wholly-Owned Subsidiary of the Parent) in which the Parent or any
Subsidiary has an ownership interest unless received by any such Person in a
cash distribution.
"Notes" means the collective reference to the Revolving Credit Notes
and the Term Notes and "Note" means any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto
in Section 2.2(b).
"Notice of Revolving Credit Loan Borrowing" shall have the meaning
assigned thereto in Section 2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned
thereto in Section 5.2.
"Notice of Prepayment" shall have the meaning assigned thereto in
Section 2.3(e).
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"Notice of Term Loan Borrowing" shall have the meaning assigned thereto
in Section 4.2.
"Obligations" means, in each case, whether now in existence or
hereafter arising: (a) the principal of and interest on (including interest
accruing after the filing of any bankruptcy or similar petition) the Loans, (b)
the L/C Obligations, (c) all payment and other obligations owing by the
Borrowers (or any of them) to any Lender or the Administrative Agent under any
Hedging Agreement with any Lender (which such Hedging Agreement is permitted or
required hereunder), and (d) all other fees and commissions (including
attorney's fees), charges, indebtedness, loans, liabilities, financial
accommodations, obligations, covenants and duties owing by the Borrowers (or any
of them) to the Lenders or the Administrative Agent, of every kind, nature and
description, direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note, in each case under or in respect of this Agreement, any
Note, any Letter of Credit or any of the other Loan Documents.
"Officer's Compliance Certificate" shall have the meaning assigned
thereto in Section 8.2.
"Other Taxes" shall have the meaning assigned thereto in Section
5.11(b).
"Parent" means DE&S Holding Co., a Pennsylvania corporation, and its
successors.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
agency.
"Pension Plan" means any Employee Benefit Plan, other than a
Multiemployer Plan, which is subject to the provisions of Title IV of ERISA or
Section 412 of the Code and which (a) is maintained for employees of any
Borrower or any ERISA Affiliates or (b) has at any time within the preceding six
years been maintained for the employees of any Borrower or any of its current or
former ERISA Affiliates.
"Permitted Acquisition" shall have the meaning assigned thereto in
Section 11.4(d).
"Person" means an individual, corporation, limited liability company,
partnership, association, trust, business trust, joint venture, joint stock
company, pool, syndicate, sole proprietorship, unincorporated organization,
Governmental Authority or any other form of entity or group thereof.
"Pledge Agreements" means the collective reference to the Investor
Pledge Agreement and the Borrower Pledge Agreement.
"Preferred Stock" means the Series A Cumulative Convertible Preferred
Stock issued by the Parent with the terms and designations set forth in the
Statement With Respect to Shares.
"Prime Rate" means, at any time, the rate of interest per annum
publicly announced from time to time by First Union as its prime rate. Each
change in the Prime Rate shall be effective as of the opening of business on the
11
day such change in the Prime Rate occurs. The parties hereto acknowledge that
the rate announced publicly by First Union as its Prime Rate is an index or base
rate and shall not necessarily be its lowest or best rate charged to its
customers or other banks.
"Real Estate Security Documents" means (a) any mortgage, deed of trust,
collateral assignment of lease or other document or agreement granting a Lien on
any interest in real property held by any Borrower or any Subsidiary thereof in
favor of the Administrative Agent, for the ratable benefit of itself and the
Lenders, to secure the Obligations and (b) any landlord consent, mortgagee
estoppel agreement or other document or agreement pertaining to any such Lien,
in each case with respect to clauses (a) and (b) in form and substance
satisfactory to the Administrative Agent.
"Recapitalization" means the restructuring and recapitalization of the
Company as a Wholly-Owned Subsidiary of the Parent effected by the Equity
Purchase, the Shareholder Distribution and the other transactions contemplated
by the Recapitalization Documents.
"Recapitalization Documents" means the collective reference to the
documents described on Schedule 1.1(b).
"Register" shall have the meaning assigned thereto in Section 14.10(d).
"Reimbursement Obligation" means the obligation of the Borrowers to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of holders of at
least sixty percent (60%) of the aggregate unpaid principal amount of the Notes,
or if no amounts are outstanding under the Notes, any combination of Lenders
whose Commitment Percentages aggregate at least sixty percent (60%); provided
that at any time there are only two Lenders under this Agreement, "Required
Lenders" shall be comprised of such two Lenders.
"Responsible Officer" means any of the following: the chief executive
officer or chief financial officer of the Parent or the applicable Borrower or
any other officer of the Parent or the applicable Borrower reasonably acceptable
to the Administrative Agent.
"Revolving Credit Commitment" means (a) as to any Lender, the
obligation of such Lender to make Revolving Credit Loans to the account of the
Borrowers hereunder in an aggregate principal amount at any time outstanding not
to exceed the amount set forth opposite such Lender's name on Schedule 1.1(a)
hereto as such amount may be reduced or modified at any time or from time to
time pursuant to the terms hereof and (b) as to all Lenders, the aggregate
commitment of all Lenders to make Revolving Credit Loans, as such amount may be
reduced or modified at any time or from time to time pursuant to the terms
hereof. The Revolving Credit Commitment of all Lenders on the Closing Date shall
be $20,000,000.
"Revolving Credit Facility" means the revolving credit facility
established pursuant to Article II hereof.
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"Revolving Credit Loans" means any revolving loan made to the Borrowers
pursuant to Section 2.1, and all such revolving loans collectively as the
context requires.
"Revolving Credit Notes" means the collective reference to the
Revolving Credit Notes made by the Borrowers payable to the order of each
Lender, substantially in the form of Exhibit A-1 hereto, evidencing the
Revolving Credit Facility, and any amendments and modifications thereto, any
substitutes therefor, and any replacements, restatements, renewals or extension
thereof, in whole or in part; "Revolving Credit Note" means any of such
Revolving Credit Notes.
"Revolving Credit Maturity Date" means the earliest of the dates
referred to in Section 2.6.
"Security Agreement" means the Security Agreement of even date executed
by the Borrowers in favor of the Administrative Agent, for the ratable benefit
of itself and the Lenders, substantially in the form of Exhibit H, as amended,
restated, supplemented or otherwise modified.
"Security Documents" means the collective reference to the Security
Agreement, the Pledge Agreements, any Real Estate Security Documents and each
other agreement or writing pursuant to which the Parent or any Subsidiary
thereof purports to pledge or grant a security interest in any property or
assets securing the Obligations or any such Person purports to guaranty the
payment and/or performance of the Obligations.
"Shareholder Distribution" means the cash amount payable to the
Founders on the Closing Date which amount shall repay in full and cancel the
promissory notes dated January 1, 1999 issued to the Founders in connection with
the Recapitalization; provided that the aggregate amount of the proceeds of the
initial Loans and the Equity Purchase utilized to fund such payment shall not
exceed $55,000,000.
"Solvent" means, as to the Parent and its Subsidiaries on a particular
date, that any such Person (a) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage and is able to pay its debts as they mature in the normal course of
business, (b) owns property having a value, both at fair valuation and at
present fair saleable value, greater than the amount required to pay its
probable liabilities (including contingencies), and (c) does not believe that it
will incur debts or liabilities beyond its ability to pay such debts or
liabilities as they mature in the normal course of business.
"Statement With Respect To Shares" means the Statement With Respect to
Shares Designating the Preferences, Relative, Participating, Optional or other
Rights, Qualifications, Limitations and Restrictions of the Preferred Stock
filed with the Pennsylvania Secretary of State on or prior to Closing Date by
the Parent.
"Subordinated Debt" means any Debt of the Parent or any Subsidiary
subordinated in right and time of payment to the Obligations on terms reasonably
satisfactory to the Required Lenders.
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"Subsidiary" means as to any Person, any corporation, partnership,
limited liability company or other entity of which more than fifty percent (50%)
of the outstanding capital stock or other ownership interests having ordinary
voting power to elect a majority of the board of directors or other managers of
such corporation, partnership, limited liability company or other entity is at
the time, directly or indirectly, owned by or the management is otherwise
controlled by such Person (irrespective of whether, at the time, capital stock
or other ownership interests of any other class or classes of such corporation,
partnership, limited liability company or other entity shall have or might have
voting power by reason of the happening of any contingency). Unless otherwise
qualified references to "Subsidiary" or "Subsidiaries" herein shall refer to
those of the Parent.
"Subsidiary Borrowers" means each Subsidiary of the Parent party hereto
on the Closing Date or thereafter joined hereto pursuant to Section 9.12.
"Syndication Agent" means BankBoston, N.A. in its capacity as
Syndication Agent hereunder.
"Taxes" shall have the meaning assigned thereto in Section 5.11(a).
"Term Loans" shall mean the term loans made to the Borrowers by the
Lenders pursuant to Section 4.1.
"Term Loan Commitment" means (a) as to any Lender, the obligation of
such Lender to make the Term Loans to the account of the Borrowers hereunder in
an aggregate principal amount not to exceed the amount set forth opposite such
Lender's name on Schedule 1.1(a) hereto, as such amount may be reduced or
modified at any time or from time to time pursuant to the terms hereof and (b)
as to all Lenders, the aggregate commitment to make Term Loans. The Term Loan
Commitment of all Lenders as of the Closing Date shall be $20,000,000.
"Term Loan Facility" shall mean the term loan facility established
pursuant to Article IV hereof.
"Term Loan Maturity Date" means the first to occur of (a) December 31,
2003, and (b) the date of termination by the Administrative Agent on behalf of
the Lenders pursuant to Section 12.2(a).
"Term Notes" means the Term Notes made by the Borrowers payable to the
order of each of the Lenders, substantially in the form of Exhibit A-2 hereto,
evidencing the Debt incurred by the Borrowers pursuant to the Term Loan
Facility, and any amendments, modifications and supplements thereto, any
substitute therefor, and any replacement, restatements, renewals or extensions
thereof, in whole or in part.
"Termination Event" means: (a) a "Reportable Event" described in
Section 4043 of ERISA, or (b) the withdrawal of any Borrower or any ERISA
Affiliate from a Pension Plan during a plan year in which it was a "substantial
14
employer" as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a
Pension Plan, the filing of a notice of intent to terminate a Pension Plan or
the treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the PBGC, or (e) any other event
or condition which would constitute grounds under Section 4042(a) of ERISA for
the termination of, or the appointment of a trustee to administer, any Pension
Plan, or (f) the partial or complete withdrawal of any Borrower or any ERISA
Affiliate from a Multiemployer Plan, or (g) the imposition of a Lien pursuant to
Section 412 of the Code or Section 302 of ERISA, or (h) any event or condition
which results in the reorganization or insolvency of a Multiemployer Plan under
Sections 4241 or 4245 of ERISA, or (i) any event or condition which results in
the termination of a Multiemployer Plan under Section 4041A of ERISA or the
institution by PBGC of proceedings to terminate a Multiemployer Plan under
Section 4042 of ERISA.
"Total Funded Debt" means, as of any date of determination with respect
to the Parent and its Subsidiaries on a Consolidated basis without duplication,
the sum of all Debt of the Parent and its Subsidiaries.
"Transactions" means the collective reference to the closing and
initial funding hereunder and the Recapitalization.
"Uniform Customs" the Uniform Customs and Practice for Documentary
Credits (1993 Revision), International Chamber of Commerce Publication No. 500.
"UCC" shall have the meaning given thereto in the Security Agreement.
"United States" means the United States of America.
"Warrants" means the warrants issued to the Investors (other than the
Founders) on the Closing Date to purchase, in the aggregate, up to four percent
(4%) of the outstanding shares of common stock of the Parent.
"Wholly-Owned" means, with respect to a Subsidiary, that all of the
shares of capital stock or other equity ownership interests of such Subsidiary
are, directly or indirectly, owned or controlled by any Borrower and/or one or
more of its Wholly-Owned Subsidiaries.
SECTION 1.2 General. Unless otherwise specified, a reference in this
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Philadelphia time" shall refer
to the applicable time of day in Philadelphia, Pennsylvania.
15
SECTION 1.3 Other Definitions and Provisions.
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement.
ARTICLE II
REVOLVING CREDIT FACILITY
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions
of this Agreement, each Lender severally agrees to make Revolving Credit Loans
to the Borrowers on a joint and several basis from time to time from the Closing
Date through the Revolving Credit Maturity Date as requested by the Borrowers in
accordance with the terms of Article II; provided, that (a) the aggregate
principal amount of all outstanding Revolving Credit Loans (after giving effect
to any amount requested) shall not exceed the Revolving Credit Commitment less
the sum of all outstanding L/C Obligations and (b) the principal amount of
outstanding Revolving Credit Loans from any Lender to the Borrowers shall not at
any time exceed such Lender's Revolving Credit Commitment less the sum of such
Lender's Commitment Percentage of outstanding L/C Obligations. Each Revolving
Credit Loan by a Lender shall be in a principal amount equal to such Lender's
Commitment Percentage of the aggregate principal amount of Revolving Credit
Loans requested on such occasion. Subject to the terms and conditions hereof,
the Borrowers may borrow, repay and reborrow Revolving Credit Loans hereunder
until the Revolving Credit Maturity Date.
SECTION 2.2 Procedure for Advances of Revolving Credit Loans.
(a) Requests for Borrowing. The Parent, on behalf of the Borrowers,
shall give the Administrative Agent irrevocable notice in the form attached
hereto as Exhibit B-1 (a "Notice of Revolving Credit Loan Borrowing") not later
than 11:00 a.m. (Philadelphia time) (i) on the same Business Day as each Base
Rate Loan and (ii) at least three (3) Business Days before each LIBOR Rate Loan,
of its intention to borrow, specifying (A) the date of such borrowing, which
shall be a Business Day, (B) the amount of such borrowing, which shall be in an
amount equal to the amount of the Revolving Credit Commitment then available to
the Borrowers, or if less, (x) with respect to Base Rate Loans in an aggregate
principal amount of $500,000 or a whole multiple of $250,000 in excess thereof
and (y) with respect to LIBOR Rate Loans in an aggregate principal amount of
$500,000 or a whole multiple of $250,000 in excess thereof, (C) whether such
Loan is to be a Revolving Credit Loan, (D) in the case of a Revolving Credit
Loan whether the Loans are to be LIBOR Rate Loans or Base Rate Loans, and (E) in
the case of a LIBOR Rate Loan, the duration of the Interest Period applicable
16
thereto. Notices received after 11:00 a.m. (Philadelphia time) shall be deemed
received on the next Business Day. The Administrative Agent shall promptly
notify the Lenders of each Notice of Revolving Credit Loan Borrowing.
(b) Disbursement of Revolving Credit Loans. Not later than 2:00 p.m.
(Philadelphia time) on the proposed borrowing date set forth in the applicable
Notice of Revolving Credit Loan Borrowing, each Lender will make available to
the Administrative Agent, for the account of the Borrowers, at the office of the
Administrative Agent in funds immediately available to the Administrative Agent,
such Lender's Commitment Percentage of the Revolving Credit Loans to be made on
such borrowing date. The Borrowers hereby irrevocably authorize the
Administrative Agent to disburse the proceeds of each borrowing requested
pursuant to this Section 2.2 in immediately available funds by crediting or
wiring such proceeds to the deposit account of the Borrowers identified in the
most recent notice substantially in the form of Exhibit C hereto (a "Notice of
Account Designation") delivered by the Parent, on behalf of the Borrowers, to
the Administrative Agent or may be otherwise agreed upon by the Borrowers and
the Administrative Agent from time to time. Subject to Section 5.7 hereof, the
Administrative Agent shall not be obligated to disburse the portion of the
proceeds of any Revolving Credit Loan requested pursuant to this Section 2.2 to
the extent that any Lender has not made available to the Administrative Agent
its Commitment Percentage of such Loan.
SECTION 2.3 Repayment of Revolving Credit Loans.
(a) Repayment on Revolving Credit Maturity Date. The Borrowers shall
repay the outstanding principal amount of all Revolving Credit Loans in full on
the Revolving Credit Maturity Date, together with all accrued but unpaid
interest thereon.
(b) Mandatory Repayment of Revolving Credit Loans. If at any time the
outstanding principal amount of all Revolving Credit Loans plus the sum of all
outstanding L/C Obligations exceeds the Revolving Credit Commitment, the
Borrowers shall repay immediately upon notice from the Administrative Agent, by
payment to the Administrative Agent for the account of the Lenders, Revolving
Credit Loans and/or furnishing cash collateral reasonably satisfactory to the
Administrative Agent or repay the L/C Obligations in an amount equal to such
excess with each such repayment applied first to the principal amount of the L/C
Obligations and second to the principal amount of outstanding Revolving Credit
Loans. Such cash collateral shall be applied in accordance with Section 12.2(b).
(c) Excess Proceeds. If at any time proceeds ("Excess Proceeds") remain
after the prepayment of Term Loans pursuant to Section 4.4(b), the Borrowers
shall repay any outstanding Revolving Credit Loans by an amount equal to the
amount of such Excess Proceeds.
(d) Insurance Proceeds. Any Net Cash Proceeds referred to in Section
4.4(b)(iv) that are required to be applied to the Loans shall be utilized in
accordance with such Section 4.4(b)(iv) to repay any outstanding Revolving
Credit Loans in an amount up to the amount of such Net Cash Proceeds (with any
such excess Net Cash Proceeds being applied to the Term Loans in accordance with
Sections 4.4(b)(iv) and 4.4(b)(v)).
17
(e) Optional Repayments. The Borrowers may at any time and from time to
time repay the Loans, in whole or in part, upon at least three (3) Business
Days' irrevocable notice to the Administrative Agent with respect to LIBOR Rate
Loans and one (1) Business Day irrevocable notice with respect to Base Rate
Loans, in the form attached hereto as Exhibit D (a "Notice of Prepayment")
specifying the date and amount of repayment and whether the repayment is of
LIBOR Rate Loans, Base Rate Loans or a combination thereof, and, if of a
combination thereof, the amount allocable to each. Upon receipt of such notice,
the Administrative Agent shall promptly notify each Lender. If any such notice
is given, the amount specified in such notice shall be due and payable on the
date set forth in such notice. Partial repayments (other than with respect to
the final repayment of Revolving Credit Loans) shall be in an aggregate amount
of $500,000 or a whole multiple of $250,000 in excess thereof with respect to
Base Rate Loans and $500,000 or a whole multiple of $250,000 in excess thereof
with respect to LIBOR Rate Loans.
(f) Limitation on Repayment of LIBOR Rate Loans. The Borrowers may not
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 5.9 hereof.
SECTION 2.4 Revolving Credit Notes. Each Lender's Revolving Credit
Loans and the obligation of the Borrowers to repay such Revolving Credit Loans
shall be evidenced by a separate Revolving Credit Note executed by the Borrowers
payable to the order of such Lender in principal amount equal to such Lender's
Revolving Credit Commitment. Each Revolving Credit Note shall be dated the date
hereof and shall bear interest on the unpaid principal amount thereof at the
applicable interest rate per annum specified in Section 5.1.
SECTION 2.5 Permanent Reduction of the Revolving Credit Commitment.
(a) Voluntary Reduction. The Borrowers shall have the right at any time
and from time to time, upon at least five (5) Business Days prior written notice
to the Administrative Agent, to permanently reduce, without premium or penalty,
(i) the entire Revolving Credit Commitment at any time or (ii) portions of the
Revolving Credit Commitment, from time to time, in an aggregate principal amount
not less than $500,000 or any whole multiple of $250,000 in excess thereof.
(b) Payments. Each permanent reduction permitted or required pursuant
to this Section 2.5 shall be accompanied by a payment of principal sufficient to
reduce the aggregate outstanding Revolving Credit Loans and L/C Obligations, as
applicable, after such reduction to the Revolving Credit Commitment as so
reduced, and if the Revolving Credit Commitment as so reduced is less than the
aggregate amount of all outstanding Letters of Credit, the Borrowers shall be
required to deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Any reduction of the Revolving Credit Commitment to zero
shall be accompanied by payment of all outstanding Revolving Credit Loans (and
furnishing of cash collateral satisfactory to the Administrative Agent for all
L/C Obligations) and shall result in the termination of the Revolving Credit
Commitment and the Revolving Credit Facility. Such cash collateral shall be
applied in accordance with Section 12.2(b). If the reduction of the Revolving
Credit Commitment requires the repayment of any LIBOR Rate Loan, such repayment
shall be accompanied by any amount required to be paid pursuant to Section 5.9
hereof.
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SECTION 2.6 Termination of Revolving Credit Facility. The Revolving
Credit Facility shall terminate on the earliest of (a) December 31, 2003, (b)
the date of termination by the Borrowers pursuant to Section 2.5(a) or 2.5(b),
and (c) the date of termination by the Administrative Agent on behalf of the
Lenders pursuant to Section 12.2(a).
ARTICLE III
LETTER OF CREDIT FACILITY
SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue standby and commercial letters of credit
("Letters of Credit") for the account of the Borrowers on any Business Day from
the Closing Date through but not including the Revolving Credit Maturity Date in
such form as may be approved from time to time by the Issuing Lender; provided,
that the Issuing Lender shall have no obligation to issue any Letter of Credit
if, after giving effect to such issuance, (a) the L/C Obligations would exceed
the L/C Commitment or (b) the aggregate principal amount of outstanding
Revolving Credit Loans plus the aggregate amount of L/C Obligations would exceed
the Revolving Credit Commitment. Each Letter of Credit shall (i) be denominated
in Dollars in a minimum amount of $250,000 (provided that any Letter of Credit
issued by the Issuing Lender to replace any letter of credit existing under the
Existing Facility shall be in a minimum amount agreed to by the Administrative
Agent, Issuing Lender and the Borrowers), (ii) be a standby or a commercial
letter of credit issued to support obligations of the Borrowers or any of their
Subsidiaries, contingent or otherwise, incurred in the ordinary course of
business, (iii) expire on a date satisfactory to the Issuing Lender, which date
shall be no later than one year from the date of issuance (or if sooner, the
Revolving Credit Maturity Date) and (iv) be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of North
Carolina. The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
Applicable Law. References herein to "issue" and derivations thereof with
respect to Letters of Credit shall also include extensions or modifications of
any existing Letters of Credit, unless the context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrowers
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at its address for notices set forth herein
and to the Administrative Agent at the Administrative Agent's Office an
Application therefor, completed to the satisfaction of the Issuing Lender, and
such other certificates, documents and other papers and information as the
Issuing Lender may request. Upon receipt of any Application, the Issuing Lender
shall process such Application and the certificates, documents and other papers
19
and information delivered to it in connection therewith in accordance with its
customary procedures and shall, subject to Section 3.1 and Article VI hereof,
promptly issue the Letter of Credit requested thereby (but in no event shall the
Issuing Lender be required to issue any Letter of Credit earlier than three (3)
Business Days after its receipt of the Application therefor and all such other
certificates, documents and other papers and information relating thereto) by
issuing the original of such Letter of Credit to the beneficiary thereof or as
otherwise may be agreed by the Issuing Lender and the Borrowers. The Issuing
Lender shall promptly furnish to the Borrowers a copy of such Letter of Credit
and promptly notify each Lender of the issuance and upon request by any Lender,
furnish to such Lender a copy of such Letter of Credit and the amount of such
Lender's L/C Participation therein.
SECTION 3.3 Commissions and Other Charges.
(a) The Borrowers shall pay to the Administrative Agent, for the
account of the Issuing Lender and the L/C Participants based upon their
respective Commitment Percentages, a letter of credit commission on a per annum
basis with respect to each Letter of Credit for as long as such Letter of Credit
is outstanding in an amount equal to the product of (i) the Applicable Margin
with respect to LIBOR Rate Loans in effect on the corresponding payment date and
(ii) the average face amount of such Letter of Credit for the corresponding
quarterly period. Such commission shall be payable quarterly in arrears on the
last Business Day of each calendar quarter and on the Revolving Credit Maturity
Date. The Administrative Agent shall, promptly following its receipt thereof,
distribute to the Issuing Lender and the L/C Participants all commissions
received by the Administrative Agent in accordance with their respective
Commitment Percentages.
(b) In addition to the foregoing commission, the Borrowers shall pay
the Issuing Lender for its account an issuance fee of .125% per annum of the
average face amount of each Letter of Credit for the corresponding quarterly
period, payable quarterly in arrears on the last Business Day of each calendar
quarter and on the Revolving Credit Maturity Date for as long as such Letter of
Credit is outstanding.
(c) In addition to the foregoing commissions, the Borrowers shall pay
or reimburse the Issuing Lender for such normal and customary costs and expenses
as are incurred or charged by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender to issue Letters of
Credit hereunder, each L/C Participant irrevocably agrees to accept and purchase
and hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant's own account and risk
an undivided interest equal to such L/C Participant's Commitment Percentage in
the Issuing Lender's obligations and rights under each Letter of Credit issued
hereunder and the amount of each draft paid by the Issuing Lender thereunder.
Each L/C Participant unconditionally and irrevocably agrees with the Issuing
Lender that, if a draft is paid under any Letter of Credit for which the Issuing
Lender is not reimbursed in full by the Borrowers in accordance with the terms
20
of this Agreement, such L/C Participant shall pay to the Issuing Lender upon
demand at the Issuing Lender's address for notices specified herein an amount
equal to such L/C Participant's Commitment Percentage of the amount of such
draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Administrative Agent during the period from and
including the date such payment is due to the date on which such payment is
immediately available to the Issuing Lender, times (iii) a fraction the
numerator of which is the number of days that elapse during such period and the
denominator of which is 360. A certificate of the Issuing Lender with respect to
any amounts owing under this Section 3.4(b) shall be conclusive in the absence
of manifest error. With respect to payment to the Issuing Lender of the
unreimbursed amounts described in this Section 3.4(b), if the L/C Participants
receive notice that any such payment is due (A) prior to 1:00 p.m. (Philadelphia
time) on any Business Day, such payment shall be due that Business Day, and (B)
after 1:00 p.m. (Philadelphia time) on any Business Day, such payment shall be
due on the following Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its
Commitment Percentage of such payment in accordance with this Section 3.4, the
Issuing Lender receives any payment related to such Letter of Credit (whether
directly from the Borrowers or otherwise), or any payment of interest on account
thereof, the Issuing Lender will distribute to such L/C Participant its pro rata
share thereof; provided, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrowers. The Borrowers
agree to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrowers of the date and amount of a draft paid under any Letter
of Credit for the amount of (a) such draft so paid and (b) any taxes, fees,
charges or other costs or expenses incurred by the Issuing Lender in connection
with such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrowers under this Article III from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full at the rate which would be payable on any
outstanding Base Rate Loans which were then overdue. If the Borrowers fail to
timely reimburse the Issuing Lender on the date the Borrowers receive the notice
referred to in this Section 3.5, the Borrowers shall be deemed to have timely
given a Notice of Revolving Credit Loan Borrowing hereunder to the
Administrative Agent requesting the Lenders to make a Base Rate Loan on such
21
date in an amount equal to the amount of such drawing and, regardless of whether
or not the conditions precedent specified in Article VI have been satisfied, the
Lenders shall make Base Rate Loans in such amount, the proceeds of which shall
be applied to reimburse the Issuing Lender for the amount of the related drawing
and costs and expenses.
SECTION 3.6 Obligations Absolute. The Borrowers' obligations under this
Article III (including without limitation the Reimbursement Obligation) shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the Borrowers may have or
have had against the Issuing Lender or any beneficiary of a Letter of Credit.
The Borrowers also agree with the Issuing Lender that the Issuing Lender shall
not be responsible for, and the Borrowers' Reimbursement Obligation under
Section 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, except for errors or
omissions caused by the Issuing Lender's gross negligence or willful misconduct
even though such documents shall in fact prove to be invalid, fraudulent or
forged, or any dispute between or among the Borrowers and any beneficiary of any
Letter of Credit or any other party to which such Letter of Credit may be
transferred or any claims whatsoever of any Borrower against any beneficiary of
such Letter of Credit or any such transferee. The Issuing Lender shall not be
liable for any error, omission, interruption or delay in transmission, dispatch
or delivery of any message or advice, however transmitted, in connection with
any Letter of Credit, except for errors or omissions caused by the Issuing
Lender's gross negligence or willful misconduct. The Borrowers agree that any
action taken or omitted by the Issuing Lender under or in connection with any
Letter of Credit or the related drafts or documents, if done in the absence of
gross negligence or willful misconduct and in accordance with the standards of
care specified in the Uniform Customs and, to the extent not inconsistent
therewith, the UCC shall be binding on the Borrowers and shall not result in any
liability of the Issuing Lender to the Borrowers. The responsibility of the
Issuing Lender to the Borrowers in connection with any draft presented for
payment under any Letter of Credit shall, in addition to any payment obligation
expressly provided for in such Letter of Credit, be limited to determining that
the documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are in conformity with such Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision of
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
TERM LOAN FACILITY
SECTION 4.1 Term Loan. Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make a Term Loan to the Borrowers on
a joint and several basis on the Closing Date. The Term Loan shall be funded by
each Lender in a principal amount equal to such Lender's Commitment Percentage
22
of the aggregate principal amount of the Term Loans made on the Closing Date,
which aggregate principal amount shall equal the total Term Loan Commitment.
SECTION 4.2 Procedure for Advance of Term Loan. The Parent, on behalf
of the Borrowers, shall give the Administrative Agent irrevocable prior written
notice in the form attached hereto as Exhibit B-2 (a "Notice of Term Loan
Borrowing") prior to 11:00 a.m. (Philadelphia time) on the Closing Date
requesting that the Lenders make the Term Loan as Base Rate Loan on the Closing
Date. To the extent any conversion of the applicable interest rate is effected
pursuant to Section 5.2, each Base Rate Loan shall be in an aggregate principal
amount of at least $500,000 or any integral multiple of $250,000 in excess
thereof and each LIBOR Rate Loan shall be in an aggregate principal amount of
$500,000 or any integral multiple of $250,000 in excess thereof. Upon receipt of
such Notice of Term Loan Borrowing from the Parent, on behalf of the Borrowers,
the Administrative Agent shall promptly notify each Lender thereof. Not later
than 2:00 p.m. (Philadelphia time) on the Closing Date, each Lender will make
available to the Administrative Agent for the account of the Borrowers, at the
office of the Administrative Agent in immediately available funds, the amount of
such Loan to be made on such borrowing date. The Borrowers hereby irrevocably
authorize the Administrative Agent to disburse the proceeds of the Term Loan in
immediately available funds by wire transfer to such Person or Persons as may be
designated by the Borrowers.
SECTION 4.3 Repayment of Term Loan. The Borrowers shall repay the
aggregate outstanding principal amount of the Term Loan in consecutive quarterly
installments on the last Business Day of each of March 31, June 30, September 30
and December 31 commencing March 31, 2000 as set forth below, except as the
amounts of individual installments may be adjusted pursuant to Section 4.4
hereof:
----------------------------------------------------------------------------------------------------------------------
YEAR PAYMENT DATE PRINCIPAL TERM LOAN
INSTALLMENT COMMITMENT
($) ($)
----------------------------------------------------------------------------------------------------------------------
1999 March 31, 1999 0 $20,000,000
---------------------------------------------------------------------------------------
June 30, 1999 0 $20,000,000
---------------------------------------------------------------------------------------
September 30, 1999 0 $20,000,000
---------------------------------------------------------------------------------------
December 31, 1999 0 $20,000,000
----------------------------------------------------------------------------------------------------------------------
2000 March 31, 2000 $ 500,000 $19,500,000
---------------------------------------------------------------------------------------
June 30, 2000 $ 500,000 $19,000,000
---------------------------------------------------------------------------------------
September 30, 2000 $ 500,000 $18,500,000
---------------------------------------------------------------------------------------
December 31, 2000 $ 500,000 $18,000,000
----------------------------------------------------------------------------------------------------------------------
2001 March 31, 2001 $1,000,000 $17,000,000
---------------------------------------------------------------------------------------
June 30, 2001 $1,000,000 $16,000,000
---------------------------------------------------------------------------------------
September 30, 2001 $1,000,000 $15,000,000
---------------------------------------------------------------------------------------
December 31, 2001 $1,000,000 $14,000,000
----------------------------------------------------------------------------------------------------------------------
2002 March 31, 2002 $1,500,000 $12,500,000
---------------------------------------------------------------------------------------
June 30, 2002 $1,500,000 $11,000,000
---------------------------------------------------------------------------------------
September 30, 2002 $1,500,000 $ 9,500,000
---------------------------------------------------------------------------------------
December 31, 2002 $1,500,000 $ 8,000,000
----------------------------------------------------------------------------------------------------------------------
2003 March 31, 2003 $2,000,000 $ 6,000,000
---------------------------------------------------------------------------------------
June 30, 2003 $2,000,000 $ 4,000,000
---------------------------------------------------------------------------------------
September 30, 2003 $2,000,000 $ 2,000,000
---------------------------------------------------------------------------------------
December 31, 2003 $2,000,000 0
----------------------------------------------------------------------------------------------------------------------
23
If not sooner paid, the Term Loan shall be paid in full, together with accrued
interest thereon, on the Term Loan Maturity Date.
SECTION 4.4 Prepayments of Term Loan.
(a) Optional Prepayment of Term Loan. The Borrowers shall have the
right at any time and from time to time, upon delivery to the Administrative
Agent of a Notice of Prepayment at least three (3) Business Days prior to any
repayment of any LIBOR Rate Loan and at least one (1) Business Day prior to any
repayment of any Base Rate Loan, to prepay the Term Loan in whole or in part
without premium or penalty (except as referenced below in this paragraph). Each
optional prepayment of the Term Loan hereunder (other than the final payment
thereof) shall be in an aggregate principal amount of at least $500,000 or any
whole multiple of $250,000 in excess thereof, shall be applied to the
outstanding principal installments of the Term Loan in inverse order of maturity
thereof. Each repayment shall be accompanied by any amount required to be paid
pursuant to Section 5.9 hereof.
(b) Mandatory Prepayment of Term Loan.
(i) Debt Proceeds. The Borrowers shall make mandatory principal
prepayments of the Loans in the manner set forth in Section 4.4(b)(v) below in
amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds
from any incurrence of Debt by any Borrower or any Subsidiary thereof pursuant
to Section 11.1(e). Such prepayment shall be made within three (3) Business Days
after the date of receipt of Net Cash Proceeds of any such transaction.
(ii) Equity Proceeds. The Borrowers shall make mandatory principal
prepayments of the Loans in the manner set forth in Section 4.4(b)(v) below in
amounts equal to one hundred percent (100%) of the aggregate Net Cash Proceeds
from any offering of equity securities by any Borrower or any Subsidiary
thereof. Such prepayment shall be made within three (3) Business Days after the
date of receipt of Net Cash Proceeds of any such transaction.
(iii) Asset Sale Proceeds. If any Borrower or any Subsidiary
thereof receives Net Cash Proceeds in excess of $1,000,000 from any sale or
other disposition or series of related sales or other dispositions of assets
completed thereby pursuant to Section 11.6(e) (or if any Borrower or any
Subsidiary thereof receives Net Cash Proceeds in any amount from any such sale
or other disposition during the continuance of any Default or Event of Default),
the Borrowers shall make mandatory principal prepayments of the Loans in the
manner set forth in Section 4.4(b)(v) below in amounts equal to one hundred
percent (100%) of all such Net Cash Proceeds (including the amount of Net Cash
Proceeds below $1,000,000). All such Net Cash Proceeds shall be applied to make
prepayments of the Loans, such prepayments to be made within three (3) Business
Days after the applicable Borrower's or Subsidiary's receipt of such Net Cash
Proceeds.
(iv) Insurance Proceeds. If any Borrower or any Subsidiary thereof
receives Net Cash Proceeds under any of the insurance policies maintained
pursuant to Section 9.3 ("Insurance Proceeds") in excess of $2,000,000 (or if
24
any Borrower or any Subsidiary thereof receives Net Cash Proceeds under any such
insurance policies in any amount during the continuance of any Default or Event
of Default), the Borrowers shall make mandatory principal prepayments of the
Loans in the manner set forth in Section 4.4(b)(v) below in amounts equal to one
hundred percent (100%) of all such Insurance Proceeds (excluding the amount of
Insurance Proceeds below $2,000,000). All such Insurance Proceeds shall be
applied to make prepayments of the Loans, such prepayments to be made within
three (3) Business Days after the applicable Borrower's or Subsidiary's receipt
of such Insurance Proceeds.
(v) Notice; Manner of Payment. Upon the occurrence of any event
triggering the prepayment requirement under Sections 4.4(b)(i) through and
including 4.4(b)(iv), the Parent, on behalf of the Borrowers, shall promptly
deliver a Notice of Prepayment to the Administrative Agent and upon receipt of
such notice, the Administrative Agent shall promptly so notify the Lenders. Each
prepayment under Section 4.4(b)(i), (ii) and (iii) shall be applied as follows:
first, to reduce in inverse order of maturity the remaining scheduled principal
installments of the Term Loans required pursuant to Section 4.3 and second, to
the extent of any excess, to repay Revolving Credit Loans pursuant to Section
2.3(c). Each prepayment under Section 4.4(b)(iv) shall be applied first, to
repay Revolving Credit Loans pursuant to Section 2.3(d) and second, to the
extent of any excess, to reduce in inverse order of maturity the remaining
scheduled principal installments of the Term Loans required pursuant to Section
4.3. Amounts prepaid under the Term Loan pursuant to this Section 4.4 may not be
reborrowed. Each prepayment shall be accompanied by any amount required to be
paid pursuant to Section 5.9 hereof.
SECTION 4.5 Term Notes. Each Lender's Term Loan and the obligation of
the Borrowers to repay such Term Loan shall be evidenced by a Term Note payable
to the order of such Lender. Each Term Note shall be dated as of the Closing
Date and shall bear interest on the unpaid principal amount thereof at the
applicable interest rate per annum specified in Section 5.1.
ARTICLE V
GENERAL LOAN PROVISIONS
SECTION 5.1 Interest.
(a) Interest Rate Options. Subject to the provisions of this Section
5.1, at the election of the Parent, on behalf of the Borrowers, the aggregate
principal balance of any Revolving Credit Note and any Term Loan Note shall bear
interest at (A) the Base Rate plus the Applicable Margin as set forth in Section
5.1(c) or (B) the LIBOR Rate plus the Applicable Margin as set forth in Section
5.1(c); provided that the LIBOR Rate shall not be available until three (3)
Business Days after the Closing Date. The Parent, on behalf of the Borrowers,
shall select the rate of interest and Interest Period, if any, applicable to any
Loan at the time a Notice of Revolving Credit Loan Borrowing is given pursuant
to Section 2.2(a) or a Notice of Term Loan Borrowing is given pursuant to
Section 4.2 or at the time a Notice of Conversion/Continuation is given pursuant
to Section 5.2. Each Loan or portion thereof bearing interest based on the Base
Rate shall be a "Base Rate Loan", each Loan or portion thereof bearing interest
26
based on the LIBOR Rate shall be a "LIBOR Rate Loan." Any Loan or any portion
thereof as to which the Parent, on behalf of the Borrowers, has not duly
specified an interest rate as provided herein shall be deemed a Base Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
Parent, on behalf of the Borrowers, by giving notice at the times described in
Section 5.1(a), shall elect an interest period (each, an "Interest Period") to
be applicable to such Loan, which Interest Period shall be a period of one (1),
two (2), three (3), or six (6) months with respect to each LIBOR Rate Loan;
provided that:
(i) the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately
successive Interest Periods, each successive Interest Period shall
commence on the date on which the next preceding Interest Period
expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, that if any Interest Period with
respect to a LIBOR Rate Loan would otherwise expire on a day that is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;
(iii) any Interest Period with respect to a LIBOR Rate Loan that
begins on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the calendar month
at the end of such Interest Period) shall end on the last Business Day
of the relevant calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Revolving Credit
Maturity Date or the Term Loan Maturity Date, as applicable, and
Interest Periods shall be selected by the Parent, on behalf of the
Borrowers so as to permit the Borrowers to make mandatory reductions of
the Revolving Credit Commitment pursuant to Section 2.5(b) and the
quarterly principal installment payments pursuant to Section 4.3
without payment of any amounts pursuant to Section 5.9; and
(v) there shall be no more than five (5) Interest Periods in effect
at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
5.1(a) with respect to the Loans (the "Applicable Margin") shall (i) on the
Closing Date equal the percentages set forth in Level II below and (ii) for each
fiscal quarter thereafter be determined by reference to the Leverage Ratio as of
the end of the fiscal quarter immediately preceding the delivery of the
applicable Officer's Compliance Certificate as follows:
26
Level Leverage Ratio Applicable Margin Per Annum
Base Rate + LIBOR Rate +
--------- -------------------- ---------------------------------
I > 2.50 1.00% 2.75%
-
II > 2.25 < 2.50 0.75% 2.50%
-
III > 2.00 < 2.25 0.50% 2.25%
-
IV > 1.50 < 2.00 0.25% 2.00%
-
V < 1.50 0.00% 1.75%
Adjustments, if any, in the Applicable Margin shall be made by the
Administrative Agent on the tenth (10th) Business Day after receipt by the
Administrative Agent of quarterly financial statements for the Parent and its
Subsidiaries and the accompanying Officer's Compliance Certificate setting forth
the Leverage Ratio of the Parent and its Subsidiaries as of the most recent
fiscal quarter end. Subject to Section 5.1(d), in the event the Borrowers fail
to deliver such financial statements and certificate within the time required by
Section 8.2 hereof, the Applicable Margin shall be the highest Applicable Margin
set forth above until the delivery of such financial statements and certificate.
(d) Default Rate. Subject to Section 12.3, at the discretion of the
Administrative Agent, upon the occurrence and during the continuance of an Event
of Default and upon delivery by the Administrative Agent to the Borrowers of
notice of such Event of Default, (i) the Borrowers shall no longer have the
option to request LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall
bear interest at a rate per annum two percent (2%) in excess of the rate then
applicable to LIBOR Rate Loans, as applicable, until the end of the applicable
Interest Period and thereafter at a rate equal to two percent (2%) in excess of
the rate then applicable to Base Rate Loans, and (iii) all outstanding Base Rate
Loans shall bear interest at a rate per annum equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans. Interest shall continue
to accrue on the Notes after the filing by or against the Borrowers of any
petition seeking any relief in bankruptcy or under any act or law pertaining to
insolvency or debtor relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
shall be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 1999; and interest on each LIBOR Rate Loan shall be payable
on the last day of each Interest Period applicable thereto, and if such Interest
Period extends over three (3) months, at the end of each three (3) month
interval during such Interest Period. Interest on LIBOR Rate Loans and all fees
payable hereunder shall be computed on the basis of a 360-day year and assessed
for the actual number of days elapsed and interest on Base Rate Loans shall be
computed on the basis of a 365/66-day year and assessed for the actual number of
days elapsed.
(f) Maximum Rate. In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
27
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Administrative
Agent's option (i) promptly refund to the Borrowers any interest received by
Lenders in excess of the maximum lawful rate or (ii) shall apply such excess to
the principal balance of the Obligations. It is the intent hereof that the
Borrowers not pay or contract to pay, and that neither the Administrative Agent
nor any Lender receive or contract to receive, directly or indirectly in any
manner whatsoever, interest in excess of that which may be paid by the Borrowers
under Applicable Law.
SECTION 5.2 Notice and Manner of Conversion or Continuation of Loans.
Provided that no Event of Default has occurred and is then continuing, the
Borrowers shall have the option to (a) convert at any time following the third
Business Day after the Closing Date all or any portion of its outstanding Base
Rate Loans in a principal amount equal to $500,000 or any whole multiple of
$250,000 in excess thereof into one or more LIBOR Rate Loans and (b) upon the
expiration of any Interest Period, (i) convert all or any part of its
outstanding LIBOR Rate Loans in a principal amount equal to $500,000 or a whole
multiple of $250,000 in excess thereof into Base Rate Loans or (ii) continue
such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrowers desire to
convert or continue Loans as provided above, the Parent, on behalf of the
Borrowers, shall give the Administrative Agent irrevocable prior written notice
in the form attached as Exhibit E (a "Notice of Conversion/Continuation") not
later than 11:00 a.m. (Philadelphia time) three (3) Business Days before the day
on which a proposed conversion or continuation of such Loan is to be effective
specifying (A) the Loans to be converted or continued, and, in the case of any
LIBOR Rate Loan to be converted or continued, the last day of the Interest
Period therefor, (B) the effective date of such conversion or continuation
(which shall be a Business Day), (C) the principal amount of such Loans to be
converted or continued, and (D) the Interest Period to be applicable to such
converted or continued LIBOR Rate Loan. The Administrative Agent shall promptly
notify the Lenders of such Notice of Conversion/Continuation.
SECTION 5.3 Fees.
(a) Commitment Fee. The Borrowers shall pay to the Administrative
Agent, for the account of the Lenders, a non-refundable commitment fee at a rate
per annum equal to 0.50% on the average daily unused portion of the Revolving
Credit Commitment; provided, that if at any time the Leverage Ratio as of the
immediately preceding fiscal quarter end is less than 2.00 to 1.00, the
commitment fee shall be calculated at a rate per annum equal to 0.375% on the
average daily unused portion of the Revolving Credit Commitment. The commitment
fee shall be payable in arrears on a quarterly basis on the last Business Day of
each calendar quarter during the term of this Agreement commencing March 31,
1999, and on the Revolving Credit Maturity Date. Such commitment fee shall be
distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders' respective Commitment Percentages.
(b) Upfront Fees. The Borrowers shall pay to the Administrative Agent,
for the account of the Lenders, a non-refundable upfront fee as referenced in
the Fee Letter in the aggregate amount set forth in the settlement statement
delivered on the Closing Date.
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(c) Arranger's and Administrative Agent's Fees. In order to compensate
Capital Markets for structuring and syndicating the Facilities, the Borrowers
agree to pay to Capital Markets, for its account, the arrangement fee set forth
in the Fee Letter. In addition, in order to compensate the Administrative Agent
for its obligations hereunder, the Borrowers agree to pay to the Administrative
Agent, for its account, on each anniversary of the Closing Date the
administrative fee set forth in the Fee Letter.
SECTION 5.4 Manner of Payment; Allocation of Commitment Deductions.
(a) Each payment by the Borrowers on account of the principal of or
interest on the Loans or of any fee, commission or other amounts (including the
Reimbursement Obligation) payable to the Lenders under this Agreement or any
Note shall be made not later than 1:00 p.m. (Philadelphia time) on the date
specified for payment under this Agreement to the Administrative Agent at the
Administrative Agent's Office for the account of the Lenders (other than as set
forth below) pro rata in accordance with their respective Commitment Percentages
(except as specified below), in Dollars, in immediately available funds and
shall be made without any set-off, counterclaim or deduction whatsoever. Any
payment received after such time but before 2:00 p.m. (Philadelphia time) on
such day shall be deemed a payment on such date for the purposes of Section
12.1, but for all other purposes shall be deemed to have been made on the next
succeeding Business Day. Any payment received after 2:00 p.m. (Philadelphia
time) shall be deemed to have been made on the next succeeding Business Day for
all purposes. Upon receipt by the Administrative Agent of each such payment, the
Administrative Agent shall distribute to each Lender at its address for notices
set forth herein its pro rata share of such payment in accordance with such
Lender's Commitment Percentage (except as specified below) and shall wire advice
of the amount of such credit to each Lender. Each payment to the Administrative
Agent of the Issuing Lender's fees or L/C Participants' commissions shall be
made in like manner, but for the account of the Issuing Lender or the L/C
Participants, as the case may be. Each payment to the Administrative Agent of
Administrative Agent's fees or expenses shall be made for the account of the
Administrative Agent and any amount payable to any Lender under Sections 5.8,
5.9, 5.10, 5.11 or 14.2 shall be paid to the Administrative Agent for the
account of the applicable Lender. Subject to Section 5.1(b)(ii) if any payment
under this Agreement or any Note shall be specified to be made upon a day which
is not a Business Day, it shall be made on the next succeeding day which is a
Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.
(b) Notwithstanding anything to the contrary contained in this
Agreement, at any time the sum of the outstanding balance of Term Loans made by
First Union and the Revolving Credit Commitment of First Union exceeds
$15,000,000, (i) all voluntary prepayments made by the Borrowers pursuant to
Section 4.4(a) and all voluntary Revolving Credit Commitment reductions (and any
corresponding repayments) made by the Borrowers pursuant to Section 2.5(a) shall
be applied solely to reduce the outstanding Term Loan balance of First Union and
the Revolving Credit Commitment of First Union (on a pro rata basis between such
amounts) until the sum thereof is equal to $15,000,000; provided that the total
Revolving Credit Commitment shall be reduced to the extent of any reduction of
the Revolving Credit Commitment of First Union. Thereafter, all voluntary
prepayments and commitment reductions made by the Borrowers pursuant to Sections
29
4.4(a) and 2.5(a) shall be applied on a pro rata basis in accordance with the
Commitment Percentages of each Lender.
SECTION 5.5 Crediting of Payments and Proceeds. In the event that the
Borrowers shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 12.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrowers hereunder, then to all indemnity obligations then
due and payable by the Borrowers hereunder, then to all Administrative Agent's
and Issuing Lender's fees then due and payable, then to all commitment and other
fees and commissions then due and payable, then to accrued and unpaid interest
on the Notes, the Reimbursement Obligation and any termination payments due in
respect of a Hedging Agreement with any Lender (which Hedging Agreement is
permitted or required hereunder) (pro rata in accordance with all such amounts
due), then to the principal amount of the Notes and Reimbursement Obligation
(pro rata in accordance with all such amounts due) and then to the cash
collateral account described in Section 12.2(b) hereof to the extent of any L/C
Obligations then outstanding, in that order.
SECTION 5.6 Adjustments. Subject to the provisions of Section 5.4(b)
above, if any Lender (a "Benefitted Lender") shall at any time receive any
payment of all or part of the Obligations owing to it, or interest thereon, or
if any Lender shall at any time receive any collateral in respect to the
Obligations owing to it (whether voluntarily or involuntarily, by set-off or
otherwise) in a greater proportion than any such payment to and collateral
received by any other Lender, if any, in respect of the Obligations owing to
such other Lender, or interest thereon, such Benefitted Lender shall purchase
for cash from the other Lenders such portion of each such other Lender's
Extensions of Credit, or shall provide such other Lenders with the benefits of
any such collateral, or the proceeds thereof, as shall be necessary to cause
such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefitted Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without interest. The
Borrowers agrees that each Lender so purchasing a portion of another Lender's
Extensions of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
SECTION 5.7 Nature of Obligations of Lenders Regarding Extensions of
Credit; Assumption by the Administrative Agent. The obligations of the Lenders
under this Agreement to make the Loans and issue or participate in Letters of
Credit are several and are not joint or joint and several. Unless the
Administrative Agent shall have received notice from a Lender prior to a
proposed borrowing date that such Lender will not make available to the
Administrative Agent such Lender's ratable portion of the amount to be borrowed
on such date (which notice shall not release such Lender of its obligations
hereunder), the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the proposed borrowing date in
accordance with Sections 2.2(b) and 4.2, and the Administrative Agent may, in
30
reliance upon such assumption, make available to the Borrowers on such date a
corresponding amount. If such amount is made available to the Administrative
Agent on a date after such borrowing date, such Lender shall pay to the
Administrative Agent on demand an amount, until paid, equal to the product of
(a) the amount not made available by such Lender in accordance with the terms
hereof, times (b) the daily average Federal Funds Rate during such period as
determined by the Administrative Agent, times (c) a fraction the numerator of
which is the number of days that elapse from and including such borrowing date
to the date on which such amount is made available by such Lender in accordance
with the terms hereof shall have become immediately available to the
Administrative Agent and the denominator of which is 360. A certificate of the
Administrative Agent with respect to any amounts owing under this Section 5.7
shall be conclusive, absent manifest error. If such Lender's Commitment
Percentage of such borrowing is not made available to the Administrative Agent
by such Lender within three (3) Business Days of such borrowing date, the
Administrative Agent shall be entitled to recover such amount made available by
the Administrative Agent with interest thereon at the rate per annum applicable
to the rate applicable to such borrowing hereunder, on demand, from the
Borrowers after notice thereto. The failure of any Lender to make available its
Commitment Percentage of any Loan requested by the Borrowers shall not relieve
it or any other Lender of its obligation, hereunder to make its Commitment
Percentage of such Loan available on the borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of such Loan available on the borrowing date.
SECTION 5.8 Changed Circumstances.
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
any Interest Period the Administrative Agent or any Lender (after consultation
with Administrative Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via Telerate Page
3750 or offered to the Administrative Agent or such Lender for such Interest
Period, then the Administrative Agent shall forthwith give notice thereof to the
Borrowers. Thereafter, until the Administrative Agent notifies the Borrowers
that such circumstances no longer exist, the obligation of the Lenders to make
LIBOR Rate Loans and the right of the Borrowers to convert any Loan to or
continue any Loan as a LIBOR Rate Loan shall be suspended, and the Borrowers
shall repay in full (or cause to be repaid in full) the then outstanding
principal amount of each such LIBOR Rate Loans together with accrued interest
thereon, on the last day of the then current Interest Period applicable to such
LIBOR Rate Loan or convert the then outstanding principal amount of each such
LIBOR Rate Loan to a Base Rate Loan as of the last day of such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof,
the introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Authority, central bank or comparable agency, shall make it unlawful
or impossible for any of the Lenders (or any of their respective Lending
Offices) to honor its obligations hereunder to make or maintain any LIBOR Rate
Loan, such Lender shall promptly give notice thereof to the Administrative Agent
and the Administrative Agent shall promptly give notice to the Borrowers and the
other Lenders. Thereafter, until the Administrative Agent notifies the Borrowers
that such circumstances no longer exist, (i) the obligations of the Lenders to
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make LIBOR Rate Loans and the right of the Borrowers to convert any Loan or
continue any Loan as a LIBOR Rate Loan shall be suspended and thereafter the
Borrowers may select only Base Rate Loans hereunder, and (ii) if any of the
Lenders may not lawfully continue to maintain a LIBOR Rate Loan to the end of
the then current Interest Period applicable thereto as a LIBOR Rate Loan, the
applicable LIBOR Rate Loan shall immediately be converted to a Base Rate Loan
for the remainder of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Authority, central
bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with respect to any Note,
Letter of Credit or Application or shall change the basis of taxation of
payments to any of the Lenders (or any of their respective Lending Offices) of
the principal of or interest on any Note, Letter of Credit or Application or any
other amounts due under this Agreement in respect thereof (except for changes in
the rate of tax on the overall net income of any of the Lenders or any of their
respective Lending Offices imposed by the jurisdiction in which such Lender is
organized or is or should be qualified to do business or such Lending Office is
located); or
(ii) shall impose, modify or deem applicable any reserve
(including, without limitation, any imposed by the Board of Governors of the
Federal Reserve System), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note; and the result of any of the foregoing is to increase the costs to any of
the Lenders of maintaining any LIBOR Rate Loan or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Administrative Agent, and the Administrative
Agent shall promptly notify the Borrowers of such fact and demand compensation
therefor and, within fifteen (15) days after such notice by the Administrative
Agent, the Borrowers shall pay to such Lender such additional amount or amounts
as will compensate such Lender or Lenders for such increased cost or reduction.
The Administrative Agent will promptly notify the Borrowers of any event of
which it has knowledge which will entitle such Lender to compensation pursuant
to this Section 5.8(c); provided, that the Administrative Agent shall incur no
liability whatsoever to the Lenders or the Borrowers in the event it fails to do
so. The amount of such compensation shall be determined, in the applicable
Lender's sole discretion, based upon the assumption that such Lender funded its
Commitment Percentage of the LIBOR Rate Loans in the London interbank market and
using any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis
for determining such amount or amounts necessary to compensate such Lender shall
32
be forwarded to the Borrowers through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 5.9 Indemnity. The Borrowers hereby indemnify each of the
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrowers to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrowers to borrow on a
date specified therefor in a Notice of Revolving Credit Loan Borrowing, a Notice
of Term Loan Borrowing or a Notice of Continuation/Conversion or (c) due to any
payment, prepayment or conversion of any LIBOR Rate Loan on a date other than
the last day of the Interest Period therefor. The amount of such loss or expense
shall be determined, in the applicable Lender's sole discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the LIBOR Rate
Loans in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and practical. A
certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrowers through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.
SECTION 5.10 Capital Requirements. If either (a) the introduction of,
or any change in, or in the interpretation of, any Applicable Law or (b)
compliance with any guideline or request from any central bank or comparable
agency or other Governmental Authority (whether or not having the force of law),
has or would have the effect of reducing the rate of return on the capital of,
or has affected or would affect the amount of capital required to be maintained
by, any Lender or any corporation controlling such Lender as a consequence of,
or with reference to the Commitments and other commitments of this type, below
the rate which the Lender or such other corporation could have achieved but for
such introduction, change or compliance, then within five (5) Business Days
after written demand by any such Lender, the Borrowers shall pay to such Lender
from time to time as specified by such Lender additional amounts sufficient to
compensate such Lender or other corporation for such reduction. A certificate as
to such amounts submitted to the Borrowers and the Administrative Agent by such
Lender, shall, in the absence of manifest error, be presumed to be correct and
binding for all purposes.
SECTION 5.11 Taxes.
(a) Payments Free and Clear. Any and all payments by the Borrowers
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Administrative Agent,
income and franchise taxes imposed by the jurisdiction under the laws of which
such Lender or the Administrative Agent (as the case may be) is organized or is
or should be qualified to do business or any political subdivision thereof, (ii)
in the case of each Lender, income and franchise taxes imposed by the
jurisdiction of such Lender's Lending Office or any political subdivision
33
thereof and (iii) any other tax imposed on any Lender by any Governmental
Authority without regard to the Extensions of Credit of such Lender (all such
non-excluded taxes, levies, imposts, deductions, charges, withholdings and
liabilities being hereinafter referred to as "Taxes"). If the Borrowers shall be
required by law to deduct any Taxes from or in respect of any sum payable
hereunder or under any Note or Letter of Credit to any Lender or the
Administrative Agent, (A) the sum payable shall be increased as may be necessary
so that after making all required deductions (including deductions applicable to
additional sums payable under this Section 5.11) such Lender or the
Administrative Agent (as the case may be) receives an amount equal to the amount
such party would have received had no such deductions been made, (B) the
Borrowers shall make such deductions, (C) the Borrowers shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrowers shall deliver to the
Administrative Agent evidence of such payment to the relevant taxing authority
or other authority in the manner provided in Section 5.11(d).
(b) Stamp and Other Taxes. In addition, the Borrowers shall pay any
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrowers shall indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including,
without limitation, any Taxes and Other Taxes imposed by any jurisdiction on
amounts payable under this Section 5.11) paid by such Lender or the
Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally asserted.
Such indemnification shall be made within thirty (30) days from the date such
Lender or the Administrative Agent (as the case may be) makes written demand
therefor together with reasonable documentation of the tax due.
(d) Evidence of Payment. Within thirty (30) days after the date of any
payment of Taxes or Other Taxes, the Borrowers shall furnish to the
Administrative Agent, at its address referred to in Section 14.1, the original
or a certified copy of a receipt evidencing payment thereof or other evidence of
payment satisfactory to the Administrative Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
jurisdiction other than the United States or any state thereof shall deliver to
the Borrowers, with a copy to the Administrative Agent, on the Closing Date or
concurrently with the delivery of the relevant Assignment and Acceptance, as
applicable, (i) two United States Internal Revenue Service Forms 4224 or Forms
1001, as applicable (or successor forms) properly completed and certifying in
each case that such Lender is entitled to a complete exemption from withholding
or deduction for or on account of any United States federal income taxes, and
(ii) an Internal Revenue Service Form W-8 or W-9 or successor applicable form,
as the case may be, to establish an exemption from United States backup
withholding taxes. Each such Lender further agrees to deliver to the Borrowers,
with a copy to the Administrative Agent, a Form 1001 or 4224 and Form W-8 or
W-9, or successor applicable forms or manner of certification, as the case may
be, on or before the date that any such form expires or becomes obsolete or
after the occurrence of any event requiring a change in the most recent form
previously delivered by it to the Borrowers, certifying in the case of a Form
1001 or 4224 that such Lender is entitled to receive payments under this
34
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrowers and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-8 or W-9, establishing an exemption from United
States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other agreement
of the Borrowers hereunder, the agreements and obligations of the Borrowers
contained in this Section 5.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
SECTION 5.12 Use of Proceeds. The Borrowers shall use the proceeds of
the Extensions of Credit (a) to finance a portion of the Shareholder
Distribution, (b) to refinance and terminate the Existing Facility, and (c) for
working capital and general corporate requirements of the Borrowers, including
the payment of fees and expenses incurred in connection herewith and the Equity
Purchase and related transactions. The Borrowers shall use the proceeds of the
initial loans to finance the Recapitalization in accordance with sources and
uses table set forth on Schedule 5.12.
SECTION 5.13 Security. The Obligations of the Borrowers shall be
secured as provided in the Security Documents.
ARTICLE VI
CLOSING; CONDITIONS OF CLOSING AND BORROWING
SECTION 6.1 Closing. The closing shall take place at the offices of
Xxxxxx Xxxxxxxx LLP at 10:00 a.m. on February 5, 1999, or on such other date as
the parties hereto shall mutually agree.
SECTION 6.2 Conditions to Closing and Initial Extensions of Credit. The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue the initial Letter of Credit is subject to the satisfaction of each of
the following conditions:
(a) Executed Loan Documents. The following Loan Documents in form and
substance reasonably satisfactory to the Administrative Agent and each Lender:
(i) this Agreement;
(ii) the Revolving Credit Notes;
35
(iii) the Term Notes;
(iv) the Security Agreement; and
(v) the Pledge Agreements;
shall have been duly authorized, executed and delivered to the Administrative
Agent by the parties thereto, shall be in full force and effect and no default
shall exist thereunder, and the Borrowers shall have delivered original
counterparts thereof to the Administrative Agent.
(b) Closing Certificates; etc.
(i) Officer's Certificate of the Parent. The Administrative Agent
shall have received a certificate from a Responsible Officer of the Parent, in
form and substance satisfactory to the Administrative Agent, to the effect that
all representations and warranties of the Borrowers contained in this Agreement
and the other Loan Documents are true, correct and complete; that the Borrowers
are not in violation of any of the covenants contained in this Agreement and the
other Loan Documents; that, after giving effect to the transactions contemplated
by this Agreement, no Default or Event of Default has occurred and is
continuing; and that the Borrowers have satisfied each of the closing conditions
to be satisfied thereby.
(ii) Certificate of Secretary of each Borrower. The Administrative
Agent shall have received a certificate of the secretary or assistant secretary
of each Borrower certifying as to the incumbency and genuineness of the
signature of each officer of such Borrower executing Loan Documents to which it
is a party and certifying that attached thereto is a true, correct and complete
copy of (A) the articles of incorporation of such Borrower and all amendments
thereto (x) with respect to the Company, certified as of a recent date by the
appropriate Governmental Authority in its jurisdiction of incorporation, and (y)
with respect to the Parent, a recorded copy certified thereby, (B) the bylaws of
such Borrower as in effect on the date of such certifications, (C) resolutions
duly adopted by the Board of Directors of such Borrower authorizing the
borrowings contemplated hereunder and the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party, and (D) each
certificate required to be delivered pursuant to Section 6.2(b)(iii).
(iii) Investor Closing Documents. The Administrative Agent shall
have received in form and substance satisfactory thereto (A) the charter
documents, bylaws, limited partnership agreement, articles of organization or
operating agreement, as applicable, for each Investor which is a corporation,
partnership or limited liability company, duly certified by such Investor or the
recording jurisdiction therefor, or such other evidence requested by the
Administrative Agent of the due formation and valid existence of each such
Investor and (B) incumbency certificates, resolutions or other evidence
requested by the Administrative Agent that the Loan Documents executed by each
such Investor have been duly authorized, executed and delivered thereby.
36
(iv) Certificates of Good Standing. The Administrative Agent shall
have received certificates as of a recent date of the subsistence of each
Borrower under the laws of its jurisdiction of organization and, to the extent
requested by the Administrative Agent, each other jurisdiction where such
Borrower is qualified to do business.
(v) Opinions of Counsel. The Administrative Agent shall have
received opinions of counsel reasonably satisfactory thereto from counsel to the
Investors and the Borrowers addressed to the Administrative Agent and the
Lenders (or on which they are expressly entitled to rely) with respect to the
Investors, the Borrowers, the Loan Documents, the Collateral, the Transactions
and such other matters as the Administrative Agent shall reasonably request.
(vi) Tax Forms. The Administrative Agent shall have received copies
of the United States Internal Revenue Service forms required by Section 5.11(e)
hereof (and furnished copies thereof to the Borrowers).
(c) Collateral.
(i) Filings and Recordings. All filings and recordations that are
necessary to perfect the security interests of the Lenders in the collateral
described in the Security Documents shall have been forwarded for filing in all
appropriate locations and the Administrative Agent shall have received evidence
satisfactory to the Administrative Agent that upon such filings and recordations
such security interests constitute valid and perfected first priority Liens
therein.
(ii) Pledged Collateral. The Administrative Agent shall have
received (A) original stock certificates or other certificates evidencing the
capital stock or other ownership interests pledged pursuant to the Pledge
Agreements, together with an undated stock power for each such certificate duly
executed in blank by the registered owner thereof and (B) appropriate
certificates and transfer instruments for any other certificated security
pledged pursuant to the Pledge Agreements.
(iii) Lien Searches. The Administrative Agent shall have received
the results of Lien searches (including a search as to judgments, pending
litigation and tax matters) made against the Borrowers under the Uniform
Commercial Code (or applicable judicial docket) as in effect in any state in
which any of its assets are located, indicating among other things that its
assets are free and clear of any Lien except for Liens permitted hereunder.
(iv) Hazard and Liability Insurance. The Administrative Agent shall
have received certificates of insurance, and, if requested by the Administrative
Agent, copies (certified by a Responsible Officer) of insurance policies in the
form required hereunder and under the Security Documents and otherwise in form
and substance reasonably satisfactory to the Administrative Agent.
37
(d) Real Estate Security Documents.
(i) Documents. The Administrative Agent shall have received such
Real Estate Security Documents requested thereby with respect to each parcel of
real property so designated on Schedule 7.1(r) (each, a "Closing Date
Property").
(ii) Other Real Property Information. The Administrative Agent
shall have received such other certificates, documents and information as are
reasonably requested thereby with respect to each Closing Date Property,
including, without limitation, title insurance policies, flood hazard
certifications, surveys, environmental assessments, engineering and structural
reports, permanent certificates of occupancy and evidence of zoning compliance,
each in form and substance satisfactory to the Administrative Agent.
(e) Consents; Defaults.
(i) Governmental and Third Party Approvals. The Borrowers shall
have obtained all necessary approvals, authorizations and consents of any Person
and of all Governmental Authorities and courts having jurisdiction with respect
to the Transactions.
(ii) No Injunction, Etc. No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of any
of the Transactions, or which, in the Administrative Agent's reasonable
discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall
have occurred and be continuing.
(f) Financial Matters.
(i) Financial Statements. The Administrative Agent shall have
received the most recent audited Consolidated financial statements of the
Company and its Subsidiaries, all in form and substance satisfactory to the
Administrative Agent.
(ii) Financial Condition Certificate. The Parent, on behalf of the
Borrowers, shall have delivered to the Administrative Agent a certificate, in
form and substance satisfactory to the Administrative Agent, and certified as
accurate by a Responsible Officer, that (A) the Parent and each of its
Subsidiaries are each Solvent, (B) the Borrowers' payables are current and not
past due, (C) attached thereto are calculations evidencing compliance on a pro
forma basis with the covenants contained in Article X hereof and (D) attached
thereto are calculations evidencing that EBITDA of the Company and its
Subsidiaries for the four (4) fiscal quarter period ending as of December 31,
1998 is at least $11,500,000.
(iii) Projections. The Administrative Agent shall have received
projected financial statements of the Parent and its Subsidiaries in form and
substance reasonably satisfactory thereto for the Fiscal Years ending 1999
through and including 2007, including Consolidated balance sheets, statements of
income and cash flow statements of Parent and its Subsidiaries giving effect to
the Transactions, together with appropriate supporting details and such other
facts as relate to the ongoing business of the Parent and its Subsidiaries as
requested by the Administrative Agent.
(iv) Minimum Availability. After the initial Extensions of Credit
on the Closing Date, availability under the Revolving Credit Facility shall be
at least $8,250,000.
(v) No Material Adverse Change. Since December 31, 1997, there has
been no material adverse change in the properties, business, operations,
prospects, or condition (financial or otherwise) of the Company and its
Subsidiaries taken as a whole and no event has occurred or condition arisen that
could reasonably be expected to have a Material Adverse Effect.
(vi) Payment at Closing; Fee Letters. The Borrowers shall have paid
the fees set forth or referenced in Section 5.3 and any other accrued and unpaid
fees or commissions due hereunder (including, without limitation, legal fees and
expenses) to the Administrative Agent and Lenders, and to any other Person such
amount as may be due thereto on the Closing Date in connection with the
transactions contemplated hereby, including all taxes, fees and other charges in
connection with the execution, delivery, recording, filing and registration of
any of the Loan Documents. The Administrative Agent shall have received duly
authorized and executed copies of the Fee Letter.
(g) Equity Purchase and Recapitalization.
(i) Recapitalization. The Recapitalization Documents shall be duly
executed by each party thereto and be in form and substance satisfactory to the
Administrative Agent and the Lenders. All conditions precedent to complete each
Recapitalization transaction under the Recapitalization Documents shall have
been satisfied to the satisfaction of the Administrative Agent and no default
shall exist under the Recapitalization Documents. The Statement With Respect to
Shares and all other charter amendments with respect to the Parent and the
Company shall have been recorded with the Pennsylvania Secretary of State and
the remaining Recapitalization transactions shall occur contemporaneously with
the initial funding under the Credit Facilities on the Closing Date.
(ii) Equity Purchase. The Parent shall have received at least
$35,000,000 in Net Cash Proceeds from the Equity Purchase on terms and
conditions satisfactory to the Administrative Agent.
(iii) Subchapter C Conversion. The Shareholder Distribution shall
be completed, and the Company shall become a Wholly-Owned Subsidiary of the
Parent and automatically convert to a subchapter C corporation under the Code,
in each case substantially contemporaneously with the initial funding of the
Credit Facility on the Closing Date.
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(iv) Existing Debt. The Existing Facility and any other
outstanding Debt of the Borrowers (excluding Debt permitted pursuant to Section
11.1) shall be repaid in full with the initial Extensions of Credit and any
agreement and other supplemental documents relating to such Debt shall be
terminated, and if requested thereby the Administrative Agent shall have
received pay-off letters in form and substance satisfactory to it evidencing
such repayment, termination and any corresponding collateral release.
(v) Approval of the Holders of Preferred Shares. The Administrative
Agent shall have received evidence, in form and substance reasonably
satisfactory thereto, that a majority of the outstanding shares of the Preferred
Stock have approved the borrowings contemplated hereunder and the execution,
delivery and performance of this Agreement and the other Loan Documents to which
the Parent is a party.
(vi) Termination of the Existing Shareholder Agreement. The
Administrative Agent shall have received evidence, in form and substance
reasonably satisfactory thereto, that the Existing Shareholder Agreement shall
have been terminated.
(h) Miscellaneous.
(i) Notice of Borrowing. The Administrative Agent shall have
received Notice of Revolving Credit Loan Borrowing and a Notice of Term Loan
Borrowing from the Parent, on behalf of the Borrowers, in accordance with
Section 2.2(a) and Section 4.2, and a Notice of Account Designation specifying
the account or accounts to which the proceeds of any Loans made after the
Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and
other instruments and all proceedings in connection with the Transactions shall
be satisfactory in form and substance to the Lenders. The Administrative Agent
and the Lenders shall have received copies of all other instruments and other
evidence as the Administrative Agent and the Lenders may reasonably request, in
form and substance satisfactory to the Administrative Agent and the Lenders,
with respect to the Transactions and the taking of all actions in connection
therewith.
(iii) Due Diligence and Other Documents. The Administrative Agent
and the Lenders shall have completed to their satisfaction their due diligence
review of the Parent, its Subsidiaries and Affiliates and the Transactions.
SECTION 6.3 Conditions to All Extensions of Credit. The obligations of
the Lenders to make any Extensions of Credit is subject to the satisfaction of
the following conditions precedent on the relevant borrowing or issue date, as
applicable:
(a) Continuation of Representations and Warranties. The representations
and warranties contained in Article VII shall be true and correct on and as of
such borrowing or issuance date with the same effect as if made on and as of
such date; except for any representation and warranty made as of an earlier
date, which representation and warranty shall remain true and correct as of such
earlier date.
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(b) No Existing Default. No Default or Event of Default shall have
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) or
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
(c) Officer's Compliance Certificate; Additional Documents. The
Administrative Agent shall have received the current Officer's Compliance
Certificate and each additional document, instrument, or other item of
information reasonably requested by it.
SECTION 6.4 Real Estate Post-Closing Covenants. Within sixty (60) days
of the Closing Date, the Borrowers shall execute (or have executed) and deliver
to the Administrative Agent such Real Estate Security Documents requested
thereby with respect to each parcel of real property not designated as a Closing
Date Property on Schedule 7.1(r). In addition, the Borrowers shall execute (or
have executed) and deliver to the Administrative Agent such other documents or
agreements consistent with Section 6.2(d) reasonably requested by the
Administrative Agent and, if requested thereby, duly record each applicable Real
Estate Security Document in such manner and in such places as are required by
the law to perfect and preserve the Liens in favor of the Administrative Agent
and the Lenders granted pursuant thereto.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF THE BORROWERS
SECTION 7.1 Representations and Warranties. To induce the
Administrative Agent and Lenders to enter into this Agreement and to induce the
Lenders to make Extensions of Credit, the Borrowers hereby represent and warrant
to the Administrative Agent and Lenders both before and after giving effect to
the transactions contemplated hereunder that:
(a) Organization; Power; Qualification. Each of the Parent and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization and where
such failure to qualify could not reasonably be expected to have a Material
Adverse Effect. The jurisdictions in which the Parent and its Subsidiaries are
organized and qualified to do business as of the Closing Date are described on
Schedule 7.1(a).
(b) Ownership. Each Subsidiary of the Parent as of the Closing Date is
listed on Schedule 7.1(b). As of the Closing Date, the capitalization of the
Parent and its Subsidiaries consists of the number of shares, authorized, issued
and outstanding, of such classes and series, with or without par value,
described on Schedule 7.1(b). All outstanding shares have been duly authorized
and validly issued and are fully paid and nonassessable. The shareholders of the
41
Subsidiaries of the Parent and the number of shares owned by each as of the
Closing Date are described on Schedule 7.1(b). As of the Closing Date, there are
no outstanding stock purchase warrants, subscriptions, options, securities,
instruments or other rights of any type or nature whatsoever, which are
convertible into, exchangeable for or otherwise provide for or permit the
issuance of capital stock of the Parent or its Subsidiaries, except as described
on Schedule 7.1(b).
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
the Parent and its Subsidiaries has the right, power and authority and has taken
all necessary corporate and other action to authorize the execution, delivery
and performance of this Agreement and each of the other Loan Documents to which
it is a party in accordance with their respective terms. This Agreement and each
of the other Loan Documents have been duly executed and delivered by the duly
authorized officers of the Parent and each of its Subsidiaries party thereto,
and each such document constitutes the legal, valid and binding obligation of
the Parent or its Subsidiary party thereto, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors' rights in
general and the availability of equitable remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
Etc. The execution, delivery and performance by the Parent and its Subsidiaries
of the Loan Documents to which each such Person is a party, in accordance with
their respective terms, the borrowings hereunder and the transactions
contemplated hereby do not and will not, by the passage of time, the giving of
notice or otherwise, (i) require any Governmental Approval or violate any
Applicable Law relating to the Parent or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation, bylaws or other organizational documents of the Parent or any of
its Subsidiaries, (iii) conflict with, result in a breach of or constitute a
default under any indenture, agreement or other instrument to which such Person
is a party or by which any of its properties may be bound or any Governmental
Approval relating to such Person, except where such conflict, breach or default
could not reasonably be expected to have a Material Adverse Effect, or (iv)
result in or require the creation or imposition of any Lien upon or with respect
to any property now owned or hereafter acquired by such Person other than Liens
arising under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Parent and
its Subsidiaries (i) has all Governmental Approvals required by any Applicable
Law for it to conduct its business, each of which is in full force and effect,
is final and not subject to review on appeal and is not the subject of any
pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, and (ii) is in compliance with each Governmental Approval
applicable to it and in compliance with all other Applicable Laws relating to it
or any of its respective properties, except in each case where the failure to do
so or such non-compliance could not reasonably be expected to have a Material
Adverse Effect.
(f) Tax Returns and Payments. Each of the Parent and its Subsidiaries
has duly filed or caused to be filed all federal, state, local and other tax
returns required by Applicable Law to be filed, and has paid, or made adequate
provision for the payment of, all federal, state, local and other taxes,
assessments and governmental charges or levies upon it and its property, income,
42
profits and assets which are due and payable, except where the failure to do so
could not reasonably be expected to have a Material Adverse Effect. No
Governmental Authority has asserted any Lien or other claim against the Parent
or Subsidiary thereof with respect to unpaid taxes which has not been discharged
or resolved. The charges, accruals and reserves on the books of the Parent and
any of its Subsidiaries in respect of federal, state, local and other taxes for
all Fiscal Years and portions thereof since the organization of the Parent and
any of its Subsidiaries are in the judgment of the Parent adequate, and the
Parent does not anticipate any additional taxes or assessments for any of such
years, which such additional taxes or assessments could reasonably be expected
to have a Material Adverse Effect.
(g) Intellectual Property Matters. Each of the Parent and its
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business. No event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any such
rights, and, except as set forth on Schedule 7.1(g) hereto, neither the Parent
nor any Subsidiary thereof is liable to any Person for infringement under
Applicable Law with respect to any such rights as a result of its business
operations.
(h) Environmental Matters.
(i) The properties currently owned, leased or operated by the
Parent and its Subsidiaries do not contain and the properties owned, leased or
operated in 9the past when so owned, leased or operated did not contain, and, to
the knowledge of the Borrowers, have not previously contained, any Hazardous
Materials in amounts or concentrations which (A) constitute or constituted a
violation of applicable Environmental Laws or (B) could give rise to liability
under applicable Environmental Laws;
(ii) Except as set forth on Schedule 7.1(h), the Parent, each
Subsidiary and such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof;
(iii) Neither the Parent nor any Subsidiary thereof has received
any notice of violation, alleged violation, non-compliance, liability or
potential liability regarding environmental matters, Hazardous Materials, or
compliance with Environmental Laws, nor does the Parent or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed of
to or from the properties owned, leased or operated by of the Parent and its
Subsidiaries in violation of, or in a manner or to a location which could give
rise to liability under, Environmental Laws, nor have any Hazardous Materials
been generated, treated, stored or disposed of at, on or under any of such
properties in violation of, or in a manner that could give rise to liability
under, any applicable Environmental Laws;
43
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of any Borrower, threatened, under any
Environmental Law to which the Parent or any Subsidiary thereof is or will be
named as a party, nor are there any consent decrees or other decrees, consent
orders, administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with respect to
Parent, any Subsidiary or such properties or operations; and
(vi) There has been no release, or to the best of any Borrower's
knowledge, threat of release, of Hazardous Materials at or from properties
currently owned, leased or operated by the Parent or any Subsidiary or at or
from properties owned, leased or operated in the past when so owned, leased or
operated by the Parent or any Subsidiary in violation of or in amounts or in a
manner that could give rise to liability under Environmental Laws.
(i) ERISA.
(i) As of the Closing Date, neither the Parent nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans other than those identified on Schedule 7.1(i);
(ii) The Parent and each ERISA Affiliate is in compliance with all
applicable provisions of ERISA and the regulations and published interpretations
thereunder with respect to all Employee Benefit Plans except for any required
amendments for which the remedial amendment period as defined in Section 401(b)
of the Code has not yet expired and except where such non-compliance could not
reasonably be expected to have a Material Adverse Effect. Each Employee Benefit
Plan that is intended to be qualified under Section 401(a) of the Code has been
determined by the Internal Revenue Service to be so qualified, and each trust
related to such plan has been determined to be exempt under Section 501(a) of
the Code. No liability has been incurred by the Parent or any ERISA Affiliate
which remains unsatisfied for any taxes or penalties with respect to any
Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has the Parent or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension
Plan;
(iv) Neither the Parent nor any ERISA Affiliate has: (A) engaged in
a nonexempt prohibited transaction described in Section 406 of the ERISA or
Section 4975 of the Code, (B) incurred any material liability to the PBGC which
remains outstanding other than the payment of premiums and there are no premium
44
payments which are due and unpaid, (C) failed to make a required contribution or
payment to a Multiemployer Plan, or (D) failed to make a required installment or
other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected to
occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is existing
or, to the best knowledge of the Parent after due inquiry, threatened concerning
or involving any (A) employee welfare benefit plan (as defined in Section 3(1)
of ERISA) currently maintained or contributed to by the Parent or any ERISA
Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Parent nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulation U of the Board of Governors of the
Federal Reserve System). No part of the proceeds of any of the Loans or Letters
of Credit will be used for purchasing or carrying margin stock or for any
purpose which violates, or which would be inconsistent with, the provisions of
Regulation T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Parent nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Parent nor any Subsidiary thereof is, or after
giving effect to any Extension of Credit will be, subject to regulation under
the Public Utility Holding Company Act of 1935 or the Interstate Commerce Act,
each as amended, or any other Applicable Law which limits its ability to incur
or consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 7.1(l) sets forth a complete and
accurate list of all Material Contracts of the Parent and its Subsidiaries in
effect as of the Closing Date not listed on any other Schedule hereto; other
than as set forth in Schedule 7.1(l), each such Material Contract is, and after
giving effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in accordance with the terms
thereof. The Parent and its Subsidiaries have made available to the
Administrative Agent a true and complete copy of each Material Contract required
to be listed on Schedule 7.1(l) or any other Schedule hereto.
(m) Employee Relations. Each of the Parent and its Subsidiaries has a
stable work force in place and is not, as of the Closing Date, party to any
collective bargaining agreement nor has any labor union been recognized as the
representative of its employees except as set forth on Schedule 7.1(m). The
Parent knows of no pending, threatened or contemplated strikes, work stoppage or
other collective labor disputes involving its employees or those of its
Subsidiaries.
(n) Trade Relations. To the best knowledge of the Borrowers after due
inquiry, there exists no actual or threatened termination, cancellation or
limitation of, or any adverse modification or change in, the business
relationship of the Borrowers or their business with any customer or any group
45
of customers whose purchases (individually or in the aggregate) are material to
the business of the Borrowers, or with any supplier whose sales to the Borrowers
(individually or in the aggregate) are material to the Borrowers. To the best
knowledge of the Borrowers, there exists no present condition or state of facts
or circumstances that could reasonably be expected to prevent the Borrowers from
conducting their business after the consummation of the Transactions in
substantially the same manner in which it has heretofore been conducted.
(o) Financial Statements. The (i) Consolidated balance sheets of the
Company and its Subsidiaries as of December 31, 1997 and the related statements
of income and retained earnings and cash flows for the Fiscal Years then ended
and (ii) unaudited Consolidated balance sheet of the Company and its
Subsidiaries as of September 30, 1998 and related unaudited interim statements
of revenue and retained earnings, copies of which have been furnished to the
Administrative Agent and each Lender, are complete and correct in all material
respects and fairly present the assets, liabilities and financial position of
the Company and its Subsidiaries as at such dates, and the results of the
operations and changes of financial position for the periods then ended. All
such financial statements, including the related schedules and notes thereto,
have been prepared in accordance with GAAP. The Parent and its Subsidiaries have
no Debt, obligation or other liability which is not fairly reflected in the
foregoing financial statements or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 1997, there has been
no material adverse change in the properties, business, operations, prospects,
or condition (financial or otherwise) of the Parent and its Subsidiaries taken
as a whole and no event has occurred or condition arisen that could reasonably
be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
Extension of Credit made hereunder, the Parent and each of its Subsidiaries will
be Solvent.
(r) Titles to Properties. Each of the Parent and its Subsidiaries has
such title to the real property owned by it as is necessary or desirable to the
conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Company and its Subsidiaries delivered pursuant to Section
7.1(o), except those which have been disposed of by the Company or its
Subsidiaries subsequent to such date which dispositions have been in the
ordinary course of business or as otherwise expressly permitted hereunder.
Schedule 7.1(r) lists, as of the Closing Date, all real property owned or leased
by the Parent and each Subsidiary thereof. Each of the Parent and its
Subsidiaries enjoys peaceful and undisturbed possession under all of its leases
and such leases are valid and subsisting and in full force and effect and no
default exists thereunder.
(s) Liens. None of the properties and assets of the Parent or any
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 11.3 or Liens to be removed at closing. No financing statement under the
Uniform Commercial Code of any state which names the Parent or any Subsidiary
thereof or any of their respective trade names or divisions as debtor and which
has not been terminated, has been filed in any state or other jurisdiction and
neither the Parent nor any Subsidiary thereof has signed any such financing
statement or any security agreement authorizing any secured party thereunder to
46
file any such financing statement, except to perfect those Liens permitted by
Section 11.3 hereof.
(t) Debt and Guaranty Obligations. Schedule 7.1(t) is a complete and
correct listing of all Debt and Guaranty Obligations of the Parent and its
Subsidiaries as of the Closing Date in excess of $250,000 (other than any Debt
and Guaranty Obligations of the Parent and its Subsidiaries being terminated on
the Closing Date). The Parent and its Subsidiaries have performed and are in
compliance with all of the terms of such Debt and Guaranty Obligations and all
instruments and agreements relating thereto, and no default or event of default,
or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of the Parent or its
Subsidiaries exists with respect to any such Debt or Guaranty Obligation.
(u) Litigation. Except for matters existing on the Closing Date and set
forth on Schedule 7.1(u) or covered by insurance, there are no actions, suits or
proceedings pending nor, to the knowledge of the Parent, threatened against or
in any other way relating adversely to or affecting the Parent or any Subsidiary
thereof or any of their respective properties in any court or before any
arbitrator of any kind or before or by any Governmental Authority which could
reasonably be expected to have a Material Adverse Effect.
(v) Absence of Defaults. No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by the Parent or any Subsidiary thereof under any Material
Contract or judgment, decree or order to which the Parent or its Subsidiaries is
a party or by which the Parent or its Subsidiaries or any of their respective
properties may be bound or which would require the Parent or its Subsidiaries to
make any payment thereunder prior to the scheduled maturity date therefor,
except where such default, event of default or obligation to make such a payment
could not reasonably be expected to have a Material Adverse Effect.
(w) Year 2000 Issues.
(i) As of the Closing Date, each Borrower and each Subsidiary
thereof (A) has initiated a review and assessment of all areas of its business
and operations (including those affected by information received from suppliers
and vendors) that may be adversely affected by a Year 2000 Problem, (B) has
developed or is in the process of developing a comprehensive and detailed
strategic plan to address its Year 2000 Problem, if any, and will, on a timely
basis (but in no event later than September 30, 1999), implement such plan and
(C) reasonably believes that the necessary expenditure of capital and resources
to eliminate any such Year 2000 Problem will not result in a Material Adverse
Effect.
(ii) As of the Closing Date, no Borrower has reason to believe that
any material supplier and vendor of such Borrower and each Subsidiary of such
Borrower thereof will not on a timely basis eliminate its Year 2000 Problem.
47
(iii) "Year 2000 Problem" shall mean, with respect to any Person,
the possibility that the computer applications and software programs used by
such Person in the operation of its business will be unable to effectively
process data including data fields requiring references to dates on and after
January 1, 2000, and may experience or produce invalid or incorrect results or
abnormal operation related to or as a result of the occurrence of such dates.
(x) Recapitalization Documents. The Company delivered to the
Administrative Agent true, complete and correct copies of the Recapitalization
Documents, together with all amendments and modifications thereto, on the
Closing Date. The Recapitalization Documents (including the schedules and
exhibits thereto) comprise a full and complete copy of all agreements between
the parties thereto with respect to the subject matter thereof and all
transactions related thereto, and there are no agreements or understandings,
oral or written, or side agreements not contained therein that relate to or
modify the substance thereof. The Recapitalization Documents have been duly
authorized by all necessary corporate action on the part of each Borrower and
each of its Subsidiaries party thereto, and, when executed and delivered by such
Borrower and each such Subsidiary, shall be enforceable in accordance with their
respective terms except as such enforcement may be limited by bankruptcy,
insolvency, fraudulent conveyance, moratorium or similar state or federal debtor
relief laws which affect the enforcement of creditors' rights in general and the
availability of equitable remedies. The representations and warranties made by
each Borrower and each of its Subsidiaries party thereto, and to the best
knowledge of each Borrowers and each of its Subsidiaries after due inquiry, the
representations and warranties made by any other Person contained in the
Recapitalization Documents, are true and correct and no default or event of
default exists thereunder.
(y) Accuracy and Completeness of Information. No written information,
written statements, reports and other papers and data produced by or on behalf
of each Borrower or any Subsidiary thereof and furnished to the Administrative
Agent or the Lenders by or on behalf of any Borrower or any Subsidiary thereof
in connection with the negotiation, preparation or execution of this Agreement
or any of the Loan Documents (other than the financial statements delivered
pursuant to Section 6.2(f)(i), which are subject to the representations and
warranties contained in Section 7.1(o) and the financial projections delivered
pursuant to Section 6.2(f)(iii), which are subject to the certificate delivered
pursuant to such Section) contains or will contain any untrue statement of a
fact material to the creditworthiness of such Borrower or its Subsidiaries or
omits or will omit to state a material fact necessary in order to make the
statements contained therein not misleading in the circumstances in which made.
SECTION 7.2 Survival of Representations and Warranties, Etc. All
representations and warranties set forth in this Article VII and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement. All representations and warranties
made under this Agreement shall be made or deemed to be made at and as of the
Closing Date, shall survive the Closing Date and shall not be waived by the
execution and delivery of this Agreement, any investigation made by or on behalf
of the Lenders or any borrowing hereunder.
48
ARTICLE VIII
FINANCIAL INFORMATION AND NOTICES
Until all the Obligations have been paid and satisfied in full and the
Commitments terminated, unless consent has been obtained in the manner set forth
in Section 14.11 hereof, the Parent will furnish or cause to be furnished to the
Administrative Agent and to the Lenders at their respective addresses as set
forth on Schedule 1.1(a), or such other office as may be designated by the
Administrative Agent and Lenders from time to time:
SECTION 8.1 Financial Statements and Projections.
(a) Monthly Financial Statements. As soon as practicable and in any
event within thirty (30) days after the end of each calendar month, an unaudited
Consolidated and consolidating balance sheet of the Parent and its Subsidiaries
as of the close of such calendar month and unaudited Consolidated and
consolidating statements of income, retained earnings and cash flows for the
calendar month then ended and that portion of the Fiscal Year then ended,
including the notes thereto, all in reasonable detail (and commencing with the
monthly statements for March 2000 setting forth in comparative form the
corresponding figures for the applicable month of the preceding Fiscal Year) and
prepared by the Parent in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operations of
any change in the application of accounting principles and practices during the
period, and certified by the chief financial officer of the Parent to present
fairly in all material respects the financial condition of the Parent and its
Subsidiaries as of their respective dates and the results of operations of the
Parent and its Subsidiaries for the respective periods then ended, subject to
normal year end adjustments.
(b) Quarterly Financial Statements. As soon as practicable and in any
event within forty-five (45) days after the end of the first three fiscal
quarters, an unaudited Consolidated and consolidating balance sheet of the
Parent and its Subsidiaries as of the close of such fiscal quarter and unaudited
Consolidated and consolidating statements of income, retained earnings and cash
flows for the fiscal quarter then ended and that portion of the Fiscal Year then
ended, including the notes thereto, all in reasonable detail (and commencing
with the quarterly statements for March 2000 setting forth in comparative form
the corresponding figures for the applicable fiscal quarter of the preceding
Fiscal Year) and prepared by the Parent in accordance with GAAP and, if
applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Parent to present fairly in all material respects the financial condition of
the Parent and its Subsidiaries as of their respective dates and the results of
operations of the Parent and its Subsidiaries for the respective periods then
ended, subject to normal year end adjustments.
(c) Annual Financial Statements. As soon as practicable and in any
event within ninety (90) days after the end of each Fiscal Year, an audited
Consolidated balance sheet of the Parent and its Subsidiaries as of the close of
49
such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by an
independent certified public accounting firm acceptable to the Administrative
Agent in accordance with GAAP and, if applicable, containing disclosure of the
effect on the financial position or results of operation of any change in the
application of accounting principles and practices during the year, and
accompanied by a report thereon by such certified public accountants that is not
qualified with respect to scope limitations imposed by the Parent or any of its
Subsidiaries or with respect to accounting principles followed by the Parent or
any of its Subsidiaries not in accordance with GAAP.
(d) Annual Business Plan and Financial Projections. As soon as
practicable and in any event within forty-five (45) days prior to the beginning
of each Fiscal Year, a business plan of the Parent and its Subsidiaries for the
ensuing Fiscal Year, such plan to be prepared in accordance with GAAP and to
include, on a quarterly basis, the following: a quarterly operating and capital
budget, a projected income statement, statement of cash flows and balance sheet
and a report containing management's discussion and analysis of such
projections, accompanied by a certificate from the chief financial officer of
the Parent to the effect that, to the best of such officer's knowledge, such
projections are good faith estimates of the financial condition and operations
of the Parent and its Subsidiaries for such four (4) fiscal quarter period.
SECTION 8.2 Officer's Compliance Certificate. At each time financial
statements are delivered pursuant to Sections 8.1 (b) or (c), and at such other
times as the Administrative Agent shall reasonably request, a certificate of the
chief financial officer or the treasurer of the Parent in the form of Exhibit F
attached hereto (an "Officer's Compliance Certificate").
SECTION 8.3 Accountants' Certificate. At each time financial statements
are delivered pursuant to Section 8.1(c), a certificate of the independent
public accountants certifying such financial statements addressed to the
Administrative Agent for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required to
establish whether or not the Parent and its Subsidiaries are in compliance with
the financial covenants set forth in Article X hereof as at the end of each
respective period.
SECTION 8.4 Other Reports.
(a) Auditors' Letter. Promptly upon receipt thereof, copies of all
reports, if any, submitted to the Parent or any Subsidiary or any Board of
Directors thereof by their independent public accountants in connection with
their auditing function, including, without limitation, any management report
and any management responses thereto;
50
(b) Financial Reports. Promptly upon distribution thereof, copies of
all financial statements and reports that any Borrower shall send to its
shareholders and copies of all registration statements and all regular or
periodic reports (including, without limitation, any applicable annual report on
Form 10-K and quarterly report on Form 10-Q) which any Borrower shall file with
the Securities and Exchange Commission or any successor commission.
(c) Financing Transaction Terms. Promptly upon distribution thereof, a
copy of any written offer made to the Investors pursuant to Section 2(a) of the
Investor Rights Agreement for the purpose of raising capital, incurring
indebtedness for borrowed money or otherwise engaging in a financial
transaction.
(d) Other Information. Such other information regarding the operations,
business affairs and financial condition of the Parent or any of its
Subsidiaries as the Administrative Agent or any Lender may reasonably request.
SECTION 8.5 Notice of Litigation and Other Matters. Prompt (but in no
event later than ten (10) days after an officer of any Borrower obtains
knowledge thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or before
any Governmental Authority and all actions and proceedings in any court or
before any arbitrator against or involving a Borrower or any Subsidiary thereof
or any of their respective properties, assets or businesses;
(b) any notice of any violation received by a Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws which in any such case
could reasonably be expected to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against a Borrower or any Subsidiary thereof
which controversy can reasonably be expected to have a Material Adverse Effect;
(d) any attachment, judgment, lien, levy or order exceeding $250,000
that may be assessed against or threatened against a Borrower or any Subsidiary
thereof;
(e) any Default or Event of Default, or any event which constitutes or
which with the passage of time or giving of notice or both would constitute a
default or event of default by a Borrower or any Subsidiary thereof under any
Material Contract to which a Borrower or any Subsidiary thereof is a party or by
which a Borrower or any Subsidiary thereof or any of their respective properties
may be bound;
(f) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by a
51
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by a Borrower or any ERISA Affiliate from a Multiemployer Plan
sponsor concerning the imposition or amount of withdrawal liability pursuant to
Section 4202 of ERISA and (iv) a Borrower obtaining knowledge or reason to know
that a Borrower or any ERISA Affiliate has filed or intends to file a notice of
intent to terminate any Pension Plan under a distress termination within the
meaning of Section 4041(c) of ERISA; and
(g) any event which makes any of the representations set forth in
Section 6.1 inaccurate in any respect.
SECTION 8.6 Accuracy of Information. All written information, reports,
statements and other papers and data furnished by or on behalf of the Borrowers
to the Administrative Agent or any Lender (other than financial forecasts)
whether pursuant to this Article VIII or any other provision of this Agreement,
or any of the Security Documents, shall, at the time the same is so furnished,
comply with the representations and warranties set forth in Section 7.1(y). All
financial forecasts delivered by or on behalf of the Borrowers to the
Administrative Agent or any Lender pursuant to the Agreement or any other Loan
Document shall be based on reasonable estimates and assumptions, all of which
are fair in light of the conditions which existed at the time the forecasts were
made, have been prepared on the basis of the assumptions stated therein, and
reflect, as of the time so furnished, the reasonable estimate of the Parent and
its Subsidiaries of the results of the operations and other information
projected therein.
ARTICLE IX
AFFIRMATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner
provided for in Section 14.11, the Parent will, and will cause each of its
Subsidiaries to:
SECTION 9.1 Preservation of Corporate Existence and Related Matters.
Except as permitted by Section 11.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify would have a Material Adverse Effect.
SECTION 9.2 Maintenance of Property. In addition to the requirements of
any of the Security Documents, protect and preserve all properties useful in and
material to its business as currently conducted, including copyrights, patents,
trade names and trademarks; maintain in good working order (reasonable wear and
tear excepted) and condition all buildings, equipment and other tangible real
and personal property; and from time to time make or cause to be made all
renewals, replacements and additions to such property necessary for the conduct
52
of its business, so that the business carried on in connection therewith may be
properly and advantageously conducted at all times.
SECTION 9.3 Insurance. Maintain insurance with financially sound and
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law and as are required by any Security Documents, and on the Closing
Date and from time to time thereafter deliver to the Administrative Agent upon
its request a detailed list of the insurance then in effect, stating the names
of the insurance companies, the amounts and rates of the insurance, the dates of
the expiration thereof and the properties and risks covered thereby.
SECTION 9.4 Accounting Methods and Financial Records. Maintain a system
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 9.5 Payment and Performance of Obligations. Pay and perform all
Obligations under this Agreement and the other Loan Documents, and pay or
perform (a) all taxes, assessments and other governmental charges that may be
levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the Parent or such Subsidiary may contest any item
described in clauses (a) or (b) of this Section 9.5 in good faith so long as
adequate reserves are maintained with respect thereto in accordance with GAAP.
SECTION 9.6 Compliance With Laws and Approvals. Observe and remain in
compliance with all Applicable Laws and maintain in full force and effect all
Governmental Approvals, in each case applicable to the conduct of its business,
except where the failure to so comply could not reasonably be expected to have a
Material Adverse Effect.
SECTION 9.7 Environmental Laws. In addition to and without limiting the
generality of Section 9.6, (a) comply in all material respects with, and use its
best efforts to ensure such compliance by all tenants and subtenants with all
applicable Environmental Laws and obtain and comply with and maintain in all
material respects, and use its best efforts to ensure that all tenants and
subtenants obtain and comply with and maintain, any and all licenses, approvals,
notifications, registrations or permits required by applicable Environmental
Laws, (b) conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required under
Environmental Laws, and promptly comply with all lawful orders and directives of
any Governmental Authority regarding Environmental Laws, and (c) defend,
indemnify and hold harmless the Administrative Agent and the Lenders, and their
respective parents, Subsidiaries, Affiliates, employees, agents, officers and
directors, from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
presence of Hazardous Materials, or the violation of, noncompliance with or
liability under any Environmental Laws applicable to the operations of the
Parent or such Subsidiary, or any orders, requirements or demands of
Governmental Authorities related thereto, including, without limitation,
53
reasonable attorney's and consultant's fees, investigation and laboratory fees,
response costs, court costs and litigation expenses, except to the extent that
any of the foregoing directly result from the gross negligence or willful
misconduct of the party seeking indemnification therefor.
SECTION 9.8 Compliance with ERISA. In addition to and without limiting
the generality of Section 9.6, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans to the full extent necessary to avoid any Material
Adverse Effect, (b) not take any action or fail to take action the result of
which could be a liability to the PBGC or to a Multiemployer Plan, (c) not
participate in any prohibited transaction that could result in any civil penalty
under ERISA or tax under the Code, (d) operate each Employee Benefit Plan in
such a manner that will not incur any tax liability under Section 4980B of the
Code or any liability to any qualified beneficiary as defined in Section 4980B
of the Code which (in either case) could reasonably be expected to have a
Material Adverse Effect, except in each such case where the failure to do so
could not reasonably be expected to have a Material Adverse Effect and (e)
furnish to the Administrative Agent upon the Administrative Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Administrative Agent.
SECTION 9.9 Compliance With Agreements. Comply in all respects with
each term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract except where the failure to comply could not
reasonably be expected to have a Material Adverse Effect; provided, that the
Parent or such Subsidiary may contest any such lease, agreement or other
instrument in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
SECTION 9.10 Conduct of Business. Engage only in businesses in
substantially the same fields as the businesses conducted on the Closing Date.
SECTION 9.11 Visits and Inspections. Permit representatives of the
Administrative Agent or any Lender, from time to time, to visit and inspect its
properties; inspect, audit and make extracts from its books, records and files,
including, but not limited to, management letters prepared by independent
accountants; and discuss with its principal officers, and its independent
accountants, its business, assets, liabilities, financial condition, results of
operations and business prospects, provided that such visits and discussions
shall be upon prior reasonable notice and for a reasonable duration.
SECTION 9.12 Additional Borrowers and Collateral.
(a) Within ten (10) Business Days after the creation or the acquisition
of any Subsidiary of any Borrower, cause to be executed and delivered to the
Administrative Agent (i) a Joinder Agreement duly executed by the Parent, such
Subsidiary and (if a separate Person) the parent of such Subsidiary pursuant to
which (A) such Subsidiary shall become a Borrower hereunder, (B) such Subsidiary
shall become a Grantor under the Security Agreement and (C) such Subsidiary
54
shall become an Issuer or Partnership/LLC under the Borrower Pledge Agreement,
(ii) replacement Notes duly executed by such Subsidiary and each other Borrower
then party hereto, (iii) such closing documents, closing certificates and
opinions of counsel consistent with Section 6.2 hereof as may reasonably be
requested by the Administrative Agent, and (iv) such other documents reasonably
requested by the Administrative Agent in order that such Subsidiary shall become
bound by all of the terms, covenants and agreements contained in the Credit
Agreement, the Security Agreement, the Borrower Pledge Agreement and any other
Loan Document applicable to such Subsidiary and the assets of such Subsidiary
shall constitute Collateral hereunder and under the Loan Documents.
(b) Upon the acquisition by any Borrower or any Subsidiary thereof of
any real property (whether owned in fee or leased) not listed on Schedule
7.1(r), the Borrowers shall provide to the Administrative Agent copies of the
purchase or lease documents, as applicable, and any other information reasonably
requested by the Administrative Agent with respect thereto. Promptly at the
request of the Administrative Agent or the Required Lenders, grant to the
Administrative Agent for the ratable benefit of itself and the Lenders a Lien on
any real property owned or leased by any Borrower or any Subsidiary thereof (not
then subject to any such Lien) pursuant to any applicable Real Estate Security
Documents requested by the Administrative Agent and deliver such other documents
or agreements consistent with Section 6.2(d) as requested by the Administrative
Agent. In addition, if requested by the Administrative Agent, such Real Estate
Security Documents shall be duly recorded by the Borrowers in such manner and in
such places as are required by law to perfect and preserve the Liens in favor of
the Administrative Agent and the Lenders granted pursuant to such Real Estate
Security Documents.
SECTION 9.13 Hedging Agreement. Maintain, for a period of two (2) years
from the Closing Date, a Hedging Agreement with minimum notional amount at any
date of determination equal to fifty percent (50%) of the outstanding principal
balance on the Term Loans at an interest rate, with a counterparty and upon
other terms and conditions reasonably satisfactory to the Administrative Agent.
SECTION 9.14 Year 2000 Compatibility. Take all actions reasonably
necessary to assure that Borrower's computer based systems are able to operate
and effectively process data which includes dates on and after January 1, 2000.
At the request of the Administrative Agent, the Parent shall provide reasonable
assurances satisfactory to the Administrative Agent that the foregoing actions
are being or have been taken.
SECTION 9.15 Further Assurances. Make, execute and deliver all such
additional and further acts, things, deeds and instruments as the Administrative
Agent or any Lender may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan Documents.
55
ARTICLE X
FINANCIAL COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11 hereof, the Parent and its Subsidiaries on a Consolidated
basis will not:
SECTION 10.1 Leverage Ratio: As of any fiscal quarter end during the
applicable period set below, permit the ratio of (a) Total Funded Debt on such
date to (b) EBITDA (the "Leverage Ratio") for the period of four (4) consecutive
fiscal quarters ending on such date to be greater than the corresponding ratio
set forth below:
Period Ratio
------ -----
Closing Date through and
Including September 30, 1999 2.85 to 1.00
October 1, 1999 through and
Including September 30, 2000 2.50 to 1.00
October 1, 2000 and thereafter 2.25 to 1.00
SECTION 10.2 Fixed Charge Coverage Ratio: As of any fiscal quarter end
during the applicable period set forth below, permit the ratio of (a) EBITDA for
the period of four (4) consecutive fiscal quarters ending on such date (except
as otherwise provided below) to (b) Fixed Charges for such period of four (4)
consecutive fiscal quarters (except as provided below) to be less than the
corresponding ratio set forth below:
Period Ratio
------ -----
Closing Date through and
Including March 31, 1999 .70 to 1.00
April 1, 1999 through and
Including September 30, 1999 .90 to 1.00
October 1, 1999 and
thereafter 1.10 to 1.00
For the purposes of calculating EBITDA (and Fixed Charges) under this Section
10.2, (i) with respect to the fiscal quarter ending March 31, 1999, EBITDA shall
be equal to EBITDA (and Fixed Charges shall be equal to Fixed Charges) for the
fiscal quarter ending on such date, (ii) with respect to the fiscal quarter
ending June 30, 1999, EBITDA shall be equal to EBITDA (and Fixed Charges shall
be equal to Fixed Charges) for the period of two (2) consecutive fiscal quarters
ending on such date and (iii) with respect to the fiscal quarter ending
56
September 30, 1999, EBITDA shall be equal to EBITDA (and Fixed Charges shall be
equal to Fixed Charges) for the period of three (3) consecutive fiscal quarters
ending on such date.
SECTION 10.3. Minimum EBITDA. As of any fiscal quarter end during the
applicable period set forth below, permit EBITDA for the period of four (4)
consecutive fiscal quarters ending on such date (except as otherwise provided
below) to be less than the corresponding amount set forth below:
Period Minimum EBITDA
------ --------------
Closing Date through and
Including March 31, 1999 $ 1,300,000
April 1, 1999 through and
Including June 30, 1999 $ 4,300,000
July 1, 1999 through and
Including September 30, 1999 $ 6,500,000
October 1, 1999 through and
Including December 31, 1999 $12,000,000
January 1, 2000 through and
Including March 31, 2000 $12,500,000
April 1, 2000 through and
Including June 30, 2000 $14,000,000
July 1, 2000 through and
Including September 30, 2000 $14,500,000
October 1, 2000 through and
Including December 31, 2000 $16,000,000
For the purposes of calculating EBITDA under this Section 10.3, (i) with respect
to the fiscal quarter ending March 31, 1999, EBITDA shall be to equal EBITDA for
the fiscal quarter ending on such date, (ii) with respect to the fiscal quarter
ending June 30, 1999, EBITDA shall be equal to EBITDA for the period of two (2)
consecutive fiscal quarters ending on such date and (iii) with respect to the
fiscal quarter ending September 30, 1999, EBITDA shall be equal to EBITDA for
the period of three (3) consecutive fiscal quarters ending on such date.
57
ARTICLE XI
NEGATIVE COVENANTS
Until all of the Obligations have been paid and satisfied in full and
the Commitments terminated, unless consent has been obtained in the manner set
forth in Section 14.11 hereof, the Parent shall not and shall not permit any of
its Subsidiaries to:
SECTION 11.1 Limitations on Debt. Create, incur, assume or suffer to
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement (i) with a
counterparty and upon terms and conditions (including interest rate) reasonably
satisfactory to the Administrative Agent or (ii) required pursuant to Section
9.13;
(c) Debt of the Parent and its Subsidiaries incurred in connection with
Capitalized Leases and purchase money Debt of the Parent and its Subsidiaries in
an aggregate amount not to exceed $1,500,000 on any date of determination;
(d) Debt consisting of Guaranty Obligations permitted by Section 11.2;
and
(e) Debt not otherwise referred to in this Section 11.1 in an aggregate
amount not to exceed $1,000,000 or any date of determination.
provided, that no agreement or instrument with respect to Debt permitted to be
incurred by this Section 11.1 shall restrict, limit or otherwise encumber (by
covenant or otherwise) the ability of any Subsidiary of the Parent to make any
payment to the Parent or any other Borrower (in the form of dividends,
intercompany advances or otherwise) for the purpose of enabling the Parent or
such Borrower to pay the Obligations.
SECTION 11.2 Limitations on Guaranty Obligations. Create, incur, assume
or suffer to exist any Guaranty Obligations except:
(a) Guaranty Obligations in favor of the Administrative Agent, for the
benefit of itself and the Lenders; and
(b) Guaranty Obligations incurred in the ordinary course of business in
an aggregate amount not to exceed $500,000 at any date of determination.
SECTION 11.3 Limitations on Liens. Create, incur, assume or suffer to
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
58
(a) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
(b) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(c) Liens consisting of deposits or pledges made in the ordinary course
of business in connection with, or to secure payment of, obligations under
workers' compensation, unemployment insurance or similar legislation or
obligations under customer service contracts;
(d) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(e) Liens of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;
(f) Liens not otherwise permitted by or referred to in this Section
11.3 and in existence on the Closing Date and described on Schedule 11.3; and
(g) Liens securing purchase money Debt permitted under Section 11.1(d);
provided that (i) such Liens shall be created substantially simultaneously with
the acquisition of the related asset, (ii) such Liens do not at any time
encumber any property other than the property financed by such Debt, (iii) the
amount of Debt secured thereby is not increased and (iv) the principal amount of
Debt secured by any such Lien shall at no time exceed one hundred percent (100%)
of the original purchase price of such property at the time it was acquired.
SECTION 11.4 Limitations on Loans, Advances, Investments and
Acquisitions. Purchase, own, invest in or otherwise acquire, directly or
indirectly, any capital stock, interests in any partnership or joint venture
(including without limitation the creation or capitalization of any Subsidiary),
evidence of Debt or other obligation or security, substantially all or a portion
of the business or assets of any other Person or any other investment or
interest whatsoever in any other Person, or make or permit to exist, directly or
indirectly, any loans, advances or extensions of credit to, or any investment in
cash or by delivery of property in, any Person except:
(a) investments in any Borrower and the existing loans, advances and
investments not otherwise permitted or referred to in this Section 11.4 and
described on Schedule 11.4;
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
59
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or Xxxxx'x
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; provided, that the
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank, or (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder;
(c) loans and advances to employees in the ordinary course of business
in an aggregate amount not to exceed $250,000 at any time; and
(d) investments by the Parent or any Subsidiary thereof in the form of
acquisitions of all or substantially all of the business or a line of business
(whether by the acquisition of capital stock, assets or any combination thereof)
of any other Person if such acquisition has been previously approved in writing
by the Required Lenders and, as required by the Statement With Respect to
Shares, a majority of the outstanding shares of Preferred Stock (a "Permitted
Acquisition"); provided that the approval of the Required Lenders shall not be
required with respect to any Permitted Acquisition for which the aggregate
consideration given in connection therewith does not exceed a total amount of
$5,000,000 during any Fiscal Year as long as the following requirements are met:
(i) no Default or Event of Default shall have occurred and be continuing both
before and after giving effect to such acquisition, (ii) the Borrowers shall
have delivered to the Administrative Agent an Officer's Compliance Certificate
on or before the closing date of such acquisition demonstrating, in form and
substance reasonably satisfactory thereto, pro forma compliance with each
covenant contained in Articles X and XI and (iii) the Borrowers shall have
delivered to the Administrative Agent on or before such closing date a
description of such acquisition.
SECTION 11.5 Limitations on Mergers and Liquidation. Merge, consolidate
or enter into any similar combination with any other Person or liquidate,
wind-up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) any Subsidiary Borrower may merge with any other Subsidiary
Borrower;
(b) any Wholly-Owned Subsidiary may merge into the Person such
Subsidiary was formed to acquire in connection with a Permitted Acquisition; and
(c) any Wholly-Owned Subsidiary of the Parent may wind-up into the
Parent or another Borrower.
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SECTION 11.6 Limitations on Sale of Assets. Convey, sell, lease,
assign, transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets no longer used or usable in the
business of the Parent or any of its Subsidiaries;
(c) the transfer of assets to any Borrower by any other Borrower
pursuant to Section 11.5;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof; and
(e) any other sale of assets in the ordinary course of business as long
as the Net Cash Proceeds thereof are applied as set forth in Section 4.4
(b)(iii).
SECTION 11.7 Limitations on Dividends, Distributions and Redemptions.
Declare or pay any dividends upon any of its capital stock or other equity
interests; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its capital stock or other equity interests, or make
any distribution of cash, property or assets among the holders of shares of its
capital stock or other equity interests; provided that:
(a) any Borrower or any Subsidiary may pay dividends in shares of its
own capital stock;
(b) any Subsidiary may pay cash dividends to any Borrower; and
(c) the Company may redeem shares of its capital stock on the Closing
Date in connection with the Recapitalization; and
(d) the Parent may complete Permitted Repurchases (as defined in the
Statement With Respect to Shares) in connection with the termination of the
corresponding employees and the Parent may pay cash adjustments for fractional
shares (but make no other cash dividend or distribution) in connection with both
(i) the conversion of the Preferred Stock into common stock of the Parent and
(ii) the exercise of any Warrants.
SECTION 11.8 Limitations on Exchange and Issuance of Capital Stock.
Issue, sell or otherwise dispose of any class or series of capital stock that,
by its terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased prior to the later of the Revolving Credit Maturity Date or the Term
Loan Maturity Date, including at the option of the holder, in whole or in part,
or has, or upon the happening of an event or passage of time would have, a
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redemption or similar payment due prior to the later of the Revolving Credit
Maturity Date or the Term Loan Maturity Date.
SECTION 11.9 Transactions with Affiliates. Directly or indirectly (a)
make any loan or advance to, or purchase or assume any note or other obligation
to or from, any of its officers, directors, shareholders or other Affiliates, or
to or from any member of the immediate family of any of its officers, directors,
shareholders or other Affiliates, or (b) enter into, or be a party to, any other
transaction with any of its Affiliates, except in each case pursuant to the
reasonable requirements of its business and upon fair and reasonable terms that
are fully disclosed to and approved in writing by the Required Lenders prior to
the consummation thereof and are no less favorable to it than it would obtain in
a comparable arm's length transaction with a Person not its Affiliate (other
than the renewal of any lease with respect to which the separate consent of
holders of the Preferred Stock is not required).
SECTION 11.10 Certain Accounting Changes. Change its Fiscal Year end,
or make any change in its accounting treatment and reporting practices except as
required by GAAP.
SECTION 11.11 Charter Documents; Capitalization. (a) Amend or modify
its articles of incorporation (including, without limitation, the Articles of
Incorporation), agreement of limited partnership, by-laws, or other charter
documents, or any Recapitalization Document or its corporate structure or
capitalization structure, in each case in any way that could reasonably be
expected to have a Material Adverse Effect or (b) notwithstanding clause (a) of
this Section 11.12, amend or modify in any way the Warrants or the Statement
With Respect to Shares.
SECTION 11.12 Restrictive Agreements. Enter into any Debt which
contains any negative pledge on assets or any covenants more restrictive than
the provisions of Articles IX, X and XI hereof, or which restricts, limits or
otherwise encumbers its ability to incur Liens on or with respect to any of its
assets or properties other than the assets or properties securing such Debt.
ARTICLE XII
DEFAULT AND REMEDIES
SECTION 12.1 Events of Default. Each of the following shall constitute
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
Obligations. The Borrowers shall default in any payment of principal of any
Loan, Note or Reimbursement Obligation when and as due (whether at maturity, by
reason of acceleration or otherwise).
(b) Other Payment Default. The Borrowers shall default in the payment
when and as due (whether at maturity, by reason of acceleration or otherwise) of
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interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for five (5)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed to
be made by the Parent or any Subsidiary under this Agreement, any Loan Document
or any amendment hereto or thereto, shall at any time prove to have been
incorrect or misleading in any material respect when made or deemed made.
(d) Default in Performance of Certain Covenants. The Parent or any
Subsidiary shall default in the performance or observance of any covenant or
agreement contained in Section 8.5(e) or Articles X or XI of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
Parent or any Subsidiary shall default in the performance or observance of any
term, covenant, condition or agreement contained in this Agreement (other than
as specifically provided for otherwise in this Section 12.1) or any other Loan
Document and such default shall continue for a period of thirty (30) days after
written notice thereof has been given to the Parent by the Administrative Agent.
(f) Hedging Agreement. Any termination payment shall be due by any
Borrower under any Hedging Agreement and such amount is not paid within thirty
(30) Business Days after the due date thereof.
(g) Debt Cross-Default. The Parent or any Subsidiary shall (i) default
in the payment of any Debt (other than the Notes or any Reimbursement
Obligation) the aggregate outstanding amount of which Debt is in excess of
$250,000 beyond the period of grace if any, provided in the instrument or
agreement under which such Debt was created, or (ii) default in the observance
or performance of any other agreement or condition relating to any Debt (other
than the Notes or any Reimbursement Obligation) the aggregate outstanding amount
of which Debt is in excess of $250,000 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 Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(h) Other Cross-Defaults. The Parent or any Subsidiary shall default in
the payment when due, or in the performance or observance, of any obligation or
condition of any Material Contract which could reasonably be expected to result
in liability to be paid greater than $250,000 unless, but only as long as, the
existence of any such default is being contested by the Parent or such
Subsidiary in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of the Parent or such
Subsidiary to the extent required by GAAP.
(i) Change in Control. Other than as a result of a Qualified Public
Offering (as defined in the Statement With Respect to Shares), (i) any person or
group of persons (within the meaning of Section 13(d) of the Securities Exchange
Act of 1934, as amended), other than the Founders or the Advent Purchasers,
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shall obtain ownership or control in one or more series of transactions of more
than thirty-five percent (35%) of the common stock or thirty-five percent (35%)
of the voting power of the Parent entitled to vote in the election of members of
the board of directors of the Parent or (ii) the Founders shall fail to hold
such executive positions and exercise management responsibility as held and
exercised thereby on the Closing Date or (iii) the Advent Purchasers and the
Founders, collectively, shall fail to own greater fifty-one percent (51%) of the
common stock and fifty-one percent (51%) of the voting power of the Parent
entitled to vote in the elections of members of the board of directors of the
Parent or (iv) any Borrower (other than the Parent) shall fail to be a
Wholly-Owned Subsidiary of the Parent or (v) there shall have occurred under the
Warrants any Change in Control (as defined therein) (any such event, a "Change
in Control").
(j) Voluntary Bankruptcy Proceeding. The Parent or any Subsidiary shall
(i) commence a voluntary case under the federal bankruptcy laws (as now or
hereafter in effect), (ii) file a petition seeking to take advantage of any
other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
(k) Involuntary Bankruptcy Proceeding. A case or other proceeding shall
be commenced against the Parent or any Subsidiary in any court of competent
jurisdiction seeking (i) relief under the federal bankruptcy laws (as now or
hereafter in effect) or under any other laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding up or adjustment of debts, or
(ii) the appointment of a trustee, receiver, custodian, liquidator or the like
for the Parent or any Subsidiary thereof or for all or any substantial part of
their respective assets, domestic or foreign, and such case or proceeding shall
continue without dismissal or stay for a period of sixty (60) consecutive days,
or an order granting the relief requested in such case or proceeding (including,
but not limited to, an order for relief under such federal bankruptcy laws)
shall be entered.
(l) Failure of Agreements. Any material provision of this Agreement or
of any other Loan Document shall for any reason cease to be valid and binding on
the Parent or any Subsidiary party thereto or any such Person shall so state in
writing, or this Agreement or any other Loan Document shall for any reason cease
to create a valid and perfected first priority Lien on, or security interest in,
any of the collateral purported to be covered thereby, in each case other than
in accordance with the express terms hereof or thereof.
(m) Termination Event. The occurrence of any of the following events:
(i) the Parent or any ERISA Affiliate fails to make full payment when due of all
amounts which, under the provisions of any Pension Plan or Section 412 of the
Code, the Parent or any ERISA Affiliate is required to pay as contributions
thereto, (ii) an accumulated funding deficiency in excess of $250,000 occurs or
exists, whether or not waived, with respect to any Pension Plan, (iii) a
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Termination Event or (iv) the Parent or any ERISA Affiliate as employers under
one or more Multiemployer Plan makes a complete or partial withdrawal from any
such Multiemployer Plan and the plan sponsor of such Multiemployer Plans
notifies such withdrawing employer that such employer has incurred a withdrawal
liability requiring payments in an amount exceeding $250,000.
(n) Judgment. A judgment or order for the payment of money not covered
by insurance which causes the aggregate amount of all such judgments to exceed
$250,000 in any Fiscal Year shall be entered against the Parent or any of its
Subsidiaries by any court and such judgment or order shall continue without
discharge or stay for a period of thirty (30) days.
SECTION 12.2 Remedies. Upon the occurrence of an Event of Default, with
the consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, by notice to
the Parent, on behalf of the Borrowers:
(a) Acceleration; Termination of Facilities. Declare the principal of
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the
Administrative Agent under this Agreement or any of the other Loan Documents
(other than any Hedging Agreement) (including, without limitation, all L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) and all other
Obligations (other than obligations owing under any Hedging Agreement), to be
forthwith due and payable, whereupon the same shall immediately become due and
payable without presentment, demand, protest or other notice of any kind, all of
which are expressly waived, anything in this Agreement or the other Loan
Documents to the contrary notwithstanding, and terminate the Credit Facility and
any right of the Borrowers to request borrowings or Letters of Credit
thereunder; provided, that upon the occurrence of an Event of Default specified
in Section 12.1(j) or (k), the Credit Facility shall be automatically terminated
and all Obligations (other than obligations owing under any Hedging Agreement)
shall automatically become due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrowers at such
time to deposit in a cash collateral account opened by the Administrative Agent
an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be applied
by the Administrative Agent to the payment of drafts drawn under such Letters of
Credit, and the unused portion thereof after all such Letters of Credit shall
have expired or been fully drawn upon, if any, shall be applied to repay the
other Obligations. After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrowers.
(c) Rights of Collection. Exercise on behalf of the Lenders all of its
other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrowers' Obligations.
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SECTION 12.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the Loan Documents or that may now or hereafter exist in law
or in equity or by suit or otherwise. No delay or failure to take action on the
part of the Administrative Agent or any Lender in exercising any right, power or
privilege shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or privilege preclude other or further
exercise thereof or the exercise of any other right, power or privilege or shall
be construed to be a waiver of any Event of Default. No course of dealing
between the Borrowers, the Administrative Agent and the Lenders or their
respective agents or employees shall be effective to change, modify or discharge
any provision of this Agreement or any of the other Loan Documents or to
constitute a waiver of any Event of Default.
ARTICLE XIII
THE ADMINISTRATIVE AGENT
SECTION 13.1 Appointment. Each of the Lenders hereby irrevocably
designates and appoints First Union as Administrative Agent of such Lender under
this Agreement and the other Loan Documents for the term hereof and each such
Lender irrevocably authorizes First Union as Administrative Agent for such
Lender, to take such action on its behalf under the provisions of this Agreement
and the other Loan Documents and to exercise such powers and perform such duties
as are expressly delegated to the Administrative Agent by the terms of this
Agreement and such other Loan Documents, together with such other powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
elsewhere in this Agreement or such other Loan Documents, the Administrative
Agent shall not have any duties or responsibilities, except those expressly set
forth herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Administrative Agent. Any reference to the
Administrative Agent in this Article XIII shall be deemed to refer to the
Administrative Agent solely in its capacity as Administrative Agent and not in
its capacity as a Lender.
SECTION 13.2 Delegation of Duties. The Administrative Agent may execute
any of its respective duties under this Agreement and the other Loan Documents
by or through agents or attorneys-in-fact and shall be entitled to advice of
counsel concerning all matters pertaining to such duties. The Administrative
Agent shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by the Administrative Agent with reasonable care.
SECTION 13.3 Exculpatory Provisions. Neither the Administrative Agent
nor any of its officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates shall be (a) liable for any action lawfully taken or
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omitted to be taken by it or such Person under or in connection with this
Agreement or the other Loan Documents (except for actions occasioned solely by
its or such Person's own gross negligence or willful misconduct), or (b)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by the Borrowers or any of their Subsidiaries
or any officer thereof contained in this Agreement or the other Loan Documents
or in any certificate, report, statement or other document referred to or
provided for in, or received by the Administrative Agent under or in connection
with, this Agreement or the other Loan Documents or for the value, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
the other Loan Documents or for any failure of any Borrower or any of its
Subsidiaries to perform its obligations hereunder or thereunder. The
Administrative Agent shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement, or to inspect the
properties, books or records of any Borrower or any of its Subsidiaries.
SECTION 13.4 Reliance by the Administrative Agent. The Administrative
Agent shall be entitled to rely, and shall be fully protected in relying, upon
any note, writing, resolution, notice, consent, certificate, affidavit, letter,
cablegram, telegram, telecopy, telex or teletype message, statement, order or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons and upon advice
and statements of legal counsel (including, without limitation, counsel to the
Borrowers), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes unless such Note shall have been
transferred in accordance with Section 14.10 hereof. The Administrative Agent
shall be fully justified in failing or refusing to take any action under this
Agreement and the other Loan Documents unless it shall first receive such advice
or concurrence of the Required Lenders (or, when expressly required hereby or by
the relevant other Loan Document, all the Lenders) as it deems appropriate or it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action except for its own gross negligence or
willful misconduct. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 13.5 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or Event of
Default hereunder unless it has received notice from a Lender or the Borrowers
referring to this Agreement, describing such Default or Event of Default and
stating that such notice is a "notice of default". In the event that the
Administrative Agent receives such a notice, it shall promptly give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders; provided that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it shall deem advisable in the
best interests of the Lenders, except to the extent that other provisions of
this Agreement expressly require that any such action be taken or not be taken
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only with the consent and authorization or the request of the Lenders or
Required Lenders, as applicable.
SECTION 13.6 Non-Reliance on the Administrative Agent and Other
Lenders. Each Lender expressly acknowledges that neither the Administrative
Agent nor any of its respective officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates has made any representations or
warranties to it and that no act by the Administrative Agent hereinafter taken,
including any review of the affairs of the Borrower or any of its Subsidiaries,
shall be deemed to constitute any representation or warranty by the
Administrative Agent to any Lender. Each Lender represents to the Administrative
Agent that it has, independently and without reliance upon the Administrative
Agent or any other Lender, and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, operations, property, financial and other condition and
creditworthiness of the Borrowers and their Subsidiaries and made its own
decision to make its Loans and issue or participate in Letter of Credit
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit analysis, appraisals
and decisions in taking or not taking action under this Agreement and the other
Loan Documents, and to make such investigation as it deems necessary to inform
itself as to the business, operations, property, financial and other condition
and creditworthiness of the Borrowers and their Subsidiaries. Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or by the other Loan Documents,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrowers or any of their Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.
SECTION 13.7 Indemnification. The Lenders agree to indemnify the
Administrative Agent in its capacity as such and (to the extent not reimbursed
by the Borrowers and without limiting the obligation of the Borrowers to do so),
ratably according to the respective amounts of their Commitment Percentages,
from and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind whatsoever which may at any time (including, without limitation, at any
time following the payment of the Notes or any Reimbursement Obligation) be
imposed on, incurred by or asserted against the Administrative Agent in any way
relating to or arising out of this Agreement or the other Loan Documents, or any
documents contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by the
Administrative Agent under or in connection with any of the foregoing; provided
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Administrative
Agent's bad faith, gross negligence or willful misconduct. The agreements in
this Section 13.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.
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SECTION 13.8 The Administrative Agent in Its Individual Capacity. The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrowers as though the Administrative Agent were not an Administrative
Agent hereunder. With respect to any Loans made or renewed by it and any Note
issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not an Administrative Agent, and the terms
"Lender" and "Lenders" shall include the Administrative Agent in its individual
capacity.
SECTION 13.9 Resignation of the Administrative Agent; Successor
Administrative Agent. Subject to the appointment and acceptance of a successor
as provided below, the Administrative Agent may resign at any time by giving
notice thereof to the Lenders and the Borrowers. Upon any such resignation, the
Required Lenders shall have the right to appoint a successor Administrative
Agent, which successor shall have minimum capital and surplus of at least
$500,000,000. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and shall have accepted such appointment within thirty
(30) days after the Administrative Agent's giving of notice of resignation, then
the Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which successor shall have minimum capital and surplus of
at least $500,000,000. Upon the acceptance of any appointment as Administrative
Agent hereunder by a successor Administrative Agent, such successor
Administrative Agent shall thereupon succeed to and become vested with all
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 13.9 shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
SECTION 13.10 Syndication Agent. The Syndication Agent, in its capacity
as Syndication Agent, shall have no duties or responsibilities under this
Agreement or any other Loan Document.
ARTICLE XIV
MISCELLANEOUS
SECTION 14.1 Notices.
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be presumed to be
received by a party hereto (i) on the date of delivery if delivered by hand or
sent by telecopy, (ii) on the next Business Day if sent by recognized overnight
courier service and (iii) on the third Business Day following the date sent by
certified mail, return receipt requested. A telephonic notice to the
Administrative Agent as understood by the Administrative Agent will be deemed to
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be the controlling and proper notice in the event of a discrepancy with or
failure to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it at
the following addresses, or any other address as to which all the other parties
are notified in writing.
If to the Borrowers: Dollar Express, Inc.
0000 Xxxxxxxxx Xxxx
Xxxxxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: Xxxxxxx Spain
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Advent International Corporation
00 Xxxxx Xxxxxx
Xxxxxx, Xxxxxxxxxxxxx
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to First Union as First Union National Bank
Administrative Agent: 0000 Xxxxxxxx Xxxxxx
Xxxxxxx Building, 8th Floor
Philadelphia, Pennsylvania 19107-4843
Attention: Xxxx X. Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Lender: To the Address set forth on Schedule 1.1(a)
hereto
(c) Administrative Agent's Office. The Administrative Agent hereby
designates its office located at the address set forth above, or any subsequent
office which shall have been specified for such purpose by written notice to the
Borrowers and the Lenders, as the Administrative Agent's Office referred to
herein, to which payments due are to be made and at which Loans will be
disbursed and Letters of Credit issued.
SECTION 14.2 Expenses; Indemnity. The Borrowers will (a) pay all
out-of-pocket expenses of the Administrative Agent in connection with (i) the
preparation, execution and delivery of this Agreement and each other Loan
Document, whenever the same shall be executed and delivered, including without
limitation all out-of-pocket syndication and due diligence expenses and
reasonable fees and disbursements of counsel for the Administrative Agent and
(ii) the preparation, execution and delivery of any waiver, amendment or consent
by the Administrative Agent or the Lenders relating to this Agreement or any
other Loan Document, including without limitation reasonable fees and
disbursements of counsel for the Administrative Agent, (b) pay all reasonable
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out-of-pocket expenses of the Administrative Agent in connection with the
administration of the Credit Facility, (c) pay all reasonable out of pocket
expenses of the Administrative Agent and each Lender actually incurred in
connection with the administration and enforcement of any rights and remedies of
the Administrative Agent and Lenders under the Credit Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Loan Document or
any factual matters in connection therewith, which expenses shall include
without limitation the reasonable fees and disbursements of such Persons, and
(d) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
Administrative Agents, officers and directors, from and against any losses,
penalties, fines, liabilities, settlements, damages, costs and expenses,
suffered by any such Person in connection with any claim, investigation,
litigation or other proceeding (whether or not the Administrative Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with the Agreement, any other Loan Document or the
Loans, including without limitation reasonable attorney's and consultant's fees,
except to the extent that any of the foregoing directly result from the gross
negligence or willful misconduct of the party seeking indemnification therefor.
SECTION 14.3 Set-off. In addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
upon and after the occurrence of any Event of Default and during the continuance
thereof, the Lenders and any assignee or participant of a Lender in accordance
with Section 14.10 are hereby authorized by the Borrowers at any time or from
time to time, without notice to the Borrowers or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and to apply
any and all deposits (general or special, time or demand, including, but not
limited to, indebtedness evidenced by certificates of deposit, whether matured
or unmatured) and any other indebtedness at any time held or owing by the
Lenders, or any such assignee or participant to or for the credit or the account
of the Borrowers against and on account of the Obligations irrespective of
whether or not (a) the Lenders shall have made any demand under this Agreement
or any of the other Loan Documents or (b) the Administrative Agent shall have
declared any or all of the Obligations to be due and payable as permitted by
Section 12.2 and although such Obligations shall be contingent or unmatured.
SECTION 14.4 Governing Law. This Agreement, the Notes and the other
Loan Documents, unless otherwise expressly set forth therein, shall be governed
by, construed and enforced in accordance with the laws of the Commonwealth of
Pennsylvania, without reference to the conflicts or choice of law principles
thereof.
SECTION 14.5 Consent to Jurisdiction. Each Borrower hereby irrevocably
consents to the personal jurisdiction of the state and federal courts located in
Philadelphia, Pennsylvania, in any action, claim or other proceeding arising out
of any dispute in connection with this Agreement, the Notes and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations. Each Borrower hereby irrevocably consents to the
service of a summons and complaint and other process in any action, claim or
proceeding brought by the Administrative Agent or any Lender in connection with
this Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section 14.1.
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Nothing in this Section 14.5 shall affect the right of the Administrative Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Administrative Agent or any Lender to bring any
action or proceeding against any Borrower or its properties in the courts of any
other jurisdictions.
SECTION 14.6 Binding Arbitration; Waiver of Jury Trial.
(a) Binding Arbitration. Upon demand of any party, whether made before
or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any other
Loan Documents ("Disputes"), between or among parties to the Notes or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, disputes as to whether a matter is
subject to arbitration, or claims concerning any aspect of the past, present or
future relationships arising out of or connected with the Loan Documents.
Arbitration shall be conducted under and governed by the Commercial Financial
Disputes Arbitration Rules (the "Arbitration Rules") of the American Arbitration
Association and Title 9 of the U.S. Code. All arbitration hearings shall be
conducted in Philadelphia, Pennsylvania. The expedited procedures set forth in
Rule 51, et seq. of the Arbitration Rules shall be applicable to claims of less
than $1,000,000. All applicable statutes of limitation shall apply to any
Dispute. A judgment upon the award may be entered in any court having
jurisdiction. Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one hundred and twenty
(120) days after such demand. These time limitations may not be extended unless
a party hereto shows cause for extension and then such extension shall not
exceed a total of sixty (60) days. The panel from which all arbitrators are
selected shall be comprised of licensed attorneys. The single arbitrator
selected for expedited procedure shall be a retired judge from the highest court
of general jurisdiction, state or federal, of the state where the hearing will
be conducted. The parties hereto do not waive any applicable Federal or state
substantive law except as provided herein. Notwithstanding the foregoing, this
paragraph shall not apply to any Hedging Agreement that is a Loan Document.
(b) Jury Trial. THE ADMINISTRATIVE AGENT, EACH LENDER AND EACH BORROWER
HEREBY ACKNOWLEDGE THAT BY AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY
WAIVED THEIR RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM
OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS
AGREEMENT, THE NOTES OR THE OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS
HEREUNDER OR THEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
binding arbitration provisions, the parties hereto and the other Loan Documents
preserve, without diminution, certain remedies that such Persons may employ or
72
exercise freely, either alone, in conjunction with or during a Dispute. Each
such Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies: (i) all rights to foreclose against any real or personal property or
other security by exercising a power of sale granted in the Loan Documents or
under applicable law or by judicial foreclosure and sale, (ii) all rights of
self help including peaceful occupation of property and collection of rents, set
off, and peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
SECTION 14.7 Reversal of Payments. To the extent any Borrower makes a
payment or payments to the Administrative Agent for the ratable benefit of the
Lenders or the Administrative Agent receives any payment or proceeds of the
collateral which payments or proceeds or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside and/or
required to be repaid to a trustee, receiver or any other party under any
bankruptcy law, state or federal law, common law or equitable cause, then, to
the extent of such payment or proceeds repaid, the Obligations or part thereof
intended to be satisfied shall be revived and continued in full force and effect
as if such payment or proceeds had not been received by the Administrative
Agent.
SECTION 14.8 Injunctive Relief; Punitive Damages.
(a) The Borrowers recognize that, in the event the Borrowers fail to
perform, observe or discharge any of their obligations or liabilities under this
Agreement, any remedy of law may prove to be inadequate relief to the Lenders.
Therefore, the Borrowers agree that the Lenders, at the Lenders' option, shall
be entitled to temporary and permanent injunctive relief in any such case
without the necessity of proving actual damages.
(b) The Administrative Agent, Lenders and each Borrower (on behalf of
itself and its Subsidiaries) hereby agree that no such Person shall have a
remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
(c) The parties agree that they shall not have a remedy of punitive or
exemplary damages against any other party in any Dispute and hereby waive any
right or claim to punitive or exemplary damages they have now or which may arise
in the future in connection with any Dispute whether the Dispute is resolved by
arbitration or judicially.
SECTION 14.9 Accounting Matters. All financial and accounting
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Parent or any Subsidiary to determine compliance with any covenant contained
73
herein, shall, except as otherwise expressly contemplated hereby or unless there
is an express written direction by the Administrative Agent to the contrary
agreed to by the Parent, be performed in accordance with GAAP as in effect on
the Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Parent's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Parent and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
SECTION 14.10 Successors and Assigns; Participations.
(a) Benefit of Agreement. This Agreement shall be binding upon and
inure to the benefit of the Borrowers, the Administrative Agent and the Lenders,
all future holders of the Notes, and their respective successors and assigns,
except that no Borrower shall assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of each
Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
Borrowers (so long as no Default or Event of Default has occurred and is
continuing) and the consent of the Administrative Agent, which consents shall
not be unreasonably withheld, assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Agreement
(including, without limitation, all or a portion of the Extensions of Credit at
the time owing to it and the Notes held by it); provided that:
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement;
(ii) if less than all of the assigning Lender's Commitment is to be
assigned, the Commitment so assigned shall not be less than $5,000,000;
(iii) the parties to each such assignment shall execute and deliver
to the Administrative Agent, for its acceptance and recording in the Register,
an Assignment and Acceptance in the form of Exhibit G attached hereto (an
"Assignment and Acceptance"), together with any Note or Notes subject to such
assignment;
(iv) such assignment shall not, without the consent of the
Borrowers, require the Borrowers to file a registration statement with the
Securities and Exchange Commission or apply to or qualify the Loans or the Notes
under the blue sky laws of any state; and
(v) the assigning Lender shall pay to the Administrative Agent an
assignment fee of $3,000 upon the execution by such Lender of the Assignment and
Acceptance; provided that no such fee shall be payable upon any assignment by a
Lender to an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective date
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shall be at least five (5) Business Days after the execution thereof, (A) the
assignee thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereby
and (B) the Lender thereunder shall, to the extent provided in such assignment,
be released from its obligations under this Agreement.
(c) Rights and Duties Upon Assignment. By executing and delivering an
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Administrative Agent shall maintain a copy of each
Assignment and Acceptance delivered to it and a register for the recordation of
the names and addresses of the Lenders and the amount of the Extensions of
Credit with respect to each Lender from time to time (the "Register"). The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrowers, the Administrative Agent and the Lenders may treat each
person whose name is recorded in the Register as a Lender hereunder for all
purposes of this Agreement. The Register shall be available for inspection by
the Borrowers or Lenders at any reasonable time and from time to time upon
reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is substantially in the form of Exhibit G:
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrowers;
and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Parent, on behalf of the Borrowers.
Within five (5) Business Days after receipt of notice, the Borrowers shall
execute and deliver to the Administrative Agent, in exchange for the surrendered
Note or Notes, a new Note or Notes to the order of such Eligible Assignee in
amounts equal to the Commitment assumed by it pursuant to such Assignment and
Acceptance and a new Note or Notes to the order of the assigning Lender in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes delivered to the assigning Lender. Each surrendered Note
or Notes shall be canceled and returned to the Borrowers.
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(f) Participations. Each Lender may sell participations to one or more
banks or other entities in all or a portion of its rights and obligations under
this Agreement (including, without limitation, all or a portion of its
Extensions of Credit and the Notes held by it); provided that:
(i) each such participation shall be in an amount not less than
$5,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it
for all purposes of this Agreement;
(v) the Borrowers, the Administrative Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this Agreement or any
other Loan Document other than waivers, amendments or modifications which would
reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled, extend any scheduled
payment date for principal of any Loan or, except as expressly contemplated
hereby or thereby, release substantially all of the Collateral; and
(vii) any such disposition shall not, without the consent of the
Borrowers, require the Borrowers to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality.
(i) The Administrative Agent and the Lenders agree that all
confidential non-public information regarding the Borrowers or the Transactions,
including, without limitation, all analyses, compilations, studies or other
documents (whether in writing or electronic storage), which contain or otherwise
reflect such confidential non-public information, received prior to the earlier
of the Closing Date and the termination of the Commitments, from the Borrowers,
the Investors, or their respective legal counsel or other advisors
(collectively, the "Confidential Information"), will be held and treated by
them, for the twenty-four (24) month period immediately subsequent to the
Closing Date, in accordance with their respective customary procedures for
handling their own confidential information, and will be held and treated by
them, thereafter, in accordance with their respective customary procedures for
handling confidential information of third parties; provided, that such
Confidential Information may be provided to any employees, attorneys and
consultants or Affiliates of the Administrative Agent, the Lenders and
prospective Lenders on a need to know basis, who are participating, or
evaluating participating, in the transactions contemplated by this Agreement,
and provided further, that the Administrative Agent may disclose information
related to this Agreement to Gold Sheets and other similar bank trade
publications, such information to consist of deal terms and other information
76
customarily found in such publications. Further, any Confidential Information
may be disclosed by the Administrative Agent or any Affiliate thereof in any
case in which disclosure is required by law or requested by any regulatory
authority; provided, however, in any case in which disclosure is so required or
requested during the twenty-four (24) month period immediately subsequent to the
date hereof, the Administrative Agent shall provide the Borrowers with such
notice of any such disclosure as may be legally permissible and reasonably
practicable under the circumstances and the Administrative Agent shall
cooperate, to the extent possible and at the Borrowers' expense to obtain an
appropriate protective order or other reliable assurance that confidential
treatment will be accorded the Confidential Information to be disclosed. In any
event, the Confidential Information will not be used by the Administrative Agent
and the Lenders other than in connection with evaluating whether or not to
extend credit to the Borrowers. The term "Confidential Information" does not
include information which (i) becomes generally available to the public other
than as a result of a disclosure by the Administrative Agent or the Lenders,
(ii) was available to the Administrative Agent or the Lenders on a
non-confidential basis from a source other than the Borrowers or the Investors;
provided that the recipient is not aware such source is bound by a
confidentiality agreement with the Borrowers or the Investors or otherwise
prohibited from transmitting the information to the Administrative Agent or the
Lenders by a contractual, legal or fiduciary obligation.
(ii) Nothing contained herein shall limit or preclude the
Administrative Agent or any Lender or any of their Affiliates (i) from carrying
on any business with, providing banking or other financial services to, or from
participating in any capacity, including as an equity investor, in any party
whatsoever, including, without limitation, any competitor, supplier or customer
of any Investor or any Borrower, or any other party which may have interests
different than or adverse to the Investors and the Borrowers or (ii) from
carrying on its business as currently conducted or as such business may be
conducted in the future. The foregoing shall not limit or change the obligations
of confidentiality and nondisclosure contained herein.
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 14.11 Amendments, Waivers and Consents. Except as set forth
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents (other than any Hedging Agreement, the terms and
conditions of which may be amended, modified or waived by the parties thereto)
may be amended or waived by the Lenders, and any consent given by the Lenders,
if, and only if, such amendment, waiver or consent is in writing signed by the
Required Lenders (or by the Administrative Agent with the consent of the
Required Lenders) and delivered to the Administrative Agent and, in the case of
an amendment, signed by the Parent, on behalf of the Borrowers; provided, that
no amendment, waiver or consent shall (a) increase the amount or extend the time
of the obligation of the Lenders to make Loans or issue or participate in
Letters of Credit, (b) extend the originally scheduled time or times of payment
of the principal of any Loan or Reimbursement Obligation or the time or times of
78
payment of interest on any Loan or Reimbursement Obligation, (c) reduce the rate
of interest or fees payable on any Loan or Reimbursement Obligation, (d) reduce
the principal amount of any Loan or Reimbursement Obligation, (e) permit any
subordination of the principal or interest on any Loan or Reimbursement
Obligation, (f) permit any assignment (other than as specifically permitted in
this Agreement) of any of the Borrowers' rights and obligations hereunder, (g)
release any material portion of the Collateral or release any Security Document
(other than as specifically permitted in this Agreement or the applicable
Security Document) or (h) amend the provisions of this Section 14.11 or the
definition of Required Lenders, without the prior written consent of each
Lender. In addition, no amendment, waiver or consent to the provisions of (a)
Article XIII shall be made without the written consent of the Administrative
Agent and (b) Article III shall be made without the written consent of the
Issuing Lender.
SECTION 14.12 Performance of Duties. The Borrowers' obligations under
this Agreement and each of the Loan Documents shall be performed by the
Borrowers at their sole cost and expense.
SECTION 14.13 All Powers Coupled with Interest. All powers of attorney
and other authorizations granted to the Lenders, the Administrative Agent and
any Persons designated by the Administrative Agent or any Lender pursuant to any
provisions of this Agreement or any of the other Loan Documents shall be deemed
coupled with an interest and shall be irrevocable so long as any of the
Obligations remain unpaid or unsatisfied or the Credit Facility has not been
terminated.
SECTION 14.14 Survival of Indemnities. Notwithstanding any termination
of this Agreement, the indemnities to which the Administrative Agent and the
Lenders are entitled under the provisions of this Article XIV and any other
provision of this Agreement and the Loan Documents shall continue in full force
and effect and shall protect the Administrative Agent and the Lenders against
events arising after such termination as well as before.
SECTION 14.15 Titles and Captions. Titles and captions of Articles,
Sections and subsections in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement.
SECTION 14.16 Severability of Provisions. Any provision of this
Agreement or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 14.17 Counterparts. This Agreement may be executed in any
number of counterparts and by different parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and shall be
binding upon all parties, their successors and assigns, and all of which taken
together shall constitute one and the same agreement.
SECTION 14.18 Parent as Agent for Borrowers. The Borrowers hereby
irrevocably appoint and authorize the Parent (i) to provide the Administrative
78
Agent with all notices with respect to Extensions of Credit obtained for the
benefit of any Borrower and all other notices and instructions under this
Agreement and (ii) to take such action on behalf of the Borrowers as the Parent
deems appropriate on its behalf to obtain Extensions of Credit and to exercise
such other powers as are reasonably incidental thereto to carry out the purposes
of this Agreement.
SECTION 14.19 Obligations Joint and Several; Contribution.
(a) All of the Borrowers shall be jointly and severally liable for the
Obligations, however incurred. References to the Borrowers with respect to the
Obligations or any portion thereof shall mean each Borrower on a joint and
several basis.
(b) To the extent any Borrower is required, by reason of its
Obligations hereunder, to pay to the Administrative Agent or any Lender or to
any other Borrower an amount greater than the amount of the Extensions of Credit
actually made available to or for the account of such Borrower, such Borrower
shall have an enforceable right of contribution and indemnity against the
remaining Borrowers, and the remaining Borrowers shall be jointly and severally
liable to such Borrower, for repayment of the full amount of such excess
payment. Such Borrower shall be subrogated to any and all rights of the
Administrative Agent and the Lenders against the remaining Borrowers to the
extent of such excess payment. The rights of any Borrower to contribution,
subrogation and indemnity under this Section 14.19 or under Applicable Law shall
in all events and all respects be subject and subordinate to the rights of the
Administrative Agent and the Lenders under this Agreement and the other Loan
Documents and subject to the prior full, final and indefeasible payment to the
Administrative Agent and the Lenders of all Obligations.
(c) Notwithstanding anything to the contrary in this Agreement, the
amount of any Borrower's obligations under this Section 14.19 shall in all
events be limited to, but not in excess of, the maximum amount thereof not
subject to avoidance or recovery by operation of Applicable Law governing
bankruptcy, reorganization, receivership, arrangement, adjustment of debts,
relief of debtors, dissolution, insolvency, fraudulent transfers or conveyances
or other similar laws (including, without limitation, 11 U.S.C. ss.546, ss.547,
ss.548, ss.550 and other "avoidance" provisions of Title 11 of the United States
Code) applicable at any time to such Borrower and this Agreement.
SECTION 14.20 Inconsistencies with Other Documents; Independent Effect
of Covenants.
(a) In the event there is a conflict or inconsistency between this
Agreement and any other Loan Document, the terms of this Agreement shall
control; provided, that any provision of the Security Documents which imposes
additional burdens on the Borrowers or their Subsidiaries or further restricts
the rights of the Borrowers or their Subsidiaries or gives the Administrative
Agent or Lenders additional rights shall not be deemed to be in conflict or
inconsistent with this Agreement and shall be given full force and effect.
(b) The Borrowers expressly acknowledge and agree that each covenant
contained in Articles IX, X, or XI hereof shall be given independent effect.
79
Accordingly, the Borrowers shall not engage in any transaction or other act
otherwise permitted under any covenant contained in Articles IX, X, or XI if,
before or after giving effect to such transaction or act, the Borrowers shall or
would be in breach of any other covenant contained in Articles IX, X, or XI.
SECTION 14.21 Term of Agreement. This Agreement shall remain in effect
from the Closing Date through and including the date upon which all Obligations
shall have been paid and satisfied in full. The Administrative Agent is hereby
permitted to release all Liens on the Collateral in favor of the Administrative
Agent, for the ratable benefit of itself and the Lenders, upon repayment of the
outstanding principal of and all accrued interest on the Loans, payment of all
outstanding fees and expenses hereunder and the termination of the Lender's
Commitments. No termination of this Agreement shall affect the rights and
obligations of the parties hereto arising prior to such termination.
[Signature pages to follow]
80
Credit Agreement Signature Pages
Credit Agreement Signature Pages
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.
[CORPORATE SEAL] DE&S HOLDING CO., as Borrower
By: /s/ Xxxxxx Spain
----------------------------------------
Name: Xxxxxx Spain
Title: President
[CORPORATE SEAL] DOLLAR EXPRESS, INC., as Borrower
By: /s/ Xxxxxx Spain
----------------------------------------
Name: Xxxxxx Spain
Title: President
[Signature pages continued on the next page]
[CORPORATE SEAL] FIRST UNION NATIONAL BANK, as
Administrative Agent and Lender
By: /s/ Xxxx X. Xxxxx
----------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
[Signature pages continued on the next page]
BANKBOSTON, N.A., as Syndication Agent and
as Lender
By: /s/ Xxxxxxxx X. Xxxxxx
----------------------------------------
Name: Xxxxxxxx X. Xxxxxx
Title: Vice President
Schedule 1.1(a)
(Lenders and Commitments)
--------------------------------------------------------------------------------------------------
LENDER REVOLVING TERM LOAN TOTAL COMMITMENT
CREDIT COMMITMENT COMMITMENT PERCENTAGE
COMMITMENT
--------------------------------------------------------------------------------------------------
First Union National Bank
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000 $12,500,000 $12,500,000 $25,000,000 62.50000000%
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
--------------------------------------------------------------------------------------------------
BankBoston, N.A.
000 Xxxxxxx Xxxxxx
Mail Code 01-09-05 $ 7,500,000 $ 7,500,000 $15,000,000 37.50000000%
Xxxxxx, Xxxxxxxxxxxxx 00000
Attention: Xxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: 434-6685
--------------------------------------------------------------------------------------------------
