Exhibit 10.6
CREDIT AGREEMENT
AMONG
THANE INTERNATIONAL, INC.,
VARIOUS BANKS
AND
PARIBAS,
AS AGENT
$24,000,000
---------------------------------
DATED AS OF JUNE 10, 1999
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CREDIT AGREEMENT
TABLE OF CONTENTS
PAGE
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Section 1. Amount and Terms of Credit................................... 1
1.01 The Commitments.................................................... 1
1.02 Minimum Amount of Each Borrowing................................... 3
1.03 Notice of Borrowing................................................ 4
1.04 Disbursement of Funds.............................................. 5
1.05 Notes.............................................................. 5
1.06 Conversions........................................................ 7
1.07 Pro Rata Borrowings................................................ 8
1.08 Interest........................................................... 8
1.09 Interest Periods................................................... 9
1.10 Increased Costs, Illegality, etc................................... 10
1.11 Compensation....................................................... 13
1.12 Replacement of Banks............................................... 13
1.13 Change of Lending Office........................................... 15
Section 2. Letters of Credit............................................ 15
2.01 Letters of Credit.................................................. 15
2.02 Minimum Stated Amount.............................................. 17
2.03 Letter of Credit Requests.......................................... 17
2.04 Letter of Credit Participations.................................... 17
2.05 Agreement to Repay Letter of Credit Drawings....................... 19
2.06 Increased Costs.................................................... 20
Section 3. Fees; Reductions of Commitment............................... 20
3.01 Fees............................................................... 21
3.02 Voluntary Termination of Unutilized Commitments.................... 22
3.03 Mandatory Reduction of Commitments................................. 22
Section 4. Prepayments; Payments; Taxes................................. 23
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CREDIT AGREEMENT
4.01 Voluntary Prepayments.............................................. 23
4.02 Mandatory Repayments and Commitment Reductions..................... 24
4.03 Method and Place of Payment........................................ 28
4.04 Net Payments....................................................... 28
Section 5. Conditions Precedent to Loans on the Initial Borrowing Date.. 30
5.01 Execution of Agreement; Notes...................................... 30
5.02 Officer's Certificate.............................................. 31
5.03 Opinions of Counsel................................................ 31
5.04 Corporate Documents; Proceedings................................... 31
5.05 Plans; Shareholders' Agreements; Management Agreements; Employment
Agreements; Collective Bargaining Agreements; Debt Agreements;
Affiliate Contracts; Tax Sharing Agreements; and Material Contracts 31
5.06 Consummation of the Recapitalization............................... 33
5.07 Pledge Agreement................................................... 34
5.08 Security Agreement................................................. 34
5.09 Subsidiaries Guaranty.............................................. 35
5.10 Material Adverse Change, etc....................................... 35
5.11 Litigation......................................................... 35
5.12 Fees, etc.......................................................... 35
5.13 Solvency Certificate; Insurance Analyses........................... 36
5.14 Approvals.......................................................... 36
5.15 Financial Statements; Projections; Management Letter Reports;
Background Investigation Reports................................... 36
5.16 Refinancing........................................................ 38
5.17 Funding............................................................ 38
5.18 Consent Letter..................................................... 39
5.19 Borrowing Base Certificate......................................... 39
5.20 Landlord Agreements................................................ 39
5.21 PCF/PNA Warrants................................................... 39
Section 6. Conditions Precedent to All Credit Events.................... 39
6.01 No Default; Representations and Warranties......................... 39
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CREDIT AGREEMENT
6.02 Notice of Borrowing; Letter of Credit Request...................... 39
Section 7. Representations, Warranties and Agreements................... 40
7.01 Corporate Status................................................... 40
7.02 Corporate Power and Authority...................................... 40
7.03 No Violation....................................................... 41
7.04 Governmental Approvals............................................. 41
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc................................................... 41
7.06 Litigation......................................................... 43
7.07 True and Complete Disclosure....................................... 43
7.08 Use of Proceeds; Margin Regulations................................ 43
7.09 Tax Returns and Payments........................................... 44
7.10 Compliance with ERISA.............................................. 44
7.11 The Security Documents............................................. 45
7.12 Representations and Warranties in Documents........................ 46
7.13 Properties......................................................... 46
7.14 Capitalization..................................................... 47
7.15 Subsidiaries....................................................... 47
7.16 Compliance with Statutes, etc...................................... 48
7.17 Investment Company Act............................................. 48
7.18 Public Utility Holding Company Act................................. 48
7.19 Environmental Matters.............................................. 48
7.20 Year 2000 Reprogramming............................................ 49
7.21 Labor Relations.................................................... 50
7.22 Patents, Licenses, Franchises and Formulas......................... 50
7.23 Indebtedness....................................................... 51
7.24 Restrictions on or Relating to Subsidiaries........................ 51
7.25 The Transaction.................................................... 51
7.26 Material Contracts................................................. 52
7.27 Valid Issuance of Borrower Common Stock............................ 52
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CREDIT AGREEMENT
Section 8. Affirmative Covenants........................................ 52
8.01 Information Covenants.............................................. 52
8.02 Books, Records and Inspections..................................... 56
8.03 Maintenance of Property, Insurance................................. 56
8.04 Corporate Franchises............................................... 57
8.05 Compliance with Statutes, etc...................................... 57
8.06 Compliance with Environmental Laws................................. 58
8.07 ERISA.............................................................. 59
8.08 End of Fiscal Year; Fiscal Quarters................................ 60
8.09 Performance of Obligations......................................... 60
8.10 Payment of Taxes................................................... 60
8.11 Interest Rate Protection........................................... 60
8.12 Use of Proceeds.................................................... 60
8.13 UCC Searches....................................................... 61
8.14 Intellectual Property Rights....................................... 61
8.15 Registry........................................................... 61
8.16 Further Actions.................................................... 62
8.17 Bank Deposit Account; Concentration Account........................ 63
8.18 Year 2000 Compliance............................................... 64
Section 9. Negative Covenants........................................... 64
9.01 Liens.............................................................. 64
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc............. 67
9.03 Dividends.......................................................... 69
9.04 Indebtedness....................................................... 70
9.05 Advances, Investments and Loans.................................... 71
9.06 Transactions with Affiliates....................................... 73
9.07 Capital Expenditures............................................... 73
9.08 Fixed Charge Coverage Ratio........................................ 74
9.09 Interest Coverage Ratio............................................ 75
9.10 Consolidated Indebtedness to Consolidated EBITDA................... 75
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CREDIT AGREEMENT
9.11 Minimum EBITDA..................................................... 76
9.12 Limitation on Voluntary Payments and Modification; Limitation on
Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc.............................................. 77
9.13 Limitation on Certain Restrictions on Subsidiaries................. 78
9.14 Limitation on Issuance of Capital Stock............................ 78
9.15 Business........................................................... 79
9.16 Limitation on Creation of Subsidiaries............................. 79
9.17 Concentration Account; Bank Deposit Accounts....................... 79
9.18 No Further Negative Pledges........................................ 79
9.19 Product Acquisition Expenditures................................... 79
Section 10. Events of Default........................................... 80
10.01 Payments........................................................... 80
10.02 Representations, etc............................................... 80
10.03 Covenants.......................................................... 80
10.04 Default Under Other Agreements..................................... 80
10.05 Bankruptcy, etc.................................................... 81
10.06 ERISA.............................................................. 81
10.07 Security Documents................................................. 82
10.08 Subsidiaries Guaranty.............................................. 82
10.09 Judgments.......................................................... 82
10.10 Change in Control.................................................. 83
10.11 Change in Management............................................... 83
Section 11. Definitions and Accounting Terms............................ 83
11.01 Defined Terms...................................................... 84
Section 12. The Agent................................................... 109
12.01 Appointment........................................................ 109
12.02 Nature of Duties................................................... 109
12.03 Lack of Reliance on the Agent...................................... 110
12.04 Certain Rights of the Agent........................................ 110
12.05 Reliance........................................................... 111
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12.06 Indemnification.................................................... 111
12.07 The Agent in Its Individual Capacity............................... 111
12.08 Holders............................................................ 112
12.09 Resignation by the Agent........................................... 112
Section 13. Miscellaneous............................................... 112
13.01 Payment of Expenses, etc........................................... 112
13.02 Right of Setoff.................................................... 113
13.03 Notices............................................................ 114
13.04 Benefit of Agreement............................................... 114
13.05 No Waiver; Remedies Cumulative..................................... 116
13.06 Payments Pro Rata.................................................. 116
13.07 Calculations; Computations......................................... 117
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL.............................................................. 117
13.09 Counterparts....................................................... 118
13.10 Effectiveness...................................................... 119
13.11 Headings Descriptive............................................... 119
13.12 Amendment or Waiver................................................ 119
13.13 Survival........................................................... 120
13.14 Domicile of Loans.................................................. 120
13.15 Post-Closing Obligations........................................... 121
SCHEDULE I COMMITMENTS
SCHEDULE II INSURANCE
SCHEDULE III PROJECTIONS
SCHEDULE IV ERISA
SCHEDULE V REAL PROPERTY
SCHEDULE VI CAPITALIZATION
SCHEDULE VII EXISTING INDEBTEDNESS
SCHEDULE VIII MATERIAL CONTRACTS
SCHEDULE IX EXISTING LIENS
SCHEDULE X LITIGATION
SCHEDULE XI SUBSIDIARIES
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CREDIT AGREEMENT
EXHIBIT A-1 NOTICE OF BORROWING
EXHIBIT A-2 NOTICE OF CONVERSION
EXHIBIT B-1 TERM NOTE
EXHIBIT B-2 REVOLVING NOTE
EXHIBIT B-3 SWINGLINE NOTE
EXHIBIT C LETTER OF CREDIT REQUEST
EXHIBIT D SECTION 4.04(b)(ii) CERTIFICATE
EXHIBIT E FORM OF OPINION OF WHITE & CASE
EXHIBIT F OFFICERS' CERTIFICATE OF CREDIT PARTIES
EXHIBIT G-1 FORM OF CREDIT PARTIES PLEDGE AGREEMENT
EXHIBIT G-2 FORM OF STOCKHOLDERS PLEDGE AGREEMENT
EXHIBIT H FORM OF SECURITY AGREEMENT
EXHIBIT I [RESERVED]
EXHIBIT J SUBSIDIARIES GUARANTY
EXHIBIT K SOLVENCY CERTIFICATE
EXHIBIT L CONSENT LETTER
EXHIBIT M BORROWING BASE CERTIFICATE
EXHIBIT N SUBORDINATED REDEMPTION NOTE
EXHIBIT O SUBORDINATION PROVISIONS
EXHIBIT P INTERCOMPANY NOTE
EXHIBIT Q BANK ASSIGNMENT AND ASSUMPTION AGREEMENT
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CREDIT AGREEMENT
CREDIT AGREEMENT, dated as of June 10, 1999, among THANE
INTERNATIONAL, INC., a corporation organized and existing under the laws of the
State of Delaware (the "BORROWER"), the financial institutions party hereto from
time to time (each a "BANK" and, collectively, the "BANKS"), and PARIBAS, as
agent (the "AGENT"). Unless otherwise defined herein, all capitalized terms used
herein and defined in Section 11 are used herein as therein defined.
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions herein set
forth, the Banks are willing to make available to the Borrower the respective
credit facilities provided for herein:
NOW, THEREFORE, IT IS AGREED:
SECTION 1. AMOUNT AND TERMS OF CREDIT.
1.01 THE COMMITMENTS. (a) Subject to and upon the terms and
conditions set forth herein, each Bank with a Term Loan Commitment severally
agrees to make, on the Initial Borrowing Date, a term loan (each a "TERM LOAN"
and, collectively, the "TERM LOANS") to the Borrower, which Term Loans (i) shall
be made and initially maintained as a single Borrowing of Base Rate Loans
(subject to the option to convert such Base Rate Loans pursuant to Section 1.06)
and (ii) shall not exceed for any Bank, in initial principal amount, that amount
which equals the Term Loan Commitment of such Bank on the Initial Borrowing Date
(before giving effect to any reductions thereto on such date pursuant to Section
3.03(b)). Once repaid, Term Loans incurred hereunder may not be reborrowed.
(b) Subject to and upon the terms and conditions set forth herein,
each Bank with a Revolving Loan Commitment severally agrees, at any time and
from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a loan or loans (each a "REVOLVING LOAN"
and, collectively, the "REVOLVING LOANS") to the Borrower, which Revolving Loans
(i) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar
Loans; provided that (x) except as otherwise specifically provided in Section
1.10(b), all Revolving Loans comprising the same Borrowing shall at all times be
of the same Type, and (y) prior to the Syndication Termination Date, no
Borrowings of Revolving Loans may be made or maintained as Eurodollar Loans,
(ii) may be repaid and reborrowed in accordance with the provisions hereof,
(iii) shall not exceed for any Bank at any time outstanding that aggregate
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CREDIT AGREEMENT
principal amount which, when added to the product of (x) such Bank's Percentage
and (y) the sum of the aggregate outstanding principal amount of Swingline Loans
and the aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans), equals the
Revolving Loan Commitment of such Bank at such time, and (iv) shall not exceed
for all Banks at any time that aggregate principal amount which, when added to
the sum of the aggregate amount of all Letter of Credit Outstandings and the
aggregate outstanding principal amount of Swingline Loans at such time, equals
the Borrowing Base at such time. On the Initial Borrowing Date, the Borrower may
not borrow more than $500,000 in the aggregate under the Revolving Loan
Facility.
(c) Subject to and upon the terms and conditions herein set forth,
the Swingline Bank agrees to make, at any time and from time to time after the
Initial Borrowing Date and prior to the Swingline Expiry Date, a loan or loans
to the Borrower (each a "SWINGLINE LOAN" and, collectively, the "SWINGLINE
LOANS"), which Swingline Loans (i) shall be made and maintained as Base Rate
Loans, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed in aggregate principal amount at any time
outstanding, when combined with (x) the aggregate principal amount of all
Revolving Loans then outstanding and (y) all Letter of Credit Outstandings at
such time (exclusive of Unpaid Drawings which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence of
Swingline Loans), an amount equal to the lesser of (A) the Total Revolving Loan
Commitment at such time (after giving effect to any reductions to the Total
Revolving Loan Commitment on such date) and (B) the Borrowing Base at such time,
and (iv) shall not exceed in aggregate principal amount at any time outstanding
the Maximum Swingline Amount. The Swingline Bank shall not be obligated to make
any Swingline Loans at a time when a Bank Default exists unless the Swingline
Bank has entered into arrangements satisfactory to it and the Borrower to
eliminate the Swingline Bank's risk with respect to the Defaulting Bank's or
Banks' participation in such Swingline Loans, including by cash collateralizing
such Defaulting Bank's or Banks' Percentage(s) of the outstanding Swingline
Loans. The Swingline Bank shall not make any Swingline Loan after receiving a
written notice from the Borrower or the Required Banks stating that a Default or
an Event of Default exists and is continuing until such time as the Swingline
Bank shall have received written notice of (i) rescission of all such notices
from the party or parties originally delivering such notices or (ii) the waiver
of such Default or Event of Default by the Required Banks.
(d) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that its outstanding Swingline Loans shall
be funded with a Borrowing of Revolving Loans; provided that such notice shall
be deemed to have been automatically given upon the occurrence of a Default or
an Event of Default
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CREDIT AGREEMENT
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10, in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "MANDATORY BORROWING")
shall be made on the immediately succeeding Business Day from all Banks with a
Revolving Loan Commitment (without giving effect to any terminations and/or
reductions thereto pursuant to the last paragraph of Section 10) pro rata on the
basis of their respective Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 10) and the proceeds thereof shall be applied directly to the Swingline
Bank to repay the Swingline Bank for such outstanding Swingline Loans. Each such
Bank hereby irrevocably agrees to make Revolving Loans upon one Business Day's
notice pursuant to each Mandatory Borrowing in the amount and in the manner
specified in the preceding sentence and on the date specified in writing by the
Swingline Bank notwithstanding (i) that the amount of the Mandatory Borrowing
may not comply with the minimum amount for Borrowings otherwise required
hereunder, (ii) whether any conditions specified in Section 6 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the
date of such Mandatory Borrowing, and (v) any reduction in the Total Revolving
Loan Commitment after any such Swingline Loans were made. In the event that any
Mandatory Borrowing cannot for any reason be made on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to the Borrower), then each
such Bank hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from the Borrower in respect of outstanding Swingline Loans on or after
such date and prior to such purchase) from the Swingline Bank (without recourse
or warranty) such participations in the outstanding Swingline Loans as shall be
necessary to cause such Banks to share in such Swingline Loans ratably based
upon their respective Percentages (determined before giving effect to any
termination of the Revolving Loan Commitments pursuant to the last paragraph of
Section 10); provided that (x) all interest payable on the Swingline Loans shall
be for the account of the Swingline Bank until the date as of which the
respective participations are required to be purchased and, to the extent
attributable to any purchased participation, shall be payable to the applicable
participant from and after such date, and (y) at the time any purchase of
participations pursuant to this sentence is actually made, each purchasing Bank
shall be required to pay the Swingline Bank interest on the principal amount of
the participation purchased by such Bank, for each day from and including the
day upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the rate otherwise
applicable to Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter.
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CREDIT AGREEMENT
1.02 MINIMUM AMOUNT OF EACH BORROWING. The aggregate principal
amount of each Borrowing under a Facility hereunder shall not be less than the
Minimum Borrowing Amount for such Facility and, if greater, shall be in integral
multiples of $100,000 in the case of all Loans. More than one Borrowing may
occur on the same date, but at no time shall there be outstanding more than five
Borrowings of Eurodollar Loans.
1.03 NOTICE OF BORROWING. (a) Whenever the Borrower desires to make
a Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Agent at its Notice Office, prior to 12:30 P.M.
(New York time), at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of each Borrowing of Base Rate Loans and
at least three Business Days' prior written notice (or telephonic notice
promptly confirmed in writing) of each Borrowing of Eurodollar Loans. Each such
notice (each a "NOTICE OF BORROWING"), except as otherwise expressly provided in
Section 1.10, shall be irrevocable and shall be given by the Borrower in the
form of Exhibit A-1, appropriately completed to specify (i) the aggregate
principal amount of the Loans to be made pursuant to such Borrowing, (ii) the
date of such Borrowing (which shall be a Business Day), (iii) whether the Loans
being made pursuant to such Borrowing shall constitute Term Loans or Revolving
Loans, and (iv) whether the Loans being made pursuant to such Borrowing are to
be initially maintained as Base Rate Loans or Eurodollar Loans and, if
Eurodollar Loans, the initial Interest Period to be applicable thereto. Any
notice received after 12:30 P.M. (New York time) shall be deemed to be received
on the next succeeding Business Day. The Agent shall promptly give each Bank
which is required to make Loans of the Tranche specified in the respective
Notice of Borrowing notice of such proposed Borrowing, of such Bank's
proportionate share thereof and of the other matters specified in the Notice of
Borrowing.
(b) (i) Whenever the Borrower desires to make a Borrowing of
Swingline Loans hereunder, it shall give the Swingline Bank, not later than
12:30 P.M. (New York time) on the date that the Swingline Loan is to be made,
written notice (or telephonic notice confirmed in writing) of each Swingline
Loan to be made hereunder. Each such notice shall be irrevocable and specify in
each case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of Swingline Loans to be made pursuant to such
Borrowing.
(ii) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice permitted to be given hereunder, the
Agent or the respective Issuing Bank (in the case of Letters of Credit) or the
Swingline Bank, as the case may be, may, prior to receipt of written
confirmation, act without liability upon the basis of telephonic notice believed
by the Agent or the respective Issuing Bank (in the case of Letters of Credit)
or the Swingline Bank, as the case may be, in good faith to
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CREDIT AGREEMENT
be from an Authorized Officer of the Borrower. In each such case, the Agent's or
such Issuing Bank's or the Swingline Bank's record of the terms of such
telephonic notice shall be conclusive absent manifest error.
(iii) Mandatory Borrowings shall be made upon the notice specified
in Section 1.01(d), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(d).
1.04 DISBURSEMENT OF FUNDS. No later than 12:00 Noon (New York time)
on the date specified in each Notice of Borrowing (or (x) in the case of
Swingline Loans, no later than the close of business on the date specified
pursuant to Section 1.03(b)(i), or (y) in the case of Mandatory Borrowings, not
later than 12:00 Noon (New York time) on the date specified in Section 1.01(d)),
each Bank with a Commitment of the respective Tranche will make available its
pro rata portion (determined in accordance with Section 1.07) of each such
Borrowing requested to be made on such date (or, in the case of Swingline Loans,
the Swingline Bank shall make available the full amount thereof). All such
amounts shall be made available in Dollars and in immediately available funds at
the Payment Office, and the Agent will make available to the Borrower at the
Payment Office the aggregate of the amounts so made available by the Banks.
Unless the Agent shall have been notified in writing by any Bank prior to the
date of Borrowing that such Bank does not intend to make available to the Agent
such Bank's portion of any Borrowing to be made on such date, the Agent may
assume that such Bank has made such amount available to the Agent on such date
of Borrowing and the Agent may, in reliance upon such assumption, make available
to the Borrower a corresponding amount. If such corresponding amount is not in
fact made available to the Agent by such Bank, the Agent shall be entitled to
recover such corresponding amount on demand from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Agent. The Agent shall also be entitled to
recover on demand from such Bank or the Borrower, as the case may be, interest
on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agent to the Borrower until the
date such corresponding amount is recovered by the Agent, at a rate per annum
equal to (i) if recovered from such Bank, the Federal Funds Rate, and (ii) if
recovered from the Borrower, the rate of interest applicable to the respective
Borrowing as determined pursuant to Section 1.08. Nothing in this Section 1.04
shall be deemed to relieve any Bank from its obligation to make Loans hereunder
or to prejudice any rights which the Borrower may have against any Bank as a
result of any failure by such Bank to make Loans hereunder.
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CREDIT AGREEMENT
1.05 NOTES. (a) The Borrower's obligation to pay the principal of,
and interest on, the Loans made by each Bank shall be evidenced (i) if Term
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1 with blanks appropriately completed in
conformity herewith (each a "TERM NOTE" and, collectively, the "TERM NOTES"),
(ii) if Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2 with blanks appropriately
completed in conformity herewith (each a "REVOLVING NOTE" and, collectively, the
"REVOLVING NOTES"), and (iii) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form of Exhibit B-3
with blanks appropriately completed in conformity herewith (the "SWINGLINE
NOTE").
(b) The Term Note issued to each Bank with a Term Loan Commitment
shall (i) be executed by the Borrower, (ii) be payable to the order of such Bank
or its registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Term Loan made by such Bank on the Initial
Borrowing Date and be payable in the principal amount of the Term Loan evidenced
thereby, (iv) mature on the Term Loan Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to voluntary repayment as provided in Section 4.01 and mandatory
repayment as provided in Section 4.02, and (vii) be entitled to the benefits of
this Agreement and the Subsidiaries Guaranty and be secured by the Security
Documents.
(c) The Revolving Note issued to each Bank with a Revolving Loan
Commitment shall (i) be executed by the Borrower, (ii) be payable to the order
of such Bank or its registered assigns and be dated the Initial Borrowing Date,
(iii) be in a stated principal amount equal to the Revolving Loan Commitment of
such Bank and be payable in the principal amount of the Revolving Loans
evidenced thereby from time to time, (iv) mature on the Revolving Loan Maturity
Date, (v) bear interest as provided in the appropriate clause of Section 1.08 in
respect of the Base Rate Loans and Eurodollar Loans, as the case may be,
evidenced thereby, (vi) be subject to voluntary repayment as provided in Section
4.01 and mandatory repayment as provided in Section 4.02, and (vii) be entitled
to the benefits of this Agreement and the Subsidiaries Guaranty and be secured
by the Security Documents.
(d) The Swingline Note issued to the Swingline Bank shall (i) be
executed by the Borrower, (ii) be payable to the order of the Swingline Bank or
its registered assigns and be dated the Initial Borrowing Date, (iii) be in a
stated principal amount equal to the Maximum Swingline Amount and be payable in
the principal amount of the outstanding Swingline Loans evidenced thereby from
time to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as
provided in the appropriate
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CREDIT AGREEMENT
clause of Section 1.08 in respect of the Base Rate Loans evidenced thereby, (vi)
be subject to voluntary repayment as provided in Section 4.01 and mandatory
repayment as provided in Section 4.02, and (vii) be entitled to the benefits of
this Agreement and the Subsidiaries Guaranty and be secured by the Security
Documents.
(e) Each Bank will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will, prior to any
transfer of any of its Notes, endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation or the making of an incorrect notation shall not affect the
Borrower's obligations in respect of such Loans.
1.06 CONVERSIONS. The Borrower shall have the option to convert, on
any Business Day, all or a portion at least equal to the applicable Minimum
Borrowing Amount for such Tranche of the outstanding principal amount of the
Loans (other than Swingline Loans, which may not be converted pursuant to
Section 1.06) made pursuant to one or more Borrowings (so long as of the same
Tranche) of one Type of Loan into a Borrowing or Borrowings (of the same
Tranche) of the other Type of Loan; provided that:
(i) except as otherwise provided in Section 1.10(b) or if the
Borrower pays all amounts owing in connection therewith pursuant to
Section 1.11, Eurodollar Loans may be converted into Base Rate Loans only
on the last day of an Interest Period applicable to the Loans being
converted and no partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a
single Borrowing to less than the applicable Minimum Borrowing Amount for
the Tranche applicable thereto;
(ii) Base Rate Loans may only be converted into Eurodollar Loans if
no Default or Event of Default is in existence on the date of the
conversion;
(iii) no conversion pursuant to this Section 1.06 shall result in a
greater number of Borrowings than is permitted under Section 1.02; and
(iv) no conversions of Base Rate Loans into Eurodollar Loans may be
made prior to the Syndication Termination Date.
Each such conversion shall be effected by the Borrower by giving the Agent at
its Notice Office, prior to 12:30 P.M. (New York time), at least three Business
Days' (or one Business Day in the case of a conversion into Base Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing) (each
a "NOTICE OF CONVERSION"), which notice shall be in the form of Exhibit A-2,
appropriately completed to specify the
7
CREDIT AGREEMENT
Loans to be so converted, the Borrowing(s) pursuant to which such Loans were
made and, if to be converted into Eurodollar Loans, the Interest Period to be
initially applicable thereto.
1.07 PRO RATA BORROWINGS. All Borrowings of Loans (other than
Swingline Loans) under this Agreement shall be incurred from the Banks pro rata
on the basis of their respective Term Loan Commitments or Revolving Loan
Commitments, as the case may be. It is understood that no Bank shall be
responsible for any default by any other Bank of its obligation to make Loans
hereunder and that each Bank shall be obligated to make the Loans provided to be
made by it hereunder regardless of the failure of any other Bank to make its
Loans hereunder.
1.08 INTEREST. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan made to it, from the date of
the Borrowing thereof until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of
such Base Rate Loan to a Eurodollar Loan pursuant to Section 1.06, at a rate per
annum which shall at all times be equal to the sum of the Applicable Margin plus
the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan made to it, from the date of the
Borrowing thereof until the earlier of (i) the maturity (whether by acceleration
or otherwise) of such Eurodollar Loan and (ii) the conversion of such Eurodollar
Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or 1.10(b), as
applicable, at a rate per annum which shall, during each Interest Period
applicable thereto, be equal to the sum of the Applicable Margin plus the Quoted
Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to the greater of
(x) the rate which is 2% per annum in excess of the rate otherwise applicable to
Base Rate Loans of the respective Tranche of Loans from time to time and (y) the
rate which is 2% in excess of the rate borne by such Loans. Interest which
accrues under this Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable (i)
in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on (x) the date of any
prepayment or repayment thereof (on the amount prepaid or repaid), (y) the date
of any conversion thereof into a Base Rate Loan pursuant to Section 1.06, 1.09
or 1.10(b), as applicable (on the amount converted), and (z) on the last day of
each Interest Period applicable thereto and, in the
8
CREDIT AGREEMENT
case of an Interest Period in excess of three months, on each date occurring at
three month intervals after the first day of such Interest Period, and (iii) in
respect of each Loan, at maturity (whether by acceleration or otherwise) and,
after such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall determine
the Quoted Rate for the Interest Period applicable to Eurodollar Loans and shall
promptly notify the Borrower and the Banks thereof. Each such determination
shall, absent manifest error, be final and conclusive and binding on all parties
hereto.
(f) All computations of interest hereunder shall be made in
accordance with Section 13.07(b).
1.09 INTEREST PERIODS. At the time it gives any Notice of Borrowing
or Notice of Conversion in respect of the making of, or conversion into, a
Eurodollar Loan (in the case of the initial Interest Period applicable thereto),
or prior to 12:30 p.m. (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to a Eurodollar Loan (in the case of
any subsequent Interest Period), the Borrower shall have the right to elect, by
giving the Agent notice thereof, the interest period (each an "INTEREST PERIOD")
applicable to such Eurodollar Loan, which Interest Period shall, at the option
of the Borrower, be a one, three or six month period; provided, however, that:
(i) all Eurodollar Loans comprising a single Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Loan (including the date of any
conversion thereto from a Borrowing of Base Rate Loans) and each Interest
Period occurring thereafter in respect of such Loan shall commence on the
day on which the next preceding Interest Period applicable thereto
expires;
(iii) if any Interest Period relating to a Eurodollar Loan begins on
a day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end
on the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period
for a Eurodollar Loan would otherwise expire on a day which is not a
Business Day but is a day
9
CREDIT AGREEMENT
of the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period for a Borrowing under a Tranche shall be
selected which extends beyond the respective Maturity Date of such
Tranche;
(vi) no Interest Period may be selected at any time when any Default
or Event of Default is then in existence;
(vii) no Interest Period in respect of any Borrowing of Term Loans
shall be selected which extends beyond any date upon which a Scheduled
Term Loan Repayment will be required to be made under Section 4.02(A)(c)
if, after giving effect to the selection of such Interest Period, the
aggregate principal amount of Term Loans maintained as Eurodollar Loans
which have Interest Periods expiring after such date will be in excess of
the aggregate principal amount of Term Loans then outstanding less the
aggregate amount of such Scheduled Term Loan Repayment;
(viii) no Interest Period may be selected at any time prior to the
Syndication Termination Date; and
(ix) no Interest Period in respect of any Borrowing of Revolving
Loans shall be selected which extends beyond the Revolving Loan Maturity
Date.
If, upon the expiration of any Interest Period applicable to a Borrowing of
Eurodollar Loans, the Borrower has failed to elect a new Interest Period to be
applicable to such Eurodollar Loans as provided above or a Default or Event of
Default then exists, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
1.10 INCREASED COSTS, ILLEGALITY, ETC. (a) In the event that any
Bank shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the interbank
Eurodollar market, adequate and fair means do not exist for ascertaining
the applicable interest rate on the basis provided for in the definition
of Quoted Rate; or
10
CREDIT AGREEMENT
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payments to any Bank of the principal of or interest on the
Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits
of such Bank imposed by the jurisdiction in which its principal office or
applicable lending office is located) or (B) a change in official reserve
requirements (but, in all events, excluding reserves required under
Regulation D to the extent included in the computation of the Quoted Rate)
and/or (y) other circumstances since the date of this Agreement affecting
such Bank or the interbank Eurodollar market or the position of such Bank
in such market; or
(iii) at any time since the date of the Agreement, that the making
or continuance of any Eurodollar Loan has been made (x) unlawful by
compliance by such Bank in good faith with any law or governmental rule,
regulation or order, (y) impossible by compliance by any Bank in good
faith with any governmental request (whether or not having the force of
law), or (z) impracticable as a result of a contingency occurring after
the date of this Agreement which materially and adversely affects the
interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (if by telephone, promptly confirmed in
writing) to the Borrower, and, except in the case of clause (i) above, to the
Agent of such determination (which notice the Agent shall promptly transmit to
each of the other Banks). Thereafter (x) in the case of clause (i) above,
Eurodollar Loans shall no longer be available until such time as the Agent
notifies the Borrower and the Banks that the circumstances giving rise to such
notice by the Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Bank, promptly upon written demand therefor (accompanied by the written
notice referred to below), such additional amounts (in the form of an increased
rate of, or a different method of calculating, interest or otherwise as such
Bank in its sole discretion shall determine) as shall be required to compensate
such Bank for such increased costs or reductions in amounts received or
receivable hereunder (a written notice as to the
11
CREDIT AGREEMENT
additional amounts owed to such Bank, showing in reasonable detail the basis for
the calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto),
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (i) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Agent telephonic
notice (confirmed in writing) on the same date that such Borrower was notified
by the affected Bank or the Agent pursuant to Section 1.10(a)(ii) or (iii),
cancel the respective Borrowing or conversion, or (ii) if the affected
Eurodollar Loan is then outstanding, upon at least three Business Days' written
notice to the Agent, require the affected Bank to convert such Eurodollar Loan
into a Base Rate Loan; provided that if more than one Bank is affected at any
time, then all affected Banks must be treated the same pursuant to this Section
1.10(b).
(c) If any Bank shall have determined that, after the date hereof,
the adoption or effectiveness of any applicable law, rule or regulation
regarding capital adequacy, or any change therein, or any change in the
interpretation or administration thereof by the National Association of
Insurance Commissioners ("NAIC") or any governmental authority, central bank or
comparable agency charged with the interpretation or administration thereof, or
compliance by such Bank or any corporation controlling such Bank with any
request or directive regarding capital adequacy (whether or not having the force
of law) of the NAIC or any such authority, central bank or comparable agency,
has or would have the effect of reducing the rate of return on such Bank's or
such other corporation's capital or assets as a consequence of such Bank's
Commitment or Commitments hereunder or its obligations hereunder to a level
below that which such Bank or such other corporation could have achieved but for
such adoption, effectiveness, change or compliance (taking into consideration
such Bank's or such other corporation's policies with respect to capital
adequacy), then from time to time, upon written demand by such Bank (with a copy
to the Agent), accompanied by the notice referred to in the last sentence of
this clause (c), the Borrower shall pay to such Bank such additional amount or
amounts as will compensate such Bank or such other corporation for such
reduction. In determining such additional amounts, each Bank will act reasonably
and in good faith and will use reasonable averaging and attribution methods.
Each Bank, upon determining that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the Borrower
(a copy of which shall be sent by such Bank to the Agent), which notice shall
set forth the basis of the calculation of such additional amounts, although the
failure to
12
CREDIT AGREEMENT
give any such notice shall not release or diminish the Borrower's obligations to
pay additional amounts pursuant to this Section 1.10(c) upon the subsequent
receipt of such notice.
1.11 COMPENSATION. The Borrower shall compensate each Bank, promptly
upon its written request (which request shall set forth in reasonable detail the
basis for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans) which such Bank may sustain:
(i) if for any reason (other than a default by such Bank or the Agent) a
Borrowing of, or conversion from or into, Eurodollar Loans does not occur on a
date specified therefor in a Notice of Borrowing or Notice of Conversion
(whether or not withdrawn by such Borrower or deemed withdrawn pursuant to
Section 1.10(a)); (ii) if any repayment (including any repayment made pursuant
to Section 4.02 or as a result of an acceleration of the Loans pursuant to
Section 10 or as a result of the replacement of a Bank pursuant to Section 1.12
or 13.12(b)) or conversion of any of its Eurodollar Loans occurs on a date which
is not the last day of an Interest Period with respect thereto; (iii) if any
prepayment of any of its Eurodollar Loans is not made on any date specified in a
notice of prepayment given by such Borrower; or (iv) as a consequence of (x) any
other default by such Borrower to repay its Loans when required by the terms of
this Agreement or any Note held by such Bank or (y) any election made pursuant
to Section 1.10(b). It is further understood and agreed that, if any repayment
of Eurodollar Loans pursuant to Section 4.01 or any conversion of Eurodollar
Loans pursuant to Section 1.06, in any such case occurs on a date which is not
the last day of an Interest Period, such repayment or conversion shall be
accompanied by any amounts owing to any Bank pursuant to this Section 1.11 and,
on the date of such assignment, the Borrower shall pay to the assigning Banks
any amounts owing to such Banks pursuant to this Section 1.11. A Bank's basis
for requesting compensation pursuant to this Section, and a Bank's calculations
of the amount thereof, shall, absent manifest error, be final and conclusive and
binding on all the parties hereto.
1.12 REPLACEMENT OF BANKS. (x) if any Bank becomes a Defaulting Bank
or otherwise defaults in its obligations to make Loans or fund Unpaid Drawings,
(y) upon the occurrence of any event giving rise to the operation of Section
1.10(a)(ii) or (iii), 1.10(c), 2.06 or 4.04 with respect to any Bank (other than
the Agent) which results in any Bank charging to the Borrower materially
increased costs in excess of those being generally charged by the other Banks,
or (z) if any Bank (other than the Agent) refuses to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as provided in Section 13.12(b),
then the Borrower shall have the right, if no Default or Event of Default then
exists, to replace such Bank (other than the Agent
13
CREDIT AGREEMENT
except in the case of clause (x), in which case the Agent may be replaced) (the
"REPLACED BANK") with any other Bank or with one or more Eligible Transferee or
Transferees, none of whom shall constitute a Defaulting Bank or shall be in
default in its obligations to make Loans or fund Unpaid Drawings at the time of
such replacement (collectively, the "REPLACEMENT BANKS") reasonably acceptable
to the Agent, the Swingline Bank and each Issuing Bank with outstanding Letters
of Credit (unless the respective Replacement Bank is not acquiring any Revolving
Loan Commitment); provided that:
(i) at the time of any replacement pursuant to this Section 1.12,
the Replacement Bank shall enter into one or more assignment agreements
pursuant to Section 13.04(b) (with all fees payable pursuant to said
Section 13.04(b) to be paid by the Replacement Bank) pursuant to which the
Replacement Bank shall acquire all of the Commitments and outstanding
Loans of, and participations in Letters of Credit by, the Replaced Bank
and, in connection therewith, shall pay to (x) the Replaced Bank in
respect thereof an amount equal to the sum of (A) an amount equal to the
principal of, and all accrued interest on, all outstanding Loans of the
Replaced Bank, (B) an amount equal to such Replaced Bank's Percentage of
all Unpaid Drawings that have been funded by (and not reimbursed to) such
Replaced Bank, together with all then unpaid interest with respect thereto
at such time, and (C) an amount equal to all accrued, but theretofore
unpaid, Fees owing to the Replaced Bank pursuant to Section 3.01 hereof,
(y) the Issuing Bank or Banks an amount equal to such Replaced Bank's
Percentage of any Unpaid Drawing (which at such time remains an Unpaid
Drawing) to the extent such amount was not theretofore funded by such
Replaced Bank, and (z) the Swingline Bank an amount equal to such Bank's
Percentage of any Mandatory Borrowing to the extent such amount was not
therefore funded by such Replaced Bank; and
(ii) all obligations of the Borrower owing to the Replaced Bank in
respect of the Commitments and Loans of such Replaced Bank that are being
replaced (other than those specifically described in clause (i) above in
respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full by the Borrower to such
Replaced Bank concurrently with such replacement.
Upon the execution of the respective assignment documentation, the payment of
amounts referred to in clauses (i) and (ii) above, recordation of the assignment
on the Register by the Agent pursuant to Section 8.15, and delivery to the
Replacement Bank of the appropriate Notes executed by the Borrower, the
Replacement Bank shall become a Bank hereunder and the Replaced Bank shall cease
to constitute a Bank hereunder with respect to the Commitments and Loans so
transferred (except with respect to
14
CREDIT AGREEMENT
indemnification provisions under this Agreement, which shall survive as to such
Replaced Bank), and the Percentages of the Banks shall be automatically adjusted
at such time to the extent necessary to give effect to such replacement.
1.13 CHANGE OF LENDING OFFICE. Each Bank agrees that, upon the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), 1.10(c), 2.06 or 4.04 with respect to such Bank, it will, if requested by
the Borrower, use reasonable efforts (subject to overall policy considerations
of such Bank) to designate another lending office for any Loans or Letters of
Credit affected by such event; provided, that such designation is made on such
terms that, in the sole judgment of such Bank, such Bank and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequences of the event giving rise to the operation of any such
Section. Nothing in this Section 1.13 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Section 1.10,
2.06 or 4.04.
SECTION 2. LETTERS OF CREDIT.
2.01 LETTERS OF CREDIT. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request any Issuing Bank, at any
time and from time to time after the Initial Borrowing Date and prior to the
tenth Business Day (or the 30th day in the case of trade Letters of Credit)
immediately preceding the Revolving Loan Maturity Date, to issue, for the
account of the Borrower and for the benefit of any holder (or any trustee, agent
or other similar representative for any such holders) and in support of (x)
trade obligations of the Borrower or any of its Subsidiaries that arise in the
ordinary course of business and are in respect of general corporate purposes of
the Borrower or such Subsidiary, as the case may be, an irrevocable trade letter
of credit in a form customarily used by such Issuing Bank or in such other form
as has been approved by such Issuing Bank in support of said trade obligations,
and/or (y) on a standby basis, L/C Supportable Indebtedness of the Borrower or
any of its Subsidiaries to any other Person, an irrevocable standby letter of
credit in a form customarily used by such Issuing Bank or in such other form as
has been approved by such Issuing Bank in support of said L/C Supportable
Indebtedness (each such letter of credit referred to in clause (x) or (y) being
a "LETTER OF CREDIT" and, collectively, the "LETTERS OF CREDIT"). All Letters of
Credit shall be denominated in Dollars.
(b) Each Issuing Bank (other than Paribas) may agree in its sole
discretion, and Paribas hereby agrees that it will (subject to the terms and
conditions contained herein), at any time and from time to time after the
Initial Borrowing Date and prior to the tenth Business Day (or the 30th day in
the case of trade Letters of Credit) immediately preceding the Revolving Loan
Maturity Date, following its receipt
15
CREDIT AGREEMENT
of the respective Letter of Credit Request, issue for the account of the
Borrower one or more Letters of Credit in support of such obligations as are
permitted to remain outstanding without giving rise to a Default or Event of
Default hereunder; provided that the respective Issuing Bank shall be under no
obligation to issue any Letter of Credit if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain such Issuing
Bank from issuing such Letter of Credit, or any requirement of law
applicable to such Issuing Bank or any request or directive (whether or
not having the force of law) from any governmental authority with
jurisdiction over such Issuing Bank shall prohibit, or request that such
Issuing Bank refrain from, the issuance of letters of credit generally or
such Letter of Credit in particular or shall impose upon such Issuing Bank
with respect to such Letter of Credit any restriction or reserve or
capital requirement (for which such Issuing Bank is not otherwise
compensated) not in effect on the date hereof, or any unreimbursed loss,
cost or expense which was not applicable, in effect or known to such
Issuing Bank as of the date hereof and which such Issuing Bank in good
xxxxx xxxxx material to it;
(ii) such Issuing Bank shall have received a notice of the type
described in the second sentence of Section 2.03(b) from any Bank prior to
the issuance of such Letter of Credit; or
(iii) a Bank Default exists, unless such Issuing Bank has entered
into arrangements satisfactory to it and the Borrower to eliminate such
Issuing Bank's risk with respect to the Bank which is the subject of such
Bank Default, including by cash collateralizing such Bank's Percentage of
the Letter of Credit Outstandings.
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, (x)
would exceed $1,000,000 or (y) when added to the aggregate principal amount of
all Revolving Loans and Swingline Loans then outstanding, would exceed the
lesser of (A) the Total Revolving Loan Commitment then in effect (after giving
effect to any reductions to the Total Revolving Loan Commitment on such date) or
(B) the Borrowing Base at such time, (ii) each standby Letter of Credit shall by
its terms terminate on or before the earlier of (x) the date which occurs 12
months after the date of the issuance thereof (although any such Letter of
Credit may be renewable for successive periods of up to 12 months, but not
beyond the tenth Business Day immediately preceding the Revolving Loan Maturity
Date, on terms acceptable to the Issuing Bank) and (y) the tenth Business Day
16
CREDIT AGREEMENT
immediately preceding the Revolving Loan Maturity Date, and (iii) each trade
Letter of Credit shall have an expiry date occurring not later than 180 days
after such trade Letter of Credit's date of issuance and shall have an expiry
date occurring no later than 30 days prior to the Revolving Loan Maturity Date.
2.02 MINIMUM STATED AMOUNT. The Stated Amount of each Letter of
Credit shall be not less than $25,000 or such lesser amount as is acceptable to
the Issuing Bank.
2.03 LETTER OF CREDIT REQUESTS. (a) Whenever the Borrower desires
that a Letter of Credit be issued for its account, the Borrower shall give the
Agent and the respective Issuing Bank at least three Business Days' (or such
shorter period as is acceptable to the respective Issuing Bank in any given
case) written notice prior to the proposed date of issuance (which shall be a
Business Day). Each notice shall be in the form of Exhibit C (each a "LETTER OF
CREDIT REQUEST").
(b) The making of each Letter of Credit Request shall be deemed to
be a representation and warranty by the Borrower that such Letter of Credit may
be issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless the Issuing Bank has received notice from any Bank before it
issues a Letter of Credit that one or more of the conditions specified in
Section 6 are not then satisfied, or that the issuance of such Letter of Credit
would violate Section 2.01(c), then such Issuing Bank may issue the requested
Letter of Credit for the account of the Borrower in accordance with the Issuing
Bank's usual and customary practices.
2.04 LETTER OF CREDIT PARTICIPATIONS. (a) Immediately upon the
issuance by the respective Issuing Bank of any Letter of Credit, such Issuing
Bank shall be deemed to have sold and transferred to each Bank with a Revolving
Loan Commitment, other than such Issuing Bank (each such Bank, in its capacity
under this Section 2.04, a "PARTICIPANT"), and each such Participant shall be
deemed irrevocably and unconditionally to have purchased and received from such
Issuing Bank, without recourse or warranty, an undivided interest and
participation, to the extent of such Participant's Percentage, in such Letter of
Credit, each substitute letter of credit, each drawing made thereunder and the
obligations of the Borrower under this Agreement with respect thereto, and any
security therefor or guaranty pertaining thereto. Upon any change in the
Revolving Loan Commitments of the Banks pursuant to Section 13.04, it is hereby
agreed that, with respect to all outstanding Letters of Credit and Unpaid
Drawings, there shall be an automatic adjustment to the participations pursuant
to this Section 2.04 to reflect the new Percentages of the assignor and assignee
Bank or of all Banks with Revolving Loan Commitments, as the case may be.
17
CREDIT AGREEMENT
(b) In determining whether to pay under any Letter of Credit, the
Issuing Bank shall not have any obligation relative to the respective
Participants other than to confirm that any documents required to be delivered
under such Letter of Credit appear to have been delivered and that they appear
to comply on their face with the requirements of such Letter of Credit. Any
action taken or omitted to be taken by any Issuing Bank under or in connection
with any Letter of Credit, if taken or omitted in the absence of gross
negligence or willful misconduct, shall not create for such Issuing Bank any
resulting liability to the Borrower, any Bank, any Participant or any other
Person.
(c) In the event that any Issuing Bank makes any payment under any
Letter of Credit and the Borrower shall not have reimbursed such amount in full
to the Issuing Bank pursuant to Section 2.05(a), such Issuing Bank shall
promptly notify the Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Agent for the account of such Issuing Bank the amount of such Participant's
Percentage of such unreimbursed payment in Dollars and in same day funds. If the
Agent so notifies, prior to 11:00 A.M. (New York time) on any Business Day, any
Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to the Agent at the Payment Office for the
account of such Issuing Bank such Participant's Percentage of the amount of such
payment on such Business Day in Dollars and in same day funds. If and to the
extent such Participant shall not have so made its Percentage of the amount of
such payment available to the Agent for the account of such Issuing Bank, such
Participant agrees to pay such amount to the Agent for the account of such
Issuing Bank, forthwith on demand, together with interest thereon at the Federal
Funds Rate for each day from such date until the date such amount is paid to the
Agent for the account of such Issuing Bank. The failure of any Participant to
make available to the Agent for the account of such Issuing Bank its Percentage
of any payment under any Letter of Credit shall not relieve any other
Participant of its obligation hereunder to make available to the Agent for the
account of such Issuing Bank its Percentage of any payment under any Letter of
Credit on the date required, as specified above, but no Participant shall be
responsible for the failure of any other Participant to make available to the
Agent for the account of such Issuing Bank such other Participant's Percentage
of any such payment.
(d) Whenever any Issuing Bank receives a payment of a reimbursement
obligation as to which the Agent has received for the account of such Issuing
Bank any payments from the Participants pursuant to clause (c) above, such
Issuing Bank shall pay to the Agent, and the Agent shall promptly pay each
Participant which has paid its Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based on the proportionate
aggregate amount funded by such Participant to the aggregate amount funded by
all Participants) of the principal amount
18
CREDIT AGREEMENT
of such reimbursement obligation and interest thereon accruing after the
purchase of the respective participations.
(e) The obligations of the Participants to make payments to the
Agent for the account of each Issuing Bank with respect to Letters of Credit
issued shall be irrevocable and not subject to any qualification or exception
whatsoever and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances, including, without limitation, any of the
following circumstances:
(i) any lack of validity or enforceability of this Agreement or any
of the Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in a
Letter of Credit, any transferee of any Letter of Credit (or any Person
for whom any such transferee may be acting), the Agent, any Participant,
or any other Person, whether in connection with this Agreement, any Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between the Borrower
and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented under
any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 AGREEMENT TO REPAY LETTER OF CREDIT DRAWINGS. (a) The Borrower
hereby agrees to reimburse the respective Issuing Bank, by making payment to the
Agent in immediately available funds at the Payment Office (or by making the
payment directly to such Issuing Bank at such location as may otherwise have
been agreed upon by the Borrower and such Issuing Bank), for any payment or
disbursement made by such Issuing Bank under any Letter of Credit (each such
amount so paid or disbursed by such Issuing Bank, until reimbursed, an "UNPAID
DRAWING"), immediately after, and in any event on the date of, such payment or
disbursement, with interest on the amount so paid or disbursed by such Issuing
Bank, to the extent not reimbursed prior to 12:00 Noon (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date such Issuing Bank is reimbursed by the
Borrower therefor at a rate per annum which
19
CREDIT AGREEMENT
shall be the Base Rate in effect from time to time plus 4.25%, in each case with
such interest to be payable on demand.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the respective Issuing Bank with respect to Unpaid Drawings
(including, in each case, interest thereon) shall be absolute and unconditional
under any and all circumstances (including without limitation the circumstances
described in Section 2.04(e)) and irrespective of any setoff, counterclaim or
defense to payment which the Borrower may have or have had against any Bank
(including in its capacity as Issuing Bank or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "DRAWING") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse any Issuing Bank for any wrongful payment made by such
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of such Issuing
Bank.
2.06 INCREASED COSTS. If at any time after the date hereof any
Issuing Bank or any Participant determines that the introduction of or any
change in any applicable law, rule, regulation, order, guideline or request or
in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by such
Issuing Bank or any Participant, or any corporation controlling such Person,
with any request or directive by any such authority (whether or not having the
force of law), shall either (i) impose, modify or make applicable any reserve,
deposit, capital adequacy or similar requirement against letters of credit
issued by such Issuing Bank or participated in by any Participant, or (ii)
impose on such Issuing Bank or any Participant, or any corporation controlling
such Person, any other conditions relating, directly or indirectly, to this
Agreement or any Letter of Credit; and the result of any of the foregoing is to
increase the cost to such Issuing Bank or any Participant of issuing,
maintaining or participating in any Letter of Credit, or reduce the amount of
any sum received or receivable by such Issuing Bank or any Participant hereunder
or reduce the rate of return on its capital with respect to Letters of Credit,
then, promptly upon written demand to the Borrower by such Issuing Bank or any
Participant (a copy of which demand shall be sent by such Issuing Bank or such
Participant to the Agent), the Borrower shall pay to such Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. Such Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this Section
2.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by such Issuing Bank or
such Participant (a copy of which certificate shall be sent by such Issuing Bank
or such Participant to the Agent), setting forth in reasonable
20
CREDIT AGREEMENT
detail the basis for the calculation of such additional amount or amounts
necessary to compensate such Issuing Bank or such Participant, although failure
to give any such notice shall not release or diminish the Borrower's obligations
to pay additional amounts pursuant to this Section 2.06. The certificate
required to be delivered pursuant to this Section 2.06 shall, absent manifest
error, be final, conclusive and binding on the Borrower.
SECTION 3. FEES; REDUCTIONS OF COMMITMENT.
3.01 FEES. (a) The Borrower agrees to pay to the Agent, for
distribution to each Bank with a Revolving Loan Commitment, a commitment
commission (the "REVOLVING LOAN COMMITMENT COMMISSION") for the period from and
including the Initial Borrowing Date to and excluding the Revolving Loan
Maturity Date (or such earlier date as the Total Revolving Loan Commitment shall
have been terminated) computed at a rate for each day equal to 1/2 of 1% per
annum on the daily Unutilized Revolving Loan Commitment of such Bank. Accrued
Revolving Loan Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Revolving Loan Maturity Date
or such earlier date upon which the Total Revolving Loan Commitment is
terminated.
(b) The Borrower agrees to pay to each Issuing Bank, for its own
account, a facing fee in respect of each Letter of Credit issued by such Issuing
Bank hereunder (the "FACING FEE"), for the period from and including the date of
issuance of such Letter of Credit to and including the date of termination of
such Letter of Credit, equal to 1/4 of 1% per annum of the daily Stated Amount
of such Letter of Credit; provided that in no event shall the annual Facing Fee
with respect to each Letter of Credit be less than $750. Accrued Facing Fees
shall be due and payable in arrears to the Issuing Bank in respect of each
Letter of Credit issued by it on each Quarterly Payment Date and on the first
date after the termination of the Total Revolving Loan Commitment on which no
Letters of Credit remain outstanding.
(c) The Borrower agrees to pay to the Agent, for distribution to
each Bank with a Revolving Loan Commitment, a fee in respect of each Letter of
Credit issued hereunder (the "LETTER OF CREDIT FEE"), for the period from and
including the date of issuance of such Letter of Credit to and including the
date of termination of such Letter of Credit, computed at a rate per annum equal
to the Applicable Margin for Revolving Loans which are maintained as Eurodollar
Loans multiplied by the daily Stated Amount of such Letter of Credit. Letter of
Credit Fees shall be distributed by the Agent to the Banks on the basis of the
respective Percentages as in effect from time to time. Accrued Letter of Credit
Fees shall be due and payable quarterly in arrears on each Quarterly Payment
Date and on the first date after the termination of the Total Revolving Loan
Commitment on which no Letters of Credit remain outstanding.
21
CREDIT AGREEMENT
(d) The Borrower hereby agrees to pay in immediately available funds
directly to each Issuing Bank, upon each issuance of, drawing under, and/or
amendment of a Letter of Credit issued by such Issuing Bank, such amount as
shall at the time of such issuance, drawing or amendment be the administrative
charge which such Issuing Bank is customarily charging for issuances of,
drawings under (including wire charges) or amendments of letters of credit
issued by it or such alternative amounts as may have been agreed upon in writing
by the Borrower and such Issuing Bank.
(e) The Borrower shall pay to the Agent when and as due, for its own
account, such fees as may be agreed to in writing from time to time between the
Borrower and the Agent.
(f) All computations of Fees shall be made in accordance with
Section 13.07(b).
3.02 VOLUNTARY TERMINATION OF UNUTILIZED COMMITMENTS. Upon at least
two Business Days' prior written notice (or telephonic notice promptly confirmed
in writing) to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), the Borrower shall have the right,
without premium or penalty, to terminate the Total Unutilized Revolving Loan
Commitment, in whole or in part; provided that (i) each such reduction shall
apply proportionately to reduce the Revolving Loan Commitment of each Bank with
such a Commitment and (ii) any partial reduction pursuant to this Section 3.02
shall be in integral multiples of at least $250,000.
3.03 MANDATORY REDUCTION OF COMMITMENTS. (a) The Total Commitment
(and the Term Loan Commitment and the Revolving Loan Commitment of each Bank
with such a Commitment) shall terminate on June 30, 1999 unless the Initial
Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank with such a Commitment) shall terminate in its entirety
on the Initial Borrowing Date (after giving effect to the making of the Term
Loans on such date).
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate on the Revolving Loan
Maturity Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan
22
CREDIT AGREEMENT
Commitment of each Bank with such a Commitment) shall be reduced at the time any
payment is required to be made on the principal amount of Revolving Loans (or
would be required to be made if Revolving Loans were then outstanding) pursuant
to Section 4.02(B)(a) by an amount equal to the maximum amount of Revolving
Loans that would be required to be repaid pursuant to Section 4.02(B)(a)
assuming that Revolving Loans were outstanding in an aggregate principal amount
equal to the Total Revolving Loan Commitment.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, upon each prepayment of Revolving Loans or
Swingline Loans that is made pursuant to Section 4.01(a) at a time when all
outstanding Term Loans have been repaid in full, the Total Revolving Loan
Commitment (and the Revolving Loan Commitment of each Bank with such a
Commitment) shall be reduced by the amount of such excess.
(f) Each reduction to the Total Term Loan Commitment and the Total
Revolving Loan Commitment pursuant to this Section 3.03 shall be applied
proportionately to reduce the Term Loan Commitment or the Revolving Loan
Commitment, as the case may be, of each Bank with such a Commitment.
SECTION 4. PREPAYMENTS; PAYMENTS; TAXES.
4.01 VOLUNTARY PREPAYMENTS. (a) The Borrower shall have the right to
prepay Loans, without premium or penalty, in whole or in part from time to time
on the following terms and conditions:
(i) the Borrower shall give the Agent prior to 11:00 A.M. (New York
time) at its Notice Office at least three Business Days' prior written
notice in the case of Eurodollar Loans and one Business Day's prior
written notice in the case of Base Rate Loans (and on the date of such
prepayment in the case of Swingline Loans) of its intent to prepay the
Loans, whether Term Loans, Revolving Loans or Swingline Loans shall be
prepaid, the amount of such prepayment and the Types of Loans to be
prepaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, which notice the Agent shall promptly
transmit to each of the Banks;
(ii) each prepayment shall be in an aggregate principal amount of at
least the applicable Minimum Borrowing Amount and, if greater, in integral
multiples of $250,000, in the case of Term Loans, and in integral
multiples of $100,000, in the case of Revolving Loans; provided that no
partial prepayment of Eurodollar Loans made pursuant to any Borrowing
shall reduce the
23
CREDIT AGREEMENT
outstanding Loans made pursuant to such Borrowing to an amount less than
the Minimum Borrowing Amount;
(iii) no prepayments of Eurodollar Loans made pursuant to this
Section 4.01 may be made on a day other than the last day of an Interest
Period applicable thereto unless the Borrower pays all costs owing
pursuant to Section 1.11; and
(iv) each prepayment of Term Loans pursuant to this Section 4.01
shall be applied to reduce the then remaining Scheduled Term Loan
Repayments on a pro rata basis (based upon the then remaining principal
amount of each such Scheduled Term Loan Repayment).
(b) In the event of certain refusals by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as provided in Section
13.12(b), the Borrower shall have the right, upon five Business Days' prior
written notice to the Agent at its Notice Office (which notice the Agent shall
promptly transmit to each of the Banks), to repay all Loans, together with
accrued and unpaid interest, Fees and all other amounts owing to such Bank, in
accordance with, and to the extent provided in, Section 1.12.
4.02 MANDATORY REPAYMENTS AND COMMITMENT REDUCTIONS.
(A) REQUIREMENTS:
(a) If any Borrowing Base Certificate shall disclose the existence
of a Borrowing Base Deficiency the Borrower shall, on the date of delivery of
the Borrowing Base Certificate in accordance with Section 8.01(k), repay the
principal of the Swingline Loans outstanding in an aggregate amount equal to the
Borrowing Base Deficiency and, to the extent such Swingline Loans have been
repaid in full and to the extent such Borrowing Base Deficiency continues to
exist after such repayment, the Borrower shall repay the principal of the
Revolving Loans outstanding in an aggregate amount equal to the remaining
Borrowing Base Deficiency and, to the extent such Swingline Loans and Revolving
Loans have been repaid in full and to the extent such Borrowing Base Deficiency
continues to exist after such repayments, the Borrower shall pay to the Agent at
the Payment Office an amount of cash or Cash Equivalents equal to such excess,
such cash or Cash Equivalents to be held as security for all Obligations of the
Borrower hereunder with respect to the Letter of Credit Outstandings in a cash
collateral account established and maintained (including the investments made
pursuant thereto) by the Agent pursuant to a cash collateral agreement in form
and substance
24
CREDIT AGREEMENT
reasonably satisfactory to the Agent (the "LETTER OF CREDIT CASH COLLATERAL
ACCOUNT").
(b) On any day on which the sum of (x) the aggregate outstanding
principal amount of the Revolving Loans, (y) the aggregate outstanding principal
amount of all Swingline Loans, and (z) the Letter of Credit Outstandings at such
time exceeds the Total Revolving Loan Commitment as then in effect, the Borrower
shall prepay the principal of Swingline Loans and, after the Swingline Loans
have been repaid in full, the principal of Revolving Loans in an amount equal to
such excess. If, after giving effect to the prepayment of all outstanding
Swingline Loans and Revolving Loans, the aggregate amount of the Letter of
Credit Outstandings exceeds the Total Revolving Loan Commitment as then in
effect, the Borrower shall pay to the Agent at the Payment Office on such date
an amount of cash or Cash Equivalents equal to the amount of such excess, such
cash or Cash Equivalents to be held as security for all Obligations of the
Borrower hereunder in the Letter of Credit Cash Collateral Account.
(c) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02(A), the Borrower shall be required to
repay on each date set forth below (to the extent any day set forth below is not
a Business Day then the required date of repayment shall be the immediately
preceding Business Day) the principal amount of Term Loans, to the extent then
outstanding, set forth below opposite such date (each such repayment, as the
same may be reduced as provided in Sections 4.01 and 4.02(B), a "SCHEDULED TERM
LOAN REPAYMENT"):
Scheduled Term Loan Repayment Date Amount
---------------------------------- ------
September 30, 1999 $ 900,000
December 31, 1999 $ 900,000
March 31, 2000 $ 900,000
June 30, 2000 $ 900,000
September 30, 2000 $1,100,000
December 31, 2000 $1,100,000
March 31, 2001 $1,100,000
June 30, 2001 $1,100,000
September 30, 2001 $1,250,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
June 30, 2002 $1,250,000
September 30, 2002 $1,500,000
December 31, 2002 $1,500,000
March 31, 2003 $1,500,000
Term Loan Maturity Date $1,500,000
25
CREDIT AGREEMENT
(d) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on the date of the receipt thereof by
the Borrower or any of its Subsidiaries, an amount equal to:
(i) 100% of the cash proceeds (net of underwriting discounts and
commissions and all other reasonable costs associated with such
transaction) from any sale or issuance on or after the Effective Date of
equity of the Borrower or any Subsidiary of the Borrower, or from any
other equity contributions made to the Borrower or any Subsidiary of the
Borrower (excluding equity contributions to any Subsidiary of the Borrower
made by the Borrower or any other Subsidiary of the Borrower), shall be
applied as provided in Section 4.02(B); and
(ii) 100% of the cash proceeds (net of underwriting discounts and
commissions, loan fees and all other reasonable costs associated with such
transaction) from any incurrence of any Indebtedness by the Borrower or
any Subsidiary of the Borrower (other than Indebtedness permitted by
Section 9.04 as said Section is in effect on the Effective Date), shall be
applied as provided in Section 4.02(B).
(e) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, no later than 120 days after the last
day of each fiscal year of the Borrower (commencing with fiscal year 2000), an
amount equal to 75% of Excess Cash Flow of the Borrower and its Subsidiaries for
the relevant Excess Cash Flow Payment Period shall be applied as provided in
Section 4.02(B).
(f) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date on or after the Effective
Date on which the Borrower or any Subsidiary of the Borrower receives cash
proceeds from any sale of assets or other dispositions (including capital stock
and securities (other than capital stock the proceeds from the sale of which are
recaptured under Section 4.02(A)(d) or would be recaptured but for the
exclusions contained therein), but excluding (1) sales of inventory in the
ordinary course of business and (2) other sales of assets so long as the
aggregate amount of Net Sale Proceeds excluded pursuant to this clause (2) does
not exceed $100,000 in the aggregate for all such asset sales in any fiscal year
of the Borrower, an amount equal to 100% of the Net Sale Proceeds thereof shall
be applied as provided in Section 4.02(B).
(g) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on each date (on or after the
Effective Date) of
26
CREDIT AGREEMENT
the receipt thereof by the Borrower or any Subsidiary of the Borrower, an amount
equal to 100% of the cash proceeds of any Recovery Event (net of reasonable
costs incurred in connection with such Recovery Event (including the estimated
marginal increase in income taxes which will be payable as a result of such
Recovery Event by the Borrower or any Subsidiary of the Borrower) shall be
applied as provided in Section 4.02(B); provided that, so long as no Default or
Event of Default then exists and such proceeds are not in excess of $500,000 in
the aggregate for all Recovery Events described in clause (i) of the definition
thereof that occur during one fiscal year of the Borrower and $2 million in the
aggregate for all such Recovery Events that occur during the term of the Loans,
such proceeds shall not be required to be so applied on such date to the extent
that the Borrower delivers a certificate to the Agent on or prior to such date
stating that such proceeds shall be used (or shall be contractually committed to
be used) to replace or restore any properties or assets in respect of which such
proceeds were paid within a period specified in such certificate not to exceed
180 days after the date of receipt of such proceeds (which certificate shall set
forth estimates of the proceeds to be so expended); and provided, further that
(A) notwithstanding the immediately preceding proviso, if the amount of such
proceeds from any such Recovery Event described in clause (i) of the definition
thereof, when aggregated with the total amount of all such proceeds from all
such Recovery Events occurring during the same fiscal year exceeds $500,000 or
during the term of this Agreement exceeds $2 million (excluding any amounts from
any such Recovery Events previously repaid pursuant to this Section 4.02(A)
(g)), the entire amount of proceeds from such Recovery Event shall be applied as
provided in Section 4.02(B), and (B) if all or any portion of such proceeds not
applied pursuant to Section 4.02(B) as a result of the immediately preceding
proviso are not used (or are not so contractually committed to be used) as
described in the immediately preceding proviso within the period specified
therein, such remaining portion shall be applied on the last day of such
specified period as provided in Section 4.02(B).
(h) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, all then outstanding Loans of a Tranche shall be repaid in full
on the Maturity Date for such Tranche.
(B) APPLICATION:
(a) Each mandatory repayment of Loans pursuant to Section 4.02(A)(d)
through (g), inclusive, shall be applied:
(i) first, to prepay the principal of outstanding Term Loans, which
prepayments of the Term Loans shall be applied to reduce the then
remaining Scheduled Term Loan Repayments pro rata (based on the then
remaining Scheduled Term Loan Repayments);
27
CREDIT AGREEMENT
(ii) second, to prepay the principal of outstanding Swingline Loans
(with a corresponding reduction to the Total Revolving Loan Commitment);
(iii) third, to prepay the principal of outstanding Revolving Loans
(with a corresponding reduction to the Total Revolving Loan Commitment);
(iv) fourth, to cash collateralize Letter of Credit Outstandings by
depositing cash in the Letter of Credit Cash Collateral Account in an
amount equal to such Letter of Credit Outstandings (it being understood
that the Total Revolving Loan Commitment shall be reduced by the amount of
cash collateral required to be deposited by this clause (iv)); and
(v) fifth, to reduce the remaining (i.e., after giving effect to all
prior reductions thereto, including, without limitation, to the reductions
theretofore effected pursuant to the preceding clauses (ii)(iii), and
(iv)) Total Revolving Loan Commitment (it being understood and agreed that
the amount of such reduction shall be deemed to be an application of
proceeds for purposes of this clause (v) even though cash is not actually
applied).
(b) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings of the
respective Tranche pursuant to which made; provided that: (i) repayments of
Eurodollar Loans pursuant to this Section 4.02 may only be made on the last day
of an Interest Period applicable thereto unless all Eurodollar Loans of the
respective Tranche with Interest Periods ending on such date of required
repayment and all Base Rate Loans of the respective Tranche have been paid in
full; (ii) if any repayment of Eurodollar Loans made pursuant to a single
Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to such
Borrowing to an amount less than the applicable Minimum Borrowing Amount, such
Borrowing shall immediately be converted into Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a single Borrowing shall be applied pro
rata among such Loans. In the absence of a designation by such Borrower as
described in the preceding sentence, the Agent shall, subject to the above, make
such designation in its sole discretion with a view, but no obligation, to
minimize costs owing under Section 1.11.
4.03 METHOD AND PLACE OF PAYMENT. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Agent for the account of the Bank or Banks entitled thereto not later than
12:00 Noon (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office. Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is not
a Business Day, the due
28
CREDIT AGREEMENT
date thereof shall be extended to the next succeeding Business Day and, with
respect to payments of principal, interest shall be payable at the applicable
rate during such extension.
4.04 NET PAYMENTS. (a) All payments made by the Borrower hereunder
or under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but
excluding, except as provided in the second succeeding sentence, any tax imposed
on or measured by the net income of a Bank pursuant to the laws of the
jurisdiction or any political subdivision or taxing authority thereof or therein
in which the principal office or applicable lending office of such Bank is
located) and all interest, penalties or similar liabilities with respect thereto
(collectively, "TAXES"). If any Taxes are so levied or imposed, the Borrower
agrees to pay the full amount of such Taxes, and such additional amounts as may
be necessary so that every payment of all amounts due hereunder or under any
Note, after withholding or deduction for or on account of any Taxes, will not be
less than the amount provided for herein or in such Note. If any amounts are
payable in respect of Taxes pursuant to the preceding sentence, then the
Borrower shall be obligated to reimburse each Bank, upon the written request of
such Bank, for taxes imposed on or measured by the net income of such Bank
pursuant to the laws of the jurisdiction or any political subdivision or taxing
authority thereof or therein in which the principal office or applicable lending
office of such Bank is located as such Bank shall determine are payable by such
Bank in respect of such amounts so paid to or on behalf of such Bank pursuant to
the preceding sentence and in respect of any amounts paid to or on behalf of
such Bank pursuant to this sentence. The Borrower will furnish to the Agent,
within 45 days after the date of the payment of any Taxes due pursuant to
applicable law, certified copies of tax receipts evidencing such payment by such
Borrower. The Borrower agrees to indemnify and hold harmless each Bank, and
reimburse such Bank promptly upon its written request (which shall include
reasonable detail supporting such indemnification claim), for the amount of any
Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) agrees to deliver to the Borrower
and the Agent on or prior to the Effective Date, or in the case of a Bank that
is an assignee or transferee of an interest under this Agreement pursuant to
Section 1.12 or 13.04 (unless the respective Bank was already a Bank hereunder
immediately prior to such assignment or transfer), on the date of such
assignment or transfer to such Bank, (i) two accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor forms)
certifying to such Bank's entitlement to a complete exemption from
00
XXXXXX XXXXXXXXX
Xxxxxx Xxxxxx withholding tax with respect to payments to be made under this
Agreement and under any Note, or (ii) if the Bank is not a "bank" within the
meaning of Section 881(c)(3)(A) of the Code and cannot deliver either Internal
Revenue Service Form 1001 or 4224 pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"SECTION 4.04(b)(ii) CERTIFICATE") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8 (or successor form)
certifying to such Bank's entitlement to a complete exemption from United States
withholding tax with respect to payments of interest to be made under this
Agreement and under any Note. In addition, each Bank agrees that from time to
time after the Effective Date, when a lapse in time or change in circumstances
renders the previous certification obsolete or inaccurate in any material
respect, it will deliver to the Borrower and the Agent two new accurate and
complete original signed copies of Internal Revenue Service Form 4224 or 1001,
or Form W-8 and a Section 4.04(b)(ii) Certificate, as the case may be, and such
other forms as may be required in order to confirm or establish the entitlement
of such Bank to a continued exemption from or reduction in United States
withholding tax with respect to payments under this Agreement and any Note, or
it shall immediately notify the Borrower and the Agent of its inability to
deliver any such Form or Certificate, in which case such Bank shall not be
required to deliver any such form of certificate pursuant to this Section
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to the immediately succeeding sentence, (x) the Borrower shall be
entitled, to the extent it is required to do so by law, to deduct or withhold
income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder for the account of any Bank which is not a United
States person (as such term is defined in Section 7701(a)(30) of the Code) for
U.S. Federal income tax purposes to the extent that such Bank has not provided
to the Borrower U.S. Internal Revenue Service Forms that establish a complete
exemption from such deduction or withholding and (y) the Borrower shall not be
obligated pursuant to Section 4.04(a) hereof to gross-up payments to be made to
a Bank in respect of income or similar taxes imposed by the United States if (I)
such Bank has not provided the Borrower the Internal Revenue Service Forms
required to be provided the Borrower pursuant to this Section 4.04(b) or (II) in
the case of a payment, other than interest, to a Bank described in clause (ii)
above, to the extent that such forms do not establish a complete exemption from
withholding of such taxes. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 4.04, the Borrower agrees to
pay additional amounts and to indemnify each Bank in the manner set forth in
Section 4.04(a) (without regard to the identity of the jurisdiction requiring
the deduction or withholding) in respect of any amounts deducted or withheld by
it as described in the immediately preceding sentence as a result of any changes
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline
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CREDIT AGREEMENT
or order, or in the interpretation thereof, relating to the deducting or
withholding of income or similar Taxes.
SECTION 5. CONDITIONS PRECEDENT TO LOANS ON THE INITIAL BORROWING
DATE. The obligation of each Bank to make Loans on the Initial Borrowing Date is
subject at the time of such Loan to the satisfaction of the following
conditions:
5.01 EXECUTION OF AGREEMENT; NOTES. On or prior to the Initial
Borrowing Date (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Agent, for the account of each of the Banks, the
appropriate Term Note and/or Revolving Note executed by the Borrower and, for
the account of the Swingline Bank, the Swingline Note executed by the Borrower,
in each case in the amount, maturity and as otherwise provided herein.
5.02 OFFICER'S CERTIFICATE. On the Initial Borrowing Date, the Agent
shall have received a certificate dated the Initial Borrowing Date signed on
behalf of the Borrower by an Authorized Officer of the Borrower stating that all
of the conditions in Sections 5.06, 5.10, 5.11, 5.14, 5.16, 5.17, 6.01 and 6.02
have been satisfied on such date; provided the certificate shall not be required
to certify as to the acceptability of any items to the Agent and/or the Banks or
as to whether the Agent and/or the Banks are satisfied with any of the matters
described in said Sections.
5.03 OPINIONS OF COUNSEL. On the Initial Borrowing Date, the Agent
shall have received from (i) White & Case LLP, counsel to the Borrower and its
Subsidiaries, an opinion addressed to the Agent, the Collateral Agent and each
of the Banks and dated the Initial Borrowing Date covering the matters set forth
in Exhibit E, and (ii) counsel rendering such opinions, reliance letters
addressed to the Agent, the Collateral Agent and each of the Banks dated the
Initial Borrowing Date with respect to all legal opinions delivered in
connection with the Recapitalization, which legal opinions and reliance letters
shall be in form and substance reasonably satisfactory to the Agent.
5.04 CORPORATE DOCUMENTS; PROCEEDINGS. (a) On the Initial Borrowing
Date, the Agent shall have received a certificate, dated the Initial Borrowing
Date, signed by an Authorized Officer of each Credit Party, and attested to by
the Secretary or any Assistant Secretary of such Credit Party, in the form of
Exhibit F with appropriate insertions, together with copies of the Certificate
of Incorporation and By-Laws of such Credit Party and the resolutions of such
Credit Party referred to in such certificate, and the foregoing shall be
reasonably acceptable to the Agent and the Required Banks in their sole
discretion.
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CREDIT AGREEMENT
(b) On the Initial Borrowing Date, all corporate and legal
proceedings and all instruments and agreements relating to the transactions
contemplated by this Agreement and the other Documents shall be reasonably
satisfactory in form and substance to the Agent and the Required Banks, and the
Agent shall have received all information and copies of all documents and
papers, including records of corporate proceedings, governmental approvals, good
standing certificates and bring-down telegrams, if any, which the Agent or the
Required Banks may have reasonably requested in connection therewith, such
documents and papers where appropriate to be certified by proper corporate or
governmental authorities.
5.05 PLANS; SHAREHOLDERS' AGREEMENTS; MANAGEMENT AGREEMENTS;
EMPLOYMENT AGREEMENTS; COLLECTIVE BARGAINING AGREEMENTS; DEBT AGREEMENTS;
AFFILIATE CONTRACTS; TAX SHARING AGREEMENTS; AND MATERIAL CONTRACTS. On or prior
to the Initial Borrowing Date, there shall have been delivered to the Agent true
and correct copies, certified as true and complete by an appropriate officer of
the Borrower, of:
(i) all Plans (and for each Plan that is required to file an annual
report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting
statements, certifications, schedules and information), and for each Plan
that is a "single-employer plan," as defined in Section 4001(a)(15) of
ERISA, the most recently prepared actuarial valuation therefor) and any
other "employee benefit plans," as defined in Section 3(3) of ERISA, and
any other material agreements, plans or arrangements, with or for the
benefit of current or former employees of the Borrower or any of its
Subsidiaries or any ERISA Affiliate (provided that the foregoing shall
apply in the case of any multiemployer plan, as defined in 4001(a)(3) of
ERISA, only to the extent that any document described therein is in the
possession of the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of
any such plan) (collectively, the "EMPLOYEE BENEFIT PLANS");
(ii) all agreements entered into by the Borrower or any Subsidiary
of the Borrower governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to any such
entity with respect to their capital stock (collectively, the
"SHAREHOLDERS' AGREEMENTS");
(iii) all agreements with members of, or with respect to the,
management of the Borrower or any Subsidiary of the Borrower other than
Employment Agreements (collectively, the "MANAGEMENT AGREEMENTS");
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CREDIT AGREEMENT
(iv) any employment agreements entered into by the Borrower or any
Subsidiary of the Borrower with an officer or director of the Borrower or
any Subsidiary of the Borrower (collectively, the "EMPLOYMENT
AGREEMENTS");
(v) all collective bargaining agreements applying or relating to any
employee of the Borrower or any Subsidiary of the Borrower (collectively,
the "COLLECTIVE BARGAINING AGREEMENTS");
(vi) all agreements evidencing or relating to Indebtedness of the
Borrower or any Subsidiary of the Borrower whether or not such agreement
is to remain outstanding after giving effect to the incurrence of Loans on
the Initial Borrowing Date (collectively, the "DEBT AGREEMENTS");
(vii) all tax sharing, tax allocation and other similar agreements
entered into by the Borrower or any Subsidiary of the Borrower
(collectively, the "TAX SHARING AGREEMENTS");
(viii) all contracts, agreements or understandings between the
Borrower or any of its Subsidiaries, on the one hand, and any Affiliate of
the Borrower, on the other hand (collectively, the "AFFILIATE CONTRACTS");
and
(ix) all other material contracts and licenses of the Borrower or
any of its Subsidiaries that are to remain in effect after giving effect
to the consummation of the Transaction (collectively, the "MATERIAL
CONTRACTS");
all of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Employment Agreements, Collective Bargaining Agreements, Debt
Agreements, Tax Sharing Agreements, Affiliate Contracts and Material Contracts
shall be in form and substance reasonably satisfactory to the Agent and the
Required Banks and shall be in full force and effect on the Initial Borrowing
Date.
5.06 CONSUMMATION OF THE RECAPITALIZATION. (a) On or prior to the
Initial Borrowing Date, there shall have been delivered to the Banks true and
correct copies of all Recapitalization Documents, and all terms and provisions
of such Recapitalization Documents shall be in form and substance reasonably
satisfactory to the Agent and the Required Banks. The Recapitalization,
including all of the terms and conditions thereof, shall have been duly approved
by the board of directors and (if required by applicable law) the shareholders
of the parties thereto, and all Recapitalization Documents shall have been duly
executed and delivered by the parties thereto and shall be in full force and
effect. The representations and warranties set forth in the Recapitalization
Documents shall be true and correct in all material respects as if made on and
as of the Initial Borrowing Date unless stated to relate to a specific date, in
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CREDIT AGREEMENT
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date. Each of the conditions precedent to
the obligations of Newco, the Borrower and the Continuing Stockholders to
consummate the Recapitalization as set forth in the applicable Recapitalization
Documents shall have been satisfied to the reasonable satisfaction of the Agent
and the Required Banks or waived with (in the case of any condition deemed
material by the Agent in its reasonable discretion) the consent of the Agent and
the Required Banks, and the Recapitalization shall have been consummated in
accordance with all applicable law and (except to the extent waived as
aforesaid) the Recapitalization Documents, and the consideration payable in
connection therewith shall not exceed the Merger Consideration.
(b) On the Initial Borrowing Date, after giving effect to the
Transaction, the ownership and capital structure of the Borrower and its
Subsidiaries (including, without limitation, the terms of any capital stock,
options, warrants or other securities issued or to be issued by the Borrower or
any of its Subsidiaries), and the management of the Borrower and its
Subsidiaries, shall be in form and substance reasonably satisfactory to the
Agent.
5.07 PLEDGE AGREEMENT. On the Initial Borrowing Date, (a) each
Credit Party shall have duly authorized, executed and delivered the Credit
Parties Pledge Agreement substantially in the form of Exhibit G-1 (as modified,
supplemented or amended from time to time, the "CREDIT PARTIES PLEDGE
AGREEMENT") and shall have delivered to the Collateral Agent, as Pledgee
thereunder, all of the Pledged Securities referred to therein then owned by such
Credit Party, (x) endorsed in blank, in the case of promissory notes
constituting Pledged Securities, and (y) together with executed and undated
irrevocable stock powers, in the case of capital stock constituting Pledged
Securities, and (b) each of Holdings and each Continuing Stockholder shall have
duly authorized, executed and delivered the Stockholders Pledge Agreement
substantially in the form of Exhibit G-2 (as modified, supplemented or amended
from time to time, the "STOCKHOLDERS PLEDGE AGREEMENT") and shall have delivered
to the Collateral Agent, as Pledgee thereunder, all of the Pledged Securities
referred to therein then owned by Holdings or such Continuing Stockholder,
together with executed and undated irrevocable stock powers.
5.08 SECURITY AGREEMENT. On the Initial Borrowing Date, each Credit
Party shall have duly authorized, executed and delivered a Security Agreement
substantially in the form of Exhibit H (as modified, supplemented or amended
from time to time, the "SECURITY AGREEMENT") covering all of such Credit Party's
present and future Security Agreement Collateral, together with:
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CREDIT AGREEMENT
(i) proper financing statements (Form UCC-1 or such other financing
statements or similar notices as shall be required by local law) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the opinion of the Collateral
Agent, desirable to perfect the security interests purported to be created
by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all judgment liens, tax liens or
effective financing statements that name the Borrower or any of its
Subsidiaries, or a division or other operating unit of any such Person, as
debtor and that are filed in the jurisdictions referred to in said clause
(i) above, together with copies of such other financing statements (none
of which shall cover the Collateral except to the extent evidencing
Permitted Liens or for which the Collateral Agent shall receive
termination statements (Form UCC-3 or such other termination statements as
shall be required by local law) fully executed for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the opinion of the Collateral Agent, desirable to perfect the security
interests (including, without limitation, security interests in
Intellectual Property) intended to be created by such Security Agreement;
and
(iv) evidence that all other actions necessary or, in the opinion of
the Collateral Agent, desirable to perfect and protect the security
interests (including, without limitation, a security interest in the
Indemnity Insurance Policy and any "key man" life insurance policies
covering any officers or employees of the Borrower) purported to be
created by the Security Agreement have been taken.
5.09 SUBSIDIARIES GUARANTY. On the Initial Borrowing Date, each
Subsidiary of the Borrower shall have duly authorized, executed and delivered a
Guaranty in the form of Exhibit I (as modified, supplemented or amended from
time to time, the "SUBSIDIARIES GUARANTY").
5.10 MATERIAL ADVERSE CHANGE, ETC. On or prior to the Initial
Borrowing Date, since March 31, 1998 (or, if the audited consolidated financial
statements of the Borrower and its Subsidiaries for the fiscal year ended March
31, 1999 are delivered to the Agent pursuant Section 5.15(a)(ii), since March
31, 1999), nothing shall have occurred (and the Banks shall have become aware of
no facts or conditions not previously known) which the Agent or the Required
Banks shall determine (a) could reasonably be expected to have a material
adverse effect on the rights or remedies of the
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CREDIT AGREEMENT
Banks or the Agent, or on the ability of the Borrower or any of its Subsidiaries
to perform their obligations to the Agent and the Banks, under this Agreement or
any other Credit Document, or (b) could reasonably be expected to have a
materially adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
5.11 LITIGATION. On the Initial Borrowing Date, no litigation by any
entity (private or governmental) shall be pending or, to the knowledge of the
Borrower or its Subsidiaries, threatened with respect to this Agreement, any
other Document or any documentation executed in connection herewith or with
respect to the transactions contemplated hereby, or which the Agent or Required
Banks shall determine could reasonably be expected to have a materially adverse
effect on the Transaction or on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
5.12 FEES, ETC. On the Initial Borrowing Date, the Borrower shall
have paid in full to the Agent and the Banks all costs, fees and expenses
(including, without limitation, all reasonable legal fees and expenses) payable
to the Agent and the Banks to the extent then due pursuant hereto or as
otherwise agreed between the Borrower and the Agent.
5.13 SOLVENCY CERTIFICATE; INSURANCE ANALYSES. On the Initial
Borrowing Date, the Borrower shall cause to be delivered to the Agent and the
Banks: (i) a solvency certificate from the Chief Financial Officer of the
Borrower, in the form of Exhibit K, which shall be addressed to the Agent and
each of the Banks and dated the Initial Borrowing Date and in form and substance
reasonably satisfactory to the Agent and the Required Banks, setting forth the
conclusion that, after giving effect to the Transaction and the incurrence of
all financings contemplated herein, each of the Borrower and its Subsidiaries
(taken as a whole) and the Borrower (on a stand-alone basis) are not insolvent
and will not be rendered insolvent by the Indebtedness incurred in connection
herewith, will not be left with unreasonably small capital with which to engage
in their respective businesses and will not have incurred debts beyond their
ability to pay such debts as they mature and become due, and (ii) evidence
(including, without limitation, certificates with respect to each insurance
policy listed on Schedule II) of insurance, complying with the requirements of
Section 8.03, with respect to the business and properties of the Borrower and
its Subsidiaries, in scope, form and substance reasonably satisfactory to the
Agent and the Required Banks and naming each of the Collateral Agent, the Agent
and the Banks as an additional insured and the Collateral Agent as loss payee
and stating that such insurance shall not be cancelled or revised without 30
days' prior written notice by the insurer to the Collateral Agent.
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CREDIT AGREEMENT
5.14 APPROVALS. On or prior to the Initial Borrowing Date, all
necessary governmental and third party approvals in connection with the
Transaction and the transactions contemplated by the Documents and otherwise
referred to herein or therein (including, but not limited to, those approvals
required in respect of existing permits, landlord consents and transfers of
contract rights) shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent authority which restrains, prevents, or imposes materially adverse
conditions upon, the consummation of the Transaction or the other transactions
contemplated by the Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed, or a hearing seeking injunctive relief or other
restraint pending or notified, prohibiting or imposing materially adverse
conditions upon the consummation of the Transaction, the making of the Loans or
the issuance of Letters of Credit.
5.15 FINANCIAL STATEMENTS; PROJECTIONS; MANAGEMENT LETTER REPORTS;
BACKGROUND INVESTIGATION REPORTS. (a) On or prior to the Initial Borrowing Date,
the Banks shall have received and shall be satisfied with:
(i) consolidated balance sheets of the Borrower and its Subsidiaries
as at March 31, 1997 and March 31, 1998, and the related consolidated
statements of income and retained earnings and cash flows of the Borrower
and its Subsidiaries for the fiscal periods ended as of such dates, which
have been audited by Ernst & Young;
(ii) either (A) consolidated balance sheets of the Borrower and its
Subsidiaries as at March 31, 1999, and the related consolidated statements
of income and retained earnings and cash flows of the Borrower and its
Subsidiaries for the fiscal period ended as of such date, which have been
audited by Ernst & Young, or (B) copies of the report prepared by
PricewaterhouseCoopers LLP for HIG with respect to the Borrower and its
Subsidiaries; and
(iii) the pro forma (after giving effect to the Transaction and the
related financing thereof) consolidated balance sheet of the Borrower and
its Subsidiaries as at the Initial Borrowing Date, prepared in accordance
with GAAP consistent with past practices and in form and substance
reasonably satisfactory to the Agent and the Required Banks, which shall
not disclose any material adverse differences in the business, properties,
assets, liabilities, results of operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole from that previously disclosed to the Agent and the Required Banks.
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CREDIT AGREEMENT
(b) On the Initial Borrowing Date, the Banks shall have received
detailed consolidated financial projections, certified by the Chief Financial
Officer of the Borrower, for the Borrower and its Subsidiaries, which include
the projected results of the Borrower and its Subsidiaries, after giving effect
to the Transaction and the other transactions contemplated herein, for the
period commencing on the Initial Borrowing Date and ending after the fourth
anniversary of the Initial Borrowing Date (the "PROJECTIONS"), which
Projections, and the supporting assumptions and explanations thereto, and the
accounting practices and procedures to be utilized by the Borrower following the
Initial Borrowing Date, shall be reasonably satisfactory in form and substance
to the Agent and the Required Banks and shall be as set forth on Schedule III
hereto.
(c) On or prior to the Initial Borrowing Date, the Agent shall have
received a copy of any "management letter" received by the Borrower or any of
its Subsidiaries from its certified public accountants on or after March 31,
1997.
(d) No later than one week prior to the Initial Borrowing Date, the
Banks shall have received and shall be satisfied with a copy of a background
check on certain key members of management of the Borrower and its Subsidiaries
specified by the Agent to HIG prior to the Initial Borrowing Date, prepared by a
firm satisfactory to the Agent.
5.16 REFINANCING. (a) On the Initial Borrowing Date and after giving
effect to the Loans incurred on the Initial Borrowing Date, the Recapitalization
and the other transactions contemplated hereby, neither the Borrower nor any of
its Subsidiaries shall have any Indebtedness or preferred stock outstanding
except for the Loans and except for Indebtedness permitted under Section 9.04.
(b) The Agent and the Required Banks shall be satisfied with the
amount of and the terms and conditions of the repayment of, and the termination
of all commitments and documentation relating to, all Indebtedness repaid by the
Borrower or its Subsidiaries in connection with the transactions contemplated
hereby (collectively, the "REFINANCED INDEBTEDNESS") and the amount of all
accrued interest, premiums, fees, commissions and expenses owing in connection
with the repayment of such Refinanced Indebtedness. In no event shall the
aggregate amount paid pursuant to the preceding sentence exceed $50,000. All
Liens arising in connection with such Refinanced Indebtedness shall have been
terminated (and all appropriate releases, termination statements or other
instruments of assignment with respect thereto shall have been obtained), in
each case to the reasonable satisfaction of the Agent and the Required Banks.
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CREDIT AGREEMENT
(c) The Agent shall have received copies, certified as true and
complete by an Authorized Officer, of all documents executed in connection with
the repayment and termination of the Refinanced Indebtedness and the release of
the Liens thereunder (the "DEBT TERMINATION DOCUMENTS"), all of which shall be
in form and substance reasonably satisfactory to the Agent and the Required
Banks.
5.17 FUNDING. (a) On or prior to the Initial Borrowing Date, (i)
Holdings shall have received an aggregate of $6 million in cash equity
contributions from the HIG Funds and the other shareholders of Holdings
reasonably acceptable to the Agent, and in such proportions as are reasonably
acceptable to the Agent, (ii) Holdings shall have contributed the full amount of
such cash equity contributions to Newco pursuant to the terms of the
Contribution Agreement, (iii) the Continuing Stockholders shall have contributed
2,165,978 shares of Borrower Common Stock to Newco pursuant to the Contribution
Agreement, and (iv) following the consummation of the Merger, the Borrower shall
have utilized the full amount of the cash equity contribution referred to in
clause (ii) to make payments owing in connection with the Transaction prior to
or concurrently with the utilization of any proceeds of the Loans for such
purposes.
(b) On or prior to the Initial Borrowing Date, (i) the Borrower
shall have received $3 million in cash proceeds from the issuance of the Senior
Subordinated Notes and (ii) the Borrower shall have utilized the full amount of
such cash proceeds to make payments owing in connection with the Transaction
prior to or concurrently with the utilization of any proceeds of the Loans for
such purposes.
5.18 CONSENT LETTER. The Agent shall have received a letter from CT
Corporation System, presently located at 0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx
00000, substantially in the form of Exhibit L hereto, indicating its consent to
its appointment by the Borrower and its Subsidiaries as their agent to receive
service of process as specified in Section 13.08 of this Agreement and Section
21 of the Subsidiaries Guaranty.
5.19 BORROWING BASE CERTIFICATE. On the Initial Borrowing Date, the
Borrower shall have delivered to each Bank its initial Borrowing Base
Certificate meeting the requirements of Section 8.01(k).
5.20 LANDLORD AGREEMENTS. On the Initial Borrowing Date, the
Collateral Agent shall have received from the Borrower and each applicable
Subsidiary Guarantor, with respect to each Leasehold, an agreement from the
landlord acknowledging, among other things, the Collateral Agent's security
interests in property maintained on the leased premises and waiving its own
security interest, if any, thereon and acknowledging the Collateral Agent's
authority to obtain access to such property and covering such other matters as
the Collateral Agent may reasonably request.
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CREDIT AGREEMENT
5.21 PCF/PNA WARRANTS. On the Initial Borrowing Date, PCF and PNA
shall have received the PCF/PNA Warrants and the other PCF/PNA Warrant
Documents, in each case duly executed by the parties thereto pursuant to the
PCF/PNA Warrant Documents.
SECTION 6. CONDITIONS PRECEDENT TO ALL CREDIT EVENTS. The obligation
of each Bank to make Loans (including Loans made on the Initial Borrowing Date),
and the obligation of an Issuing Bank to issue any Letter of Credit, is subject,
at the time of each such Credit Event (except as hereinafter indicated), to the
satisfaction of the following conditions:
6.01 NO DEFAULT; REPRESENTATIONS AND WARRANTIES. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of the making of such Credit Event unless
stated to relate to a specific earlier date, in which case such representations
and warranties shall be true and correct in all material respects as of such
earlier date.
6.02 NOTICE OF BORROWING; LETTER OF CREDIT REQUEST. (a) Prior to the
making of each Loan (other than a Swingline Loan or a Mandatory Borrowing), the
Agent shall have received a Notice of Borrowing meeting the requirements of
Section 1.03. Prior to the making of each Swingline Loan, the Swingline Bank
shall have received the notice referred to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Issuing Bank
shall have received a Letter of Credit Request meeting the requirements of
Section 2.03.
The acceptance of the benefits of each Credit Event shall constitute
a representation and warranty by the Borrower to each of the Banks that all the
conditions specified in Section 5 and in this Section 6 and applicable to such
Credit Event exist as of that time. All of the Notes, certificates, legal
opinions and other documents and papers referred to in Section 5 and in this
Section 6, unless otherwise specified, shall be delivered to the Agent at the
Notice Office for the account of each of the Banks and, except for the Notes, in
sufficient counterparts for each of the Banks and, unless otherwise specified,
shall be in form and substance reasonably satisfactory to the Banks.
SECTION 7. REPRESENTATIONS, WARRANTIES AND AGREEMENTS. In order to
induce the Banks to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, the Borrower makes
the following representations, warranties and agreements as to itself and as to
each of its
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CREDIT AGREEMENT
Subsidiaries, as of the Initial Borrowing Date (both before and after giving
effect to the Credit Events occurring on such date and to the Transaction) and
as of the date of each subsequent Credit Event, which representations,
warranties and agreements shall survive the execution and delivery of this
Agreement and the Notes and any subsequent Credit Event, with the occurrence of
each Credit Event on or after the Initial Borrowing Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 7 are true and correct on and as of the Initial Borrowing Date and on
the date of each such Credit Event, unless stated to relate to a specific
earlier date in which case all representations and warranties shall be true and
correct in all material respects as of such earlier date.
7.01 CORPORATE STATUS. Each of the Borrower and its Subsidiaries (i)
is a duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage, and (iii) is duly qualified and
authorized to do business and in good standing in each jurisdiction where the
ownership, leasing or operation of property or the conduct of its business
requires such qualifications except for failures to be so qualified which, in
the aggregate, could not reasonably be expected to have a material adverse
effect on the performance, business, assets, nature of assets, liabilities,
operations, properties, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
7.02 CORPORATE POWER AND AUTHORITY. Each of the Borrower and its
Subsidiaries has the corporate power to execute, deliver and perform the terms
and provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each of the Borrower and its Subsidiaries has
duly executed and delivered each of the Documents to which it is party, and each
of such Documents constitutes its legal, valid and binding obligation
enforceable in accordance with its terms, except as the enforceability thereof
may be limited by bankruptcy, reorganization, moratorium or similar laws
relating to or limiting creditors' rights generally or by general equitable
principles (regardless of whether the issue of enforceability is considered in a
proceeding in equity or at law).
7.03 NO VIOLATION. Neither the execution, delivery or performance by
the Borrower or any of its Subsidiaries of the Documents to which it is a party,
nor compliance by it with the terms and provisions thereof, (i) will contravene
any provision of any applicable law, statute, rule or regulation or any order,
writ, injunction or decree of any court or governmental instrumentality, (ii)
will conflict with or result in any breach of any of the terms, covenants,
conditions or provisions of, or constitute a default under, or result in the
creation or imposition of (or the obligation to create or impose)
41
CREDIT AGREEMENT
any Lien (except pursuant to the Security Documents) upon any of the property or
assets of the Borrower or any of its Subsidiaries pursuant to the terms of any
indenture, mortgage, deed of trust, credit agreement or loan agreement, or any
other material agreement, contract or instrument to which the Borrower or any of
its Subsidiaries is a party or by which it or any of its property or assets is
bound or to which it may be subject, or (iii) will violate any provision of the
Certificate of Incorporation or By-Laws (or similar organizational documents) of
the Borrower or any of its Subsidiaries.
7.04 GOVERNMENTAL APPROVALS. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by (except as have been obtained or made on or prior to the Initial
Borrowing Date and are in full force and effect), any governmental or public
body or authority, or any subdivision thereof, is required to authorize, or is
required in connection with, (i) the execution, delivery and performance of any
Document or (ii) the legality, validity, binding effect or enforceability of any
Document.
7.05 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; PROJECTIONS; ETC. (a) (i) The consolidated financial statements of
the Borrower and its Subsidiaries for the fiscal years ended as of March 31,
1997 and March 31, 1998 (and, if delivered pursuant to Section 5.15(a)(ii),
March 31, 1999), which have been audited by Ernst & Young, (ii) the unaudited
consolidated financial statements of the Borrower and its Subsidiaries for the
eleven-month period ended February 28, 1999, and (iii) the pro forma (after
giving effect to the Transaction and the related financing thereof) consolidated
balance sheet of the Borrower and its Subsidiaries as at the Initial Borrowing
Date, copies of all of which financial statements referred to in the preceding
clauses (i), (ii) and (iii) have heretofore been furnished to the Agent, present
fairly in all material respects the financial position of the respective
entities at the dates of said statements and the results of operations for the
periods covered thereby (or, in the case of the pro forma balance sheet referred
to in the preceding clause (iii), present a good faith estimate by the
management of the Borrower as to the pro forma financial condition of the
Borrower and its Subsidiaries (after giving effect to the Transaction) on a
consolidated basis at the date thereof). All such financial statements have been
prepared in accordance with GAAP consistently applied, except to the extent
provided in the notes to said financial statements and, with respect to interim
financial statements, subject to normal year end-adjustments (which shall not be
material) and the absence of footnotes. Since March 31, 1998 (or, if the audited
consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal year ended March 31, 1999 are delivered to the Agent pursuant Section
5.15(a)(ii), since March 31, 1999), there has been no material adverse change in
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
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CREDIT AGREEMENT
(b) On and as of the Initial Borrowing Date, on a pro forma basis
after giving effect to the Transaction and all other transactions contemplated
by the Documents and to all Indebtedness (including, without limitation, the
Loans) being incurred in connection with the Transaction, and all Liens created,
and to be created, by each Credit Party in connection therewith: (a) the sum of
the assets, at a fair valuation, of each Credit Party will exceed its debts; (b)
no Credit Party has incurred or intends to, or believes that it will, incur
debts beyond its ability to pay such debts as such debts mature; and (c) each
Credit Party will have sufficient capital with which to conduct its business.
For purposes of this Section 7.05(b) "debt" means any liability on a claim, and
"claim" means (i) right to payment, whether or not such a right is reduced to
judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
disputed, undisputed, legal, equitable, secured, or unsecured or (ii) right to
an equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, subordinated, disputed,
undisputed, secured or unsecured.
(c) Except as fully reflected in the financial statements and the
notes related thereto described in Section 7.05(a), there were as of the Initial
Borrowing Date (and after giving effect to the Transaction and the other
transactions contemplated hereby and by the Documents) no liabilities or
obligations with respect to the Borrower or any of its Subsidiaries of any
nature whatsoever (whether absolute, accrued, contingent or otherwise and
whether or not due) which, either individually or in aggregate, could reasonably
be expected to be material to the Borrower and its Subsidiaries taken as a
whole. As of the Initial Borrowing Date, neither the Borrower nor any of its
Subsidiaries knows of any basis for the assertion against the Borrower or any of
its Subsidiaries of any liability or obligation of any nature whatsoever that is
not fully reflected in the financial statements and the notes related thereto
described in Section 7.05(a) which, either individually or in the aggregate,
could reasonably be expected to be material to the Borrower and its Subsidiaries
taken as a whole. As of the Initial Borrowing Date (and after giving effect to
the Transaction) neither the Borrower nor any of its Subsidiaries will have any
outstanding Indebtedness or preferred stock (other than the Loans and
Capitalized Lease Obligations).
(d) On and as of the Initial Borrowing Date, the Projections have
been prepared in good faith with the participation of management of the Borrower
and have been prepared on a basis consistent with the pro forma financial
statements referred to in Section 7.05(a), and there are no statements or
conclusions in any of the Projections which are based upon or include
information known to the Borrower to be misleading or which fail to take into
account material information regarding the matters reported therein. On the
Initial Borrowing Date, the Borrower believes that the Projections were
reasonable and attainable (it being recognized by the Banks that projections as
to future events are not to be viewed as facts and actual results during the
periods covered by the
43
CREDIT AGREEMENT
Projections probably will differ from the projected results and that those
differences may be material, and no representation is made that the Projections
will in fact be attained).
7.06 LITIGATION. There are no actions, suits or proceedings pending
or, to the best knowledge of the Borrower, threatened (i) with respect to any
Document, or (ii) that are reasonably likely to materially and adversely affect
the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
7.07 TRUE AND COMPLETE DISCLOSURE. All factual information (taken as
a whole, it being understood that the Projections shall not be deemed to be
factual information) heretofore or contemporaneously furnished by or on behalf
of the Borrower or any Subsidiary of the Borrower in writing to any Bank
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction contemplated
herein is, and all other such factual information (taken as a whole with all
information previously furnished) hereafter furnished by or on behalf of the
Borrower or any Subsidiary of the Borrower in writing to any Bank will be, true
and accurate in all material respects on the date as of which such information
is dated or certified and not incomplete by omitting to state any material fact
necessary to make such information (taken as a whole) not misleading at such
time in light of the circumstances under which such information was provided.
7.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) All proceeds of the
Term Loans and up to $500,000 of the Revolving Loans incurred by the Borrower on
the Initial Borrowing Date shall be used to finance, in part, the
Recapitalization Consideration, directly or indirectly to repay the Refinanced
Indebtedness, and to pay Transaction Fees and Expenses.
(b) All proceeds of Revolving Loans and Swingline Loans incurred
after the Initial Borrowing Date shall be used by the Borrower for general
corporate and working capital purposes of the Borrower and its Subsidiaries.
(c) No part of the proceeds of any Loan will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock. Neither the making of any Loan nor the use of the
proceeds thereof nor the occurrence of any other Credit Event will violate or be
inconsistent with the provisions of Regulation T, U or X of the Board of
Governors of the Federal Reserve System.
7.09 TAX RETURNS AND PAYMENTS. Each of the Borrower and each of its
Subsidiaries has timely filed or caused to be timely filed (including pursuant
to any
44
CREDIT AGREEMENT
valid extensions of time for filing) with the appropriate taxing authority all
returns, statements, forms and reports for taxes (the "RETURNS") required to be
filed by or with respect to the income, properties or operations of the Borrower
and/or any of its Subsidiaries. The Returns accurately reflect in all material
respects all liability for taxes of the Borrower and its Subsidiaries as a whole
for the periods covered thereby. Each of the Borrower and each of its
Subsidiaries have paid all material taxes payable by them which have become due
other than those contested in good faith and for which adequate reserves have
been established in accordance with GAAP. There is no material action, suit,
proceeding, investigation, audit, or claim now pending or, to the best knowledge
of the Borrower or any of its Subsidiaries, threatened by any authority
regarding any taxes relating to the Borrower or any of its Subsidiaries. As of
the Initial Borrowing Date, neither the Borrower nor any of its Subsidiaries has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of taxes of the Borrower or any of its Subsidiaries, or is aware of
any circumstances that would cause the taxable years or other taxable periods of
the Borrower or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Borrower nor any of its
Subsidiaries has provided, with respect to themselves or property held by them,
any consent under Section 341 of the Code. None of the Borrower or any of its
Subsidiaries has incurred, or will incur, any material tax liability in
connection with the Transaction or any other transactions contemplated hereby.
7.10 COMPLIANCE WITH ERISA. Schedule IV sets forth each Plan; each
Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made except to the extent that any failure to make timely contributions would
not result in a material liability to the Borrower, any Subsidiary of the
Borrower or any ERISA Affiliate; neither the Borrower nor any Subsidiary of the
Borrower nor any ERISA Affiliate has incurred any material liability (including
any indirect, contingent or secondary liability) to or on account of a Plan
pursuant to Section 409, 502(i), 502(l),
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CREDIT AGREEMENT
515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29),
4971 or 4975 of the Code or expects to incur any such liability under any of the
foregoing sections with respect to any Plan (other than liabilities of any ERISA
Affiliate which could not, by operation of law or otherwise, become a liability
of the Borrower or any of its Subsidiaries); no condition exists which presents
a material risk to the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate of incurring a liability to or on account of a Plan pursuant to the
foregoing provisions of ERISA and the Code; no proceedings have been instituted
to terminate or appoint a trustee to administer any Plan which is subject to
Title IV of ERISA; no action, suit, proceeding, hearing, audit or investigation
with respect to the administration, operation or the investment of assets of any
Plan (other than routine claims for benefits) is pending, expected or
threatened; using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, the aggregate liabilities of the
Borrower and its Subsidiaries and its ERISA Affiliates to all Plans which are
multiemployer plans (as defined in Section 4001(a)(3) of ERISA) in the event of
a complete withdrawal therefrom, as of the close of the most recent fiscal year
of each such Plan ended prior to the date of the most recent Credit Event, would
not exceed $25,000; each group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) which covers or has covered employees
or former employees of the Borrower, any Subsidiary of the Borrower, or any
ERISA Affiliate has at all times been operated in material compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B of the
Code; no lien imposed under the Code or ERISA on the assets of the Borrower or
any Subsidiary of the Borrower or any ERISA Affiliate exists or is likely to
arise on account of any Plan; and the Borrower and its Subsidiaries may cease
contributions to or terminate any employee benefit plan maintained by any of
them without incurring any material liability.
7.11 THE SECURITY DOCUMENTS. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the respective Credit Parties in
the Collateral described therein and the Collateral Agent, for the benefit of
the Secured Creditors, has a fully perfected Lien on, and security interest in,
all right, title and interest of the respective Credit Parties in all of the
Collateral described therein, subject to no other Liens other than Permitted
Liens. The recordation of the Security Agreement in the United States Patent and
Trademark Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will be effective, under federal and state law, to perfect
the security interest granted to the Collateral Agent in any trademarks and
patents covered by the Security Agreement, and the filing of the Security
Agreement with the United States Copyright Office together with filings on Form
UCC-1 made pursuant to the Security Agreement will be effective under federal
and state law to perfect the security interest granted to the
46
CREDIT AGREEMENT
Collateral Agent in any copyrights covered by the Security Agreement. Each of
the Credit Parties party to the Security Agreement has good and merchantable
title to all Collateral described therein, free and clear of all Liens except
those described above in this clause (a).
(b) The security interests created in favor of the Collateral Agent,
as Pledgee for the benefit of the Secured Creditors, under the Pledge Agreements
constitute first perfected security interests in the Pledged Securities
described in the Pledge Agreements, subject to no security interests of any
other Person. No filings or recordings are required in order to perfect (or
maintain the perfection or priority of) the security interests created in the
Pledged Securities and the proceeds thereof under the Pledge Agreements.
7.12 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS. All
representations and warranties made by any Person in the Documents are true and
correct at the time as of which such representations and warranties were made
and on the Initial Borrowing Date unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct as of such earlier date, in each case except to the extent that the
failure of any such representation and warranty to be true and correct could not
reasonably be expected to have a material adverse effect on the performance,
business, assets, liabilities, nature of assets, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
7.13 PROPERTIES. Each of the Borrower and each of its Subsidiaries
has good and merchantable title to all material properties owned by them,
including all property reflected in the consolidated pro forma balance sheet
(after giving effect to the Transaction) referred to in Section 7.05(a) (except
as sold or otherwise disposed of since the date of such balance sheet in the
ordinary course of business or as permitted by Section 9.02), free and clear of
all Liens, other than (i) as referred to in such consolidated pro forma balance
sheet or in the notes thereto or (ii) Liens otherwise permitted by Section 9.01.
Schedule V contains a true and complete list of each parcel of Real Property
owned or leased by the Borrower or any of its Subsidiaries on the Initial
Borrowing Date and the type of interest therein held by the Borrower or such
Subsidiary.
7.14 CAPITALIZATION. On the Initial Borrowing Date, after giving
effect to the Transaction, the attached Schedule VI accurately sets forth the
following information with respect to each Credit Party's capitalization: (1)
the authorized partnership interests, capital stock, shares or membership
interests of such Credit Party, (2) the number of units of each class of
partnership interests, capital stock, shares or membership interests issued and
outstanding in each case (i) as of the Initial Borrowing
47
CREDIT AGREEMENT
Date and (ii) assuming exercise of the PCF/PNA Warrants, (3) the number of units
of each class of partnership interests, capital stock, shares or membership
interests reserved for issuance upon exercise of options, warrants (including
the PCF/PNA Warrants) or convertible securities, (4) the name of each holder of
partnership interests, capital stock, shares or membership interests and the
number of units and percentage interest owned by each such holder and (5) with
respect to all outstanding options and rights to acquire such Credit Party's
equity interests: the holder, the number of units or other interests covered,
the exercise price and the expiration date. No Credit Party has violated any
applicable federal or state securities laws in connection with the offer, sale
or issuance of any of its equity interests (including the PCF/PNA Warrants) or
the Notes, and the offer, sale and issuance of the Notes or the PCF/PNA Warrants
or the issuance of Borrower Common Stock upon the exercise of the PCF/PNA
Warrants or conversion of one class of Borrower Common Stock to another do not
require registration under the Securities Act or any applicable state securities
laws. There are no agreements between any Credit Party's equityholders with
respect to the voting or transfer of the equity interests of such Credit Party
or with respect to any other aspect of such Credit Party's affairs, except for
the Stockholders Agreement and the Certificate of Incorporation of the Borrower.
All of the outstanding equity interests of each Credit Party have been duly and
validly issued, are fully paid and nonassessable, and except as set forth on
Schedule VI and as provided for in the PCF/PNA Warrant Documents and the
Stockholders Agreement, there are no subscriptions, options, warrants, rights,
puts, calls, commitments, conversion rights, profit participation rights, equity
appreciation rights, phantom equity plans, rights of exchange, preemptive rights
(statutory or contractual), rights of first refusal, rights of first offer,
registration rights, plans or other agreements of any character providing for
the purchase, issuance or sale of any equity interest of any Credit Party.
7.15 SUBSIDIARIES. All of the Subsidiaries of the Borrower as of the
Initial Borrowing Date are identified in Schedule XI. The capital stock of each
of the Subsidiaries of the Borrower is duly authorized, validly issued, fully
paid and nonassessable and none of such capital stock constitutes Margin Stock.
Schedule XI correctly sets forth, as of the Initial Borrowing Date, all of the
ownership interests of all Persons in each of the Subsidiaries of the Borrower
identified therein.
7.16 COMPLIANCE WITH STATUTES, ETC. Each of the Borrower and each of
its Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except with
respect to each of the foregoing such noncompliance as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets,
48
CREDIT AGREEMENT
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
7.17 INVESTMENT COMPANY ACT. None of the Borrower nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Borrower nor
any of its Subsidiaries is a "holding company," or a "subsidiary company" of a
"holding company," or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended.
7.19 ENVIRONMENTAL MATTERS. (A) The Borrower and each of its
Subsidiaries have complied with, and on the date of such Credit Event are in
compliance with, in all respects, all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws except such
noncompliances which, in the aggregate, could not reasonably be expected to have
a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole. There are no
past, pending or, to the best knowledge of the Borrower, threatened
Environmental Claims against the Borrower or any of its Subsidiaries or any Real
Property currently owned or operated by the Borrower or any of its Subsidiaries
which could reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole or any Real Property currently owned or
operated by the Borrower or any of its Subsidiaries. There are no facts,
circumstances, conditions or occurrences concerning the business or operations
of the Borrower or any of its Subsidiaries or any Real Property owned or
operated at any time by the Borrower or any of its Subsidiaries or, to the
knowledge of the Borrower the Borrower, any property adjoining any such Real
Property that could reasonably be expected (i) to form the basis of an
Environmental Claim against the Borrower or any of its Subsidiaries or any Real
Property owned or operated by the Borrower or any of its Subsidiaries or (ii) to
cause such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property under any Environmental
Law except such Environmental Claims and restrictions which individually or in
the aggregate could not reasonably be expected to have a material adverse effect
on the performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
49
CREDIT AGREEMENT
(b) Neither the Borrower nor any of its Subsidiaries has, at any
time, generated, used, treated, stored, transported or released Hazardous
Materials on, to or from any Real Property at any time owned or leased or at any
time operated by the Borrower or any of its Subsidiaries, except such
generation, use, treatment, storage, transportation or release as could not
reasonably be expected to have a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
(c) There are not now and, to the best knowledge of the Borrower,
never have been any underground storage tanks located on any Real Property owned
or operated by the Borrower or any of its Subsidiaries except any such
underground storage tanks located on any Real Property owned or operated by the
Borrower or any of its Subsidiaries which could not reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, condition (financial or otherwise) or prospects
of the Borrower and its Subsidiaries taken as a whole.
(d) No Real Property at any time owned or at any time operated by
the Borrower or any of its Subsidiaries is located in any site listed on, or
proposed in the Federal Register for listing on, the Superfund National
Priorities List, or listed on the Comprehensive Environmental Response
Compensation and Liability Information System or their state equivalent, except
for such listing which could not reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole.
7.20 YEAR 2000 REPROGRAMMING. Any reprogramming required to permit
the proper functioning, in and following the year 2000, of the Borrower's or any
of its Subsidiaries' (i) computer systems and (ii) equipment containing embedded
microchips (including systems and equipment supplied by others or with which the
Borrower's systems interface) and the testing of all such systems and equipment,
as so reprogrammed, shall be completed by September 30, 1999. The consequences
of year 2000 (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) could not reasonably be expected to
have a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole. Except for
such of the reprogramming referred to in the preceding sentence as may be
necessary, the computer and management information systems of the Borrower and
its Subsidiaries are, and with ordinary course upgrading and maintenance will
continue to be for the term of this Agreement, sufficient to permit the Borrower
and its Subsidiaries to conduct its business without such conduct resulting
50
CREDIT AGREEMENT
in a material adverse effect on the performance, business, assets, nature of
assets, liabilities, operations, properties, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole.
7.21 LABOR RELATIONS. Neither the Borrower nor any of its
Subsidiaries is engaged in any unfair labor practice that could reasonably be
expected to have a material adverse effect on the Borrower and its Subsidiaries
taken as a whole. There is (i) no significant unfair labor practice complaint
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them, before the National
Labor Relations Board, and no significant grievance or significant arbitration
proceeding arising out of or under any collective bargaining agreement is so
pending against the Borrower or any of its Subsidiaries or, to the best
knowledge of the Borrower, threatened against any of them and (ii) no
significant strike, labor dispute, slowdown or stoppage pending against the
Borrower or any of its Subsidiaries or, to the best knowledge of the Borrower,
threatened against the Borrower or any of its Subsidiaries.
7.22 PATENTS, LICENSES, FRANCHISES AND FORMULAS. (a) The Borrower,
together with its Subsidiaries, has a license to use or otherwise has the right
to use, free and clear of Liens, all the material patents, patent applications,
trademarks, service marks, trade names, trade secrets, copyrights, proprietary
information, computer programs, data bases, licenses, franchises and formulas,
or rights with respect to the foregoing (collectively, "INTELLECTUAL PROPERTY"),
that are necessary for the present conduct of its business, free from
restrictions that are adverse to the use thereof, and has obtained all licenses
and other rights of whatever nature that are necessary for the present conduct
of its business, in each case without any known conflict with the rights of
others which, or the failure to obtain which, as the case may be, could
reasonably be expected to have a material adverse effect on the performance,
business, assets, nature of assets, liabilities, operations, properties,
condition (financial or otherwise) or prospects of the Borrower and its
Subsidiaries taken as a whole.
(b) Except as described on Schedule X, neither the Borrower nor any
of its Subsidiaries has knowledge of any claim by any third party contesting the
validity, enforceability, use or ownership of the Intellectual Property, or of
any existing state of facts that would support a claim that use by the Borrower
or any of its Subsidiaries of any such Intellectual Property has infringed or
otherwise violated any Intellectual Property right of any other Person and, to
the best knowledge of the Borrower and its Subsidiaries, no such claim is
threatened, in each case except for such claims that could not individually or
in the aggregate reasonably be expected to have a material adverse affect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
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CREDIT AGREEMENT
7.23 INDEBTEDNESS. Schedule VII sets forth a true and complete list
of all Indebtedness (other than the Loans and the Indebtedness evidenced by the
Senior Subordinated Notes) and preferred stock of the Borrower and each of its
Subsidiaries as of the Initial Borrowing Date after giving effect to the
Transaction and the other transactions contemplated hereby (the "EXISTING
INDEBTEDNESS"), in each case showing the aggregate amount thereof and the name
of the respective obligor and any other entity which directly or indirectly
guaranteed such debt. None of the Existing Indebtedness was incurred in
connection with, or in contemplation of, the Transaction or the other
transactions contemplated hereby.
7.24 RESTRICTIONS ON OR RELATING TO SUBSIDIARIES. There does not
exist any encumbrance or restriction on the ability of (i) any Subsidiary of the
Borrower to pay dividends or make any other distributions on its capital stock
or any other interest or participation in its profits owned by the Borrower or
any Subsidiary of the Borrower, or to pay any Indebtedness owed to the Borrower
or a Subsidiary of the Borrower, (ii) any Subsidiary of the Borrower to make
loans or advances to the Borrower or any of the Borrower's Subsidiaries, or
(iii) the Borrower or any Subsidiary of the Borrower to transfer any of its
properties or assets to the Borrower or any Subsidiary of the Borrower, except
for such encumbrances or restrictions existing under or by reason of (v)
applicable law, (w) this Agreement, the other Credit Documents and the Senior
Subordinated Loan Documents, (x) customary provisions restricting subletting or
assignment of any lease governing a leasehold interest of the Borrower or a
Subsidiary of the Borrower, (y) customary provisions restricting the transfer
of, or the imposition of Liens on assets subject to Liens permitted pursuant to
Section 9.01(vi) or (viii), or (z) customary provisions restricting assignment
of any licensing agreement entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business.
7.25 THE TRANSACTION. All aspects of the Transaction have been
effected in accordance with the Documents (except to the extent waived by the
parties as provided in Section 5.06) and all applicable law. At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to consummate the
Transaction shall have been obtained, given, filed or taken and are in full
force and effect (or effective judicial relief with respect thereto has been
obtained). All applicable waiting periods with respect thereto have or, prior to
the time when required, will have, expired without, in all such cases, any
action being taken by any competent authority which restrains, prevents or
imposes material adverse conditions upon the consummation of the Transaction.
Additionally, at the time of consummation thereof, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the consummation of the Transaction.
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CREDIT AGREEMENT
7.26 MATERIAL CONTRACTS. All Material Contracts of the Borrower and
each of its Subsidiaries as of the Initial Borrowing Date are listed on Schedule
VIII. No Credit Party nor any of its Subsidiaries is in, nor has any Credit
Party or any of its Subsidiaries received any notices alleging any, breach or
default by any Credit Party or any of its Subsidiaries under any Material
Contract.
7.27 VALID ISSUANCE OF BORROWER COMMON STOCK. The Borrower has duly
authorized and reserved a sufficient number of Class B Shares for issuance upon
the exercise of the PCF/PNA Warrants and a sufficient number of Class A Shares
for issuance upon conversion of such Class B Shares, in each case without giving
effect to any additional shares of Borrower Common Stock which may be issued
after giving effect to antidilution adjustments to the PCF/PNA Warrants after
the Initial Borrowing Date pursuant to the PCF/PNA Warrant Agreement. The Class
B Shares, when issued and delivered by the Borrower pursuant to the PCF/PNA
Warrants, will be duly and validly issued with no liability on the part of the
holders thereof, and fully paid and nonassessable shares of Borrower Common
Stock, free and clear of all Liens, and no Person has any preemptive rights,
rights of first refusal or rights of first offer with respect thereto.
SECTION 8. AFFIRMATIVE COVENANTS. The Borrower covenants and agrees
that on and after the Effective Date and until the Total Commitment and all
Letters of Credit have terminated and the Loans, Notes and Unpaid Drawings,
together with interest, Fees and all other Obligations (other than indemnities
described in Section 13.13 which are not due and payable) incurred hereunder and
thereunder, are paid in full:
8.01 INFORMATION COVENANTS. The Borrower will furnish to the Agent:
(a) Monthly Reports. Within 30 days after the end of each fiscal
month, the consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such month and the related consolidated statements of
income and retained earnings and cash flows for such month and for the
elapsed portion of the fiscal year ended with the last day of such month,
in each case setting forth comparative figures for the corresponding month
and elapsed portion of the prior fiscal year and comparable budgeted
figures for such period, all of which shall be certified by an Authorized
Officer of the Borrower, subject to normal year-end audit adjustments and
the absence of footnotes.
(b) Quarterly Reports. Within 45 days after the end of each of the
first three fiscal quarters of each fiscal year, the consolidated balance
sheet of the Borrower and its Subsidiaries as at the end of such fiscal
quarter and the related consolidated statements of income and retained
earnings and cash flows for such
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CREDIT AGREEMENT
fiscal quarter and for the elapsed portion of the fiscal year ended with
the last day of such fiscal quarter, in each case setting forth
comparative figures for the corresponding fiscal quarter and elapsed
portion of the prior fiscal year and comparable budgeted figures for such
period, all of which shall be certified by an Authorized Officer of the
Borrower, subject to normal year-end audit adjustments and the absence of
footnotes.
(c) Annual Financial Statements. Within 120 days after the close of
each fiscal year of the Borrower, (i) the consolidated and consolidating
balance sheets of the Borrower and its Subsidiaries as at the end of such
fiscal year and the related consolidated and consolidating statements of
income and retained earnings and cash flows for such fiscal year, in each
case setting forth comparative figures for the preceding fiscal year and
comparable budgeted figures for such period and certified (x) in the case
of the consolidating statements, by an Authorized Officer of the Borrower,
and (y) in the case of the consolidated financial statements of the
Borrower and its Subsidiaries, by any of the "big six" or "big four" or
other independent certified public accountants of recognized national
standing acceptable to the Required Banks, together with a signed opinion
of such accounting firm (which opinion shall not be qualified with respect
to scope or going concern in any respect) stating that in the course of
its regular audit of the financial statements of the Borrower, which audit
was conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Default or Event of
Default of a financial nature which has occurred and is continuing or, if
in the opinion of such accounting firm such a Default or Event of Default
has occurred and is continuing, a statement as to the nature thereof, and
(ii) a management discussion and analysis of the results of operations and
financial condition with respect to such period.
(d) Management Letters. Promptly after the receipt thereof by the
Borrower or any of its Subsidiaries, a copy of any "management letter"
received by the Borrower or any of its Subsidiaries from its certified
public accountants.
(e) Budgets. As soon as available but in no event later than 30 days
after the first day of each fiscal year of the Borrower, a budget for the
Borrower and its Subsidiaries, in the form customarily prepared by the
Borrower (including budgeted statements of earnings, sources and uses of
cash, capital expenditures, cash flow statements and balance sheets), for
each calendar month of such fiscal year and on an annual basis for the
next succeeding fiscal year, all prepared in reasonable detail, with
appropriate presentation and discussion of the principal assumptions upon
which such budgets are based, and accompanied by the statement of an
Authorized Officer of the Borrower to the effect that, to the
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CREDIT AGREEMENT
best of his or her knowledge, the budget is a reasonable estimate for the
periods covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(a), (b) and (c), a
certificate of an Authorized Officer of the Borrower to the effect that no
Default or Event of Default has occurred and is continuing or, if any
Default or Event of Default has occurred and is continuing, specifying the
nature and extent thereof, which certificate, (x) in the case of
certificates delivered pursuant to Sections 8.01(b) and (c), shall set
forth the calculations required to establish whether the Borrower was in
compliance with the provisions of Sections 3.03, 4.02, 9.02, 9.04, 9.05
and 9.07 through 9.11, inclusive, at the end of the applicable fiscal
quarter or year, as the case may be, and (y) in the case of certificates
delivered pursuant to Section 8.01(c), shall set forth the calculation of
the amount of Excess Cash Flow, if any, for the relevant Excess Cash Flow
Payment Period.
(g) Notice of Default or Litigation. Promptly, and in any event
within five days after an officer of the Borrower or any of its
Subsidiaries obtains knowledge thereof, notice of (i) the occurrence of
any event which constitutes a Default or Event of Default, (ii) any
litigation or governmental investigation or proceeding pending (x) against
the Borrower or its Subsidiaries which could reasonably be expected to
materially and adversely affect the performance, business, assets, nature
of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a
whole or (y) with respect to any Document, (iii) any other event which
could reasonably be expected to materially and adversely affect the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole, and (iv) any default or
breach by any Credit Party or any of its Subsidiaries under any Material
Contract, or receipt of any notice of such default or breach received from
any party to any Material Contract.
(h) Other Reports and Filings. Promptly upon transmission thereof,
copies of any financial information, proxy materials and other information
and reports, if any, which any Credit Party or any of its Subsidiaries has
filed with the Securities and Exchange Commission (the "SEC").
(i) Environmental Matters. Promptly (and in any event within five
days) after an officer of the Borrower or of any of its Subsidiaries
obtains knowledge thereof, notice of any of the following environmental
matters: (i) any pending or threatened material Environmental Claim
against the Borrower or any of its Subsidiaries or any Real Property owned
or operated at any time by the
55
CREDIT AGREEMENT
Borrower or any of its Subsidiaries; (ii) any condition or occurrence on
or arising from any Real Property owned or operated at any time by the
Borrower or any of its Subsidiaries that (a) could reasonably be
anticipated to result in a material noncompliance by the Borrower or any
of its Subsidiaries with any applicable Environmental Law or (b) could
reasonably be anticipated to form the basis of a material Environmental
Claim against the Borrower or any of its Subsidiaries or any Real Property
owned or operated by the Borrower or any of its Subsidiaries; (iii) any
condition or occurrence on any Real Property owned or operated by the
Borrower or any of its Subsidiaries or any property adjoining such Real
Property that could reasonably be anticipated to cause such Real Property
to be subject to any material restrictions on the ownership, occupancy,
use or transferability of such Real Property under any Environmental Law;
and (iv) the taking of any removal or remedial action in response to a
material Release or material threatened Release or the actual or alleged
presence of any Hazardous Material on or from any Real Property owned or
operated at any time by the Borrower or any of its Subsidiaries, in each
case as required by any Environmental Law or any governmental or other
administrative agency. All such notices shall describe in reasonable
detail the nature of the claim, investigation, condition, occurrence or
removal or remedial action and the Borrower's or such Subsidiary's
response thereto. In addition, the Borrower will provide the Banks with
copies of all material communications with any government or governmental
agency relating to material Environmental Claims, all material
communications with any Person relating to material Environmental Claims,
and such detailed reports of any Environmental Claim as may reasonably be
requested by the Required Banks.
(j) Annual Meetings with Banks. Within 120 days after the close of
each fiscal year of the Borrower, the Borrower shall, at the request of
the Agent or Required Banks, hold a meeting (at a mutually agreeable
location and time) with all Banks who choose to attend such meeting, at
which meeting shall be reviewed the financial results of the previous
fiscal year and the financial condition of the Borrower and its
Subsidiaries and the budgets presented for the current fiscal year of the
Borrower and its Subsidiaries.
(k) Borrowing Base Certificates. (i) On the Initial Borrowing Date
and (ii) no later than 11:00 A.M. (New York time) on the thirtieth day
after the end of each calendar month, a borrowing base certificate of the
Borrower in the form of Exhibit M (each a "BORROWING BASE CERTIFICATE"),
with respect to the Eligible Receivables and Eligible Inventory of the
Borrower and its Subsidiaries as of (x) in the case of clause (i), April
30, 1999 (after giving effect to the Transaction), and (y) in the case of
clause (ii), the last day of such calendar
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CREDIT AGREEMENT
month, in all such cases certified by the chief financial officer or other
Authorized Officer of the Borrower.
(l) Senior Subordinated Loan Document Notices, Etc. Simultaneously
with the delivery thereof to any of the Senior Subordinated Lenders, a
copy of any notice (including without limitation any notice of default)
furnished by the Borrower under the Senior Subordinated Loan Documents.
(m) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to any Credit Party or any
of its Subsidiaries, as the Agent or the Required Banks may reasonably
request.
8.02 BOOKS, RECORDS AND INSPECTIONS. The Borrower will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries, in conformity with GAAP and all
requirements of law, shall be made of all dealings and transactions in relation
to its business and activities. The Borrower will, and will cause each of its
Subsidiaries to, permit, upon reasonable notice to an Authorized Officer,
officers and designated representatives of the Agent or any Bank to visit and
inspect, under guidance of officers of the Borrower or of such Subsidiary, any
of the properties of the Borrower or such Subsidiary, and to examine the books
of account of the Borrower or such Subsidiary and discuss the affairs, finances
and accounts of the Borrower or of such Subsidiary with, and be advised as to
the same by, its and their officers, all at such reasonable times and intervals
and to such reasonable extent as the Agent or such Bank may request.
8.03 MAINTENANCE OF PROPERTY, INSURANCE. (a) Schedule II sets forth
a true and complete listing of all insurance maintained by the Borrower and each
of its Subsidiaries as of the Effective Date. The Borrower will, and will cause
each of its Subsidiaries to, (i) keep all material property used and necessary
in its business in good working order and condition (ordinary wear and tear, and
damage by casualty (so long as the Borrower is applying the proceeds of such
insurance in accordance with Section 4.02(A)(g)), excepted), (ii) maintain with
financially sound and reputable insurance companies insurance on all its
property in at least such amounts and against at least such risks as are
described on Schedule II, (iii) at all times maintain "key man" life insurance
policies in effect with respect to Xxxxxxx X. Xxx and Xxxxxx XxXxxxx Hay in the
amount of $5 million for each such Person, and (iv) furnish to each Bank, upon
written request, full information as to the insurance carried. The provisions of
this Section 8.03 shall be deemed to be supplemental to, but not duplicative of,
the provisions of any of the Security Documents that require the maintenance of
insurance.
(b) The Borrower will at all times keep, and will cause each of its
Subsidiaries to keep, its property insured in favor of the Collateral Agent, and
all
57
CREDIT AGREEMENT
policies (including mortgage policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
the Borrower or its Subsidiaries (other than employee benefit insurance, but
specifically including the "key man" life insurance referred to in Section
8.03(a)(iii))) (i) shall be endorsed to the Collateral Agent's satisfaction for
the benefit of the Collateral Agent (including, without limitation, by naming
the Collateral Agent as loss payee and naming the Collateral Agent, the Agent
and each Bank as an additional insured) with respect to Collateral and with
respect to such "key man" life insurance, and (ii) shall state that such
insurance policies shall not be cancelled or revised without 30 days' prior
written notice thereof by the respective insurer to the Collateral Agent. If the
Borrower or any of its Subsidiaries shall fail to maintain insurance in
accordance with this Section 8.03, or if the Borrower or any of its Subsidiaries
shall fail to endorse and deposit all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation) to procure such insurance, and the Borrower agrees to reimburse the
Collateral Agent for all costs and expenses of procuring such insurance.
8.04 CORPORATE FRANCHISES. The Borrower will do, and will cause each
of its Subsidiaries to do or cause to be done, all things necessary to preserve
and keep in full force and effect its existence and its rights, franchises,
licenses and patents; provided, however, that (a) nothing in this Section 8.04
shall prevent the withdrawal by the Borrower or any Subsidiary of the Borrower
of its qualification as a foreign corporation in any jurisdiction where such
withdrawal could not reasonably be expected to have a material adverse effect on
the performance, business, assets, nature of assets, liabilities, properties,
operations, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole and (b) any transaction permitted by Section
9.02 will not constitute a breach of this Section 8.04.
8.05 COMPLIANCE WITH STATUTES, ETC. The Borrower will, and will
cause each of its Subsidiaries to, comply with all applicable statutes,
regulations and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property except such noncompliances as could
not, individually or in the aggregate, reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
8.06 COMPLIANCE WITH ENVIRONMENTAL LAWS. (a) The Borrower will
comply, and will cause each of its Subsidiaries to comply, with all
Environmental Laws applicable to ownership or use of the Real Property, will
promptly pay or cause the Borrower to pay all costs and expenses incurred in
such compliance, and will keep or cause to be kept all such Real Properties free
and clear of any Liens imposed pursuant to such Environmental Laws. Neither the
Borrower nor any Subsidiary of the Borrower
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CREDIT AGREEMENT
will generate, use, treat, store, Release or dispose of, or permit the
generation, use, treatment, storage, Release or disposal of Hazardous Materials
on any Real Property, or transport or permit the transportation of Hazardous
Materials to or from any Real Property, other than in compliance with applicable
law. Notwithstanding the foregoing, the provisions of this Section 8.06(a) shall
not be breached unless such noncompliances, nonpayments, Liens or handling of
Hazardous Materials, individually or in the aggregate, could reasonably be
expected to have a material adverse effect on the performance, business, assets,
nature of assets, liabilities, operations, properties, condition (financial or
otherwise) or prospects of the Borrower and Subsidiaries taken as a whole.
(b) At the request of the Agent or the Required Banks at any time
and from time to time during the existence of this Agreement (i) if an Event of
Default exists under this Agreement and the Agent or the Required Banks
reasonably believe that such assessments would be desirable in connection with
any potential exercise of remedies pursuant to the Credit Documents, (ii) upon
the reasonable belief by the Agent that the Borrower or any of its Subsidiaries
has breached any representation or covenant herein with respect to any
environmental matters and such breach is continuing, or (iii) in the event
notice is provided under Section 8.01(i) herein, the Borrower will provide, at
its sole cost and expense (or will cause the Borrower to provide at its sole
cost and expense), an environmental site assessment report reasonable in scope
concerning any Real Property of the Borrower or its Subsidiaries, prepared by an
environmental consulting firm approved by the Agent and the Required Banks,
indicating the presence or Release of Hazardous Materials on or from any of the
Real Property and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property. If the Borrower
fails to provide the same after thirty days' notice, the Agent may order the
same, and the Borrower shall grant and hereby grants to the Agent and the Banks
and their agents access to such Real Property and specifically grants the Agent
and the Banks an irrevocable non-exclusive license, subject to the rights of
tenants, to undertake such an assessment, all at the Borrower's expense, which
assessments, if obtained, will be provided to the Borrower.
8.07 ERISA. As soon as possible and, in any event, within ten (10)
days after the Borrower, any Subsidiary of the Borrower or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, the
Borrower will deliver to each of the Banks a certificate of the chief financial
officer or other Authorized Officer of the Borrower setting forth the full
details as to such occurrence and the action, if any, that the Borrower, such
Subsidiary or such ERISA Affiliate is required or proposes to take, together
with any notices required or proposed to be given to or filed with or by the
Borrower, the Subsidiary, the ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator with respect thereto: that a Reportable Event has
occurred (except to the extent that the Borrower has previously delivered to the
59
CREDIT AGREEMENT
Banks a certificate and notices (if any) concerning such event pursuant to the
next clause hereof); that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application may be or has been
made for a waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect to a Plan;
that any contribution required to be made with respect to a Plan has not been
timely made; that a Plan has been or may be terminated, reorganized, partitioned
or declared insolvent under Title IV of ERISA; that a Plan has an Unfunded
Current Liability; that proceedings may be or have been instituted to terminate
or appoint a trustee to administer a Plan which is subject to Title IV of ERISA;
that a proceeding has been instituted pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; that the Borrower, any Subsidiary
of the Borrower or any ERISA Affiliate will or may incur any liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
that the Borrower or any Subsidiary of the Borrower may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan. At the
request of any Bank, the Borrower will deliver to each of the Banks copies of
any records, documents or other information that must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA. At the request of
any Bank, the Borrower will also deliver to each of the Banks a complete copy of
the annual report (on Internal Revenue Service Form 5500-series) of each Plan
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof at the request of any Bank, copies of
annual reports and any records, documents or other information required to be
furnished to the PBGC, and any material notices received by the Borrower, any
Subsidiary of the Borrower or any ERISA Affiliate with respect to any Plan shall
be delivered to the Banks no later than ten (10) days after the date of any such
request.
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CREDIT AGREEMENT
8.08 END OF FISCAL YEAR; FISCAL QUARTERS. The Borrower will cause
its, and each of its Subsidiaries', fiscal years to end on March 31 and each of
its, and each of its Subsidiaries', first three fiscal quarters to end on June
30, September 30 and December 31.
8.09 PERFORMANCE OF OBLIGATIONS. The Borrower will, and will cause
each of its Subsidiaries to, perform all of its obligations under the terms of
each mortgage, indenture, security agreement and other debt instrument by which
it is bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
performance, business, assets, nature of assets, liabilities, operations,
properties, condition (financial or otherwise) or prospects of the Borrower and
its Subsidiaries taken as a whole.
8.10 PAYMENT OF TAXES. The Borrower will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, prior to the date on
which penalties would otherwise attach thereto, and all lawful claims which, if
unpaid, might become a lien or charge upon any properties of the Borrower or any
of its Subsidiaries not otherwise permitted under Section 9.01; provided that
neither the Borrower nor any of its Subsidiaries shall be required to pay any
such tax, assessment, charge, levy or claim which is being contested in good
faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with GAAP.
8.11 INTEREST RATE PROTECTION. The Borrower shall, no later than 60
days following the Initial Borrowing Date, enter into arrangements acceptable to
the Agent establishing a fixed or maximum interest rate acceptable to the Agent
for an aggregate notional amount of at least 50% of the principal amount of the
Borrower's Term Loans outstanding on such date for a period of at least two
years.
8.12 USE OF PROCEEDS. All proceeds of the Loans shall be used as
provided in Section 7.08.
8.13 UCC SEARCHES. At the request of the Agent, the Borrower shall
deliver to the Agent (at the Borrower's own cost) copies of Request for
Information or Copies (UCC-11), or equivalent reports for the purpose of
verifying that all financing statements necessary or, in the opinion of the
Collateral Agent desirable, to perfect the security interests purported to be
created by the Security Agreement shall have been properly recorded and filed.
8.14 INTELLECTUAL PROPERTY RIGHTS. The Borrower will, and will cause
each of its Subsidiaries to, maintain in full force and effect all Intellectual
Property
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CREDIT AGREEMENT
rights necessary in the business judgment of the Borrower or such Subsidiary to
the business of the Borrower or any Subsidiary of the Borrower, and take no
action, or not fail to take an action, as the case may be, in connection with
such Intellectual Property rights which could reasonably be expected to result
in a material adverse effect on the performance, business, assets, nature of
assets, liabilities, properties, operations, condition (financial or otherwise)
or prospects of the Borrower and its Subsidiaries taken as a whole. The Borrower
will, and will cause each of its Subsidiaries to, at all times from and after
the Initial Borrowing Date, diligently prosecute all pending applications filed
in connection with seeking to perfect the Intellectual Property rights and take
all other reasonable actions necessary for the protection and maintenance of the
Intellectual Property rights that are necessary or appropriate to the business
of the Borrower or any Subsidiary of the Borrower (in the business judgment of
the Borrower or such Subsidiary) other than any such actions the failure of
which, in the aggregate, could not reasonably be expected to have a material
adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole.
8.15 REGISTRY. The Borrower hereby designates the Agent to serve as
the Borrower's agent, solely for purposes of this Section 8.15, to maintain a
register (the "REGISTER") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation, shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Commitments and Loans, and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Loans shall remain owing to the transferor. The registration of an
assignment or transfer of all or part of any Commitments and Loans shall be
recorded by the Agent on the Register only upon the acceptance by the Agent of a
properly executed and delivered assignment and assumption agreement pursuant to
Section 13.04(b). Coincident with the delivery of such an assignment and
assumption agreement to the Agent for acceptance and registration of assignment
or transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Bank shall surrender the Note evidencing such Loan, and
thereupon one or more new Notes in the same aggregate principal amount shall be
issued to the assigning or transferor Bank and/or the new Bank. The Borrower
agrees to indemnify the Agent from and against any and all losses, claims,
damages and liabilities of whatsoever nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties under this Section
8.15.
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CREDIT AGREEMENT
8.16 FURTHER ACTIONS. (a) Each Credit Party shall grant to the
Collateral Agent, for the benefit of the Secured Creditors, at the request of
the Agent or the Required Banks, at any time, a security interest in Real
Property of such Credit Party and any other assets of such Credit Party not
already subject to a Security Document. Each Credit Party shall take all actions
reasonably requested by the Agent or the Required Banks (including, without
limitation, in the case of owned Real Property, the obtaining of mortgage
policies, title surveys and real estate appraisals satisfying the requirements
of all applicable laws) in connection with the granting of such security
interests; provided, however, in no event shall the Agent or the Required Banks
request a security interest in any Leaseholds unless the Agent or the Required
Banks has reasonably determined that such Leasehold has material value.
(b) The security interests required to be granted pursuant to clause
(a) above shall be granted pursuant to mortgages, deeds of trust and security
agreements, in each case reasonably satisfactory in form and substance to the
Agent and the Required Banks, which mortgages and security agreements shall
create valid and enforceable perfected security interests prior to the rights of
all third Persons and subject to no other Liens except Permitted Liens. The
mortgages and other instruments related thereto and security agreements shall be
duly recorded or filed in such manner and in such places and at such times as
are required by law to establish, perfect, preserve and protect the Liens, in
favor of the Collateral Agent for the benefit of the Secured Creditors, required
to be granted pursuant to such documents, and all taxes, fees and other charges
payable in connection therewith shall be paid in full by the Borrower. At the
time of the execution and delivery of the additional documents in the case of
owned Real Property, the Borrower shall cause to be delivered to the Collateral
Agent such opinions of counsel, mortgage policies, title surveys, real estate
appraisals, certificates of title and other related documents as may be
reasonably requested by the Agent or the Required Banks to assure themselves
that this Section 8.16 has been complied with.
(c) The Borrower will, and will cause each of its Subsidiaries to,
at the expense of the Borrower, make, execute, endorse, acknowledge, file and/or
deliver to the Collateral Agent from time to time such vouchers, invoices,
schedules, confirmatory assignments, conveyances, financing statements, transfer
endorsements, powers of attorney, certificates, real property surveys, reports
and other assurances or instruments and take such further steps relating to the
collateral covered by any of the Security Documents (including, without
limitation, any aircraft, motor vehicles or other items of collateral as to
which the security interest in favor of the Collateral Agent is not perfected as
of the Initial Borrowing Date) as the Collateral Agent may reasonably require.
(d) Each Credit Party agrees that each action required by Section
8.16(a) or (b) shall be completed within 60 days of the date such action is
requested to be taken.
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8.17 BANK DEPOSIT ACCOUNT; CONCENTRATION ACCOUNT. (a) Within sixty
days after the Initial Borrowing Date, the Borrower shall, and shall have caused
each of its Subsidiaries to, have duly authorized, executed and delivered a Bank
Deposit Account Consent Letter in such form as approved by the Collateral Agent
(each as modified, amended or supplemented from time to time in accordance with
the terms thereof and hereof, a "BANK DEPOSIT ACCOUNT CONSENT LETTER") with the
Collateral Agent and the banking institutions listed on a notice sent by the
Borrower or any of its Subsidiaries to the Collateral Agent at the time of
creation of such accounts (each a "DEPOSIT BANK"), acknowledging that each
checking, savings or other deposit account listed on such notice maintained at
such Deposit Bank (each a "BANK DEPOSIT ACCOUNT") is under the exclusive
dominion and control of the Collateral Agent and that all moneys, instruments
and other securities deposited in such Bank Deposit Account are to be held by
the Deposit Bank for the benefit of the Collateral Agent subject to the right of
the account parties to utilize such deposited amounts in accordance with the
Bank Deposit Account Consent Letter. Each Credit Party represents and warrants
that it does not now maintain, and will not in the future maintain, any other
Bank Deposit Account with any Deposit Bank other than the applicable Bank
Deposit Accounts; provided, however, that each such Credit Party shall be
permitted to establish new Bank Deposit Accounts pursuant to the terms of the
Security Agreement.
(b) Within sixty days after the Initial Borrowing Date, the Borrower
shall, and shall have caused each of its Subsidiaries to, have duly authorized,
executed and delivered a Concentration Account Consent Letter in such form as
approved by the Collateral Agent (each as modified, amended or supplemented from
time to time in accordance with the terms thereof and hereof, a "CONCENTRATION
ACCOUNT CONSENT LETTER") with the Collateral Agent and the Concentration Account
Bank, acknowledging that the Concentration Account listed on a notice sent by
the Borrower or any of its Subsidiaries to the Collateral Agent at the time of
creation of such account maintained at the Concentration Account Bank is under
the exclusive dominion and control of the Collateral Agent and that all moneys,
instruments and other securities deposited in such Concentration Account are to
be held by the Concentration Account Bank for the benefit of the Collateral
Agent subject to the right of the account parties to utilize such deposited
amounts in accordance with the Concentration Deposit Account Consent Letter.
Each of the Borrower and its Subsidiaries represents and warrants that it does
not now maintain, and will not in the future maintain, any other Concentration
Account with any Concentration Account Bank other than the applicable
Concentration Account; provided, however, that each of the Borrower and its
Subsidiaries shall be permitted to establish new Concentration Accounts pursuant
to the terms of the Security Agreement.
(c) On the Initial Borrowing Date, the Borrower and its Subsidiaries
shall deliver a notice to the Collateral Agent setting forth a true and complete
list of
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CREDIT AGREEMENT
each Bank Deposit Account maintained with each Deposit Bank by the Borrower and
each of its Subsidiaries and the Concentration Account maintained with the
Concentration Account Bank by the Borrower and each of its Subsidiaries.
8.18 YEAR 2000 COMPLIANCE. The Borrower will ensure that any
reprogramming required to permit the proper functioning, in and following the
year 2000, of the Borrower's or any of its Subsidiaries' (i) computer systems
and (ii) equipment containing embedded microchips (including systems and
equipment supplied by others or with which the Borrower's systems interface) and
the testing of all such systems and equipment, as so reprogrammed, is completed
by September 30, 1999, except insofar as the failure to do so will not have a
material adverse effect on the performance, business, assets, nature of assets,
liabilities, operations, properties, condition (financial or otherwise) or
prospects of the Borrower and its Subsidiaries taken as a whole, and the
Borrower will notify the Banks promptly upon detecting any failure to achieve
year 2000 computer readiness. In addition, the Borrower will provide any Bank
with such information about its year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
such Bank shall reasonably request.
SECTION 9. NEGATIVE COVENANTS. The Borrower hereby covenants that on
and after the Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations (other than indemnities described in
Section 13.3 which are not due and payable) incurred hereunder and thereunder,
are paid in full:
9.01 LIENS. The Borrower will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
the Borrower or any of its Subsidiaries, whether now owned or hereafter
acquired, or sell any such property or assets subject to an understanding or
agreement, contingent or otherwise, to repurchase such property or assets
(including sales of accounts receivable with recourse to the Borrower or any of
its Subsidiaries), or assign any right to receive income or permit the filing of
any financing statement under the UCC or any other similar notice of Lien under
any similar recording or notice statute; provided that the provisions of this
Section 9.01 shall not prevent the Borrower or any of its Subsidiaries from
creating, incurring, assuming or permitting the existence of the following
(liens described below are herein referred to as "PERMITTED LIENS"):
(i) inchoate Liens with respect to the Borrower or any of its
Subsidiaries for taxes not yet due or Liens for taxes being contested in
good faith and by appropriate proceedings for which adequate reserves have
been established in accordance with GAAP;
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CREDIT AGREEMENT
(ii) Liens in respect of property or assets of the Borrower or any
of its Subsidiaries imposed by law, which were incurred in the ordinary
course of business and do not secure Indebtedness for borrowed money, such
as carriers', warehousemen's, materialmen's, mechanics' and landlords'
liens and other similar Liens arising in the ordinary course of business,
and (x) which do not in the aggregate materially detract from the value of
the Borrower's or any of its Subsidiaries' property or assets or
materially impair the use thereof in the operation of the business of the
Borrower or its Subsidiaries or (y) which are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or assets subject to any
such Lien;
(iii) Liens of the Borrower or its Subsidiaries in existence on the
Effective Date which are listed, and the property subject thereto
described, on Schedule IX;
(iv) Liens created pursuant to the Security Documents;
(v) easements, rights-of-way, restrictions, covenants, encroachments
and other similar charges or encumbrances on the property of the Borrower
or any of its Subsidiaries arising in the ordinary course of business and
not materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(vi) Liens on property of the Borrower and its Subsidiaries subject
to, and securing only, Capitalized Lease Obligations to the extent such
Capitalized Lease Obligations are permitted by Section 9.04(iii); provided
that such Liens only serve to secure the payment of Indebtedness arising
under such Capitalized Lease Obligation and the Lien encumbering the asset
giving rise to the Capitalized Lease Obligation does not encumber any
other asset of the Borrower or any of its Subsidiaries;
(vii) Liens (other than any Lien imposed by ERISA) on property of
the Borrower or any of its Subsidiaries incurred or deposits made in the
ordinary course of business in connection with (x) workers' compensation,
unemployment insurance and other types of social security or (y) to secure
the performance of tenders, statutory obligations, surety and appeal
bonds, bids, leases, government contracts, trade contracts, performance
and return-of-money bonds and other similar obligations (exclusive of
obligations for the payment of borrowed money);
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CREDIT AGREEMENT
(viii) Liens placed upon equipment or machinery used in the ordinary
course of the business of the Borrower or any of its Subsidiaries within
90 days following the time of purchase thereof by the Borrower or any of
its Subsidiaries and improvements and accretions thereto to secure
Indebtedness incurred to pay all or a portion of the purchase price
thereof or any Indebtedness incurred to refinance such Indebtedness,
provided that (x) the aggregate principal amount of all Indebtedness
secured by Liens permitted by this clause (viii) does not exceed the
amounts permitted pursuant to Section 9.04(iii) with respect to all
machinery and equipment, (y) in all events, the Lien encumbering the
equipment or machinery so acquired and improvements and accretions thereto
does not encumber any other asset of the Borrower or any of its
Subsidiaries and (z) the Indebtedness secured by any such Lien does not
exceed 100%, nor is less than 70%, of the lesser of the fair market value
or the purchase price of the property being purchased at the time of the
incurrence of such Indebtedness;
(ix) Liens arising from precautionary UCC-1 financing statement
filings regarding operating leases entered into by the Borrower or any of
its Subsidiaries in the ordinary course of business;
(x) inchoate Liens (where there has been no execution or levy and no
pledge or delivery of collateral) arising from and out of judgments,
decrees or attachments in circumstances not constituting an Event of
Default under Section 10.09;
(xi) licenses of Intellectual Property permitted to be granted to
third-persons in accordance with Section 9.02(vi);
(xii) any interest or title of a licensor of Intellectual Property
licensed by the Borrower or any of its Subsidiaries or of any lessor under
any lease permitted by this Agreement; and
(xiii) additional Liens incurred by the Borrower and its
Subsidiaries so long as the value of the property subject to such Liens,
and the Indebtedness and other obligations secured thereby, do not exceed
$100,000.
9.02 CONSOLIDATION, MERGER, PURCHASE OR SALE OF ASSETS, ETC. The
Borrower will not, and will not permit any of its Subsidiaries to, (a) wind up,
liquidate or dissolve its affairs, (b) enter into any transaction of merger or
consolidation, (c) convey, sell, lease or otherwise dispose of (or agree to do
any of the foregoing at any future time) all or any part of its property or
assets (including without limitation assets consisting of capital stock of a
Subsidiary of the Borrower or stock equivalents thereof), (d) enter into any
partnerships, joint ventures or sale-leaseback transactions, or (e)
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CREDIT AGREEMENT
purchase, lease or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions by the Borrower or any of its Subsidiaries of inventory, materials
and equipment in the ordinary course of business, it being understood that
Product Acquisition Expenditures shall not be considered within the scope of
this exception) of any Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall
be permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may enter into
operating leases in the ordinary course of business;
(iii) investments may be made to the extent permitted by Section
9.05;
(iv) each of the Borrower and its Subsidiaries may make sales of
inventory in the ordinary course of business;
(v) the Transaction shall be permitted as contemplated by the
Documents;
(vi) the Borrower and its Subsidiaries may, in the ordinary course
of business, license as licensee or licensor patents, trademarks,
copyrights and know-how to or from third Persons, so long as (a) to the
extent such licensing involves Product Acquisition Expenditures, such
Product Acquisition Expenditures are permitted under Section 9.19, and (b)
any such license by the Borrower or any of its Subsidiaries in its
capacity as licensor is permitted to be assigned pursuant to the Security
Agreement (to the extent that a security interest in such patents,
trademarks, copyrights and know-how is granted thereunder) and does not
otherwise prohibit the granting of a Lien by the Borrower or any of its
Subsidiaries pursuant to the Security Agreement in the intellectual
property covered by such license;
(vii) the Borrower and its Subsidiaries may sell or discount, in
each case without recourse, accounts receivables arising in the ordinary
course of business, but only in connection with the compromise or
collection thereof;
(viii) the Borrower may transfer assets (including without
limitation cash, and which transfer may be effected by way of asset
transfer, loan or equity contribution) to Wholly-Owned Domestic
Subsidiaries that are Subsidiary Guarantors and Wholly-Owned Foreign
Subsidiaries; provided that (i) the aggregate fair market value of all
such assets so transferred (determined in good faith by the Board of
Directors or senior management of the Borrower) to all such Foreign
Subsidiaries does not exceed $100,000; and (ii) the security
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CREDIT AGREEMENT
interests granted to the Collateral Agent for the benefit of the Secured
Creditors pursuant to the Security Documents in the assets so transferred
shall remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such transfer);
(ix) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any
Wholly-Owned Foreign Subsidiary so long as such Wholly-Owned Foreign
Subsidiary is the surviving corporation of any such merger, dissolution or
liquidation;
(x) the assets of any Foreign Subsidiary may be transferred to the
Borrower or any of its Wholly-Owned Domestic Subsidiaries that are
Subsidiary Guarantors, and any Foreign Subsidiary may be merged with and
into, or be dissolved or liquidated into, the Borrower or any of its
Wholly-Owned Domestic Subsidiaries that are Subsidiary Guarantors so long
as the Borrower or such Wholly-Owned Domestic Subsidiary is the surviving
corporation of any such merger, dissolution or liquidation;
(xi) any Domestic Subsidiary of the Borrower may transfer assets to
the Borrower or to any other Wholly-Owned Domestic Subsidiary of the
Borrower that is a Subsidiary Guarantor so long as the security interests
granted to the Collateral Agent for the benefit of the Secured Creditors
pursuant to the Security Documents in the assets so transferred shall
remain in full force and effect and perfected (to at least the same extent
as in effect immediately prior to such transfer).
(xii) any Wholly-Owned Domestic Subsidiary of the Borrower may merge
with and into the Borrower so long as (i) the Borrower is the surviving
corporation of such merger, and (ii) the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets of such Wholly-Owned Domestic Subsidiary
so merged shall remain in full force and effect and perfected (to at least
the same extent as in effect immediately prior to such merger);
(xiii) any Domestic Subsidiary of the Borrower may merge with and
into, or be dissolved or liquidated into, any other Wholly-Owned Domestic
Subsidiary of the Borrower that is a Subsidiary Guarantor so long as (i)
such Wholly-Owned Domestic Subsidiary of the Borrower is the surviving
corporation of such merger, dissolution or liquidation and (ii) the
security interests granted to the Collateral Agent for the benefit of the
Secured Creditors pursuant to the Security Documents in the assets of such
Domestic Subsidiary
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CREDIT AGREEMENT
shall remain in full force and effect and perfected (to at least the same
extent as in effect immediately prior to such merger, dissolution or
liquidation);
(xiv) the Borrower and its Subsidiaries may sell obsolete, worn-out
or uneconomic equipment so long as the amount of Net Sale Proceeds from
such sales in any one fiscal year does not exceed $100,000 in the
aggregate and such proceeds are applied in accordance with the terms of
Section 4.02(A)(f).
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral (to the extent the Required Banks are
permitted to waive such provisions in accordance with Section 13.12), or any
Collateral is sold as permitted by this Section 9.02, such Collateral shall be
sold free and clear of the Liens created by the Security Documents, and the
Agent and Collateral Agent shall be authorized to take any actions deemed
appropriate in order to effect the foregoing.
9.03 DIVIDENDS. The Borrower will not, nor will the Borrower permit
any of its Subsidiaries to, declare or pay any Dividends with respect to the
Borrower or any of its Subsidiaries, except that:
(i) any Subsidiary of the Borrower may pay Dividends to the Borrower
or any Wholly-Owned Subsidiary of the Borrower;
(ii) the Borrower may redeem or purchase shares of Borrower Common
Stock or options to purchase Borrower Common Stock, as the case may be,
held by the management of the Borrower following the termination, death or
disability of such individuals, provided that (x) the aggregate amount
paid by the Borrower in cash and subordinated notes of the Borrower in the
form of Exhibit N (the "SUBORDINATED REDEMPTION NOTE") in respect of all
such redemptions and/or purchases shall not exceed $250,000 per fiscal
year or $1 million since the Effective Date and (y) at the time of any
payment permitted to be made pursuant to this Section 9.03(ii), no Default
or Event of Default shall then exist or result therefrom; and
(iii) the Borrower may (x) redeem a portion of the PCF/PNA Warrants
in connection with a "cashless exercise" of all or any portion of the
remainder of the PCF/PNA Warrants in accordance with the terms of the
PCF/PNA Warrant Documents and (y) issue shares of Class A Common Stock in
exchange for an equivalent number of shares of Class B Common Stock or
vice versa;
9.04 INDEBTEDNESS. The Borrower will not, and will not permit any of
its Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
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CREDIT AGREEMENT
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
(ii) Indebtedness of the Borrower or any of its Subsidiaries under
(a) any Interest Rate Protection or Other Hedging Agreement or under any
similar type of agreement to the extent such is entered into to satisfy
the requirements of Section 8.11 or any other interest rate caps entered
into to protect the Borrower against fluctuations in interest rates in
respect of the Obligations or (b) Indebtedness under Interest Rate
Protection or Other Hedging Agreements providing protection against
fluctuations in currency values in connection with the Borrower's or any
of its Subsidiaries' operations so long as the entering into of such
agreements are bona fide hedging activities in connection with the
purchase or sale of goods;
(iii) Indebtedness of the Borrower and its Subsidiaries evidenced by
Capitalized Lease Obligations incurred to the extent permitted pursuant to
Section 9.07 and Indebtedness secured by Liens permitted by Section
9.01(viii); provided that the aggregate amount of Indebtedness evidenced
by Capitalized Lease Obligations under all Capital Leases when aggregated
with the amount of Indebtedness secured by Liens permitted by Section
9.01(viii), in each case, incurred after the Effective Date, shall not
exceed $1 million;
(iv) Existing Indebtedness outstanding on the Initial Borrowing Date
and listed on Schedule VII, without giving effect to any subsequent
extension, renewal or refinancing thereof;
(v) Indebtedness constituting Intercompany Loans to the extent
permitted by Section 9.05(xi);
(vi) Indebtedness of the Borrower under any Subordinated Redemption
Notes issued under and in compliance with Section 9.03(ii);
(vii) Indebtedness consisting of guaranties (x) by the Borrower of
Indebtedness, leases and other obligations permitted to be incurred by
Wholly-Owned Domestic Subsidiaries that are Subsidiary Guarantors, (y) by
Domestic Subsidiaries of Indebtedness, leases and other obligations
permitted to be incurred by the Borrower or other Wholly-Owned Domestic
Subsidiaries, and (z) by Foreign Subsidiaries of Indebtedness, leases and
other obligations permitted to be incurred by other Wholly-Owned Foreign
Subsidiaries;
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CREDIT AGREEMENT
(viii) Indebtedness of (x) the Borrower under the Senior
Subordinated Notes in an aggregate principal amount not to exceed $3
million and (y) any Subsidiary Guarantor under the Senior Subordinated
Loan Guaranty; and
(ix) additional Indebtedness of the Borrower and its Domestic
Subsidiaries not otherwise permitted hereunder not exceeding $100,000 in
aggregate principal amount at any time outstanding.
9.05 ADVANCES, INVESTMENTS AND LOANS. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly lend money or
credit or make advances to any Person, or own, purchase or acquire any capital
stock or other equity interests, or any obligations or securities of, or any
other interest in, or make any capital contribution to, any other Person, or
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or hold any cash or Cash Equivalents, except that the
following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
receivables owing to any of them, if created or acquired in the ordinary
course of business and payable or dischargeable in accordance with
customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents; provided that all such cash or Cash Equivalents shall be
held by the Borrower or such Subsidiary in the Concentration Account in
accordance with the terms of the Concentration Account Consent Letter or
in a Bank Deposit Account in accordance with the Bank Deposit Account
Consent Letter; provided further, that at any time that any Revolving
Loans or Swingline Loans are outstanding, the aggregate amount of cash and
Cash Equivalents permitted to be held by the Borrower and its Subsidiaries
shall not exceed $1 million for any period of five consecutive days;
(iii) the Borrower may enter into Interest Rate Protection or Other
Hedging Agreements or under any similar type of agreement to the extent
permitted in accordance with Section 9.04;
(iv) the Borrower and its Subsidiaries may make Capital Expenditures
to the extent permitted by Section 9.07;
(v) the Transaction shall be permitted in accordance with the
provisions of Section 5;
(vi) the Borrower and its Subsidiaries may endorse negotiable
instruments for collection in the ordinary course of business;
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CREDIT AGREEMENT
(vii) the Borrower and its Subsidiaries may make loans and advances
in the ordinary course of business consistent with past practices to their
respective employees for moving, travel and emergency expenses and other
similar expenses, so long as the aggregate principal amount thereof at any
one time outstanding (determined without regard to any write-downs or
write-offs of such loans and advances) shall not exceed $100,000;
(viii) Dividends may be paid to the extent permitted by Section
9.03;
(ix) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with the
bankruptcy or reorganization of suppliers and customers and in good faith
settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(x) the Borrower may acquire and hold obligations of one or more
officers or other employees of the Borrower or its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
Borrower Common Stock so long as (a) no cash is paid by the Borrower or
any of its Subsidiaries in connection with the acquisition of any such
obligations and (b) the aggregate outstanding amount of such obligations
at any time shall not exceed $250,000;
(xi) the Borrower and its Subsidiaries may make intercompany loans,
advances and equity contributions between or among one another
("INTERCOMPANY LOANS"), to the extent permitted in accordance with Section
9.02; provided that (x) each Intercompany Loan made by a Foreign
Subsidiary to the Borrower or a Domestic Subsidiary and each Intercompany
Loan made to the Borrower shall contain the subordination provisions set
forth on Exhibit O, (y) each Intercompany Loan shall be evidenced by an
Intercompany Note and (z) each such Intercompany Note shall be pledged to
the Collateral Agent pursuant to the Pledge Agreement; provided, however,
that in the event the Agent reasonably determines, in light of all the
circumstances (including, without limitation, the value to the Banks of
obtaining a security interest in such Intercompany Note as compared to any
adverse tax consequences the Borrower may experience as a result thereof),
not to require the pledge of any promissory note issued by a Foreign
Subsidiary, then such Intercompany Note shall not be required to be
pledged;
(xii) the Borrower and its Subsidiaries may make transfers of assets
among themselves in accordance with Section 9.02;
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CREDIT AGREEMENT
(xiii) additional investments or loans in an aggregate amount after
the Effective Date not to exceed $500,000, so long as all securities
acquired in accordance with these provisions are pledged to the Collateral
Agent for the benefit of the Secured Creditors in accordance with the
Pledge Agreement with the exception of securities for which the exception
described in Section 9.05(xi) would be applicable.
9.06 TRANSACTIONS WITH AFFILIATES. The Borrower will not, and will
not permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of the Borrower or any Affiliate of the Borrower's Subsidiaries
unless such transaction or series of related transactions is in writing and on
terms that are no less favorable to the Borrower or such Subsidiary, as the case
may be, than those that would be available in a comparable transaction in
arm's-length dealings with an unrelated third party; except that (i) the
Borrower and its Subsidiaries may effect the Transaction, (ii) loans and
advances made in accordance with Section 9.05 shall be permitted, (iii) the
Borrower may pay annual management fees of up to $250,000 per annum to HIG
quarterly in arrears and out-of-pocket expenses to HIG; provided, however, to
the extent there shall exist a Default or Event of Default and the Agent at the
direction of the Required Banks notifies the Borrower that it shall not pay any
management fee, then until such Default or Event of Default is cured or waived,
no such management fee will be payable but may instead accrue, and (iv) the
Borrower may pay to HIG an investment banking fee in connection with the
Transaction; provided that the aggregate amount of any such fee paid in
connection with the Transaction shall not exceed 2% of the value (as calculated
for such purposes in accordance with customary practice in the investment
banking industry) of the Transaction.
9.07 CAPITAL EXPENDITURES. (a) The Borrower will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures, except that
during any fiscal year of the Borrower (commencing with fiscal year 2000) the
Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount thereof does not exceed the amount set forth opposite such
fiscal year below:
Fiscal Year
Ended March 31 Amount
-------------- ------
2000 $250,000
2001 $250,000
2002 $250,000
2003 $250,000
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(b) Notwithstanding the foregoing, in the event that the amount of
Capital Expenditures permitted to be made by the Borrower and its Subsidiaries
pursuant to clause (a) above in any period (before giving effect to any increase
in such permitted expenditure amount pursuant to this clause (b)) is greater
than the amount of such Capital Expenditures made by the Borrower and its
Subsidiaries during such period, such excess (the "ROLLOVER AMOUNT") may be
carried forward and utilized to make Capital Expenditures in the next succeeding
fiscal year; provided that in no event shall the aggregate amount of Capital
Expenditures made by the Borrower and its Subsidiaries during any fiscal year
pursuant to Section 9.07(a) and this Section 9.07(b) exceed 200% of the amount
permitted to be made in such fiscal year pursuant to Section 9.07(a); and
provided, further, however, to the extent unutilized Capital Expenditures are
carried forward to the next succeeding year, any Capital Expenditure made in
such succeeding fiscal year shall be applied first to the Capital Expenditures
permitted to be incurred during such fiscal year without giving effect to any
Rollover Amount and Capital Expenditures carried forward to one year shall not
be permitted to be carried forward again.
(c) Notwithstanding the foregoing, the Borrower and its Subsidiaries
may make Capital Expenditures (which Capital Expenditures will not be included
in any determination under the foregoing clause (a)) with the insurance proceeds
received by the Borrower or any of its Subsidiaries from any Recovery Event so
long as such Capital Expenditures are utilized (or contractually committed to
being utilized) to replace or restore any properties or assets in respect of
which such proceeds were paid within 180 days following the date of the receipt
of such insurance proceeds to the extent such insurance proceeds are not
required to be applied to repay Term Loans pursuant to Section 4.02(A)(g).
9.08 FIXED CHARGE COVERAGE RATIO. The Borrower will not permit the
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
ending on a date set forth below (or, if shorter, the period beginning on July
1, 1999 and ending on a date set forth below), in each case taken as one
accounting period, to be less than the ratio set forth opposite such date:
Fiscal Quarter
Ended Ratio
September 30, 1999 1.00:1.00
December 31, 1999 1.15:1.00
March 31, 2000 1.15:1.00
June 30, 2000 1.15:1.00
September 30, 2000 1.15:1.00
December 31, 2000 1.15:1.00
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CREDIT AGREEMENT
March 31, 2001 1.15:1.00
June 30, 2001 1.15:1.00
September 30, 2001 1.15:1.00
December 31, 2001 1.15:1.00
March 31, 2002 1.15:1.00
June 30, 2002 1.15:1.00
September 30, 2002 1.15:1.00
December 31, 2002 1.15:1.00
March 31, 2003 1.15:1.00
June 30, 2003 1.15:1.00
9.09 INTEREST COVERAGE RATIO. The Borrower will not permit the ratio
of its Consolidated EBITDA to its Consolidated Interest Expense for any period
of four consecutive fiscal quarters ending on a date set forth below (or, if
shorter, the period beginning on July 1, 1999 and ending on a date set forth
below), in each case taken as one accounting period, to be less than the ratio
set forth opposite such date:
Fiscal Quarter
Ended Ratio
September 30, 1999 3.75:1.00
December 31, 1999 4.75:1.00
March 31, 2000 4.75:1.00
June 30, 2000 4.75:1.00
September 30, 2000 5.25:1.00
December 31, 2000 5.75:1.00
March 31, 2001 6.25:1.00
June 30, 2001 6.50:1.00
September 30, 2001 6.50:1.00
December 31, 2001 6.75:1.00
March 31, 2002 6.75:1.00
June 30, 2002 7.00:1.00
September 30, 2002 7.00:1.00
December 31, 2002 7.00:1.00
March 31, 2003 7.00:1.00
June 30, 2003 7.00:1.00
9.10 CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED EBITDA. The Borrower
will not permit the ratio of Consolidated Indebtedness as at the end of any
fiscal quarter ended on a date set forth below to Consolidated EBITDA for any
period of four consecutive fiscal quarters ending on a date set forth below (or,
if shorter, for the period beginning on July 1, 1999 and ending on a date set
forth below; provided that for
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CREDIT AGREEMENT
any such shorter period, Consolidated EBITDA shall be annualized for purposes of
this Section 9.10 by multiplying the actual Consolidated EBITDA for such period
by a fraction the numerator of which is four and the denominator of which is (i)
for the period ending on September 30, 1999, one, (ii) for the period ending on
December 31, 1999, two, and (iii) for the period ending on March 31, 2000,
three), in each case taken as one accounting period, to be greater than the
ratio set forth opposite such date below:
Fiscal Quarter
Ended Ratio
September 30, 1999 2.60:1.00
December 31, 1999 2.00:1.00
March 31, 2000 2.00:1.00
June 30, 2000 2.00:1.00
September 30, 2000 2.00:1.00
December 31, 2000 1.75:1.00
March 31, 2001 1.50:1.00
June 30, 2001 1.50:1.00
September 30, 2001 1.25:1.00
December 31, 2001 1.25:1.00
March 31, 2002 1.00:1.00
June 30, 2002 1.00:1.00
September 30, 2002 0.75:1.00
December 31, 2002 0.75:1.00
March 31, 2003 0.50:1.00
June 30, 2003 0.50:1.00
9.11 MINIMUM EBITDA. The Borrower will not permit its Consolidated
EBITDA for any period of four consecutive fiscal quarters ending on a date set
forth below (or, if shorter, for the period beginning on July 1, 1999 and ending
on a date set forth below), in each case taken as one accounting period, to be
less than the amount set forth opposite such date set forth below:
Fiscal Quarter
Ended Amount
September 30, 1999 $ 2,075,000
December 31, 1999 $ 5,150,000
March 31, 2000 $ 8,250,000
June 30, 2000 $ 9,750,000
September 30, 2000 $10,250,000
December 31, 2000 $10,500,000
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CREDIT AGREEMENT
March 31, 2001 $11,000,000
June 30, 2001 $11,500,000
September 30, 2001 $12,000,000
December 31, 2001 $12,000,000
March 31, 2002 $13,000,000
June 30, 2002 $13,000,000
September 30, 2002 $13,500,000
December 31, 2002 $13,500,000
March 31, 2003 $14,000,000
June 30, 2003 $14,000,000
9.12 LIMITATION ON VOLUNTARY PAYMENTS AND MODIFICATION; LIMITATION
ON MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN OTHER
AGREEMENTS; ETC. The Borrower will not, and will not permit any of its
Subsidiaries to:
(i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption (including pursuant to any
change of control provision) or acquisition for value of (including,
without limitation, by way of depositing with the trustee with respect
thereto money or securities before due for the purpose of paying when
due), any Existing Indebtedness;
(ii) amend or modify, or permit the amendment or modification of,
any provision of the Documents or the Existing Indebtedness or any
agreement relating to any of the foregoing in any material respect in a
manner that could reasonably be expected to be adverse to the Banks, it
being understood that amendments or modifications of the Senior
Subordinated Loan Documents that have the effect of decreasing the
interest rate on the Senior Subordinated Notes, extending the maturity
thereof, eliminating (or increasing any applicable grace periods relating
to) any events of default or covenants with respect thereto or causing any
such events of default or covenants to be less likely to be triggered or
violated, as the case may be, shall not be deemed to be adverse to the
Banks;
(iii) amend, modify or change its Certificate of Incorporation
(including, without limitation, by the filing or modification of any
certificate of designation) or By-Laws, or any other agreement entered
into by it with respect to its capital stock, in a manner adverse to the
Banks, or enter into any new agreement with respect to its capital stock
in a manner that could reasonably be expected to be adverse to the Banks;
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CREDIT AGREEMENT
(iv) amend, modify or change, terminate, or enter into any new
Shareholders' Agreement in a manner that could reasonably be expected to
be adverse to the Banks in their capacity as lenders;
(v) amend, modify or change, terminate or enter into any new Tax
Sharing Agreement in a manner that could reasonably be expected to be
adverse to the Banks;
(vi) amend, modify or change, or enter into any new Management
Agreement, Employee Benefit Plan or Employment Agreement except if the
aggregate cost to the Borrower and its Subsidiaries as a result of such
amendments, modifications, changes to such plans and agreements and new
plans and agreements is not reasonably likely to have a material adverse
effect on the performance, business, property, assets, nature of assets,
liabilities, condition (financial or otherwise) or prospects of the
Borrower and its Subsidiaries taken as a whole; or
(vii) make any payment of any type with respect to the Senior
Subordinated Notes, other than regularly scheduled payments of interest to
the extent required by (and subject to the subordination provisions
contained in) the Senior Subordinated Loan Agreement.
9.13 LIMITATION ON CERTAIN RESTRICTIONS ON SUBSIDIARIES. The
Borrower will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective any
encumbrance or restriction on the ability of any Subsidiary of the Borrower to
(i) pay dividends or make any other distributions on its capital stock or any
other interest or participation in its profits owned by the Borrower or any
Subsidiary of the Borrower, or pay any Indebtedness owed to the Borrower or a
Subsidiary of the Borrower, (ii) make loans or advances to the Borrower or any
of its Subsidiaries, or (iii) transfer any of its properties or assets to the
Borrower, except for such encumbrances or restrictions existing under or by
reason of (v) applicable law, (w) this Agreement, the other Credit Documents and
the Senior Subordinated Loan Documents, (x) customary provisions restricting
subletting or assignments of any lease governing a leasehold interest of the
Borrower or a Subsidiary of the Borrower, (y) the asset transfer or encumbrance
restrictions imposed by purchase money or capitalized lease financing permitted
pursuant to Section 9.04 hereof, or (z) customary provisions restricting
assignment of any licensing agreement entered into by the Borrower or any of its
Subsidiaries in the ordinary course of business.
9.14 LIMITATION ON ISSUANCE OF CAPITAL STOCK. (a) The Borrower will
not permit any of its Subsidiaries to issue any capital stock (including by way
of sales of treasury stock) or any options or warrants to purchase, or
securities convertible into,
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CREDIT AGREEMENT
capital stock, except (i) for transfers and replacements of then outstanding
shares and (ii) for stock splits, stock dividends and similar issuances which do
not decrease the percentage ownership of any Person in any class of the capital
stock of the Borrower or such Subsidiary.
(b) The Borrower will not issue any capital stock, except for
issuances of Borrower Common Stock and Permitted Borrower Securities; provided
that (i) in each case the issuance thereof would not give rise to a Change of
Control and (ii) any shares of Borrower Common Stock so issued are pledged to
the Collateral Agent, for the benefit of the Secured Creditors, pursuant to the
Stockholders Pledge Agreement.
9.15 BUSINESS. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than a
Permitted Business.
9.16 LIMITATION ON CREATION OF SUBSIDIARIES. The Borrower will not,
and will not permit any of its Subsidiaries to, establish, create or acquire any
new Subsidiary; provided that the Borrower and its Wholly-Owned Subsidiaries
shall be permitted to establish, create or acquire Wholly-Owned Subsidiaries so
long as (i) at least 15 days' prior written notice thereof (or such lesser
notice as is acceptable to the Agent) is given to the Agent, (ii) the capital
stock of such new Subsidiary is pledged pursuant to this Agreement and the
Pledge Agreement and the certificates, if any, representing such stock, together
with stock powers duly executed in blank, are delivered to the Collateral Agent,
(iii) such new Subsidiary executes a counterpart of the Subsidiary Guaranty, the
Pledge Agreement and the Security Agreement, and (iv) to the extent requested by
the Agent or the Required Banks, all actions required pursuant to Section 8.16
are taken; provided, however, that in the event the Agent reasonably determines,
in light of all the circumstances (including, without limitation, the value to
the Banks of the Foreign Subsidiary entering into the documents described in
clause (iii) as compared to any adverse tax consequences that the Borrower may
experience as a result thereof), not to require any Foreign Subsidiary to enter
into the documentation described in clause (iii), then such Foreign Subsidiary
shall not be required to do so. In addition, at the request of the Agent, each
new Wholly-Owned Subsidiary that is required to execute any Credit Document
shall execute and deliver, or cause to be executed and delivered, all other
relevant documentation of the type described in Section 5 as such new Subsidiary
would have had to deliver if such new Subsidiary were a Credit Party on the
Initial Borrowing Date.
9.17 CONCENTRATION ACCOUNT; BANK DEPOSIT ACCOUNTS. The Borrower will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
open, maintain or otherwise have any checking, savings or other deposit accounts
at any bank or other financial institution where cash or Cash Equivalents is or
may be deposited or
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CREDIT AGREEMENT
maintained with any Person, other than (i) the Bank Deposit Accounts or (ii) the
Concentration Account.
9.18 NO FURTHER NEGATIVE PLEDGES. Except (a) as otherwise permitted
by or under the terms of this Agreement, and (b) with respect to specific
property encumbered to secure payment of particular Indebtedness permitted to be
incurred by the terms hereof, the Borrower shall not, and shall not permit any
of its Subsidiaries to, enter into any agreement prohibiting the creation or
assumption of any Lien upon its properties or assets, whether now owned or
hereafter acquired.
9.19 PRODUCT ACQUISITION EXPENDITURES. Anything contained in this
Agreement to the contrary notwithstanding, (i) the Borrower and its Subsidiaries
may make Product Acquisition Expenditures in any fiscal year in an aggregate
amount not to exceed (a) $500,000 in respect of any individual product or
product line and (b) $1.5 million in respect of all products and product lines,
and (ii) no other provision of this Agreement shall be deemed to permit the
Borrower and its Subsidiaries to make Product Acquisition Expenditures in any
fiscal year in aggregate amounts in excess of those specified in clauses (a) and
(b) of the immediately preceding clause (i).
SECTION 10. EVENTS OF DEFAULT. Upon the occurrence of any of the
following specified events (each an "EVENT OF DEFAULT"):
10.01 PAYMENTS. The Borrower shall (i) default in the payment when
due of any principal of any Loan or any Note or any Unpaid Drawing or (ii)
default, and such default shall continue unremedied for five days, in the
payment when due of any interest on any Loan or Note or Unpaid Drawing, or any
Fees or any other amounts owing by it hereunder or thereunder; or
10.02 REPRESENTATIONS, ETC. Any representation, warranty or
statement made by any Credit Party herein or in any other Credit Document or in
any certificate delivered pursuant hereto or thereto shall prove to be untrue in
any material respect on the date as of which made or deemed made; or
10.03 COVENANTS. Any Credit Party shall (a) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i), 8.08, 8.11, 8.12, 8.15, 8.16 or 9, or (b) default in the due
performance or observance by it of any other term, covenant or agreement
contained in this Agreement, and any such default described in this clause (b)
shall continue unremedied for a period of 30 days after written notice thereof
to the Borrower by the Agent or any Bank; or
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CREDIT AGREEMENT
10.04 DEFAULT UNDER OTHER AGREEMENTS. The Borrower or any of its
Subsidiaries shall (i) default in any payment of any Indebtedness (other than
the Indebtedness referred to in Section 10.01) beyond the period of grace (not
to exceed 10 days), if any, provided in the instrument or agreement under which
such Indebtedness was created, (ii) default in the observance or performance of
any agreement or condition relating to any Indebtedness (other than the
Indebtedness referred to in Section 10.01) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any Indebtedness to become
due prior to its stated maturity and such default shall not have been cured or
waived, or (iii) any Indebtedness (other than the Indebtedness referred to in
Section 10.01) of the Borrower or any of its Subsidiaries shall be declared to
be due and payable, or required to be prepaid other than by a regularly
scheduled required prepayment, prior to the stated maturity thereof; provided
that it shall not constitute an Event of Default pursuant to this Section 10.04
unless the aggregate amount of all Indebtedness referred to in the preceding
clauses (i) through (iii) above exceeds $500,000 at any one time; or
10.05 BANKRUPTCY, ETC. The Borrower or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled "Bankruptcy," as now or hereafter in effect, or any successor
thereto (the "Bankruptcy Code"); or an involuntary case is commenced against the
Borrower or any of its Subsidiaries and the petition is not controverted within
10 days, or is not dismissed or discharged within 60 days, after commencement of
the case; or a custodian (as defined in the Bankruptcy Code) is appointed for,
or takes charge of, all or substantially all of the property of the Borrower or
any of its Subsidiaries, or the Borrower or any of its Subsidiaries commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the Borrower or any
of its Subsidiaries, or there is commenced against the Borrower or any of its
Subsidiaries any such proceeding which remains undismissed or undischarged for a
period of 60 days, or the Borrower or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any such
case or proceeding is entered; or the Borrower or any of its Subsidiaries
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of 60
days; or the Borrower or any of its Subsidiaries makes a general assignment for
the benefit of creditors; or any corporate action is taken by the Borrower or
any of its Subsidiaries for the purpose of effecting any of the foregoing; or
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CREDIT AGREEMENT
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof), and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days; any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan has not
been timely made, the Borrower or any Subsidiary of the Borrower or any ERISA
Affiliate has incurred or is likely to incur any liability to or on account of a
Plan under Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204
or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or on account
of a group health plan (as defined in Section 607(1) of ERISA or Section
4980B(g)(2) of the Code) under Section 4980B of the Code, or the Borrower or any
Subsidiary of the Borrower has incurred or is likely to incur liabilities
pursuant to one or more employee welfare benefit plans (as defined in Section
3(1) of ERISA) that provide benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or Plans; (b) there
shall result from any such event or events the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability; and (c) such lien, security interest or liability, individually,
and/or in the aggregate, in the opinion of the Required Banks, has had, or could
reasonably be expected to have, a material adverse effect upon the business,
operations, condition (financial or otherwise) or prospects of the Borrower or
any Subsidiary of the Borrower; or
10.07 SECURITY DOCUMENTS. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full force
and effect or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted by
Section 7.11), and subject to no other Liens (except as permitted by Section
7.11); or any Credit Party shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to any
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CREDIT AGREEMENT
of the Security Documents and such default shall continue beyond any grace
period specifically applicable thereto pursuant to the terms of such Security
Document;
10.08 SUBSIDIARIES GUARANTY. At any time after the execution and
delivery thereof, the Subsidiaries Guaranty or any provision thereof shall cease
to be in full force or effect as to any Subsidiary Guarantor, or any Subsidiary
Guarantor or any Person acting by or on behalf of any Subsidiary Guarantor shall
deny or disaffirm such Subsidiary Guarantor's obligations under the Subsidiaries
Guaranty, or any Subsidiary Guarantor shall default in the due performance or
observance of any material term, covenant or agreement on its part to be
performed or observed pursuant to the Subsidiaries Guaranty and such default
shall continue beyond any grace period specifically applicable thereto; or
10.09 JUDGMENTS. One or more judgments or decrees shall be entered
against the Borrower or any of its Subsidiaries involving in the aggregate for
the Borrower and its Subsidiaries a liability (not paid or fully covered by a
reputable insurance company) in excess of $250,000 for all such judgments and
decrees and any such judgments or decrees shall not be satisfied, vacated,
discharged or stayed or bonded pending appeal for any period of 60 consecutive
days; or
10.10 CHANGE IN CONTROL. There shall be (i) a Change in Control or
(ii) a "change in control" or similar event as provided under any Senior
Subordinated Loan Document; or
10.11 CHANGE IN MANAGEMENT. Either or both of Xxxxxxx X. Xxx and
Xxxxxx XxXxxxx Hay shall cease to devote his or her full time, energy and
talents exclusively to serving in a managerial capacity for the Borrower or one
of its Subsidiaries; provided that in the event such cessation is the result of
the death, disability or termination of employment of the applicable individual,
such cessation shall not constitute an Event of Default unless a successor
individual satisfactory to the Required Banks shall not have replaced such
individual in his or her managerial capacity within 90 days after the date of
such cessation:
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of the Agent, any Bank or the holder of
any Note to enforce its claims against any Credit Party (provided that, if an
Event of Default specified in Section 10.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent to the Borrower as specified in clauses (i) and (ii) below shall occur
automatically without the giving of any such notice): (i) declare the Total
Commitment terminated, whereupon all Commitments of each Bank
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CREDIT AGREEMENT
shall forthwith terminate immediately and any Fees shall forthwith become due
and payable without any other notice of any kind; (ii) declare the principal of
and any accrued interest in respect of all Loans and the Notes and all
Obligations owing hereunder and thereunder to be, whereupon the same shall
become, forthwith due and payable without presentment, demand, protest or other
notice of any kind, all of which are hereby waived by each Credit Party; (iii)
terminate any Letter of Credit which may be terminated in accordance with its
terms; (iv) direct the Borrower to pay (and the Borrower agrees that upon
receipt of such notice, or upon the occurrence of an Event of Default specified
in Section 10.05, it will pay) to the Collateral Agent at the Payment Office
such additional amount of cash, to be held as security by the Collateral Agent
for the benefit of the Banks in a cash collateral account established and
maintained by the Collateral Agent pursuant to a cash collateral agreement in
form and substance satisfactory to the Collateral Agent, as is equal to the
aggregate Stated Amount of all Letters of Credit then outstanding; (v) exercise
any rights or remedies under the Subsidiaries Guaranty; and (vi) enforce, as
Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents.
SECTION 11. DEFINITIONS AND ACCOUNTING TERMS.
11.01 DEFINED TERMS. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"ADDITIONAL SECURITY DOCUMENTS" shall mean all mortgages, pledge
agreements and other security documents entered into pursuant to Section 8.16.
"ADJUSTED WORKING CAPITAL" shall mean Consolidated Current Assets
(excluding cash and Cash Equivalents) minus Consolidated Current Liabilities.
"AFFILIATE" shall mean, with respect to any Person, any other Person
directly or indirectly controlling (including but not limited to all directors
and officers of such Person), controlled by, or under direct or indirect common
control with, such Person; provided, however that, for purposes of Section 5.05
and 9.06, an Affiliate of the Borrower shall include any Person that directly or
indirectly (including through limited partner or general partner interests) owns
more than 5% of any class of the capital stock of the Borrower and, for all
purposes of this Agreement, neither the Agent, the Collateral Agent, any Bank or
any of their respective Affiliates shall be considered an Affiliate of the
Borrower or any of its Subsidiaries. A Person shall be deemed to control another
Person if such Person possesses, directly or indirectly, the power to direct or
cause the direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.
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CREDIT AGREEMENT
"AFFILIATE CONTRACTS" shall have the meaning provided in Section
5.05.
"AGENT" shall mean Paribas in its capacity as Agent for the Banks
hereunder, and shall include any successor to the Agent appointed pursuant to
Section 12.09.
"AGREEMENT" shall mean this Credit Agreement, as modified,
supplemented or amended from time to time.
"APPLICABLE MARGIN" shall mean a percentage per annum equal to (i)
in the case of Term Loans, Revolving Loans and Swingline Loans which are
maintained as Base Rate Loans, 2.25%, and (ii) in the case of Term Loans and
Revolving Loans which are maintained as Eurodollar Loans, 3.50%.
"AUTHORIZED OFFICER" shall mean the Chief Executive Officer,
Controller and Chief Financial Officer of the Borrower.
"BANK" shall mean each financial institution listed on Schedule I,
as well as any institution which becomes a "Bank" hereunder pursuant to Section
13.04.
"BANK DEFAULT" shall mean (i) the refusal (which has not been
retracted) of a Bank to make available its portion of any Borrowing or to fund
its portion of any unreimbursed payment under Section 2.04(c) or (ii) a Bank
having notified in writing the Borrower and/or the Agent that it does not intend
to comply with its obligations under Section 1.01 or Section 2, including in
either case as a result of any takeover of such Bank by any regulatory authority
or agency.
"BANK DEPOSIT ACCOUNT" shall have the meaning provided in Section
8.17.
"BANK DEPOSIT ACCOUNT CONSENT LETTER" shall have the meaning
provided in Section 8.17.
"BANKRUPTCY CODE" shall have the meaning provided in Section 10.05.
"BASE RATE" shall mean the higher of (i) 1/2 of 1% in excess of the
Federal Funds Rate and (ii) the Prime Lending Rate.
"BASE RATE LOAN" shall mean (i) each Swingline Loan and (ii) any
Loan designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
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CREDIT AGREEMENT
"BORROWER" shall have the meaning provided in the first paragraph of
this Agreement.
"BORROWER COMMON STOCK" shall mean, collectively, the Class A Shares
and the Class B Shares.
"BORROWING" shall mean the borrowing of one Type of Loan of a single
Tranche from all the Banks having Commitments with respect to such Tranche (or
from the Swingline Bank in the case of Swingline Loans) on a pro rata basis on a
given date (or resulting from a conversion or conversions on such date) having
in the case of Eurodollar Loans the same Interest Period; provided that Base
Rate Loans incurred pursuant to Section 1.10(b) shall be considered part of the
related Borrowing of Eurodollar Loans.
"BORROWING BASE" shall mean, as at any date on which the amount
thereof is being determined, an amount equal to the sum of (i) 85% of Eligible
Receivables, (ii) 50% of Eligible Inventory, and (iii) 50% of Prepaid
Advertising, each as determined from the Borrowing Base Certificate most
recently delivered pursuant to Section 8.01(k).
"BORROWING BASE CERTIFICATE" shall have the meaning provided in
Section 8.01(k).
"BORROWING BASE DEFICIENCY" shall mean, at any time, the amount, if
any, by which (A) the sum of (x) the aggregate principal amount of outstanding
Revolving Loans and Swingline Loans at such time and (y) the total Letter of
Credit Outstandings at such time exceeds (B) the Borrowing Base.
"BUSINESS DAY" shall mean (i) for all purposes other than as covered
by clause (ii) below, any day except Saturday, Sunday and any day which shall be
in New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"CAPITAL EXPENDITURES", as applied to any Person, shall mean
expenditures by such Person for fixed or capital assets, including without
limitation expenditures for maintenance and repairs which should be capitalized
in accordance with GAAP and including Capitalized Lease Obligations; provided
that Capital Expenditures shall not include Product Acquisition Expenditures.
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CREDIT AGREEMENT
"CAPITAL LEASE", as applied to any Person, shall mean any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is accounted for as a capital lease on the balance
sheet of that Person.
"CAPITALIZED LEASE OBLIGATIONS" of any Person shall mean all rental
obligations under Capital Leases, in each case taken at the amount thereof
accounted for as Indebtedness in accordance with GAAP; provided that in no event
shall Product Acquisition Expenditures be deemed to be Capitalized Lease
Obligations.
"CASH EQUIVALENTS" shall mean, as to any Person, (i) securities
issued or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and credit of
the United States is pledged in support thereof) having maturities of not more
than six months from the date of acquisition, (ii) time deposits and
certificates of deposit of any commercial bank organized under the laws of the
United States, any State thereof or the District of Columbia having, or which is
the principal banking subsidiary of a bank holding company organized under the
laws of the United States, any State thereof, or the District of Columbia
having, capital, surplus and undivided profits aggregating in excess of
$200,000,000 and having a long-term unsecured debt rating of at least "A" or the
equivalent thereof from Standard & Poor's Corporation ("S&P") or "A2" or the
equivalent thereof from Xxxxx'x Investors Service, Inc. ("MOODY'S"), with
maturities of not more than six months from the date of acquisition by such
Person, (iii) repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (i) above entered into
with any bank meeting the qualifications specified in clause (ii) above, (iv)
commercial paper issued by any Person incorporated in the United States rated at
least A-1 or the equivalent thereof by S&P or at least P-1 or the equivalent
thereof by Moody's and in each case maturing not more than six months after the
date of acquisition by such Person, and (v) investments in money market funds
substantially all of whose assets are comprised of securities of the types
described in clauses (i) through (iv) above.
"CASH MERGER CONSIDERATION" shall mean the "Cash Amount" under, and
as defined in, the Merger Agreement, which shall not exceed $29,825,606.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.
"CHANGE IN CONTROL" means the occurrence of one or more of the
following: (i) Holdings shall cease to have the power, or shall cease to use the
power, to elect a majority of the Board of Directors of the Borrower, (ii)
Holdings shall cease to own, of record and beneficially, at least 80% of the
Borrower Common Stock and
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CREDIT AGREEMENT
warrants to acquire Borrower Common Stock purchased by Holdings on the Initial
Borrowing Date; provided that (a) in the event any such warrants are exercised
by Holdings, the Borrower Common Stock issued upon such exercise shall
thereafter be deemed to have been issued on the Initial Borrowing Date, in lieu
of the warrants so exercised, for all purposes of this clause (ii), and (b) in
the event any such warrants expire by their terms without having been exercised,
such warrants shall be deemed never to have been issued for all purposes of this
clause (ii), or (iii) the HIG Funds and certain employees of HIG shall cease to
own, beneficially and of record, at least 95% (calculated on a fully diluted
basis) of the economic and voting securities of Holdings.
"CLAIMS" shall have the meaning provided in the definition of
"Environmental Claims."
"CLASS A SHARES" shall mean the Class A Common Stock, par value
$0.0001 per share, of the Borrower.
"CLASS B SHARES" shall mean the Class B Common Stock, par value
$0.0001 per share, of the Borrower.
"CODE" shall mean the Internal Revenue Code of 1986, as amended from
time to time, and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"COLLATERAL" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Pledge Agreement Collateral, all Security Agreement Collateral and all cash and
Cash Equivalents delivered as collateral pursuant to this Agreement or any other
Credit Document.
"COLLATERAL AGENT" shall mean the Agent acting as collateral agent
for the Secured Creditors pursuant to the Security Documents.
"COLLECTIVE BARGAINING AGREEMENTS" shall have the meaning provided
in Section 5.05.
"COMMITMENT" shall mean, with respect to each Bank, such Bank's Term
Loan Commitment and Revolving Loan Commitment, if any.
"CONCENTRATION ACCOUNT" shall mean a separate account which shall be
established and maintained with the Concentration Account Bank for the benefit
of the Secured Creditors by the Borrower and each of its Subsidiaries and in
which the
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CREDIT AGREEMENT
Collateral Agent has a security interest pursuant to the Concentration Account
Consent Letter.
"CONCENTRATION ACCOUNT BANK" shall mean Bank of America, N.T & S.A.
or such other bank that may become a Concentration Account Bank in accordance
with the provisions of the Security Agreement.
"CONCENTRATION ACCOUNT CONSENT LETTER" shall have the meaning
provided in Section 8.17.
"CONSOLIDATED CURRENT ASSETS" shall mean the consolidated current
assets of the Borrower and its Subsidiaries.
"CONSOLIDATED CURRENT LIABILITIES" shall mean the consolidated
current liabilities of the Borrower and its Subsidiaries, but excluding the
current portion of any long-term Indebtedness which would otherwise be included
therein.
"CONSOLIDATED EBIT" shall mean, for any period, the Consolidated Net
Income before interest income, Consolidated Interest Expense, non-cash interest
expense, and provision for taxes and without giving effect to any extraordinary
gains or losses, gains or losses from sales of assets (other than inventory sold
in the ordinary course of business) or unrealized foreign exchange gains or
losses.
"CONSOLIDATED EBITDA" for any period shall mean Consolidated EBIT,
adjusted by adding thereto the amount of all (i) amortization of Transaction
Fees and Expenses and (ii) depreciation of property, plant and equipment, in
each case to the extent the same were deducted in arriving at Consolidated Net
Income for such period.
"CONSOLIDATED INDEBTEDNESS" shall mean, at any time, all
Indebtedness of the Borrower and its Subsidiaries determined on a consolidated
basis (excluding all Indebtedness of the type described in clause (vii) of the
definition thereof, except to the extent amounts are owing with respect thereto
upon the termination of the respective agreement constituting such Indebtedness)
plus any original issue discount attributable to such Indebtedness.
"CONSOLIDATED INTEREST EXPENSE" shall mean, for any period, the
total consolidated cash interest expense of the Borrower and its Subsidiaries
for such period (calculated without regard to any limitations on the payment
thereof) payable during such period in respect of all Indebtedness of the
Borrower and its Subsidiaries, on a consolidated basis, for such period
(including, without duplication, that portion of Capitalized Lease Obligations
of the Borrower and its Subsidiaries representing the interest factor for such
period).
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CREDIT AGREEMENT
"CONSOLIDATED NET INCOME" shall mean, for any period, net income of
the Borrower and its Subsidiaries for such period determined on a consolidated
basis (after provision for taxes); provided, however, the net income of any
Subsidiary of the Borrower which is not a Wholly-Owned Subsidiary shall be
included in the Consolidated Net Income of the Borrower and its Subsidiaries
only to the extent of the amount of cash dividends or distributions paid by such
Subsidiary to the Borrower.
"CONTINGENT OBLIGATION" shall mean, as to any Person, any obligation
of such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("PRIMARY OBLIGATIONS") of any other Person (the
"PRIMARY OBLIGOR") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation, or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation should not include endorsements of
instruments for deposit or collection or standard contractual indemnities
entered into in the ordinary course of business. The amount of any Contingent
Obligation shall be deemed to be an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Contingent Obligation
is made or, if not stated or determinable, the maximum reasonably anticipated
liability in respect thereof (assuming such Person is required to perform
thereunder) as determined by such Person in good faith.
"CONTINUING STOCKHOLDERS" shall mean the existing stockholders of
the Borrower party to the Contribution Agreement.
"CONTRIBUTION AGREEMENT" shall mean the Contribution Agreement,
dated as of May 21, 1999, by and among Newco, Holdings and the Continuing
Stockholders, as the same may be supplemented, modified, amended or restated
from time to time in accordance with Section 9.12.
"CREDIT DOCUMENTS" shall mean this Agreement, each Note, each Notice
of Borrowing, each Notice of Conversion, each Letter of Credit, each Letter of
Credit Request, the Subsidiaries Guaranty and each Security Document.
"CREDIT EVENT" shall mean the making of any Loan or the issuance of
any Letter of Credit.
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CREDIT AGREEMENT
"CREDIT PARTIES PLEDGE AGREEMENT" shall have the meaning provided in
Section 5.07.
"CREDIT PARTY" shall mean the Borrower and each Subsidiary
Guarantor.
"DEBT AGREEMENTS" shall have the meaning provided in Section 5.05.
"DEBT TERMINATION DOCUMENTS" shall have the means provided in
Section 5.16(c).
"DEFAULT" shall mean any event, act or condition which with notice
or lapse of time, or both, would constitute an Event of Default.
"DEFAULTING BANK" shall mean any Bank with respect to which a Bank
Default is then in effect.
"DEPOSIT ACCOUNT" shall have the meaning provided in Section 8.17.
"DEPOSIT BANK" shall have the meaning provided in Section 8.17.
"DIVIDEND" shall mean, with respect to any Person, that such Person
has declared or paid a dividend or returned any equity capital to its
stockholders or authorized or made any other distribution, payment or delivery
of property (other than common stock of such Person) or cash to its stockholders
in their capacity as stockholders, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for consideration any shares of any class of
its capital stock outstanding on or after the Effective Date (or any options or
warrants issued by such Person with respect to its capital stock), or set aside
any funds for any of the foregoing purposes, or shall have permitted any of its
Subsidiaries to purchase or otherwise acquire for consideration any shares of
any class of the capital stock of such Person outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock). Without limiting the foregoing, "DIVIDENDS" with respect to
any Person shall also include all cash payments made or required to be made by
such Person with respect to any stock appreciation rights, equity incentive
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"DOCUMENTS" shall mean the Credit Documents, the Recapitalization
Documents, the Debt Termination Documents and the Senior Subordinated Loan
Documents.
"DOLLARS" and the sign "$" shall each mean freely transferable
lawful money of the United States.
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CREDIT AGREEMENT
"DOMESTIC SUBSIDIARY" shall mean each Subsidiary of the Borrower
which is not a Foreign Subsidiary.
"DRAWING" shall have the meaning provided in Section 2.05(b).
"EFFECTIVE DATE" shall have the meaning provided in Section 13.10.
"ELIGIBLE INVENTORY" shall mean the gross dollar value (valued at
the lower of cost (determined on a first in-first out basis) or market value) of
all inventory of the Borrower and its Subsidiaries which conforms to the
representations and warranties contained in the Security Agreement, less (i) any
supplies (other than raw materials), spare parts for equipment, goods returned
or rejected (except to the extent that such returned or rejected goods continue
to conform to the representations and warranties contained in the Security
Agreement and continue to be acceptable to the Collateral Agent in its
reasonable judgment) by customers, and goods returned to suppliers, (ii) any
advance payments made by customers with respect to inventory of the Borrower and
its Subsidiaries, (iii) inventory subject to any Lien other than Liens created
under the Security Agreement and other than statutory landlord liens so long as
the Borrower and its Subsidiaries are not in default under any lease, and (iv)
any market reserves or other reserves maintained by the Borrower and its
Subsidiaries or which would be required to be maintained under GAAP.
"ELIGIBLE RECEIVABLES" shall mean the total face amount of all
receivables of the Borrower and its Subsidiaries arising from the sale of
inventory by the Borrower or its Subsidiaries in the ordinary course of business
which conform to the representations and warranties contained in the Security
Agreement (including, without limitation, that the Collateral Agent shall have
and maintain a first priority perfected security interest in all such
receivables), less any returns, discounts, claims, credits and allowances of any
nature (whether issued, owing, granted or outstanding) and less reserves
maintained by the Borrower and its Subsidiaries for any other matter affecting
the creditworthiness of account debtors owing the receivables and less, without
duplication, any other reserves which would be required to be maintained in
accordance with GAAP and excluding (i) xxxx and hold (deferred shipment) and
consignment transactions, (ii) contracts or sales to any Affiliate of the
Borrower or any of its Subsidiaries, (iii) all receivables which are not due by
their terms or have not been paid in full within 120 days of the invoice date
thereof or which have been disputed or made subject to set-off, but only to the
extent of such dispute or set-off, (iv) all receivables from any governmental
agency or any departments or instrumentalities thereof unless the Assignment of
Claims Act has been complied with or from any party subject to any bankruptcy,
receivership, insolvency or like proceedings by the account debtor, and (v)
sales to account debtors outside the United States unless such receivables are
backed by (x) a letter of credit from a commercial bank meeting the criteria
contained in clause (ii)
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CREDIT AGREEMENT
of the definition of "Cash Equivalents" or (y) credit insurance from an
insurance carrier of internationally recognized standing.
"ELIGIBLE TRANSFEREE" shall mean and include a commercial bank,
financial institution, other "accredited investor" (as defined in Regulation D
of the Securities Act) other than individuals, or a "qualified institutional
buyer" as defined in Rule 144A of the Securities Act.
"EMPLOYEE BENEFIT PLANS" shall have the meaning provided in Section
5.05.
"EMPLOYMENT AGREEMENTS" shall have the meaning provided in Section
5.05.
"ENVIRONMENTAL CLAIMS" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any violation of, or liability under, any Environmental Law or any
permit issued, or any approval given, under any such Environmental Law
(hereafter, "CLAIMS"), including, without limitation, (a) any and all Claims by
governmental or regulatory authorities for enforcement, cleanup, removal,
response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.
"ENVIRONMENTAL LAW" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, written policy or rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
health, safety or Hazardous Materials, including, without limitation, CERCLA;
RCRA; the Federal Water Pollution Control Act, as amended, 33 U.S.C. Section
1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 7401 et seq.;
the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking Water Act,
42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. Section
2701 et seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et
seq.; and any applicable state, local or foreign counterparts or equivalents.
"EQUITYHOLDERS AGREEMENT" shall mean the Equityholders Agreement
dated as of June 10, 1999 by and among PNA, PCF, the Borrower and the other
stockholders of the Borrower party thereto from time to time, as the same may be
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CREDIT AGREEMENT
supplemented, modified, amended or restated form time to time in accordance with
Section 9.12.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time, and the regulations promulgated and rulings
issued thereunder. Section references to ERISA are to ERISA, as in effect at the
date of this Agreement, and to any subsequent provisions of ERISA, amendatory
thereof, supplemental thereto or substituted therefor.
"ERISA AFFILIATE" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Borrower or a Subsidiary of the Borrower would
be deemed to be a "single employer" (i) within the meaning of Section 414(b),
(c), (m) or (o) of the Code or (ii) as a result of the Borrower or a Subsidiary
of the Borrower being or having been a general partner of such person.
"EURODOLLAR LOAN" shall mean each Loan designated as such by the
Borrower at the time of the incurrence thereof or conversion thereto.
"EVENT OF DEFAULT" shall have the meaning provided in Section 10.
"EXCESS CASH FLOW" shall mean, for any period, the remainder of (i)
the sum, without duplication of (a) Consolidated EBIT for such period, (b) all
depreciation and amortization that were deducted in calculating Consolidated Net
Income for such period, and (c) the decrease, if any, in Adjusted Working
Capital from the first day to the last day of such period minus (ii) the sum,
without duplication, of (a) Consolidated Interest Expense for such period, (b)
the amount of cash taxes actually paid by the Borrower on a consolidated basis
during such period, (c) the amount of cash Capital Expenditures and Product
Acquisition Expenditures (to the extent not financed with Indebtedness, but not
in excess of the amounts permitted pursuant to Section 9.07 (a) or (b) or
Section 9.19, as the case may be) made by the Borrower on a consolidated basis
during such period, (d) the amount of production costs of the Borrower (on a
consolidated basis) capitalized during such period, (e) the amount of permanent
principal payments of Indebtedness for borrowed money of the Borrower (other
than repayments of Loans) during such period, and (f) the increase, if any, in
Adjusted Working Capital from the first day to the last day of such period;
provided that repayments of Loans shall be deducted in determining Excess Cash
Flow if such repayments were applied to Scheduled Term Loan Repayments required
to be made during such period or were made as a voluntary prepayment with
internally generated funds during such period (but in the case of a voluntary
prepayment of Revolving Loans or Swingline Loans, only to the extent accompanied
by a voluntary reduction to the Total Revolving Loan Commitment).
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CREDIT AGREEMENT
"EXCESS CASH FLOW PAYMENT PERIOD" shall mean each fiscal year of the
Borrower commencing with fiscal year 2000.
"EXISTING INDEBTEDNESS" shall have the meaning provided in Section
7.23.
"FACILITY" shall mean any of the credit facilities established under
this Agreement, i.e., the Term Loan Facility or the Revolving Loan Facility.
"FACING FEE" shall have the meaning provided in Section 3.01(b).
"FEDERAL FUNDS RATE" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds Brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three Federal Funds brokers of
recognized standing selected by the Agent.
"FEES" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"FIXED CHARGE COVERAGE RATIO" for any period shall mean the ratio of
(x) Consolidated EBITDA less the amount of all cash Capital Expenditures
(exclusive of Capital Expenditures made in accordance with Section 9.07(c)) made
by the Borrower or any of its Subsidiaries for such period to (y) Fixed Charges
for such period.
"FIXED CHARGES" for any period shall mean the sum of (i)
Consolidated Interest Expense for such period, (ii) the aggregate principal
amount of all scheduled payments of Indebtedness (including the principal
portion of rentals under Capitalized Lease Obligations but excluding repayment
of Revolving Loans or Swingline Loans not accompanied by a permanent reduction
to the Total Revolving Loan Commitment) required to be made during such period,
(iii) taxes paid by the Borrower and its Subsidiaries for such period, and (iv)
Dividends paid in accordance with Section 9.03(ii).
"FOREIGN SUBSIDIARY" shall mean each Subsidiary of the Borrower that
is incorporated under the laws of any jurisdiction other than the United States
of America, any state thereof or any territory thereof.
"GAAP" shall mean generally accepted accounting principles set forth
in opinions and pronouncements of the Accounting Principles Board of the
American
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CREDIT AGREEMENT
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as may be approved by a significant segment of the accounting
profession, in each case as the same are applicable to the circumstances as of
the date of determination.
"HAZARDOUS MATERIALS" means (a) petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls in excess of
50ppm, and radon gas; (b) any chemicals, materials or substances defined as or
included in the definition of "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants," or "pollutants,"
or words of similar meaning and regulatory effect, under any applicable
Environmental Law; and (c) any other chemical, material or substance, exposure
to which is prohibited, limited or regulated under applicable Environmental
Laws.
"HIG" shall mean H.I.G. Capital Management, Inc., a Delaware
corporation.
"HIG FUNDS" shall mean H.I.G. Investment Group L.P., a Cayman
Islands corporation, H.I.G. Investment Group II, L.P., a Cayman Islands limited
partnership and H.I.G. Capital Partners II, L.P., a Delaware limited
partnership.
"HOLDINGS" shall mean HIG Infomercial Company, a Cayman Islands
corporation in respect of which at least 95% of the total voting interests and
95% of the total economic interests are at all times owned, beneficially and of
record, by the HIG Funds and certain employees of HIG.
"INDEBTEDNESS" shall mean, as to any Person, without duplication,
(i) all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services and provided that deferred rent arising from the straight lining of
rents and trade payables and accrued expenses arising in the ordinary course of
business shall not constitute Indebtedness, (ii) the maximum amount available to
be drawn under all letters of credit issued for the account of such Person and
all unpaid drawings in respect of such letters of credit, (iii) all Indebtedness
of the types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether or
not such Indebtedness has been assumed by such Person, (iv) all Capitalized
Lease Obligations of such Person, (v) all obligations of such person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person, (vii) all
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CREDIT AGREEMENT
obligations under any Interest Rate Protection or Other Hedging Agreement or
under any similar type of agreement entered into with a Person not a Bank, and
(viii) mandatory obligations of such Person to redeem or purchase stock or other
equity interests or purchase or repay Indebtedness.
"INDEMNIFIED MATTERS" shall have the meaning provided in Section
13.01.
"INDEMNITEES" shall have the meaning provided in Section 13.01.
"INDEMNITY ESCROW ACCOUNT" shall mean the escrow account established
pursuant to the Indemnity Escrow Agreement.
"INDEMNITY ESCROW AMOUNT" shall mean the amount deposited in the
Indemnity Escrow Account on the Initial Borrowing Date pursuant to the Merger
Agreement, which shall equal $3.3 million.
"INDEMNITY ESCROW AGREEMENT" shall mean that certain Escrow
Agreement dated as of June 10, 1999 by and among Newco, the Borrower, the
"Indemnification Representative" referred to therein, and SunTrust Bank, Miami,
N.A., as the same may be supplemented, modified, amended or restated from time
to time in accordance with Section 9.12.
"INITIAL BORROWING DATE" shall mean the date on which the initial
Credit Event occurs.
"INTELLECTUAL PROPERTY" shall have the meaning provided in Section
7.22.
"INTERCOMPANY LOANS" shall have the meaning provided in Section
9.05(xi).
"INTERCOMPANY NOTE" shall mean promissory notes, in the form of
Exhibit P, evidencing Intercompany Loans.
"INTEREST DETERMINATION DATE" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"INTEREST PERIOD" shall have the meaning provided in Section 1.09.
"INTEREST RATE PROTECTION OR OTHER HEDGING AGREEMENTS" shall have
the meaning provided in the Security Documents.
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"ISSUING BANK" shall mean Paribas and any Bank which at the request
of the Borrower agrees, in such Bank's sole discretion, to become an Issuing
Bank for the purpose of issuing Letters of Credit pursuant to Section 2. The
sole Issuing Bank on the Initial Borrowing Date is Paribas.
"L/C SUPPORTABLE INDEBTEDNESS" shall mean (i) obligations of the
Borrower or any of its Subsidiaries incurred in the ordinary course of business
with respect to insurance obligations and workers compensation, surety bonds and
other similar statutory obligations, and (ii) such other obligations of the
Borrower or any of its Subsidiaries as are reasonably acceptable to the Issuing
Bank and otherwise permitted to exist pursuant to the terms of this Agreement.
"LEASEHOLDS" of any Person means all the right, title and interest
of such Person as lessee or licensee in, to and under leases or licenses of
land, improvements and/or fixtures.
"LETTER OF CREDIT" shall have the meaning provided in Section
2.01(a).
"LETTER OF CREDIT CASH COLLATERAL ACCOUNT" shall have the meaning
provided in Section 4.02(A)(a).
"LETTER OF CREDIT FEE" shall have the meaning provided in Section
3.01(d).
"LETTER OF CREDIT OUTSTANDINGS" shall mean, at any time, the sum of
(i) the aggregate Stated Amount of all outstanding Letters of Credit and (ii)
the amount of all Unpaid Drawings.
"LETTER OF CREDIT REQUEST" shall have the meaning provided in
Section 2.03(a).
"LIEN" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"LOAN" shall mean each Term Loan, each Revolving Loan and each
Swingline Loan.
"MANAGEMENT AGREEMENTS" shall have the meaning provided in Section
5.05.
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CREDIT AGREEMENT
"MANDATORY BORROWING" shall have the meaning provided in Section
1.01(d).
"MARGIN STOCK" shall have the meaning provided in Regulation U.
"MATERIAL CONTRACTS" shall have the meaning provided in Section
5.05.
"MATURITY DATE" with respect to a Tranche shall mean either the Term
Loan Maturity Date, the Revolving Loan Maturity Date or the Swingline Expiry
Date, as the case may be.
"MAXIMUM SWINGLINE AMOUNT" shall mean $1,000,000.
"MERGER" shall mean the merger of Newco with and into the Borrower,
with the Borrower being the surviving corporation of the Merger.
"MERGER AGREEMENT" shall mean the Merger Agreement, dated as of May
21, 1999, by and between Newco and the Borrower, as the same may be
supplemented, modified, amended or restated from time to time in accordance with
Section 9.12.
"MERGER CONSIDERATION" shall mean the sum of the Cash Merger
Consideration and the Indemnity Escrow Amount.
"MERGER DOCUMENTS" shall mean all documents entered into or
delivered in connection with the Merger, including, without limitation, the
Merger Agreement and the certificate of merger filed with the state of Delaware.
"MINIMUM BORROWING AMOUNT" shall mean (i) with respect to the Term
Loan Facility, $1 million, (ii) with respect to the Revolving Loan Facility,
$500,000, and (iii) with respect to any Borrowing of Swingline Loans, $200,000.
"NAIC" shall have the meaning provided in Section 1.10(c).
"NET SALE PROCEEDS" shall mean, for any sale of assets, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale, net of transaction costs, the amount of such gross cash
proceeds required to be used to permanently repay any Indebtedness which is
secured by the respective assets which were sold, and the estimated marginal
increase in income taxes which will be payable by the Borrower's consolidated
group as a result of such sale.
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CREDIT AGREEMENT
"NEWCO" shall mean Thane Acquisition Corporation, a Delaware
corporation.
"NOTE" shall mean each Term Note, each Revolving Note and each
Swingline Note.
"NOTICE OF BORROWING" shall have the meaning provided in Section
1.03(a).
"NOTICE OF CONVERSION" shall have the meaning provided in Section
1.06.
"NOTICE OFFICE" shall mean the office of the Agent located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxxxx Xxxxxxx and Xxxxxxx
Xxxxxxx (except that notices relating to Loan Operations only should be sent to
the attention of Xxxxx Xxxxxxxx), or such other office as the Agent may
hereafter designate in writing as such to the other parties hereto.
"OBLIGATIONS" shall mean all amounts owing to the Agent, the
Collateral Agent or any Bank pursuant to the terms of this Agreement or any
other Credit Document.
"PARIBAS" shall mean Paribas, a French banking organization acting
through its New York Branch.
"PARTICIPANT" shall have the meaning provided in Section 2.04(a).
"PAYMENT OFFICE" shall mean the office of the Agent located at 000
Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Xxxxx Xxxxxxxx, or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"PCF" shall mean Paribas Capital Funding LLC, a Delaware limited
liability company.
"PCF WARRANTS" shall mean the warrants to purchase Borrower Common
Stock issued to PCF pursuant to the PCF Warrant Agreement.
"PCF WARRANT AGREEMENT" shall mean the Warrant Agreement dated as of
June 10, 1999 by and between the Borrower and PCF, as the same may be
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CREDIT AGREEMENT
supplemented, modified, amended or restated from time to time in accordance with
Section 9.02.
"PCF WARRANT DOCUMENTS" shall mean the PCF Warrants, the PCF Warrant
Agreement and the Equityholders Agreement.
"PCF/PNA WARRANTS" shall mean, collectively, the PCF Warrants and
the PNA Warrants.
"PCF/PNA WARRANT DOCUMENTS" shall mean, collectively, the PCF
Warrant Documents and the PNA Warrant Documents.
"PERCENTAGE" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time; provided that if the Percentage of any
Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"PERMITTED BORROWER SECURITIES" shall mean any equity security of
the Borrower, other than Borrower Common Stock, so long as the terms of such
security (i) do not provide any collateral security, (ii) do not provide any
guaranty or other support by any Subsidiary of the Borrower, (iii) do not mature
or contain any mandatory put, redemption, repayment, sinking fund or other
similar provision occurring before the fifth anniversary of the Initial
Borrowing Date, (iv) do not require the cash payment of dividends or interest
before the fifth anniversary of the Initial Borrowing Date, (v) do not contain
any material covenant, (vi) do not grant the holders thereof any voting rights
except for (x) voting rights required to be granted to such holders under
applicable law and (y) limited customary voting rights on fundamental matters
such as mergers, consolidations, sales of substantial assets, or liquidations
involving the Borrower, and (vii) are otherwise reasonably satisfactory to the
Agent.
"PERMITTED BUSINESS" shall mean the line of business in which the
Borrower is engaged on the Initial Borrowing Date.
"PERMITTED LIENS" shall have the meaning provided in Section 9.01.
"PERSON" shall mean any individual, partnership, limited liability
company, joint venture, firm, corporation, association, trust or other
enterprise or any government or political subdivision or any agency, department
or instrumentality thereof.
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CREDIT AGREEMENT
"PLAN" shall mean any pension plan, as defined in Section 3(2) of
ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) the Borrower, a Subsidiary of the Borrower or an
ERISA Affiliate, and each such plan for the five-year period immediately
following the latest date on which the Borrower, a Subsidiary of the Borrower or
an ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan.
"PLEDGE AGREEMENTS" shall mean the Credit Parties Pledge Agreement
and the Stockholders Pledge Agreement, collectively.
"PLEDGE AGREEMENT COLLATERAL" shall mean all "Collateral" as defined
in the Pledge Agreements.
"PLEDGED SECURITIES" shall have the meaning assigned that term in
the Pledge Agreements.
"PNA" shall mean Paribas North America, Inc., a Delaware
corporation.
"PNA WARRANTS" shall mean the warrants to purchase Borrower Common
Stock issued to PNA pursuant to the PNA Warrant Agreement.
"PNA WARRANT AGREEMENT" shall mean the Warrant Agreement dated as of
June 10, 1999 by and between the Borrower and PNA, as the same may be
supplemented, modified, amended or restated from time to time in accordance with
Section 9.02.
"PNA WARRANT DOCUMENTS" shall mean the PNA Warrants, the PNA Warrant
Agreement and the Equityholders Agreement.
"PREPAID ADVERTISING" shall mean, as of any date of determination,
the gross dollar value (valued at cost) of all prepaid network or cable
television airtime carried on the books of the Borrower and its Subsidiaries.
"PRIME LENDING RATE" shall mean the rate which The Chase Manhattan
Bank announces from time to time as its prime lending rate, the Prime Lending
Rate to change when and as such prime lending rate changes. The Prime Lending
Rate is a reference rate and does not necessarily represent the lowest or best
rate actually charged to any customer by Paribas or The Chase Manhattan Bank,
who may make commercial loans or other loans at rates of interest at, above or
below the Prime Lending Rate.
"PRODUCT ACQUISITION EXPENDITURES" shall mean expenditures by the
Borrower and its Subsidiaries consisting of (i) royalty advances to other
Persons in connection with the acquisition of product distribution rights from
such other Persons
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CREDIT AGREEMENT
pursuant to a profit-sharing or similar arrangement and (ii) expenditures to
acquire Intellectual Property relating to the production, distribution or
marketing of products by the Borrower and its Subsidiaries in the ordinary
course of business.
"PROJECTIONS" shall have the meaning provided in Section 5.15.
"QUARTERLY PAYMENT DATE" shall mean the last Business Day of each
March, June, September and December of each fiscal year.
"QUOTED RATE" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by the Agent for U.S. dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of the Agent for which an interest rate
is then being determined with maturities comparable to the Interest Period
applicable to such Eurodollar Loan determined as of 10:00 A.M. (New York time)
on the date which is two Business Days prior to the commencement of such
Interest Period, divided (and rounded upward to the next whole multiple of 1/16
of 1%) by (b) a percentage equal to 100% minus the then stated maximum rate of
all reserve requirements (including, without limitation, any marginal,
emergency, supplemental, special or other reserves) applicable to any member
bank of the Federal Reserve System in respect of Eurocurrency funding or
liabilities as defined in Regulation D (or any successor category of liabilities
under Regulation D).
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"REAL PROPERTY" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"RECAPITALIZATION" shall mean the transactions contemplated by the
Recapitalization Documents described in clauses (i) through (vi) of the
definition thereof.
"RECAPITALIZATION DOCUMENTS" shall mean (i) the Contribution
Agreement, (ii) the Merger Agreement, (iii) the Stockholders Agreement, (iv) the
PCF/PNA Warrant Documents, (v) the warrants for Borrower Common Stock issued by
the Borrower to HIG on the date hereof, (vi) the warrants for Borrower Common
Stock issued by the Borrower to Xxxxxxx Xxx and Xxxxxx XxXxxxx Hay on the date
hereof, and (vii) all other documents entered into or delivered in connection
with the Recapitalization, in each case including all schedules, annexes and
exhibits thereto, as the same may be supplemented, modified, amended or restated
from time to time in accordance with Section 9.12.
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CREDIT AGREEMENT
"RECOVERY EVENT" shall mean the receipt, by the Borrower or any of
its Subsidiaries, of any cash insurance proceeds (i) payable by reason of theft,
physical destruction, damage or any other event with respect to any properties
or assets of the Borrower or any of its Subsidiaries, (ii) pursuant to any
business interruption insurance maintained by the Borrower or any of its
Subsidiaries, or (iii) pursuant to any "key man" life insurance policies
covering any officers or employees of the Borrower or any of its Subsidiaries.
"REFINANCED INDEBTEDNESS" shall have the meaning provided in Section
5.16(b).
"REGISTER" shall have its meaning provided in Section 8.15.
"REGULATION D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof establishing reserve requirements.
"REGULATION T" shall mean Regulation T of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"REGULATION U" shall mean Regulation U of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"REGULATION X" shall mean Regulation X of the Board of Governors of
the Federal Reserve System as from time to time in effect and any successor to
all or a portion thereof.
"RELATED FUND" shall mean, with respect to any Bank, a fund that
invests in loans and is managed by the same investment advisor as such Bank or
by an Affiliate of such investment advisor.
"RELEASE" means disposing, discharging, injecting, spilling,
pumping, leaking, leaching, dumping, emitting, escaping, emptying, seeping,
placing, pouring and the like, into or upon any land or water or air, or
otherwise entering into the environment.
"REPLACED BANK" shall have the meaning provided in Section 1.12.
"REPLACEMENT BANK" shall have the meaning provided in Section 1.12.
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CREDIT AGREEMENT
"REPORTABLE EVENT" shall mean an event described in Section 4043(c)
of ERISA with respect to a Plan that is subject to Title IV of ERISA other than
those events as to which the 30-day notice period is waived under subsection
.22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"REQUIRED BANKS" shall mean Banks the sum of whose outstanding Term
Loans and Revolving Loan Commitments (or, after the termination thereof,
outstanding Revolving Loans plus Percentages of outstanding Swingline Loans and
Letter of Credit Outstandings) represent an amount greater than 50% of the sum
of all outstanding Term Loans and the Total Revolving Loan Commitment (or, after
the termination thereof, the then total outstanding Revolving Loans and
Swingline Loans plus the then total Letter of Credit Outstandings).
"RETURNS" shall have the meaning provided in Section 7.09.
"REVOLVING LOAN COMMITMENT" shall mean, for each Bank, the amount
set forth opposite such Bank's name on Schedule I hereto directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced or
terminated from time to time pursuant to Section 3.02, 3.03, 4.02 and/or 10 or
(y) adjusted from time to time as a result of assignments to or from such Bank
pursuant to Section 1.12 or 13.04.
"REVOLVING LOAN COMMITMENT COMMISSION" shall have the meaning
provided in Section 3.01(a).
"REVOLVING LOAN FACILITY" shall mean the credit facility evidenced
by the Total Revolving Loan Commitment.
"REVOLVING LOAN MATURITY DATE" shall mean the fourth anniversary of
the Initial Borrowing Date.
"REVOLVING LOANS" shall have the meaning provided in Section
1.01(b).
"REVOLVING NOTES" shall have the meaning provided in Section
1.05(a)(ii).
"ROLLOVER AMOUNT" shall have the meaning provided in Section
9.07(b).
"SCHEDULED TERM LOAN REPAYMENT" shall have the meaning provided in
Section 4.02(A)(c).
"SEC" shall have the meaning provided in Section 8.01(h).
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CREDIT AGREEMENT
"SECTION 4.04(b)(ii) CERTIFICATE" shall have the meaning provided in
Section 4.04(b)(ii).
"SECURED CREDITORS" shall mean (x) the Banks, the Agent and the
Collateral Agent and (y) any Bank which on the date hereof is, or subsequently
becomes, party to any Interest Rate Protection or Other Hedging Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended,
and the rules and regulations promulgated thereunder.
"SECURITIES EXCHANGE ACT" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"SECURITY AGREEMENT" shall have the meaning provided in Section
5.08.
"SECURITY AGREEMENT COLLATERAL" shall mean all "Collateral" as
defined in the Security Agreement.
"SECURITY DOCUMENTS" shall mean the Pledge Agreements, the Security
Agreement, each Bank Deposit Account Consent Letter, the Concentration Account
Consent Letter, and any Additional Security Documents.
"SELLING STOCKHOLDERS" shall mean the stockholders of the Borrower
entitled to receive all or any portion of the Cash Merger Consideration.
"SENIOR SUBORDINATED LENDERS" shall mean the financial institutions
from time to time party to the Senior Subordinated Loan Agreement as lenders.
"SENIOR SUBORDINATED LOAN AGREEMENT" shall mean the Senior
Subordinated Loan Agreement, dated as of June 10, 1999, by and among the
Borrower and the Senior Subordinated Lenders, which governs the Senior
Subordinated Notes, as the same may be supplemented, modified, amended or
restated from time to time in accordance with Section 9.12.
"SENIOR SUBORDINATED LOAN DOCUMENTS" shall mean (i) the Senior
Subordinated Loan Agreement, (ii) the Senior Subordinated Notes, and (iii) the
Senior Subordinated Loan Guaranty, in each case including all schedules, annexes
and exhibits thereto.
"SENIOR SUBORDINATED LOAN GUARANTY" shall mean the Subordinated
Guaranty, dated as of June 10, 1999, made by the Subsidiary Guarantors for the
benefit of the Senior Subordinated Lenders with respect to the obligations of
the Borrower
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CREDIT AGREEMENT
under the Senior Subordinated Notes, as the same may be supplemented, modified,
amended or restated from time to time in accordance with Section 9.12.
"SENIOR SUBORDINATED NOTES" shall mean the $3 million in aggregate
principal amount of subordinated promissory notes issued by the Borrower
pursuant to, and subject to the terms of, the Senior Subordinated Loan
Agreement, as the same may be supplemented, modified, amended or restated from
time to time in accordance with Section 9.12.
"SHAREHOLDERS' AGREEMENTS" shall have the meaning provided in
Section 5.05(ii).
"STATED AMOUNT" of each Letter of Credit shall, at any time, mean
the maximum amount available to be drawn thereunder at such time (in each case
determined without regard to whether any conditions to drawing could then be
met).
"STOCKHOLDERS AGREEMENT" shall mean the Stockholders Agreement,
dated as of June 10, 1999, by and among the Borrower, Holdings and the
Continuing Stockholders, as the same may be supplemented, modified, amended or
restated from time to time in accordance with Section 9.12.
"STOCKHOLDERS PLEDGE AGREEMENT" shall have the meaning provided in
Section 5.07.
"SUBORDINATED REDEMPTION NOTE" shall have the meaning provided in
Section 9.03.
"SUBSIDIARIES GUARANTY" shall have the meaning provided in Section
5.09.
"SUBSIDIARY" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"SUBSIDIARY GUARANTORS" shall mean each Subsidiary of the Borrower,
except to the extent the Agent determines otherwise with respect to any Foreign
Subsidiaries in accordance with Section 9.16.
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"SWINGLINE BANK" shall mean Paribas, in its capacity as the maker of
Swingline Loans, or any other Bank with a Revolving Loan Commitment which agrees
to act as the Swingline Bank; provided, the sole Swingline Bank on the Initial
Borrowing Date shall be Paribas.
"SWINGLINE EXPIRY DATE" shall mean the date that is two Business
Days prior to the Revolving Loan Maturity Date.
"SWINGLINE LOANS" shall have the meaning provided in Section
1.01(c).
"SWINGLINE NOTE" shall have the meaning provided in Section
1.05(a)(iii).
"SYNDICATION TERMINATION DATE" shall mean the earlier of (x) 90 days
after the Initial Borrowing Date or (y) the date on which the Agent, in its sole
discretion, determines (and notifies the Borrower) that the primary syndication
(and the resultant addition of institutions as Banks pursuant to Section 13.04)
has been completed.
"TAX SHARING AGREEMENTS" shall have the meaning provided in Section
5.05.
"TAXES" shall have the meaning provided in Section 4.04(a).
"TERM LOAN" shall have the meaning provided in Section 1.01(a).
"TERM LOAN COMMITMENT" shall mean, with respect to each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Term Loan Commitment," as the same may be (x) reduced or
terminated pursuant to Section 3.03, 4.02 and/or 10 or (y) adjusted from time to
time as a result of assignments to or from such Bank pursuant to Section 1.12 or
13.04.
"TERM LOAN FACILITY" shall mean the credit facility evidenced by the
Total Term Loan Commitment.
"TERM LOAN MATURITY DATE" shall mean the fourth anniversary of the
Initial Borrowing Date.
"TERM NOTE" shall have the meaning provided in Section 1.05(a)(i).
"TOTAL TERM LOAN COMMITMENT" shall mean, at any time, the sum of the
Term Loan Commitments of each of the Banks.
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CREDIT AGREEMENT
"TOTAL COMMITMENT" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"TOTAL REVOLVING LOAN COMMITMENT" shall mean, at any time, the sum
of the Revolving Loan Commitments of each of the Banks.
"TOTAL UNUTILIZED REVOLVING LOAN COMMITMENT" shall mean, at any
time, an amount equal to the remainder of (x) the then Total Revolving Loan
Commitment less (y) the sum of (A) the aggregate principal amount of Revolving
Loans and Swingline Loans then outstanding plus (B) the then aggregate amount of
Letter of Credit Outstandings.
"TRANCHE" shall mean the respective facilities and commitments
utilized in making Loans hereunder, with there being three separate Tranches,
i.e., whether Term Loans, Revolving Loans or Swingline Loans.
"TRANSACTION" shall mean, collectively, (i) the incurrence of Loans
hereunder on the Initial Borrowing Date, (ii) the issuance of the Senior
Subordinated Notes on the Initial Borrowing Date, (iii) the consummation of the
Recapitalization, (iv) the repayment of all Refinanced Indebtedness, together
with all accrued interest, premiums, fees, commissions and expenses owing in
connection therewith, and the termination of all commitments thereunder, and (v)
the payment of the Transaction Fees and Expenses in connection with the
foregoing.
"TRANSACTION FEES AND EXPENSES" shall mean all fees and expenses
incurred in connection with and arising out of the Transaction and the
transactions contemplated thereby and hereby; provided, however, that the
aggregate amount of such fees and expenses shall not exceed approximately $2.0
million in the aggregate.
"TYPE" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
"UNFUNDED CURRENT LIABILITY" of any Plan shall mean the amount, if
any, by which (i) the value of all benefit liabilities under such Plan,
determined on a plan termination basis using the assumptions prescribed by the
PBGC for purposes of Section 4044 of ERISA, exceeds (ii) the fair market value
of all Plan assets allocable to such liabilities under Title IV of ERISA
(excluding any accrued but unpaid contributions), all determined as of the most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of the Borrower, any
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CREDIT AGREEMENT
Subsidiary of the Borrower or an ERISA Affiliate to the PBGC or any other person
(as defined in Section 3(9) of ERISA) under Title IV of ERISA.
"UNITED STATES" and "U.S." shall each mean the United States of
America.
"UNPAID DRAWING" shall have the meaning provided for in Section
2.05(a).
"UNUTILIZED REVOLVING LOAN COMMITMENT" for any Bank, at any time,
shall mean the Revolving Loan Commitment of such Bank at such time less the sum
of (i) the aggregate principal amount of Revolving Loans made by such Bank and
then outstanding and (ii) such Bank's Percentage of the Letter of Credit
Outstandings.
"WHOLLY-OWNED SUBSIDIARY" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than directors' qualifying shares
and/or other nominal shares required to be held other than by such Persons under
applicable law) is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person, and (ii) any partnership, association,
joint venture or other entity in which such Person and/or one or more
Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
SECTION 12. THE AGENT.
12.01 APPOINTMENT. The Banks hereby designate Paribas as Agent (for
purposes of this Section 12, the term "Agent" shall include Paribas in its
capacity as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Agent to take such action on its behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder by or through its officers, directors, agents or employees.
12.02 NATURE OF DUTIES. The Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and the
Security Documents. Neither the Agent nor any of its officers, directors, agents
or employees shall be liable for any action taken or omitted by it or them
hereunder or under any other Credit Document or in connection herewith or
therewith, unless caused by its or their
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CREDIT AGREEMENT
gross negligence or willful misconduct. The duties of the Agent shall be
mechanical and administrative in nature; the Agent shall not have by reason of
this Agreement or any other Credit Document a fiduciary relationship in respect
of any Bank or the holder of any Note; and nothing in this Agreement or any
other Credit Document, expressed or implied, is intended to or shall be so
construed as to impose upon the Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein.
12.03 LACK OF RELIANCE ON THE AGENT. Independently and without
reliance upon the Agent, each Bank and the holder of each Note, to the extent it
deems appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of the Borrower and its
Subsidiaries in connection with the making and the continuance of the Loans and
the participation in Letters of Credit and the taking or not taking of any
action in connection herewith and (ii) its own appraisal of the creditworthiness
of the Borrower and its Subsidiaries and, except as expressly provided in this
Agreement, the Agent shall have no duty or responsibility, either initially or
on a continuing basis, to provide any Bank or the holder of any Note with any
credit or other information with respect thereto, whether coming into its
possession before the making of the Loans, the participation in the Letters of
Credit or at any time or times thereafter. The Agent shall not be responsible to
any Bank or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, priority or sufficiency of
this Agreement or any other Credit Document or the financial condition of the
Borrower or its Subsidiaries or be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any other Credit Document, or the financial
condition of the Borrower or its Subsidiaries or the existence or possible
existence of any Default or Event of Default. In no event shall the Agent be
required in contravention of applicable law or if such action would cause it, in
its sole determination, to incur any risk or liability for which it is not
adequately indemnified for to its satisfaction.
12.04 CERTAIN RIGHTS OF THE AGENT. If the Agent shall request
instructions from the Required Banks with respect to any act or action
(including failure to act) in connection with this Agreement or any other Credit
Document, the Agent shall be entitled to refrain from such act or taking such
action unless and until the Agent shall have received instructions from the
Required Banks; and the Agent shall not incur liability to any Person by reason
of so refraining. Without limiting the foregoing, no Bank or the holder of any
Note shall have any right of action whatsoever against the Agent as a result of
the Agent acting or refraining from acting hereunder or under any other Credit
Document in accordance with the instructions of the Required Banks.
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12.05 RELIANCE. The Agent shall be entitled to rely, and shall be
fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or facsimile message, cablegram,
radiogram, legal opinion, order or other document or telephone message signed,
sent or made by any Person that the Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by it.
12.06 INDEMNIFICATION. (a) To the extent the Agent is not reimbursed
and indemnified by the Borrower, the Banks will reimburse and indemnify the
Agent, in proportion to their respective "percentages" as used in determining
the Required Banks, for and against any and all liabilities, obligations,
losses, damages, penalties, claims, actions, judgments, suits, costs, expenses
or disbursements of whatsoever kind or nature which may be imposed on, asserted
against or incurred by the Agent in performing its duties hereunder or under any
other Credit Document, in any way relating to or arising out of this Agreement
or any other Credit Document; provided that no Bank shall be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the Agent's
gross negligence or willful misconduct.
(b) The Agent shall be fully justified in failing or refusing to
take any action hereunder and under any other Credit Document (except actions
expressly required to be taken by it hereunder or under the Credit Documents)
unless it shall first be indemnified to its satisfaction by the Banks pro rata
against any and all liability, cost and expense that it may incur by reason of
taking or continuing to take any such action.
12.07 THE AGENT IN ITS INDIVIDUAL CAPACITY. With respect to its
obligation to make Loans under this Agreement, the Agent shall have the rights
and powers specified herein for a "Bank" and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
term "Banks," "Required Banks," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of banking, trust or other business with any Credit
Party or any Affiliate of any Credit Party as if it were not performing the
duties specified herein, may hold equity interests in the Borrower or any of its
Affiliates and may accept fees and other consideration from the Borrower or any
other Credit Party or any of their Affiliates for services in connection with
this Agreement and otherwise without having any liability to, and without having
to account for the same to the Banks.
12.08 HOLDERS. The Agent may deem and treat the payee of any Note as
the owner thereof for all purposes hereof unless and until a written notice of
the
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assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorses, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
12.09 RESIGNATION BY THE AGENT. (a) The Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 15 Business Days' prior written notice to
the Borrower and the Banks. Such resignation shall take effect upon the
appointment of a successor Agent pursuant to clauses (b) and (c) below or as
otherwise provided below.
(b) Upon any such notice of resignation, the Required Banks shall
appoint a successor Agent hereunder or thereunder who shall be a commercial bank
or trust company reasonably acceptable to the Borrower.
(c) If a successor Agent shall not have been so appointed within
such 15 Business Day period, the Agent, with the consent of the Borrower, shall
then appoint a successor Agent who shall serve as Agent hereunder or thereunder
until such time, if any, as the Banks appoint a successor Agent as provided
above.
(d) If no successor Agent has been appointed pursuant to clause (b)
or (c) above by the 30th Business Day after the date such notice of resignation
was given by the Agent, the Agent's resignation shall become effective and the
Banks shall thereafter perform all the duties of the Agent hereunder and/or
under any other Credit Document until such time, if any, as the Banks appoint a
successor Agent as provided above.
SECTION 13. MISCELLANEOUS.
13.01 PAYMENT OF EXPENSES, ETC. The Borrower agrees to: (i) whether
or not the transactions herein contemplated are consummated, pay all
out-of-pocket costs and expenses of the Agent (including, without limitation,
the reasonable fees and disbursements of O'Melveny & Xxxxx LLP and local
counsel) after presentation of an invoice in connection with the preparation,
execution and delivery of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein and any amendment,
waiver or consent relating hereto or thereto, of the Agent in connection with
its syndication efforts with respect to this Agreement (including, without
limitation, the reasonable fees and disbursements of O'Melveny & Xxxxx LLP) and
of the Agent and each of the Banks in connection with the enforcement of this
Agreement and the other Credit Documents and the documents and instruments
referred to herein and therein (including, without limitation, the fees and
disbursements
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of counsel for the Agent and for each of the Banks); (ii) pay and hold each of
the Banks harmless from and against any and all present and future stamp, excise
and other similar taxes with respect to the foregoing matters and save each of
the Banks harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Bank) to pay such taxes; and (iii) defend, protect, indemnify and hold
harmless the Agent and each Bank, and each of their respective officers,
directors, employees, representatives, attorneys and agents (collectively called
the "INDEMNITEES") from and against any and all liabilities, obligations
(including removal or remedial actions), losses, damages (including foreseeable
and unforeseeable consequential damages and punitive damages), penalties,
claims, actions, judgments, suits, costs, expenses and disbursements (including
reasonable attorneys' and consultants fees and disbursements) of any kind or
nature whatsoever that may at any time be incurred by, imposed on or assessed
against the Indemnitees directly or indirectly based on, or arising or resulting
from, or in any way related to, or by reason of (a) any investigation,
litigation or other proceeding (whether or not the Agent, the Collateral Agent
or any Bank is a party thereto and whether or not any such investigation,
litigation or other proceeding is between or among the Agent, the Collateral
Agent, any Bank, the Borrower or any third person or otherwise) related to the
entering into and/or performance of this Agreement or any other Credit Document
or the use of any Letter of Credit or the proceeds of any Loans hereunder or the
consummation of any transactions contemplated herein (including, without
limitation, the Transaction) or in any other Credit Document or any other
document or agreement delivered in connection herewith or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents; or,
(b) the actual or alleged generation, presence or Release of Hazardous Materials
on or from, or the transportation of Hazardous Materials to or from, any Real
Property owned or at any time operated by the Borrower or any of its
Subsidiaries or; (c) any Environmental Claim relating to the Borrower or any of
its Subsidiaries or any Real Property owned or at any time operated by the
Borrower or any of its Subsidiaries or; (d) the exercise of the rights of the
Agent and of any Bank under any of the provisions of this Agreement or any other
Credit Document or any Letter of Credit or any Loans hereunder or any other
document or agreement delivered in connection herewith; or (e) the consummation
of any transaction contemplated herein (including, without limitation, the
Transaction) or in any other Credit Document (the "INDEMNIFIED MATTERS")
regardless of when such Indemnified Matter arises; but excluding any such
Indemnified Matter to the extent based on the bad faith, gross negligence or
willful misconduct of any Indemnitee.
13.02 RIGHT OF SETOFF. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or
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other notice of any kind to any Credit Party or to any other Person, any such
notice being hereby expressly waived, to set off and to appropriate and apply
any and all deposits (general or special) and any other Indebtedness at any time
held or owing by such Bank (including, without limitation, by branches and
agencies of such Bank wherever located) to or for the credit or the account of
each Credit Party against and on account of the Obligations and liabilities of
such Credit Party to such Bank under this Agreement or under any of the other
Credit Documents, including, without limitation, all interests in Obligations
purchased by such Bank pursuant to Section 13.06(b), and all other claims of any
nature or description arising out of or connected with this Agreement or any
other Credit Document, irrespective of whether or not such Bank shall have made
any demand hereunder and although said Obligations, liabilities or claims, or
any of them, shall be contingent or unmatured.
13.03 NOTICES. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, facsimile or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to the Borrower, at
its address specified opposite its signature below; if to any Bank, at its
address specified opposite its name below; and if to the Agent, at its Notice
Office; or, as to any Credit Party or the Agent, at such other address as shall
be designated by such party in a written notice to the other parties hereto and,
as to each Bank, at such other address as shall be designated by such Bank in a
written notice to the Borrower and the Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, facsimiled, or cabled
or sent by overnight courier, be effective when received.
13.04 BENEFIT OF AGREEMENT. (a) This Agreement shall be binding upon
and inure to the benefit of and be enforceable by the respective successors and
assigns of the parties hereto; provided, however, no Credit Party may assign or
transfer any of its rights, obligations or interest hereunder or under any other
Credit Document without the prior written consent of the Banks; and provided
further, that although any Bank may transfer, assign or grant participations in
its rights hereunder, such Bank shall remain a "Bank" for all purposes hereunder
(and may not transfer or assign all or any portion of its Commitments or Loans
hereunder except as provided in Section 13.04(b)) and the transferee, assignee
or participant, as the case may be, shall not constitute a "Bank" hereunder; and
provided further, that no Bank shall transfer or grant any participation under
which the participant shall have rights to approve any amendment to or waiver of
this Agreement or any other Credit Document except to the extent such amendment
or waiver would (i) extend the final scheduled maturity of any Loan, Note or
Letter of Credit (unless such Letter of Credit is not extended beyond the
Revolving Loan Maturity Date) in which such participant is participating, or
reduce the rate or extend the time of payment of interest or Fees thereon
(except in connection with a waiver of applicability of any post-default
increase in interest rates) or reduce the
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principal amount thereof, or increase the Commitments in which such participant
is participating over the amount thereof then in effect (it being understood
that a waiver of any Default or Event of Default or of a mandatory reduction in
the Total Commitment shall not constitute a change in the terms of any
Commitment, and that an increase in any Commitment shall be permitted without
the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
any Credit Party of any of its rights and obligations under this Agreement or
(iii) release all or substantially all of the Collateral under all of the
Security Documents (except as expressly provided in the Credit Documents)
supporting the Loans hereunder in which such participant is participating. In
the case of any such participation, the participant shall not have any rights
under this Agreement or any of the other Credit Documents (the participant's
rights against such Bank in respect of such participation to be those set forth
in the agreement executed by such Bank in favor of the participant relating
thereto) and all amounts payable by the Borrower hereunder shall be determined
as if such Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank together
with one or more other Banks) may (x) (A) pledge its Loans and/or Notes
hereunder to a Federal Reserve Bank in support of borrowings made by such Bank
from such Federal Reserve Bank or (B) assign all or a portion of its Loans or
Commitments and related outstanding Obligations hereunder to its parent company,
principal office and/or any Affiliate of such Bank which is at least 50% owned
by such Bank or its parent company or to one or more other Banks or to a Related
Fund or (y) assign all or a portion equal to at least $5,000,000, of such Loans
or Commitments and related outstanding Obligations hereunder to one or more
Eligible Transferees each of which assignees shall become a party to this
Agreement as a Bank by execution of an assignment and assumption agreement
substantially in the form of Exhibit Q (appropriately completed); provided that:
(i) at such time Schedule I shall be deemed modified to reflect the Commitments
of such new Bank and of the existing Banks; (ii) new Notes will be issued to
such new Bank and to the assigning Bank, such new Notes to be in conformity with
the requirements of Section 1.05 to the extent needed to reflect the revised
Commitments; (iii) the consent of the Agent and, so long as there shall not
exist a Default or Event of Default, the consent of the Borrower, which consent,
shall, in each case, not be unreasonably withheld, shall be required in
connection with any assignment (provided, however, that no such consent by the
Agent shall be required in the case of any assignment to another Bank, any
Bank's Affiliate or Related Fund); and (iv) the Agent shall receive at the time
of each such assignment, from the assigning Bank, the payment of a
non-refundable assignment fee of $3,000. To the extent of any assignment
pursuant to this Section 13.04(b), the assigning Bank shall be relieved of its
obligations hereunder with respect to its assigned Commitments. No transfer or
assignment under this Section 13.04(b) will be effective until recorded by the
Agent on the Register
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pursuant to Section 8.15. At the time of each assignment pursuant to this
Section 13.04(b) to a Person which is not already a Bank hereunder and which is
not a United States person (as such term is defined in Section 7701(a)(30) of
the Code) for Federal income tax purposes, the respective assignee Bank shall
provide to the Borrower and the Agent the appropriate Internal Revenue Service
Forms (and, if applicable, a Section 4.04(b)(ii) Certificate) required by
Section 4.04(b).
13.05 NO WAIVER; REMEDIES CUMULATIVE. No failure or delay on the
part of the Agent or any Bank or any holder of any Note in exercising any right,
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and the Agent or any Bank
or the holder of any Note shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder or under
any other Credit Document preclude any other or further exercise thereof or the
exercise of any other right, power or privilege hereunder or thereunder. The
rights, powers and remedies herein or in any other Credit Document expressly
provided are cumulative and not exclusive of any rights, powers or remedies
which the Agent or any Bank or the holder of any Note would otherwise have. No
notice to or demand on any Credit Party in any case shall entitle any Credit
Party to any other or further notice or demand in similar or other circumstances
or constitute a waiver of the rights of the Agent or any Bank or the holder of
any Note to any other or further action in any circumstances without notice or
demand.
13.06 PAYMENTS PRO RATA. (a) The Agent agrees that promptly after
its receipt of each payment from or on behalf of the Borrower in respect of any
Obligations hereunder, it shall distribute such payment to the Banks pro rata
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.
(b) Each of the Banks agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Fees, of a sum which
with respect to the related sum or sums received by other Banks is in a greater
proportion than the total of such Obligation then owed and due to such Bank
bears to the total of such Obligation then owed and due to all of the Banks
immediately prior to such receipt, then such Bank receiving such excess payment
shall purchase for cash without recourse or warranty from the other Banks an
interest in the Obligations of the respective Credit Party to such Banks in such
amount as shall result in a proportional participation by all the Banks in such
amount; provided that if all or any portion of such excess amount is thereafter
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recovered from such Bank, such purchase shall be rescinded and the purchase
price restored to the extent of such recovery, but without interest.
13.07 CALCULATIONS; COMPUTATIONS. (a) The financial statements to be
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently applied throughout the periods involved (except as set
forth in the notes thereto or as otherwise disclosed in writing by the Borrower
to the Banks); provided that, except as otherwise specifically provided herein,
all computations of Excess Cash Flow and all computations determining compliance
with Sections 9.07 through 9.11, inclusive, including the definitions used
therein, shall utilize accounting principles and policies in conformity with
those used to prepare the financial statements delivered to the Banks pursuant
to Section 8.01(a) with respect to the first quarter following the Initial
Borrowing Date (including, without limitation, the amortization of production
costs over a period not to exceed 18 months) and provided further, that the
effects of purchase price accounting adjustments required or permitted by APB 16
and 17 shall be excluded.
(b) All computations of interest and Fees hereunder shall be made on
the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day) occurring in the period for which such
interest or Fees are payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF
JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS (OTHER THAN ANY
MORTGAGES) AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND
THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF
THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE
OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND,
BY EXECUTION AND DELIVERY OF THIS AGREEMENT, THE BORROWER HEREBY IRREVOCABLY
ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE EXCLUSIVE JURISDICTION OF THE AFORESAID COURTS. THE
BORROWER HEREBY IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION
SYSTEM WITH OFFICES ON THE DATE HEREOF AT 0000 XXXXXXXX, XXX XXXX, XXX XXXX
00000, AS ITS DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE
FOR AND ON ITS BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL
LEGAL PROCESS, SUMMONS, NOTICES AND
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DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR PROCEEDING. IF FOR ANY
REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO BE AVAILABLE TO ACT AS
SUCH, AND THE BORROWER AGREES TO DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT
ON THE TERMS AND FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT
UNDER THIS AGREEMENT. THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE
OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO THE BORROWER AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE
BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE
HOLDER OF ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO
COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY
OTHER JURISDICTION.
(b) THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF THE AFORESAID ACTIONS
OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER
CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN CLAUSE (A) ABOVE AND HEREBY
FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES
ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING
OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
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13.10 EFFECTIVENESS. This Agreement shall become effective on the
date (the "EFFECTIVE DATE") on which the Borrower and each of the Banks shall
have signed a copy hereof (whether the same or different copies) and shall have
delivered the same to the Agent at its Notice Office or, in the case of the
Banks, shall have given to the Agent telephonic (confirmed in writing), written
or facsimile transmission notice (actually received) in accordance with Section
13.03 at such office that the same has been signed and mailed to it.
13.11 HEADINGS DESCRIPTIVE. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 AMENDMENT OR WAIVER. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks; provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (with Obligations of the respective
types being directly affected thereby): (i) extend the final scheduled maturity
of any Loan or Note or extend the stated maturity of any Letter of Credit or
Unpaid Drawing beyond the Revolving Loan Maturity Date, or reduce the rate or
extend the time of payment of interest or Fees thereon (except in connection
with a waiver of applicability of any post-default increase in interest rates),
or reduce the principal amount thereof, or increase the Commitments of any Bank
over the amount thereof then in effect (it being understood that a waiver of any
conditions precedent, covenants, Default or Event of Default or of a mandatory
reduction in the Total Commitment or a mandatory prepayment shall not constitute
an increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase in the
Commitment of such Bank); (ii) release all or substantially all of the
Collateral (except as expressly provided in the relevant Credit Documents);
(iii) amend, modify or waive any provision of this Section 13.12; (iv) reduce
the percentage specified in, or otherwise modify, the definition of Required
Banks (it being understood that, with the consent of the Required Banks,
additional extensions of credit pursuant to this Agreement may be included in
the determination of the Required Banks on substantially the same basis as the
extensions of Term Loans and Revolving Loan Commitments are included on the
Effective Date); or (v) consent to the assignment or transfer by the Borrower of
any of its rights and obligations under this Agreement; provided further, that
no such change, waiver, discharge or termination shall: (A) increase the
Commitments of any Bank over the amount thereof then in effect (it being
understood that a waiver of any conditions precedent, covenants, Defaults or
Events of Default or of a mandatory reduction in the Total Commitment or of a
mandatory prepayment shall not constitute an increase of the Commitment of any
Bank, and that an increase in the available portion of any
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Commitment of any Bank shall not constitute an increase in the Commitment of
such Bank) without the consent of such Bank; or (B) without the consent of the
Issuing Bank affected thereby, amend, modify or waive any provision of Section 2
or alter its rights or obligations with respect to Letters of Credit issued by
such Issuing Bank; or (C) without the consent of the Agent, amend, modify or
waive any provision of Section 12 or any other provision relating to the rights
or obligations of the Agent; or (D) without the consent of the Collateral Agent,
amend, modify or waive any provision of Section 12 or any other provision
relating to the rights or obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination with respect to any of the provisions of this Agreement as
contemplated by clause (a)(i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right to replace each such non-consenting Bank
or Banks (so long as all non-consenting Banks are so replaced) with one or more
Replacement Banks pursuant to Section 1.12 so long as, at the time of such
replacement, each such Replacement Bank consents to the proposed change, waiver,
discharge or termination; provided that the Borrower shall not have the right to
replace a Bank solely as a result of the exercise of such Bank's rights (and the
withholding of any required consent by such Bank) pursuant to clauses (A)-(D) of
the second proviso to Section 13.12(a).
(c) The obligations or rights of the Swingline Bank with respect to
Swingline Loans, including, without limitation, the terms of any such Swingline
Loans and the obligations of the other Banks to fund Mandatory Borrowings shall
not be amended or modified without the consent of the Swingline Bank.
(d) Notwithstanding anything to the contrary contained above in this
Section 13.12, the Collateral Agent may (i) enter into amendments to the
Subsidiaries Guaranty and the Security Documents for the purpose of adding
additional Subsidiaries of the Borrower as parties thereto and (ii) enter into
security documents to satisfy the requirements of Section 8.16, in each case
without the consent of the Required Banks.
13.13 SURVIVAL. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution and delivery of this Agreement and the Notes and the making and
repayment of the Loans.
13.14 DOMICILE OF LOANS. Each Bank may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Bank.
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13.15 POST-CLOSING OBLIGATIONS. The Borrower hereby acknowledge that
in connection with certain assignments hereof, the Agent or any of the Banks may
be required to obtain a rating of the Obligations and Commitments hereunder of
the Borrower and the Borrower hereby consent to such Agent or Bank providing to
the respective rating agency such information regarding the Obligations and
creditworthiness of the Borrower as is customary practice of such rating agency.
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IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address: THANE INTERNATIONAL, INC.
00-000 Xxxxx Xxxxxxx
Xx Xxxxxx, XX 00000 By:/s/ Xxxxxxxxx Xxxxxxx
Attention: ______________ ________________________
Telephone: (000) 000-0000 Name: Xxxxxxxxx Xxxxxxx
Facsimile: (000) 000-0000 Title: Vice President
Assistant Secretary
with a copy to:
HIG Infomercial Company
C/O HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
Xxxxx 0000
Xxxxx, Xxxxxxx 00000
Attention: Xxxxxxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
S-1
CREDIT AGREEMENT
Address: PARIBAS,
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxxx By:/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx ________________________
Telephone: (000) 000-0000 Name:
Facsimile: (000) 000-0000 Title:
By:/s/ X.X. Xxxxxxxx
________________________
Name:
Title:
CREDIT AGREEMENT
THANE INTERNATIONAL, INC.
FIRST AMENDMENT AND LIMITED WAIVER
TO CREDIT AGREEMENT
This FIRST AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
(this "AMENDMENT") is dated as of September 29, 2000 and entered into by and
among THANE INTERNATIONAL, INC., a Delaware corporation (the "BORROWER"), the
financial institutions listed on the signature pages hereof (each a "BANK" and
collectively, the "BANKS") and BNP PARIBAS (successor to Paribas), as agent for
the Banks (the "AGENT"), and is made with reference to that certain Credit
Agreement dated as of June 10, 1999 (as amended, restated, supplemented or
otherwise modified as of the date hereof, the "CREDIT AGREEMENT"), by and among
the Borrower, the financial institutions party thereto from time to time and the
Agent. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
RECITALS
WHEREAS, the Borrower and the Banks desire to amend the Credit
Agreement to: (i) modify the financial covenants contained in Section 9.08,
Section 9.09, Section 9.10 and Section 9.11; (ii) provide for the guaranty by
HIG Capital Partners II, L.P., ("HIG CAPITAL") and HIG Investment Group II, L.P.
("HIG INVESTMENT" and collectively with HIG Capital, the "HIG GUARANTORS") of
the principal amount of all Scheduled Term Loan Repayments in an aggregate
amount not to exceed $1,000,000 pursuant to the HIG Guaranty (as hereinafter
defined) until, as long as no Default or Event of Default has occurred and is
continuing, the later of (x) the date that the Scheduled Term Loan Repayment for
March 31, 2001 is paid in full in accordance with the terms of the Credit
Agreement or (y) the date immediately following the first thirty consecutive day
period after the First Amendment Effective Date (as defined below) in which the
aggregate outstanding amount of Revolving Loans is at all times during such
period less than $3,500,000; (iii) permit the incurrence of Indebtedness by the
Borrower pursuant to and in accordance with the HIG Subordinated Note (as
hereinafter defined); and (iv) to make certain other amendments as set forth
below;
WHEREAS, the Borrower failed to comply with certain
requirements set forth in Section 9.08, Section 9.09, Section 9.10 and Section
9.11 of the Credit Agreement for the fiscal quarter ended on December 31, 1999
in the manner and to the extent previously reported by the Borrower to the Banks
(the "DECEMBER COVENANT FAILURE");
WHEREAS, the Borrower failed to comply with certain
requirements set forth in Section 9.09, Section 9.10 and Section 9.11 of the
Credit Agreement for the fiscal quarter ended on March 31, 2000 in the manner
and to the extent previously reported by the Borrower to the Banks (the "MARCH
COVENANT FAILURE");
WHEREAS, the Borrower failed to comply with certain
requirements set forth in Section 9.09, Section 9.10 and Section 9.11 of the
Credit Agreement for the fiscal quarter ended on June 30, 2000 in the manner and
to the extent previously reported by the Borrower to the Banks (the "JUNE
COVENANT FAILURE");
WHEREAS, the Borrower failed to deliver to the Agent the
certified consolidated and consolidating financial statements and balance sheets
of the Borrower and its Subsidiaries and certain other information for the
fiscal year ended on March 31, 2000 in accordance with Section 8.1(c) of the
Credit Agreement (the "FISCAL YEAR 2000 DELIVERY FAILURE");
WHEREAS, the Borrower failed to comply with the requirement
set forth in Section 9.05(ii) of the Credit Agreement (the "MAXIMUM CASH
EQUIVALENT REQUIREMENT") that at any time Revolving Loans or Swingline Loans are
outstanding, that the aggregate amount of cash and Cash Equivalents held by the
Borrower be no more than $1,000,000 for any period of five consecutive days (the
"CASH EQUIVALENT INVESTMENT FAILURE");
WHEREAS, in connection with the December Covenant Failure, the
Borrower and the Banks desire to waive compliance with the requirements
contained in Section 9.08, Section 9.09, Section 9.10 and Section 9.11 of the
Credit Agreement for the fiscal quarter ended on December 31, 1999, on the terms
and conditions set forth herein;
WHEREAS, in connection with the March Covenant Failure, the
Borrower and the Banks desire to waive any Default or Event of Default caused by
the failure of the Borrower to comply with the requirements contained in Section
9.09, Section 9.10 and Section 9.11 of the Credit Agreement for the fiscal
quarter ended on March 31, 2000, on the terms and conditions set forth herein;
WHEREAS, in connection with the June Covenant Failure, the
Borrower and the Banks desire to waive any Default or Event of Default caused by
the failure of the Borrower to comply with the requirements contained in Section
9.09, Section 9.10 and Section 9.11 of the Credit Agreement for the fiscal
quarter ended on June 30, 2000, on the terms and conditions set forth herein;
WHEREAS, in connection with the Fiscal Year 2000 Delivery
Failure, the Borrower and the Banks desire to waive any Default or Event of
Default caused by the failure of the Borrower to comply with the requirements
contained in Section 8.1(c) of the Credit Agreement for the fiscal year ended on
March 31, 2000, on the terms and conditions set forth herein;
WHEREAS, in connection with the Cash Equivalent Investment
Failure, the Borrower and the Banks desire to waive any Default or Event of
Default caused by the failure of the Borrower to comply with the Maximum Cash
Equivalent Requirement since the Effective Date, on the terms and conditions set
forth herein;
2
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 PROVISIONS RELATING TO DEFINED TERMS
A. AMENDED DEFINITIONS. The definition of "Credit Documents"
set forth in Subsection 11.01 of the Credit Agreement shall be amended by
deleting such definition in its entirety and substituting the following
definition therefor:
"CREDIT DOCUMENTS" shall mean this Agreement, each Note, each
Notice of Borrowing, each Notice of Conversion, each Letter of Credit, each
Letter of Credit Request, the Subsidiaries Guaranty, the HIG Guaranty and each
Security Document."
B. ADDITIONAL DEFINITIONS. Subsection 11.01 of the Credit
Agreement is hereby amended by adding thereto the following definitions, which
shall be inserted in proper alphabetical order:
""FIRST AMENDMENT" shall mean that certain First Amendment and
Limited Waiver to this Agreement, dated as of September 29, 2000, by and among
the Borrower, the financial institutions party thereto, the Subsidiary
Guarantors and the Agent.
"FIRST AMENDMENT EFFECTIVE DATE" means the date of the
effectiveness of this Amendment in accordance with Section 6E of this Amendment.
"GUARANTY EXPIRATION DATE" shall mean the later of (x) the
date that the Scheduled Term Loan Repayment for March 31, 2001 is paid in full
in accordance with the terms of the Credit Agreement or (y) the date immediately
following the first thirty consecutive day period after the First Amendment
Effective Date in which the aggregate outstanding amount of Revolving Loans is
at all times during such period less than $3,500,000; provided, however, that if
a Default or Event of Default has occurred and is continuing on such date, the
Guaranty Expiration Date shall not occur until such Default or Event of Default
has been cured or waived.
"HIG GUARANTOR" shall mean any of HIG Capital Partners II,
L.P. and HIG Investment Group II, L.P.
"HIG GUARANTY" shall mean the HIG Guaranty dated as of the
First Amendment Effective Date entered into by the HIG Guarantors, substantially
in the form of Exhibit R (as modified, supplemented or amended from time to
time).
"HIG SUBORDINATED NOTE" shall mean the promissory note entered
into by the Borrower for the benefit of the HIG Guarantors as of the First
Amendment Effective Date, substantially in the form of Exhibit S (as modified,
supplemented or amended from time to time in accordance with Section
9.04(viii)).
3
"MAXIMUM REVOLVER AVAILABILITY" shall mean $3,200,000;
provided, however, that the Maximum Revolver Availability shall be increased to
$4,100,000 if (x) the conditions set forth in Section 6.01 for a Credit Event
have been satisfied and (y) the Borrower's consolidated EBITDA for the three
month period ending on July 31, 2000 is at least $3,000,000; provided, further,
that the Maximum Revolver Availability shall be increased to $5,000,000 if (x)
the conditions set forth in Section 6.01 for a Credit Event have been satisfied
and (y) the Borrower's consolidated EBITDA at any time during the period from
May 1, 2000 through November 30, 2000 is equal to or greater than $4,000,000."
1.2 PROVISIONS RELATING TO AMOUNT AND TERMS OF CREDIT
Subsection 1.01 of the Credit Agreement is hereby amended by
deleting clause (b) and clause (c) of such Subsection in their entirety and
substituting the following therefor:
"(b) Subject to and upon the terms and conditions set forth
herein, each Bank with a Revolving Loan Commitment severally agrees, at any time
and from time to time on and after the Initial Borrowing Date and prior to the
Revolving Loan Maturity Date, to make a loan or loans (each a "REVOLVING LOAN"
and, collectively, the "REVOLVING LOANS") to the Borrower, which Revolving Loans
(i) shall, at the option of the Borrower, be Base Rate Loans or Eurodollar
Loans; provided that (x) except as otherwise specifically provided in Section
1.10(b), all Revolving Loans comprising the same Borrowing shall at all times be
of the same Type, and (y) prior to the Syndication Termination Date, no
Borrowings of Revolving Loans may be made or maintained as Eurodollar Loans,
(ii) may be repaid and reborrowed in accordance with the provisions hereof,
(iii) shall not exceed for any Bank at any time outstanding that aggregate
principal amount which, when added to the product of (x) such Bank's Percentage
and (y) the sum of the aggregate outstanding principal amount of Swingline Loans
and the aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans), equals the
Revolving Loan Commitment of such Bank at such time, and (iv) shall not exceed
for all Banks at any time that aggregate principal amount which, when added to
the sum of the aggregate amount of all Letter of Credit Outstandings and the
aggregate outstanding principal amount of Swingline Loans at such time, equals
the least of (A) the Borrowing Base at such time or (B) the Maximum Revolver
Availability at such time.
(c) Subject to and upon the terms and conditions herein set
forth, the Swingline Bank agrees to make, at any time and from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a loan
or loans to the Borrower (each a "SWINGLINE LOAN" and, collectively, the
"SWINGLINE LOANS"), which Swingline Loans (i) shall be made and maintained as
Base Rate Loans, (ii) may be repaid and reborrowed in accordance with the
provisions hereof, (iii) shall not exceed in aggregate principal amount at any
time outstanding, when combined with (x) the aggregate principal amount of all
Revolving Loans then outstanding and (y) all Letter of Credit Outstandings at
such time (exclusive of Unpaid Drawings which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence of
Swingline Loans), an amount equal to the least of (A) the Total Revolving Loan
Commitment at such time (after giving effect to any reductions to the Total
Revolving Loan Commitment on such date), (B) the Borrowing Base
4
at such time or (C) the Maximum Revolver Availability at such time, and (iv)
shall not exceed in aggregate principal amount at any time outstanding the
Maximum Swingline Amount. The Swingline Bank shall not be obligated to make any
Swingline Loans at a time when a Bank Default exists unless the Swingline Bank
has entered into arrangements satisfactory to it and the Borrower to eliminate
the Swingline Bank's risk with respect to the Defaulting Bank's or Banks'
participation in such Swingline Loans, including by cash collateralizing such
Defaulting Bank's or Banks' Percentage(s) of the outstanding Swingline Loans.
The Swingline Bank shall not make any Swingline Loan after receiving a written
notice from the Borrower or the Required Banks stating that a Default or an
Event of Default exists and is continuing until such time as the Swingline Bank
shall have received written notice of (i) rescission of all such notices from
the party or parties originally delivering such notices or (ii) the waiver of
such Default or Event of Default by the Required Banks."
1.3 PROVISIONS RELATING TO LETTERS OF CREDIT
Subsection 2.01 of the Credit Agreement is hereby amended by
deleting clause (c) of such Subsection in its entirety and substituting the
following therefor:
"(c) Notwithstanding the foregoing, (i) no Letter of Credit
shall be issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) at such time, (x)
would exceed $1,000,000 or (y) when added to the aggregate principal amount of
all Revolving Loans and Swingline Loans then outstanding, would exceed the least
of (A) the Total Revolving Loan Commitment then in effect (after giving effect
to any reductions to the Total Revolving Loan Commitment on such date), (B) the
Borrowing Base at such time or (C) the Maximum Revolver Availability at such
time, (ii) each standby Letter of Credit shall by its terms terminate on or
before the earlier of (x) the date which occurs 12 months after the date of the
issuance thereof (although any such Letter of Credit may be renewable for
successive periods of up to 12 months, but not beyond the tenth Business Day
immediately preceding the Revolving Loan Maturity Date, on terms acceptable to
the Issuing Bank) and (y) the tenth Business Day immediately preceding the
Revolving Loan Maturity Date, and (iii) each trade Letter of Credit shall have
an expiry date occurring not later than 180 days after such trade Letter of
Credit's date of issuance and shall have an expiry date occurring no later than
30 days prior to the Revolving Loan Maturity Date.
1.4 PROVISIONS RELATING TO NEGATIVE COVENANTS
A. INDEBTEDNESS. Subsection 9.04 of the Credit Agreement is
hereby amended by adding the following clause (x) immediately after clause (ix)
thereto:
"(x) Indebtedness of the Borrower evidenced by the HIG
Subordinated Note in an aggregate amount not to exceed at any time the aggregate
amount of payments made by the HIG Guarantors pursuant to the HIG Guaranty and
not theretofore reimbursed by the Borrower, plus accrued interest thereon;
provided, however, that no such repayment shall be made unless at the time of
such repayment (i) no Event of Default or Default shall have occurred and be
continuing or shall be caused thereby, and (ii) after giving effect to any
5
Revolving Loan Borrowings the proceeds of which are used to make any such
repayment (A) the lesser of (x) the Total Revolving Loan Commitment then in
effect or (y) the Borrowing Base at such time would exceed (B) the sum of (x)
the aggregate principal amount of all Revolving Loans and Swingline Loans then
outstanding, (y) Letter of Credit Outstandings at such time and (z) $1,500,000."
B. ADVANCES, INVESTMENTS AND LOANS. Subsection 9.05(ii) of the
Credit Agreement is hereby amended by deleting the reference to "$1 million"
contained therein and substituting "$2 million" therefor.
C. TRANSACTIONS WITH AFFILIATES. Subsection 9.06 of the Credit
Agreement is hereby amended by deleting clause (iii) of such subsection in its
entirety and substituting the following therefor"
"(iii) the Borrower may pay annual management fees of up to
$250,000 per annum to HIG quarterly in arrears and out-of-pocket expenses of
HIG; provided, however, that (i) prior to the Guaranty Expiration Date or (ii)
to the extent there shall exist a Default or Event of Default until such Default
or Event of Default is cured or waived, no such management fees will be payable
but may instead accrue."
D. FIXED CHARGE COVERAGE RATIO. Subsection 9.08 of the Credit
Agreement is hereby amended by deleting such Subsection in its entirety and
substituting the following therefor:
"9.08 FIXED CHARGE COVERAGE RATIO. The Borrower will not
permit the Fixed Charge Coverage Ratio for any period of four consecutive fiscal
quarters ending on a date set forth below, in each case taken as one accounting
period, to be less than the ratio set forth opposite such date:
Fiscal Quarter
Ended Ratio
-------------- -----
September 30, 2000 1.00:1.00
December 31, 2000 1.00:1.00
March 31, 2001 1.00:1.00
June 30, 2001 1.00:1.00
September 30, 2001 1.00:1.00
December 31, 2001 1.00:1.00
March 31, 2002 1.00:1.00
June 30, 2002 1.00:1.00
September 30, 2002 1.00:1.00
December 31, 2002 1.00:1.00
March 31, 2003 1.00:1.00
June 30, 2003 1.00:1.00"
E. INTEREST COVERAGE RATIO. Subsection 9.09 of the Credit
Agreement is hereby amended by deleting such Subsection in its entirety and
substituting the following therefor:
6
"9.09 INTEREST COVERAGE RATIO. The Borrower will not permit
the ratio of its Consolidated EBITDA to its Consolidated Interest Expense for
any period of four consecutive fiscal quarters ending on a date set forth below,
in each case taken as one accounting period, to be less than the ratio set forth
opposite such date:
Fiscal Quarter
Ended Ratio
-------------- -----
September 30, 2000 3.00:1.00
December 31, 2000 4.00:1.00
March 31, 2001 4.05:1.00
June 30, 2001 4.05:1.00
September 30, 2001 4.25:1.00
December 31, 2001 4.50:1.00
March 31, 2002 4.75:1.00
June 30, 2002 5.00:1.00
September 30, 2002 5.50:1.00
December 31, 2002 6.00:1.00
March 31, 2003 6.50:1.00
June 30, 2003 7.00:1.00"
F. Consolidated Indebtedness to Consolidated EBITDA Subsection
9.10 of the Credit Agreement is hereby amended by deleting such Subsection in
its entirety and substituting the following therefor:
"9.10 CONSOLIDATED INDEBTEDNESS TO CONSOLIDATED EBITDA. The
Borrower will not permit the ratio of Consolidated Indebtedness as at the end of
any fiscal quarter ended on a date set forth below to Consolidated EBITDA for
any period of four consecutive fiscal quarters ending on a date set forth below,
in each case taken as one accounting period, to be greater than the ratio set
forth opposite such date below:
Fiscal Quarter
Ended Ratio
-------------- -----
September 30, 2000 2.50:1.00
December 31, 2000 2.20:1.00
March 31, 2001 1.80:1.00
June 30, 2001 1.80:1.00
September 30, 2001 1.80:1.00
December 31, 2001 1.75:1.00
March 31, 2002 1.55:1.00
June 30, 2002 1.50:1.00
September 30, 2002 1.25:1.00
December 31, 2002 1.05:1.00
March 31, 2003 1.00:1.00
June 30, 2003 0.50:1.00
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provided, that for purposes of this Section 9.10, Consolidated Indebtedness
shall not include any Indebtedness outstanding under the HIG Subordinated Note
from time to time."
G. MINIMUM EBITDA. Subsection 9.11 of the Credit Agreement is
hereby amended by deleting such Subsection in its entirety and substituting the
following therefor:
"9.11 MINIMUM EBITDA. The Borrower will not permit its
Consolidated EBITDA for any period of four consecutive fiscal quarters ending on
a date set forth below , in each case taken as one accounting period, to be less
than the amount set forth opposite such date set forth below:
Fiscal Quarter
Ended Amount
-------------- ------
September 30, 2000 $ 9,000,000
December 31, 2000 $ 9,750,000
March 31, 2001 $ 9,750,000
June 30, 2001 $10,250,000
September 30, 2001 $10,250,000
December 31, 2001 $10,500,000
March 31, 2002 $10,500,000
June 30, 2002 $10,750,000
September 30, 2002 $10,750,000
December 31, 2002 $11,000,000
March 31, 2003 $11,000,000
June 30, 2003 $11,000,000
H. LIMITATION ON VOLUNTARY PREPAYMENTS AND MODIFICATIONS;
LIMITATION ON MODIFICATIONS OF CERTIFICATE OF INCORPORATION, BY-LAWS AND CERTAIN
OTHER AGREEMENTS. Subsection 9.12 of the Credit Agreement is hereby amended by
adding following clause (viii) immediately after clause (vii) thereto:
"(viii) amend, modify or change in any manner the HIG
Subordinated Note."
1.5 PROVISIONS RELATING TO EVENTS OF DEFAULT
A. PAYMENTS. Subsection 10.01 of the Credit Agreement is
hereby amended by deleting such subsection in its entirety and substituting
therefore the following subsection:
"10.01 PAYMENTS The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or any Unpaid Drawing (any
such payment a "PRINCIPAL PAYMENT") or (ii) default, and such default shall
continue unremedied for five days, in the payment when due of any interest on
any Loan or Note or Unpaid Drawing, or any Fees or any other amounts owing by it
hereunder or thereunder (any such payment a "INTEREST OR FEE PAYMENT");
provided, however, that any default in the payment of any
8
Scheduled Term Loan Repayment shall not constitute an Event of Default if the
HIG Guarantors, pursuant to the HIG Guaranty, make such Scheduled Term Loan
Repayment when such Scheduled Term Loan Repayment is due; or"
B. HIG GUARANTY. Section 10 of the Credit Agreement is hereby
amended by adding following subsection 10.12 immediately after subsection 10.11
thereto:
"10.12 HIG GUARANTY. At any time after the execution and
delivery thereof, the HIG Guaranty or any provision thereof shall cease to be in
full force or effect, or any HIG Guarantor or any Person acting by or on behalf
of any HIG Guarantor shall deny or disaffirm such HIG Guarantor's obligations
under the HIG Guaranty, or any HIG Guarantor shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant to the HIG Guaranty and such default
shall continue beyond any grace period specifically applicable thereto; or"
C. EVENTS OF DEFAULT. Section 10 of the Credit Agreement is
hereby amended by deleting clause (v) of the last paragraph thereof in its
entirety and substituting the following therefor:
"(v) exercise any rights or remedies under the Subsidiaries
Guaranty or the HIG Guaranty;"
1.6 ADDITION OF EXHIBITS
A. EXHIBIT R: FORM OF HIG GUARANTY. The Credit Agreement is
hereby amended by adding thereto a new Exhibit R in the form of Annex A to this
Amendment.
B. EXHIBIT S: FORM OF HIG SUBORDINATED NOTE. The Credit
Agreement is hereby amended by adding thereto a new Exhibit S in the form of
Annex B to this Amendment.
SECTION 2. LIMITED WAIVERS
A. LIMITED WAIVER OF DECEMBER COVENANT FAILURE.
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein contained,
the Banks hereby waive the requirement set forth in (i) Section 9.08 of the
Credit Agreement that the Fixed Charge Ratio for the period ended on December
31, 1999 be at least 1.15:1.00, (ii) Section 9.09 of the Credit Agreement that
the ratio of the Borrower's Consolidated EBITDA to the Borrower's Consolidated
Interest Expense for the period ended on December 31, 1999 be at least
4.75:1.00, (iii) Section 9.10 of the Credit Agreement that the ratio of the
Borrower's Consolidated Indebtedness to the Borrower's Consolidated EBITDA for
the period ended on December 31, 1999 be at most 2.00:1.00, and (iv) Section
9.11 of the Credit Agreement that the Borrower's Consolidated EBITDA for the
period ended on December 31, 1999 be at least
9
$5,150,000; provided, however, that Borrower shall not pay any annual management
fees to HIG for the quarters ending on March 31, 2000 and June 30, 2000.
B. LIMITED WAIVER OF MARCH COVENANT FAILURE.
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein contained,
the Banks hereby waive the requirement set forth in (i) Section 9.09 of the
Credit Agreement that the ratio of the Borrower's Consolidated EBITDA to the
Borrower's Consolidated Interest Expense for the period ended on March 31, 2000
be at least 4.75:1.00, (ii) Section 9.10 that the ratio of the Borrower's
Consolidated Indebtedness to the Borrower's Consolidated EBITDA for the period
ended on March 31, 2000 be at most 2.00:1.00 and (iii) Section 9.11 of the
Credit Agreement that the Borrower's Consolidated EBITDA for the period ended on
March 31, 2000 be at least $8,250,000; provided, however, that Borrower shall
not pay any annual management fees to HIG for the quarters ending on March 31,
2000 and June 30, 2000.
C. LIMITED WAIVER OF JUNE COVENANT FAILURE.
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein contained,
the Banks hereby waive the requirement set forth in (i) Section 9.09 of the
Credit Agreement that the ratio of the Borrower's Consolidated EBITDA to the
Borrower's Consolidated Interest Expense for the period ended on June 30, 2000
be at least 4.75:1.00, (ii) Section 9.10 that the ratio of the Borrower's
Consolidated Indebtedness to the Borrower's Consolidated EBITDA for the period
ended on June 30, 2000 be at most 2.00:1.00 and (iii) Section 9.11 of the Credit
Agreement that the Borrower's Consolidated EBITDA for the period ended on June
30, 2000 be at least $8,250,000; provided, however, that Borrower shall not pay
any annual management fees to HIG for the quarters ending on March 31, 2000 and
June 30, 2000.
D. LIMITED WAIVER OF FISCAL YEAR 2000 DELIVERY FAILURE.
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein contained,
the Banks hereby waive any Default or Event of Default caused by the failure of
the Borrower to deliver to Agent the certified consolidated and consolidating
balance sheets and financial statements of the Borrower and its Subsidiaries and
any other documentation required to be delivered by Borrower for the fiscal year
ending March 31, 2000 pursuant to Section 8.1(c) of the Credit Agreement;
provided, however, that the Borrower shall deliver all such financial
statements, balance sheets and other documentation to the Agent no later than 10
Business Days after the First Amendment Effective Date; provided, further, that
such financials statements, balance sheets and other documentation delivered to
the Agent shall contain no material changes from the drafts of such financial
statements, balance sheets and other documentation previously delivered by
Borrower to Agent and Banks on September 8, 2000.
E. LIMITED WAIVER OF CASH EQUIVALENT INVESTMENT FAILURE.
10
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein contained,
the Banks hereby waive any Default or Event of Default caused by the failure of
the Borrower to, at any time during the period from the Effective Date through
the First Amendment Effective Date, comply with the requirement set forth in
Section 9.05(ii) that at any time Revolving Loans or Swingline Loans are
outstanding, the aggregate amount of cash and Cash Equivalents that is held by
the Borrower and it Subsidiaries shall not exceed $1,000,000 for any period of
five consecutive days.
SECTION 3. LIMITATION OF WAIVER
Without limiting the generality of the provisions of Section
13.12 of the Credit Agreement, the waivers set forth above shall be limited
precisely as written and relate solely to the noncompliance by the Borrower with
the provisions of Section 8.01(c), Section 9.05(ii), Section 9.08, Section 9.09,
Section 9.10 and Section 9.11 of the Credit Agreement in the manner and to the
extent described above, and nothing in this Waiver shall be deemed to:
(a) constitute a waiver of compliance by the Borrower with respect to
(i) Section 8.1(c), Section 9.05(ii), Section 9.08, Section 9.09,
Section 9.10 and Section 9.11 of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Agent or any Bank may now have
or may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to therein.
SECTION 4. CONDITION SUBSEQUENT TO EFFECTIVENESS OF AMENDMENT.
Within 10 Business Days after the First Amendment Effective
Date, Borrower shall deliver to Agent (i) an opinion of White & Case, LLP,
special counsel to the HIG Guarantors, in form and substance satisfactory to
Agent, as to (a) the due organization and good standing of each of H.I.G.
Advisors, L.L.C. ("HIG ADVISORS"), the general partner of HIG Capital and H.I.G.
GP-II, Inc. ("HIG GP"), the general partner of HIG Partners II, L.P. ("HIG
PARTNERS"), the general partner of HIG Investment and (b) the due authorization,
execution and delivery by HIG Advisors, in its capacity as the general partner
of HIG Capital and HIG GP, in its capacity as the general partner of HIG
Partners, the general partner of HIG Investment, of the HIG Guaranty and (ii) an
opinion of Xxxxxx and Xxxxxx, Cayman Islands legal advisers to the HIG
Guarantors, in form and substance satisfactory to Agent, as to the matters set
forth in its opinion delivered to the Agent on the First Amendment Effective
Date, except that agreements of limited partnership of HIG Partners and HIG
Investment referenced in the opinion shall be the executed agreements as in
effect on the date of such opinion rather than unexecuted drafts of such limited
partnership agreements. Borrower and Banks hereby acknowledge and agree that any
failure to comply with any of the requirements of this Section 4 shall
constitute an immediate Event of Default under the Credit Agreement.
11
SECTION 5. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment and
to amend the Credit Agreement and to permit the limited waiver of certain
covenants thereunder in the manner provided herein, the Borrower represents and
warrants to each Bank that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all
requisite corporate power and authority to enter into this Amendment and the HIG
Subordinated Note and to carry out the transactions contemplated by, and perform
its obligations under, the Credit Agreement as amended by this Amendment (the
"AMENDED AGREEMENT") and the HIG Subordinated Note.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the HIG Subordinated Note and the performance of the Amended
Agreement and the HIG Subordinated Note have been duly authorized by all
necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of
this Amendment and the HIG Subordinated Note and the performance by the Borrower
of the Amended Agreement and the HIG Subordinated Note do not and will not (i)
violate any provision of any law or any governmental rule or regulation
applicable to the Borrower or any of its Subsidiaries, the Certificate or
Articles of Incorporation or Bylaws of the Borrower or any of its Subsidiaries
or any order, judgment or decree of any court or other agency of government
binding on the Borrower or any of its Subsidiaries, (ii) conflict with, result
in a breach of or constitute (with due notice or lapse of time or both) a
default under any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument to which
Borrower or any of its Subsidiaries is a party or by which it or any of it
property or assets is bound or to which it may be subject (each such indenture,
mortgage, deed of trust, credit agreement, loan agreement, material agreement,
contract or instrument, a "CONTRACTUAL OBLIGATION"), (iii) result in or require
the creation or imposition of any Lien upon any of the properties or assets of
the Borrower or any of its Subsidiaries (other than Liens created under any of
the Credit Documents in favor of Agent on behalf of the Banks), or (iv) require
any approval of stockholders or any approval or consent of any Person under any
Contractual Obligation of the Borrower or any of its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower of this Amendment and the HIG Subordinated Note and the performance by
the Borrower of the Amended Agreement and the HIG Subordinated Note do not and
will not require any registration with, consent or approval of, or notice to, or
other action to, with or by, any federal, state or other governmental authority
or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement and the HIG Subordinated Note have been duly executed and delivered by
the Borrower and are the legally valid and binding obligations of the Borrower,
enforceable against the
12
Borrower in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 7 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the First Amendment Effective Date (as hereinafter
defined) to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. As of the date hereof after giving
effect hereto, there exists no Default or Event of Default under the Credit
Agreement.
SECTION 6. ACKNOWLEDGEMENT AND CONSENT
Each of Bioslim, Inc., Xebec Productions, Inc., Fox Marketing
Associates, Inc., Time Prophets, Inc., Thane Direct FSC, Inc., Thane Direct,
Inc. and Thane Direct Canada Inc. (each a "SUBSIDIARY GUARANTOR") hereby
acknowledge that such Subsidiary Guarantor has read this Amendment and consents
to the terms hereof and further hereby confirms and agrees that, notwithstanding
the effectiveness of this Amendment, the obligations of such Subsidiary
Guarantor under each of the Credit Documents to which such Subsidiary Guarantor
is a party shall not be impaired and each of the Credit Documents to which such
Subsidiary Guarantor is a party are, and shall continue to be, in full force and
effect and are hereby confirmed and ratified in all respects.
SECTION 7. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
(i) On and after the First Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Credit Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement shall mean
and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of Agent
or any Bank under, the Credit Agreement or any of the other Credit Documents.
13
B. FEES AND EXPENSES. The Borrower acknowledges that all
costs, fees and expenses as described in subsection 13.01 of the Credit
Agreement incurred by Agent and its counsel with respect to this Amendment and
the documents and transactions contemplated hereby shall be for the account of
the Borrower.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon (i) the execution of a counterpart hereof by Borrower, each
Subsidiary Guarantor and Required Banks and receipt by the Borrower and Agent of
written or telephonic notification of such execution and authorization of
delivery thereof, (ii) receipt by the Borrower and the Agent of written or
telephonic notification of such execution and authorization of delivery thereof,
(iii) receipt by the Agent of opinions of White & Case, LLP, special counsel to
the HIG Guarantors and Xxxxxx and Xxxxxx, Cayman Islands legal advisers to the
HIG Guarantors, each in form and substance satisfactory to Agent, as to (a) the
due organization and good standing of each HIG Guarantor, (b) the due
authorization, execution and delivery by each HIG Guarantor of the HIG Guaranty
and (c) the enforceability of the HIG Guaranty against each HIG Guarantor, (iv)
receipt by Agent from the HIG Guarantors of the duly authorized, executed and
delivered HIG Guaranty, substantially in the form of Exhibit R to the Credit
Agreement and in form and substance satisfactory to Agent, (v) the Agent shall
have received evidence satisfactory to it that all outstanding statements of
O'Melveny & Xxxxx LLP have been paid in full, (vi) receipt by Agent of the
audited financial statements of each HIG Guarantor for its most recently ended
fiscal year and (vii) receipt by the Agent from the Borrower for distribution to
the Banks that have executed this Amendment of an amendment fee in an aggregate
amount equal to $40,800, which is equal to .2% of the aggregate Commitments of
all of the Banks as of August 31, 2000 (the date of satisfaction of such
conditions being referred to herein as the "FIRST AMENDMENT EFFECTIVE DATE").
[Remainder of this page intentionally left blank.]
14
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
Address:
00-000 Xxxxx Xxxxxxx XXXXX INTERNATIONAL, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx X. Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx X. Xxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-1
Address:
c/o HIG Capital Management, Inc. HIG INFOMERCIAL COMPANY
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000 By:/s/ Xxxx Xxxxxxxx
Attention: Xxxx Xxxxxxxx -----------------------------
Telephone: (000) 000-0000 Name:
Facsimile: (000) 000-0000 Title:
2
Address:
8-140 Calle Tampico BIOSLIM, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3
Address:
00-000 Xxxxx Xxxxxxx XXXXX PRODUCTIONS, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxxxx XxXxxxx Hay
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxx XxXxxxx Hay
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4
Address:
0000 Xxxxx Xxxxxx FOX MARKETING ASSOCIATES, INC.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
5
Address:
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx TIME PROPHETS, INC.
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
6
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT FSC, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
7
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx Xxx
Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8
Address:
0000 Xxxxxxxx Xxxxxx Xxxx XXXXX XXXXXX XXXXXX INC.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Attention: By:/s/Xxxxxxx Xxx
-----------------------------
Telephone No.: Name: Xxxxxxx Xxx
Facsimile No.: Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
9
Address: BNP PARIBAS,
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx By:/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx -----------------------------
Telephone: (000) 000-0000 Name: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000 Title: Managing Director
By:/s/Xxxxxx X. Xxxxxxxxxx
-----------------------------
Name: Xxxxxx X.Xxxxxxxxxx
Title: Director
Merchant Banking Group
10
Address: XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as a Bank
Xxxxxxx Xxxxx Business Financial
Services Inc. By:/s/ Xxxxxx X. Xxxxx
-----------------------------
000 Xxxxx Xx Xxxxx Xx. Name: Xxxxxx X. Xxxxx
17th Floor Title: Vice President
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
11
Address: BANK OF AMERICA N.A.,
as a Bank
Commercial Special Assets - West
315 Xxxxxxxxxx, 5th floor
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 By:/s/ Xxxx Xxxx
-----------------------------
Attention: Xxxx Xxxx Name: Xxxx Xxxx
Telephone: 000-000-0000 Title: Senior Vice President
Facsimile: 000-000-0000
12
THANE INTERNATIONAL, INC.
SECOND AMENDMENT TO CREDIT AGREEMENT
This SECOND AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT")
is dated as of January 12, 2001 and entered into by and among THANE
INTERNATIONAL, INC., a Delaware corporation (the "BORROWER"), the financial
institutions listed on the signature pages hereof (each a "BANK" and
collectively, the "BANKS"), BNP PARIBAS (successor to Paribas), as agent for the
Banks (in such capacity, the "AGENT"), and, for purposes of Section 4 hereof,
the Subsidiary Guarantors (as defined in Section 4 hereof) listed on the
signature pages hereof, and is made with reference to that certain Credit
Agreement dated as of June 10, 1999 (as amended by that certain First Amendment
and Limited Waiver to Credit Agreement dated as of September 29, 2000, the
"CREDIT AGREEMENT"), by and among the Borrower, the financial institutions party
thereto from time to time and the Agent. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
WHEREAS, the Borrower, the Banks and the Agent desire to amend
the Credit Agreement to (i) increase the Revolving Loan Commitment of each of
BNP Paribas ("BNP") and Bank of America N.A. ("BOFA") by $1,666,666.00 and (ii)
make certain other amendments as set forth below;
WHEREAS, the Borrower, the Banks and the Agent desire to amend
and restate the HIG Guaranty.
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 11: DEFINITIONS AND ACCOUNTING TERMS
A. Subsection 11.01 of the Credit Agreement is hereby amended
by deleting the definition of "HIG Subordinated Note" therefrom in its entirety.
B. Subsection 11.01 of the Credit Agreement is hereby further
amended by adding thereto the following definitions, which shall be inserted in
proper alphabetical order:
"BNP" shall mean BNP Paribas (successor to Paribas), in its
capacity as a Bank, and its successors and assigns.
"BOFA" shall mean Bank of America N.A., in its capacity as a
Bank, and its successors and assigns.
"BRIDGE LETTER OF CREDIT" shall have the meaning provided in
subsection 2.01(d).
"BRIDGE LETTER OF CREDIT FEES" shall have the meaning provided
in subsection 3.01(c ).
"BRIDGE LETTER OF CREDIT OUTSTANDINGS" shall mean, at any
time, the sum of (i) the aggregate Stated Amount of all outstanding
Bridge Letters of Credit and (ii) the amount of all Unpaid Drawings
under the Bridge Letters of Credit.
"BRIDGE PERCENTAGE" shall mean the percentage at any time of
any Bank with a Bridge Revolving Loan Commitment equal to a fraction
(expressed as a percentage) the numerator of which is the Bridge
Revolving Loan Commitment of such Bank at such time and the denominator
of which is the Total Bridge Revolving Loan Commitment at such time;
provided that if the Bridge Percentage of any Bank is to be determined
after the Total Revolving Loan Commitment has been terminated, then the
Bridge Percentages of the Banks shall be determined immediately prior
(and without giving effect) to such termination.
"BRIDGE STANDBY LETTER OF CREDIT" shall have the meaning
provided in subsection 2.01(d).
"BRIDGE SWINGLINE LOAN" means any Swingline Loan that is made
during the Bridge Revolving Loan Period if at the time such Swingline
Loan is made the Revolving Loan Commitments (other than the Bridge
Revolving Loan Commitments) are fully utilized.
"BRIDGE TRADE LETTER OF CREDIT" shall have the meaning
provided in subsection 2.01(d).
"BRIDGE REVOLVING LOAN" shall have the meaning provided in
subsection 1.01(b)(ii).
"BRIDGE REVOLVING LOAN COMMITMENT" shall have the meaning
provided in subsection 1.01(b)(ii).
"BRIDGE REVOLVING LOAN PERIOD" shall mean the period from the
Second Amendment Effective Date until the Bridge Revolving Loan
Termination Date
"BRIDGE REVOLVING LOAN TERMINATION DATE" shall mean the date
that is the first anniversary of the Second Amendment Effective Date.
"HIG SUBORDINATED NOTES" shall mean, collectively, (i) that
certain Amended and Restated Subordinated Note, dated as of January 12,
2001 issued by Borrower for the benefit of HIG Capital Partners II,
L.P. and (ii) that certain Amended and Restated Subordinated Note,
dated as of January 12, 2001 issued by Borrower for the benefit of HIG
Investment Group II, L.P., each substantially in the form of Exhibit S.
2
"SCHEDULED BRIDGE REVOLVING LOAN REPAYMENT" shall have the
meaning provided in subsection 4.02(A)(i).
"SECOND AMENDMENT" shall mean that certain Second Amendment to
this Agreement, dated as of January 12, 2001, by and among the
Borrower, the Banks party thereto, the Subsidiary Guarantors and the
Agent.
"SECOND AMENDMENT EFFECTIVE DATE" means the date of the
effectiveness of the Second Amendment in accordance with Section 5E of
the Second Amendment.
"TOTAL NON-BRIDGE REVOLVING LOAN COMMITMENT" shall mean, at
any time, the sum of (x) the Revolving Loan Commitments of each Bank
minus (y) the Bridge Revolving Loan Commitments of each Bank.
"TOTAL BRIDGE REVOLVING LOAN COMMITMENT" shall mean, at any
time, the sum of the Bridge Revolving Loan Commitments of each of BNP
and BofA.
"TOTAL BRIDGE PERCENTAGE" shall mean, the percentage at any
time equal to a fraction (expressed as a percentage) the numerator of
which is the Total Bridge Revolving Loan Commitment at such time and
the denominator of which is the Total Revolving Loan Commitment at such
time; provided that if the Total Bridge Percentage of any Bank is to be
determined after the Total Revolving Loan Commitment has been
terminated, then the Total Bridge Percentage shall be determined
immediately prior (and without giving effect) to such termination.
C. Subsection 11.01 of the Credit Agreement is hereby further
amended by deleting each of the definitions of "Guaranty Expiration Date",
"Maximum Revolver Availability", "Percentage", "Required Banks", "Revolving Loan
Commitment" and "Unutilized Revolving Loan Commitments" therefrom in their
entirety and substituting the following therefor:
"GUARANTY EXPIRATION DATE" shall mean the later of (x) the
date that the Scheduled Term Loan Repayment for March 31, 2001 is paid
in full in accordance with the terms of the Credit Agreement, (y) the
date that the Scheduled Bridge Revolving Loan Repayment is paid in full
and the Revolving Loan Commitments are permanently reduced, in each
case in accordance with subsection 4.02(A)(i), or (z) the date
immediately following the first thirty consecutive day period after the
Second Amendment Effective Date in which the aggregate outstanding
amount of Revolving Loans is at all times during such period less than
$3,500,000; provided, however, that if a Default or Event of Default
has occurred and is continuing on such date, the Guaranty Expiration
Date shall not occur until such Default or Event of Default has been
cured or waived.
"MAXIMUM REVOLVER AVAILABILITY" shall mean $5,000,000;
provided, however, that from the Second Amendment Effective Date until
the Bridge Revolving Loan Termination Date, the Maximum Revolver
Availability shall be increased to $8,333,332.
3
"PERCENTAGE" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the sum of (x)
the Revolving Loan Commitment of such Bank minus (y) the Bridge
Revolving Loan Commitments of such Bank at such time and the
denominator of which is the Total Non-Bridge Revolving Loan Commitment
at such time; provided further that if the Percentage of any Bank is to
be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"REQUIRED BANKS" shall mean Banks the sum of whose outstanding
Term Loans and Revolving Loan Commitments (or, after the termination
thereof, outstanding Revolving Loans plus Percentages of outstanding
Swingline Loans and Letter of Credit Outstandings (not including any
Bridge Swingline Loans or Bridge Letter of Credit Outstandings) plus
Bridge Percentages of outstanding Bridge Swingline Loans and Bridge
Letters of Credit Outstandings) represent an amount greater than 50% of
the sum of all outstanding Term Loans and the Total Revolving Loan
Commitment (or, after the termination thereof, outstanding Revolving
Loans plus Percentages of outstanding Swingline Loans and Letter of
Credit Outstandings (not including any Bridge Swingline Loans and
Bridge Letter of Credit Outstandings) plus Bridge Percentages of
outstanding Bridge Swingline Loans and Bridge Letters of Credit
Outstandings).
"REVOLVING LOAN COMMITMENT" shall mean, for each Bank, the
amount set forth opposite such Bank's name on Schedule I hereto
directly below the column entitled "Revolving Loan Commitment," as the
same may be (x) reduced or terminated from time to time pursuant to
subsection 3.02, 3.03, 4.02 and/or 10, (y) increased pursuant to
subsection 1.01(b)(ii) or (z) adjusted from time to time as a result of
assignments to or from such Bank pursuant to subsection 1.12 or 13.04.
"UNUTILIZED REVOLVING LOAN COMMITMENT" for any Bank, at any
time, shall mean the Revolving Loan Commitment of such Bank at such
time less the sum of (i) the aggregate principal amount of Revolving
Loans (including any Bridge Revolving Loans) made by such Bank and then
outstanding plus (ii) such Bank's Percentage of the Letter of Credit
Outstandings (other than Bridge Letter of Credit Outstandings) plus
(iii) such Bank's Bridge Percentage of the Bridge Letter of Credit
Outstandings.
1.2 AMENDMENTS TO SECTION 1: AMOUNTS AND TERMS OF CREDIT
A. Section 1.01 of the Credit Agreement is hereby amended by
deleting subsection 1.01(b) in its entirety and substituting the following
therefore:
"(b) (i) Subject to and upon the terms and conditions set
forth herein, each Bank with a Revolving Loan Commitment severally
agrees, at any time and from time to time on and after the Initial
Borrowing Date and prior to the Revolving Loan Maturity Date, to make a
loan or loans (each a "REVOLVING
4
LOAN" and, collectively, the "REVOLVING LOANS") to the Borrower, which
Revolving Loans (1) shall, at the option of the Borrower, be Base Rate
Loans or Eurodollar Loans; provided that (x) except as otherwise
specifically provided in Section 1.10(b), all Revolving Loans
comprising the same Borrowing shall at all times be of the same Type,
and (y) prior to the Syndication Termination Date, no Borrowings of
Revolving Loans may be made or maintained as Eurodollar Loans, (2) may
be repaid and reborrowed in accordance with the provisions hereof, (3)
(other than any Bridge Revolving Loans) shall not exceed for any Bank
at any time outstanding that aggregate principal amount which, when
added to the product of (x) such Bank's Percentage and (y) the sum of
the aggregate outstanding principal amount of Swingline Loans (other
than Bridge Swingline Loans) and the aggregate amount of all Letter of
Credit Outstandings (other than Bridge Letter of Credit Outstandings
and exclusive of Unpaid Drawings which are repaid with the proceeds of,
and simultaneously with the incurrence of, the respective incurrence of
Revolving Loans), equals the sum of (i) the Revolving Loan Commitment
of such Bank at such time minus (ii) the Bridge Revolving Loan
Commitment of such Bank at such time, and (4) shall not exceed for all
Banks at any time that aggregate principal amount which, when added to
the sum of the aggregate amount of all Letter of Credit Outstandings
and the aggregate outstanding principal amount of Swingline Loans at
such time, equals the Borrowing Base at such time. On the Initial
Borrowing Date, the Borrower may not borrow more than $500,000 in the
aggregate under the Revolving Loan Facility.
(ii) Subject to subsection 4.02(A)(i) hereof, on the Second
Amendment Effective Date the Revolving Loan Commitment of each of BNP
and BofA shall be increased by $1,666,666 (each such increase in the
Revolving Loan Commitment, a "BRIDGE REVOLVING LOAN COMMITMENT", and
any Revolving Loans made pursuant to a Bridge Revolving Loan
Commitment, a "BRIDGE REVOLVING LOAN"); provided, that, in addition to
the conditions set forth in clause (i) above for Revolving Loans, (1)
Bridge Revolving Loans shall only be available to the extent that the
Revolving Loan Commitments (other than the Bridge Revolving Loan
Commitments) are fully utilized and (2) no Bridge Revolving Loans shall
exceed for either BNP or BofA at any time outstanding that aggregate
principal amount which, when added to the product of (x) such Bank's
Bridge Percentage and (y) the sum of the aggregate outstanding
principal amount of Bridge Swingline Loans and the aggregate amount of
all Bridge Letter of Credit Outstandings (exclusive of Unpaid Drawings
on such Bridge Letter of Credit Outstanding which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Bridge Revolving Loans), equals the Bridge Revolving Loan
Commitment of such Bank at such time. Each of the parties hereto hereby
acknowledges and agrees that each Bridge Revolving Loan Commitment is a
Revolving Loan Commitment for all purposes under the Credit Agreement
and the other Credit Documents and that each Bridge
5
Revolving Loan shall constitute a Revolving Loan for all purposes under
the Credit Agreement and the other Credit Documents."
B. Section 1.01 of the Credit Agreement is hereby further
amended by adding the following sentence at the end of subsection 1.01(c):
"Notwithstanding the foregoing, no Swingline Loans shall be
made from the date that is two Business Days prior to the Bridge
Revolving Loan Termination Date until the Bridge Revolving Loan
Termination Date to the extent the Revolving Loan Commitments (other
than any Bridge Revolving Loan Commitments) are fully utilized."
C. Section 1.01 of the Credit Agreement is hereby further
amended by deleting subsection 1.01(d) in its entirety and substituting the
following therefore:
"(d) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks that (i) its outstanding Swingline
Loans (other than any Bridge Swingline Loans) shall be funded with a
Borrowing of Revolving Loans from all Banks pro rata on the basis of
their Revolving Loan Commitments and/or (ii) during the Bridge
Revolving Loan Period, that its Swingline Bridge Loans shall be funded
with a Borrowing of Bridge Revolving Loans from BNP and BofA pro rata
on the basis of their respective Bridge Revolving Loan Commitments;
provided that such notice shall be deemed to have been automatically
given (i) upon the occurrence of a Default or an Event of Default under
Section 10.05, (ii) upon the exercise of any of the remedies provided
in the last paragraph of Section 10 and (iii) in the case of any
Swingline Bridge Loan outstanding on the date that is two Business Days
prior to the Bridge Revolving Loan Termination Date on such date, in
which case a Borrowing of Revolving Loans and/or Bridge Revolving
Loans, as applicable, constituting Base Rate Loans (each such
Borrowing, a "MANDATORY BORROWING") shall be made on the immediately
succeeding Business Day from all Banks with a Revolving Loan Commitment
pro rata on the basis of their respective Percentage and/or BNP and
BofA pro rata on the basis of their respective Bridge Percentage (in
either case without giving effect to any terminations and/or reductions
thereto pursuant to the last paragraph of Section 10) and the proceeds
thereof shall be applied directly to the Swingline Bank to repay the
Swingline Bank for such outstanding Swingline Loans and/or Swingline
Bridge Loans. Each such Bank hereby irrevocably agrees to make
Revolving Loans or Bridge Revolving Loans, as applicable, upon one
Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the
date specified in writing by the Swingline Bank notwithstanding (i)
that the amount of the Mandatory Borrowing may not comply with the
minimum amount for Borrowings otherwise required hereunder, (ii)
whether any conditions specified in Section 6 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the date of
such Mandatory Borrowing, (v) any reduction in the Total Revolving Loan
Commitment after any such Swingline Loans were made and (vi) any
reduction in the Total Bridge Revolving Loan Commitment. In the event
that any Mandatory Borrowing cannot for any reason be made on the date
otherwise required above (including, without
6
limitation, as a result of the commencement of a proceeding under the
Bankruptcy Code with respect to the Borrower), then each such Bank
hereby agrees that it shall forthwith purchase (as of the date the
Mandatory Borrowing would otherwise have occurred, but adjusted for any
payments received from the Borrower in respect of outstanding Swingline
Loans or Swingline Bridge Loans on or after such date and prior to such
purchase) from the Swingline Bank (without recourse or warranty) such
participations in the outstanding Swingline Loans and/or Swingline
Bridge Loans, as applicable, as shall be necessary to cause such Banks
to share in such Swingline Loans and/or Swingline Bridge Loans ratably
based upon their respective Percentages or Bridge Percentage (in either
case determined before giving effect to any termination of the
Revolving Loan Commitments pursuant to the last paragraph of Section
10); provided that (x) all interest payable on the Swingline Loans
and/or Swingline Bridge Loans shall be for the account of the Swingline
Bank until the date as of which the respective participations are
required to be purchased and, to the extent attributable to any
purchased participation, shall be payable to the applicable participant
from and after such date, and (y) at the time any purchase of
participations pursuant to this sentence is actually made, each
purchasing Bank shall be required to pay the Swingline Bank interest on
the principal amount of the participation purchased by such Bank, for
each day from and including the day upon which the Mandatory Borrowing
would otherwise have occurred to but excluding the date of payment for
such participation, at the rate otherwise applicable to Revolving Loans
maintained as Base Rate Loans hereunder for each day thereafter."
D. Section 1.07 of the Credit Agreement is amended by adding
the following sentence immediately after the first sentence of such subsection:
"Notwithstanding the foregoing, from the Second Amendment
Effective Date until the Bridge Revolving Loan Termination Date to the
extent the Revolving Loan Commitments (other than the Bridge Revolving
Loan Commitments) are fully utilized, all Borrowings of Revolving Loans
under this Agreement shall be incurred from BNP and BofA pro rata on
the basis of their respective Bridge Revolving Loan Commitments."
E. Section 1.12 of the Credit Agreement is hereby amended by
deleting such Section in its entirety and substituting the following therefore:
"1.12 REPLACEMENT OF BANKS. (x) if any Bank becomes a
Defaulting Bank or otherwise defaults in its obligations to make Loans
or fund Unpaid Drawings, (y) upon the occurrence of any event giving
rise to the operation of Section 1.10(a)(ii) or (iii), 1.10(c), 2.06 or
4.04 with respect to any Bank (other than the Agent) which results in
any Bank charging to the Borrower materially increased costs in excess
of those being generally charged by the other Banks, or (z) if any Bank
(other than the Agent) refuses to consent to certain proposed changes,
waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Banks as provided in Section
13.12(b), then the Borrower shall have the right, if no Default or
Event of Default then exists, to replace such Bank (other than the
Agent
7
except in the case of clause (x), in which case the Agent may be
replaced) (the "REPLACED BANK") with any other Bank or with one or more
Eligible Transferee or Transferees, none of whom shall constitute a
Defaulting Bank or shall be in default in its obligations to make Loans
or fund Unpaid Drawings at the time of such replacement (collectively,
the "REPLACEMENT BANKS") reasonably acceptable to the Agent, the
Swingline Bank and each Issuing Bank with outstanding Letters of Credit
(unless the respective Replacement Bank is not acquiring any Revolving
Loan Commitment); provided that:
(i) at the time of any replacement pursuant to this
Section 1.12, the Replacement Bank shall enter into one or
more assignment agreements pursuant to Section 13.04(b) (with
all fees payable pursuant to said Section 13.04(b) to be paid
by the Replacement Bank) pursuant to which the Replacement
Bank shall acquire all of the Commitments and outstanding
Loans of, and participations in Letters of Credit by, the
Replaced Bank and, in connection therewith, shall pay to (x)
the Replaced Bank in respect thereof an amount equal to the
sum of (A) an amount equal to the principal of, and all
accrued interest on, all outstanding Loans of the Replaced
Bank, (B) an amount equal to the sum of such Replaced Bank's
(1) Percentage of all Unpaid Drawings (other than Unpaid
Drawings under Bridge Letters of Credit) and (2) Bridge
Percentage of all Unpaid Drawings under Bridge Letters of
Credit, in either case that have been funded by (and not
reimbursed to) such Replaced Bank, together with all then
unpaid interest with respect thereto at such time, and (C) an
amount equal to all accrued, but theretofore unpaid, Fees
owing to the Replaced Bank pursuant to Section 3.01 hereof,
(y) the Issuing Bank or Banks an amount equal to such Replaced
Bank's (1) Percentage of any Unpaid Drawing (which at such
time remains an Unpaid Drawing and other than Unpaid Drawing
under Bridge Letters of Credit) and (2) Bridge Percentage of
any Unpaid Drawing under Bridge Letters of Credit (which at
such time remains an Unpaid Drawing), in either case to the
extent such amount was not theretofore funded by such Replaced
Bank, and (z) the Swingline Bank an amount equal to such
Bank's Percentage and/or Bridge Percentage of any Mandatory
Borrowings to the extent such amount was not therefore funded
by such Replaced Bank; and
(ii) all obligations of the Borrower owing to the
Replaced Bank in respect of the Commitments and Loans of such
Replaced Bank that are being replaced (other than those
specifically described in clause (i) above in respect of which
the assignment purchase price has been, or is concurrently
being, paid) shall be paid in full by the Borrower to such
Replaced Bank concurrently with such replacement.
8
Upon the execution of the respective assignment documentation,
the payment of amounts referred to in clauses (i) and (ii) above,
recordation of the assignment on the Register by the Agent pursuant to
Section 8.15, and delivery to the Replacement Bank of the appropriate
Notes executed by the Borrower, the Replacement Bank shall become a
Bank hereunder and the Replaced Bank shall cease to constitute a Bank
hereunder with respect to the Commitments and Loans so transferred
(except with respect to indemnification provisions under this
Agreement, which shall survive as to such Replaced Bank), and the
Percentages and Bridge Percentages of the Banks shall be automatically
adjusted at such time to the extent necessary to give effect to such
replacement."
1.3 AMENDMENTS TO SECTION 2: LETTERS OF CREDIT
A. Section 2.01 of the Credit Agreement is hereby amended by
adding the following subsection 2.01(d) immediately after subsection 2.01(c):
"(d) Notwithstanding the foregoing, from the Second Amendment
Effective Date until the Bridge Revolving Loan Termination Date (i) if
the Stated Amount of any Letter of Credit, when added to the Letter of
Credit Outstandings (other than Bridge Letter of Credit Outstandings
and exclusive of Unpaid Drawings which are repaid on the date of, and
prior to the issuance of, the respective Letter of Credit) on the date
of issuance of such Letter of Credit, when added to the aggregate
principal amount of all Revolving Loans (other than Bridge Revolving
Loans) and Swingline Loans (other than Bridge Swingline Loans) then
outstanding, would exceed the Total Non-Bridge Revolving Loan
Commitment then in effect (after giving effect to any reductions to the
Total Revolving Loan Commitment on such date), (x) each such standby
Letter of Credit (each a "BRIDGE STANDBY LETTER OF CREDIT") shall by
its terms terminate on or before the tenth Business Day immediately
preceding the Bridge Revolving Loan Termination Date and (y) each such
trade Letter of Credit (each a "BRIDGE TRADE LETTER OF CREDIT"; each
Bridge Standby Letter of Credit and each Bridge Trade Letter of Credit,
a "BRIDGE LETTER OF CREDIT") shall have an expiry date occurring not
later than 180 days after such trade Letter of Credit's date of
issuance and shall have an expiry date occurring no later than 30 days
prior to the Bridge Revolving Loan Termination Date and (ii) only BNP
or BofA shall be the Issuing Bank for any Bridge Letter of Credit."
B. Section 2.04 of the Credit Agreement is hereby amended by
adding the following subsection 2.04(f) immediately after subsection 2.04(e)
sentence at the end of subsection 2.04(a):
"(f) Notwithstanding the foregoing, only BofA and BNP shall be
deemed Participants in any Bridge Letter of Credit to the extent of
their respective Bridge Percentage."
9
1.4 AMENDMENT TO SECTION 3: FEES; REDUCTIONS OF COMMITMENTS
A. Section 3.01 of the Credit Agreement is hereby amended by
deleting subsection 3.01(c) in its entirety and substituting the following
therefore:
"(c) The Borrower agrees to pay to the Agent, for distribution
to (i) each Bank with a Revolving Loan Commitment, a fee in respect of
each Letter of Credit (other than any Bridge Letter of Credit) issued
hereunder (the "LETTER OF CREDIT FEE") and (ii) each Bank with a Bridge
Revolving Loan Commitment, a fee in respect of each Bridge Letter of
Credit issued hereunder (the "BRIDGE LETTER OF CREDIT FEE"), in each
case for the period from and including the date of issuance of such
Letter of Credit or Bridge Letter of Credit to and including the date
of termination of such Letter of Credit or Bridge Letter of Credit,
computed at a rate per annum equal to the Applicable Margin for
Revolving Loans which are maintained as Eurodollar Loans multiplied by
the daily Stated Amount of such Letter of Credit or Bridge Letter of
Credit. Letter of Credit Fees and Bridge Letter of Credit Fees shall be
distributed by the Agent to the Banks on the basis of the respective
Percentages and Bridge Percentages, as applicable, as in effect from
time to time. Accrued Letter of Credit Fees shall be due and payable
quarterly in arrears on each Quarterly Payment Date and on the first
date after the termination of the Total Revolving Loan Commitment on
which no Letters of Credit remain outstanding. Accrued Bridge Letter of
Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the first date after the termination of
the Total Bridge Revolving Loan Commitment on which no Bridge Letters
of Credit remain outstanding."
B. Section 3.03 of the Credit Agreement is hereby amended by
adding the following subsection 3.03(g) immediately after subsection 3.03(f):
"(g) Each reduction of the Total Revolving Loan Commitment
pursuant to subsections 3.02, 3.03, 4.02 and/or 10 shall result in a
reduction of the Total Bridge Revolving Loan Commitment in an amount
equal to the product of (x) the Total Bridge Percentage (as of the date
of and without giving effect to such reduction) and (y) the aggregate
amount of such reduction in the Total Revolving Loan Commitment. Each
reduction to the Total Bridge Revolving Loan Commitment pursuant to
this Section 3.03(g) shall be applied proportionately to reduce the
Bridge Revolving Loan Commitment of each of BNP and BofA."
1.5 AMENDMENTS TO SECTION 4: PREPAYMENTS; PAYMENTS; TAXES
A. Section 4.02(A) of the Credit Agreement is hereby amended
by deleting the "," at the end of clause (x) of subsection 4.02(A)(b) and
substituting the following therefore:
"(after giving effect to any repayment of the Revolving Loans
required by Section 4.02(A)(i) on such date),"
B. Section 4.02(A) of the Credit Agreement is hereby further
amended by adding the following subsection 4.02(A)(i) immediately after
subsection 4.02(A)(h):
10
"(i) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02(A), on the Bridge
Revolving Loan Termination Date (or to the extent such date is not a
Business Day, the immediately preceding Business Day):
(1) the Revolving Loan Commitment of each of BNP and
BofA shall be permanently reduced by the amount of the Bridge
Revolving Loan Commitment of such Bank on such date; and
(2) the Borrower shall repay the principal of the
Revolving Loans of each of BofA and BNP (such repayment, the
"SCHEDULED BRIDGE REVOLVING LOAN REPAYMENT") in an amount
equal to the amount by which the sum of (x) such Bank's
outstanding Revolving Loans and (y) the product of (A) such
Bank's Percentage and (B) the sum of the aggregate outstanding
principal amount of Swingline Loans and the aggregate amount
of all Letter of Credit Outstandings exceeds the Revolving
Loan Commitment of such Bank (after giving effect to the
reduction of such Bank's Revolving Loan Commitment set forth
in clause (1) above) .
1.6 AMENDMENTS TO SECTION 9: NEGATIVE COVENANTS
A. Section 9.04 of the Credit Agreement is hereby amended by
deleting from subsection 9.04(x) the phrase "HIG Subordinated Note" and
substituting "HIG Subordinated Notes" therefor.
B. Section 9.10 of the Credit Agreement is hereby amended by
deleting therefrom the phrase "HIG Subordinated Note" and substituting "HIG
Subordinated Notes" therefor.
C. Section 9.12 of the Credit Agreement is hereby amended by
deleting from subsection 9.12(viii) the phrase "HIG Subordinated Note" and
substituting "HIG Subordinated Notes" therefor.
1.7 AMENDMENTS TO SECTION 10: EVENTS OF DEFAULT
Section 10.01 of the Credit Agreement is hereby amended by
deleting such subsection in its entirety and substituting therefore the
following:
"10.01 PAYMENTS. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or any Unpaid Drawing
(any such payment a "PRINCIPAL PAYMENT") or (ii) default, and such
default shall continue unremedied for five days, in the payment when
due of any interest on any Loan or Note or Unpaid Drawing, or any Fees
or any other amounts owing by it hereunder or thereunder (any such
payment a "INTEREST OR FEE PAYMENT"); provided, however, that any
default in the payment of (i) any Scheduled Term Loan Repayment or (ii)
the Scheduled Bridge Revolving Loan Repayment shall not constitute an
Event of Default if the HIG
11
Guarantors, pursuant to the HIG Guaranty, make such Scheduled Term Loan
Repayment or Scheduled Bridge Revolving Loan Repayment, as the case may
be, when such Scheduled Term Loan Repayment or Scheduled Bridge
Revolving Loan Repayment is due; or"
1.8 AMENDMENTS TO SECTION 13: MISCELLANEOUS
A. Section 13.06 of the Credit Agreement is hereby amended by
adding the following at the end of subsection 13.06(b):
"Notwithstanding the foregoing, this subsection 13.06(b) shall
not apply to any amount received by either BNP or BofA with respect to
the repayment of the principal amount of the Revolving Loans pursuant
to subsection 4.02(A)(i) or the HIG Guaranty.
B. Subsection 13.06 of the Credit Agreement is hereby further
amended by adding the following subsection 13.06(c) immediately after subsection
13.06(b):
"(c) Each of BNP and BofA agrees that if it should receive any
amount hereunder pursuant to Section 4.02A(i) or the HIG Guaranty in
repayment of the principal amount of any Revolving Loans that is
greater than its respective shares of such Revolving Loans, it shall
promptly transfer to the other such amount as shall result in a
proportional participation by both of BNP and BofA in such amount.
1.9 MODIFICATION AND ADDITION OF EXHIBITS
A. Exhibit R to the Credit Agreement is hereby amended by
deleting said Exhibit R in its entirety and substituting in place therefor a new
Exhibit R in the form of Annex A to this Amendment.
B. The Credit Agreement is hereby further amended by adding
thereto a new Exhibit T in the form of Annex B to this Amendment.
SECTION 2. ADDITIONAL REVOLVING NOTES
The Borrower agrees to execute and deliver to each of BNP and
BofA (or to the Agent for such Bank) an amended and restated Revolving Note,
substantially in the form of Exhibit B-2 to the Credit Agreement (each such
Revolving Note an "Additional Revolving Note") with appropriate insertions, to
evidence the Revolving Loan Commitment of such Bank after giving effect to the
increase of such Bank's Revolving Loan Commitment effective as of the Second
Amendment Effective Date (as defined in Section 5E of this Amendment).
12
SECTION 3. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, the Borrower
represents and warrants to each Bank that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all
requisite corporate power and authority to enter into this Amendment, to issue
the Additional Revolving Notes and to carry out the transactions contemplated
by, and perform its obligations under, the Credit Agreement as amended by this
Amendment (the "AMENDED AGREEMENT") and the Additional Revolving Notes.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment, the performance of the Amended Agreement and the issuance,
delivery and payment of the Additional Revolving Notes have been duly authorized
by all necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of
this Amendment, the performance by the Borrower of the Amended Agreement and the
issuance, delivery and payment of the Additional Revolving Notes by the Borrower
do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to the Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of the Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on the Borrower or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any indenture, mortgage, deed of trust, credit agreement
or loan agreement, or any other material agreement, contract or instrument to
which the Borrower or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject (each such
indenture, mortgage, deed of trust, credit agreement, loan agreement, material
agreement, contract or instrument, a "CONTRACTUAL OBLIGATION"), (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of the Borrower or any of its Subsidiaries (other than Liens created
under any of the Credit Documents in favor of the Agent on behalf of the Banks),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Borrower or any of its
Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower of this Amendment, the performance by the Borrower of the Amended
Agreement and the issuance, delivery and payment of the Additional Revolving
Notes by the Borrower do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by the Borrower and are, and the
Additional Revolving Notes, when executed and delivered, will be the legally
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their
13
respective terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to or limiting creditors'
rights generally or by equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 7 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Second Amendment Effective Date (as hereinafter
defined) to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. As of the date hereof after giving
effect hereto, there exists no Default or Event of Default under the Credit
Agreement.
SECTION 4. ACKNOWLEDGEMENT AND CONSENT
Each of Bioslim, Inc., Xebec Productions, Inc., Fox Marketing
Associates, Inc., Time Prophets, Inc., Thane Direct FSC, Inc., Thane Direct,
Inc. and Thane Direct Canada Inc. (each a "SUBSIDIARY GUARANTOR") hereby
acknowledges that such Subsidiary Guarantor has read this Amendment and consents
to the terms hereof and further hereby confirms and agrees that, notwithstanding
the effectiveness of this Amendment, the obligations of such Subsidiary
Guarantor under each of the Credit Documents to which such Subsidiary Guarantor
is a party shall not be impaired and each of the Credit Documents to which such
Subsidiary Guarantor is a party are, and shall continue to be, in full force and
effect and are hereby confirmed and ratified in all respects.
SECTION 5. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
1. On and after the Second Amendment Effective Date,
each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to
the Credit Agreement, and each reference in the other Credit Documents
to the "Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.
2. Except as specifically amended by this Amendment,
the Credit Agreement and the other Credit Documents shall remain in
full force and effect and are hereby ratified and confirmed.
3. The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of the Agent or any Bank under, the Credit Agreement or any
of the other Credit Documents.
14
B. FEES AND EXPENSES. The Borrower acknowledges that all
costs, fees and expenses as described in subsection 13.01 of the Credit
Agreement incurred by the Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrower.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon (i) the execution of a counterpart hereof by the Borrower, each
Subsidiary Guarantor and Required Banks, (ii) receipt by the Borrower and the
Agent of written or telephonic notification of such execution and authorization
of delivery thereof, (iii) receipt by the Agent of opinions of White & Case,
LLP, special counsel to the HIG Guarantors and Xxxxxx and Xxxxxx, Cayman Islands
legal advisers to the HIG Guarantors, each in form and substance satisfactory to
the Agent, as to (a) the due organization and good standing of the Borrower and
each HIG Guarantor, (b) the due authorization, execution and delivery by the
Borrower of the Second Amendment and the Additional Revolving Notes, (c) the due
authorization, execution and delivery by each HIG Guarantor of the Amended
Guaranty (as defined below), (d) the enforceability of this Amendment, the
Amended Agreement and the Additional Revolving Notes against the Borrower, (e)
the enforceability of the Amended Guaranty against each HIG Guarantor, (f) the
status of Borrower's Obligations under the Amended Agreement as "Senior
Indebtedness" under the Senior Subordinated Loan Documents and (g) such other
matters as Agent acting on behalf of Lenders may reasonably request, (iv)
receipt by the Agent from the HIG Guarantors of the duly authorized, executed
and delivered Amended and Restated HIG Guaranty, substantially in the form
attached hereto as Annex A and in form and substance satisfactory to the Agent
(the "AMENDED GUARANTY"), (v) receipt by the Agent of evidence satisfactory to
it that all outstanding statements of O'Melveny & Xxxxx LLP have been paid in
full, (vi) receipt by the Agent of the audited financial statements of each HIG
Guarantor for its most recently ended fiscal year and (vii) receipt by the Agent
from the Borrower for distribution to each of BNP and BofA a commitment fee in
an amount equal to $45,833.32, which is equal to 2.75% of the amount by which
the Revolving Loan Commitment of each of BNP and BofA will be increased pursuant
15
to this Amendment (the date of satisfaction of such conditions being referred to
herein as the "SECOND AMENDMENT EFFECTIVE DATE").
[Remainder of page intentionally left blank]
16
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
Address:
00-000 Xxxxx Xxxxxxx XXXXX INTERNATIONAL, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx Xxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-1
Address:
8-140 Calle Tampico BIOSLIM, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxx Xxxxxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxx Xxxxxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-2
Address:
00-000 Xxxxx Xxxxxxx XXXXX PRODUCTIONS, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxx XxXxxxx Hay
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxx XxXxxxx Hay
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-3
Address:
0000 Xxxxx Xxxxxx FOX MARKETING ASSOCIATES, INC.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-4
Address:
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx TIME PROPHETS, INC.
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-5
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT FSC, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-6
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
-----------------------------
Facsimile No.: (000) 000-0000 Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-7
Address:
0000 Xxxxxxxx Xxxxxx Xxxx XXXXX XXXXXX XXXXXX INC.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Attention: By:/s/Xxxxxxx Xxx
-----------------------------
Telephone No.: Name: Xxxxxxx Xxx
Facsimile No.: Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-8
Address: BNP PARIBAS,
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx By:/s/ Xxxxxxx X. Xxxxxxx
-----------------------------
Xxxxxxx Xxxxxxx Name: Xxxxxxx X. Xxxxxxx
Telephone: (000) 000-0000 Title: Managing Director
Facsimile: (000) 000-0000
By:/s/ X.X. xx Xxxxxxxx
-----------------------------
Name: X.X. xx Xxxxxxxx
Title: Managing Director
B-9
Address: XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as a Bank
Xxxxxxx Xxxxx Business Financial
Services Inc. By:/s/ Mystique Pearson
-----------------------------
000 Xxxxx Xx Xxxxx Xx. Name: Mystique Pearson
17th Floor Title: Vice President
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
X-00
Xxxxxxx: XXXX XX XXXXXXX N.A.,
as a Bank
Commercial Special Assets - West
315 Xxxxxxxxxx, 5th floor
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 By:
-----------------------------
Attention: Xxxx Xxxx Name:
Telephone: 000-000-0000 Title:
Facsimile: 000-000-0000
B-11
THANE INTERNATIONAL, INC.
THIRD AMENDMENT TO CREDIT AGREEMENT
This THIRD AMENDMENT TO CREDIT AGREEMENT (this "AMENDMENT") is
dated as of April 25, 2001 and entered into by and among THANE INTERNATIONAL,
INC., a Delaware corporation (the "BORROWER"), the financial institutions listed
on the signature pages hereof (each a "BANK" and collectively, the "BANKS"), BNP
PARIBAS (successor to Paribas), as agent for the Banks (in such capacity, the
"AGENT"), and, for purposes of Section 6 hereof, the Subsidiary Guarantors (as
defined in Section 6 hereof) listed on the signature pages hereof, and is made
with reference to that certain Credit Agreement dated as of June 10, 1999 (as
amended by that certain First Amendment and Limited Waiver to Credit Agreement
dated as of September 29, 2000 and that certain Second Amendment to Credit
Agreement dated as of January 12, 2001, the "CREDIT AGREEMENT"), by and among
the Borrower, the financial institutions party thereto from time to time and the
Agent. Capitalized terms used herein without definition shall have the same
meanings herein as set forth in the Credit Agreement.
WHEREAS, the Borrower, the Banks and the Agent desire to amend
the Credit Agreement to: (i) increase the Revolving Loan Commitment of BNP
Paribas ("BNP") by a maximum amount of $5,000,000; (ii) prohibit borrowing of
Revolving Loans if the aggregate principal amount of all outstanding Loans and
Letter of Credit Outstandings exceed the Borrowing Base; (iii) make the Maturity
Date June 30, 2002 and (iv) make certain other amendments as set forth below;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENTS TO SECTION 11: DEFINITIONS AND ACCOUNTING TERMS
A. Subsection 11.01 of the Credit Agreement is hereby further
amended by adding thereto the following definitions, which shall be inserted in
proper alphabetical order:
"AUDIT COMPLETION DATE" means the date after the Third
Amendment Effective Date that the Second Bridge Audit has been
completed and that Borrower has delivered a Borrowing Base Certificate
to Agent based on the results of such audit, in each case in form and
substance satisfactory to Agent in its sole discretion.
"SECOND BRIDGE AUDIT" means an audit of the accounts
receivable and inventory of Borrower and its Subsidiaries, to be
supervised by Agent and completed as soon as reasonably practicable
after the Third Amendment Effective Date and the results of which shall
be satisfactory to Agent in its sole discretion.
"SECOND BRIDGE SWINGLINE LOAN" means any Swingline Loan that
is made during the Second Bridge Revolving Loan Period if at the time
such Swingline Loan is made the Revolving Loan Commitments (other than
the Second Bridge Revolving Loan Commitments) are fully utilized.
"SECOND BRIDGE REVOLVING LOAN" shall mean any Revolving Loan
made pursuant to a Second Bridge Revolving Loan Commitment.
"SECOND BRIDGE REVOLVING LOAN COMMITMENT" means for BNP (i)
from the Third Amendment Effective Date to and including the Audit
Completion Date, an amount up to $2,000,000; provided that the amount
Borrower shall be permitted to draw during such period, if any, shall
be determined by BNP in its sole discretion, (ii) from the Audit
Completion Date to and including August 31, 2001, $5,000,000 and (iii)
provided the Audit Completion Date has occurred, from September 1, 2001
to the Second Bridge Revolving Loan Termination Date, $4,000,000.
"SECOND BRIDGE REVOLVING LOAN PERIOD" shall mean the period
from the Third Amendment Effective Date until the Second Bridge
Revolving Loan Termination Date
"SECOND BRIDGE REVOLVING LOAN TERMINATION DATE" shall mean
September 30, 2001.
"SCHEDULED SECOND BRIDGE REVOLVING LOAN REPAYMENT" shall have
the meaning provided in subsection 4.02(A)(ii).
"THIRD AMENDMENT" shall mean that certain Third Amendment to
this Agreement, dated as of April 25, 2001, by and among the Borrower,
the Banks party thereto, the Subsidiary Guarantors and the Agent.
"THIRD AMENDMENT EFFECTIVE DATE" means the date of the
effectiveness of the Third Amendment in accordance with Section 5E of
the Third Amendment.
"TOTAL NON-BRIDGE REVOLVING LOAN COMMITMENT" shall mean, at
any time, the sum of (x) the Revolving Loan Commitments of each Bank
minus (y) the sum of (i) the Bridge Revolving Loan Commitments plus
(ii) the Second Bridge Revolving Loan Commitments of each Bank.
B. Subsection 11.01 of the Credit Agreement is hereby further
amended by deleting each of the definitions of "Borrowing Base Deficiency",
"Maximum Revolver Availability", "Percentage", "Required Banks", "Revolving Loan
Commitment", "Revolving Loan Maturity Date", "Term Loan Maturity Date" and
"Unutilized Revolving Loan Commitments" therefrom in their entirety and
substituting the following therefor:
"BORROWING BASE DEFICIENCY" shall mean, at any time, the
amount, if any, by which (A) the sum of (x) the aggregate principal
amount of outstanding Term Loans, Revolving Loans and Swingline Loans
at such time and (y) the total Letter of Credit Outstandings at such
time exceeds (B) the Borrowing Base.
2
"MAXIMUM REVOLVER AVAILABILITY" shall mean $5,000,000;
provided, however, that from the Second Amendment Effective Date until
the Bridge Revolving Loan Termination Date, the Maximum Revolver
Availability shall be increased to $8,333,332; provided further,
however, that during the Second Bridge Revolving Loan Period, the
Maximum Revolver Availability shall be increased by an amount equal to
the Second Bridge Revolving Loan Commitment.
"PERCENTAGE" of any Bank at any time shall mean a fraction
(expressed as a percentage) (A) the numerator of which is the sum of
(x) the Revolving Loan Commitment of such Bank minus (y) the sum of (i)
the Bridge Revolving Loan Commitments plus (ii) the Second Bridge
Revolving Loan Commitments of such Bank at such time and (B) the
denominator of which is the Total Non-Bridge Revolving Loan Commitment
at such time; provided further that if the Percentage of any Bank is to
be determined after the Total Revolving Loan Commitment has been
terminated, then the Percentages of the Banks shall be determined
immediately prior (and without giving effect) to such termination.
"REQUIRED BANKS" shall mean Banks the sum of whose outstanding
Term Loans and Revolving Loan Commitments (or, after the termination
thereof, outstanding Revolving Loans plus Percentages of outstanding
Swingline Loans and Letter of Credit Outstandings (not including any
Bridge Swingline Loans, Second Bridge Swingline Loans or Bridge Letter
of Credit Outstandings) plus Bridge Percentages of outstanding Bridge
Swingline Loans and Bridge Letters of Credit Outstandings plus in the
case of BNP, any outstanding Second Bridge Swingline Loans) represent
an amount greater than 50% of the sum of all outstanding Term Loans and
the Total Revolving Loan Commitment (or, after the termination thereof,
outstanding Revolving Loans plus Percentages of outstanding Swingline
Loans and Letter of Credit Outstandings (not including any Bridge
Swingline Loans and Bridge Letter of Credit Outstandings) plus Bridge
Percentages of outstanding Bridge Swingline Loans and Bridge Letters of
Credit Outstandings plus in the case of BNP, any outstanding Second
Bridge Swingline Loans).
"REVOLVING LOAN COMMITMENT" shall mean, for each Bank, the
amount set forth opposite such Bank's name on Schedule I hereto
directly below the column entitled "Revolving Loan Commitment," as the
same may be (x) reduced or terminated from time to time pursuant to
subsection 3.02, 3.03, 4.02 and/or 10, (y) increased pursuant to
subsection 1.01(b)(ii) or 1.01(b)(iii) or (z) adjusted from time to
time as a result of assignments to or from such Bank pursuant to
subsection 1.12 or 13.04; provided that (i) for each Bank with a Bridge
Revolving Loan Commitment, the Revolving Loan Commitment of such Bank
shall include such Bridge Revolving Loan Commitment and (ii) for BNP,
the Revolving Loan Commitment of BNP shall include BNP's Second Bridge
Revolving Loan Commitment.
"REVOLVING LOAN MATURITY DATE" shall mean June 30, 2002.
"TERM LOAN MATURITY DATE" shall mean June 30, 2002.
3
"UNUTILIZED REVOLVING LOAN COMMITMENT" for any Bank, at any
time, shall mean the Revolving Loan Commitment of such Bank at such
time less the sum of (i) the aggregate principal amount of Revolving
Loans (including any Bridge Revolving Loans and Second Bridge Revolving
Loans) made by such Bank and then outstanding plus (ii) such Bank's
Percentage of the Letter of Credit Outstandings (other than Bridge
Letter of Credit Outstandings) plus (iii) such Bank's Bridge Percentage
of the Bridge Letter of Credit Outstandings.
1.2 AMENDMENTS TO SECTION 1: AMOUNTS AND TERMS OF CREDIT
A. Section 1.01 of the Credit Agreement is hereby amended by
deleting subsection 1.01(b)(i) in its entirety and substituting the following
therefore:
"(b) (i) Subject to and upon the terms and conditions set
forth herein, each Bank with a Revolving Loan Commitment severally
agrees, at any time and from time to time on and after the Initial
Borrowing Date and prior to the Revolving Loan Maturity Date, to make a
loan or loans (each a "REVOLVING LOAN" and, collectively, the
"REVOLVING LOANS") to the Borrower, which Revolving Loans (1) shall, at
the option of the Borrower, be Base Rate Loans or Eurodollar Loans;
provided that (x) except as otherwise specifically provided in Section
1.10(b), all Revolving Loans comprising the same Borrowing shall at all
times be of the same Type, and (y) prior to the Syndication Termination
Date, no Borrowings of Revolving Loans may be made or maintained as
Eurodollar Loans, (2) may be repaid and reborrowed in accordance with
the provisions hereof, (3) (other than any Bridge Revolving Loans and
Second Bridge Revolving Loans) shall not exceed for any Bank at any
time outstanding that aggregate principal amount which, when added to
the product of (x) such Bank's Percentage and (y) the sum of the
aggregate outstanding principal amount of Swingline Loans (other than
Bridge Swingline Loans and Second Bridge Swingline Loans) and the
aggregate amount of all Letter of Credit Outstandings (other than
Bridge Letter of Credit Outstandings and exclusive of Unpaid Drawings
which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Revolving Loans), equals
the sum of (i) the Revolving Loan Commitment of such Bank at such time
minus (ii) the Bridge Revolving Loan Commitment of such Bank at such
time minus (iii) the Second Bridge Revolving Loan Commitment of such
Bank at such time, and (4) shall not exceed for all Banks at any time
that aggregate principal amount which, when added to the sum of the
aggregate principal amount of all Term Loans outstanding, the aggregate
amount of all Letter of Credit Outstandings and the aggregate
outstanding principal amount of Swingline Loans at such time, equals
the Borrowing Base at such time."
B. Section 1.01 of the Credit Agreement is hereby amended by
adding the following subsection 1.01(b)(iii) immediately after subsection
1.01(b)(ii):
4
"(iii) (a) Subject to subsection 4.02(A)(ii) hereof, during
the Second Bridge Revolving Loan Period, the Revolving Loan Commitment
of BNP shall be increased by an amount equal to the Second Bridge
Revolving Loan Commitment;
(b) In addition to the conditions set forth in clause
(i) above for Revolving Loans, (1) Second Bridge Revolving Loans shall
only be available to the extent that the Revolving Loan Commitments
(other than the Second Bridge Revolving Loan Commitments) are fully
utilized, (2) Second Bridge Revolving Loans shall be made and
maintained as Base Rate Loans and (3) no Second Bridge Revolving Loans
shall exceed at any time outstanding that aggregate principal amount
which, when added to the aggregate outstanding principal amount of
Second Bridge Swingline Loans, equals the Second Bridge Revolving Loan
Commitment. Each of the parties hereto hereby acknowledges and agrees
that the Second Bridge Revolving Loan Commitment is a Revolving Loan
Commitment for all purposes under the Credit Agreement and the other
Credit Documents and that each Second Bridge Revolving Loan shall
constitute a Revolving Loan for all purposes under the Credit Agreement
and the other Credit Documents."
C. Section 1.01 of the Credit Agreement is hereby further
amended by inserting the phrase "or Second Bridge Swingline Loans" immediately
after the phrase "other than any Bridge Swingline Loans" contained in the first
subclause (i) of subsection 1.01(d).
D. Section 1.06 of the Credit Agreement is hereby amended by
deleting the first paragraph thereof in its entirety and substituting the
following therefore:
"1.06 CONVERSIONS. The Borrower shall have the option to
convert, on any Business Day, all or a portion at least equal to the
applicable Minimum Borrowing Amount for such Tranche of the outstanding
principal amount of the Loans (other than Swingline Loans and Second
Bridge Revolving Loans, which may not be converted pursuant to Section
1.06) made pursuant to one or more Borrowings (so long as of the same
Tranche) of one type of Loan into a Borrowing or Borrowings (of the
same Tranche) of the other type of Loan; provided that:"
E. Section 1.07 of the Credit Agreement is amended by deleting
the second sentence thereof in its entirety and substituting the following
therefore:
"Notwithstanding the foregoing, all Borrowings of Revolving
Loans under this Agreement that constitute (i) Bridge Revolving Loans
shall only be incurred from BNP and BofA pro rata on the basis of their
respective Bridge Revolving Loan Commitments and (ii) Second Bridge
Revolving Loans shall only be incurred from BNP."
F. Section 1.12 of the Credit Agreement is hereby amended by
deleting the phrase "and Bridge Percentages" found in the last paragraph of such
subsection and substituting the phrase", Bridge Percentages and Second Bridge
Percentages" therefore.
5
1.3 AMENDMENTS TO SECTION 2: LETTERS OF CREDIT
A. Section 2.01 of the Credit Agreement is hereby amended by
deleting subsection 2.01(c)(i) in its entirety and substituting the following
therefore:
"(i) no Letter of Credit shall be issued the Stated Amount of
which, when added to the Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, the respective Letter of Credit) at such time, (x) would
exceed $1,000,000 or (y) would exceed the lesser of (A) when added to
the aggregate principal amount of all Revolving Loans and Swingline
Loans then outstanding, the Total Revolving Loan Commitment then in
effect (excluding the Second Bridge Revolving Loan Commitment and after
giving effect to any reductions to the Total Revolving Loan Commitment
on such date) or (B) when added to the aggregate principal amount of
all Term Loans, Revolving Loans and Swingline Loans then outstanding,
the Borrowing Base at such time,"
B. Section 2.01 of the Credit Agreement is hereby further
amended by adding the following subsection 2.01(e) immediately after subsection
2.01(d):
"(e) Notwithstanding the foregoing, the Second Bridge
Revolving Loan Commitment shall not be utilized for the issuance of
Letters of Credit."
1.4 AMENDMENTS TO SECTION 4: PREPAYMENTS; PAYMENTS; TAXES
A. Section 4.01(a) of the Credit Agreement is hereby amended
by (i) deleting the "and" at the end of subclause (iii) thereof, (ii) deleting
the "." at the end of subclause (iv) thereof and substituting "; and" therefor
and (iii) adding the following new subsection 4.01(a)(v) thereto:
"(v) each prepayment of Revolving Loans pursuant to this
Section 4.01 shall be applied (x) first, to Second Bridge Revolving
Loans (without a corresponding reduction to the Second Bridge Revolving
Loan Commitment), (y) second, to Bridge Revolving Loans (without a
corresponding reduction to the Bridge Revolving Loan Commitment) and
(z) third, to any other Revolving Loans (without a corresponding
reduction to the Revolving Loan Commitment)."
B. Section 4.02 of the Credit Agreement is hereby amended by
deleting the table contained in subsection 4.02(A)(c) and substituting the
following therefore:
"Scheduled Term Loan Repayment Date Amount
June 30, 2001 $1,100,000
September 30, 2001 $1,250,000
December 31, 2001 $1,250,000
March 31, 2002 $1,250,000
Term Loan Maturity Date $7,250,000"
6
C. Section 4.02 of the Credit Agreement is hereby amended by
adding the following subsections 4.02(A)(j), 4.02(A)(k) and 4.02(A)(l)
immediately after subsection 4.02(A)(i):
"(j) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02(A), on the Second
Bridge Revolving Loan Termination Date (or to the extent such date is
not a Business Day, the immediately preceding Business Day):
(1) the Revolving Loan Commitment of BNP shall be
permanently reduced by the amount of the Second Bridge
Revolving Loan Commitment of such Bank on such date; and
(2) the Borrower shall repay the principal of the
Revolving Loans of BNP (such repayment, the "SCHEDULED SECOND
BRIDGE REVOLVING LOAN REPAYMENT") in an amount equal to the
amount by which the sum of (x) such Bank's outstanding
Revolving Loans and (y) the product of (A) such Bank's
Percentage and (B) the sum of the aggregate outstanding
principal amount of Swingline Loans and the aggregate amount
of all Letter of Credit Outstandings exceeds the Revolving
Loan Commitment of such Bank (after giving effect to the
reduction of such Bank's Revolving Loan Commitment set forth
in Section 4.02A(i) and this Section 4.02A(j).
(k) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, if at any time (x)
there are Revolving Loans and/or Swing Line Loans outstanding and (y)
Borrower and its Subsidiaries have held Cash and/or Cash Equivalents
(net of any outstanding checks) in excess of $2 million for a period of
five (5) consecutive Business Days, an amount equal to such excess
shall be applied as provided in Section 4.02(B)(b).
(l) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, if at any time (x)
there are no Revolving Loans and/or Swing Line Loans outstanding and
(y) Borrower and its Subsidiaries have held Cash and/or Cash
Equivalents (net of any outstanding checks) in excess of $5 million for
a period of ten (10) consecutive Business Days, an amount equal to such
excess shall be applied as provided in Section 4.02(B)(b)."
D. Subsection 4.02(B) of the Credit Agreement is hereby
amended by deleting subsection 4.02(B)(a) in its entirety and substituting the
following therefore:
"(i) first, to prepay Second Bridge Revolving Loans and Bridge
Revolving Loans pro rata in accordance with the respective outstanding
principal amounts
7
thereof (with a corresponding reduction to the Second Bridge Revolving
Loan Commitment and the Bridge Revolving Loan Commitment);
(ii) second, to prepay the principal of outstanding Term
Loans, which prepayments of the Term Loans shall be applied to reduce
the then remaining Scheduled Term Loan Repayments pro rata (based on
the then remaining Scheduled Term Loan Repayments);
(iii) third, to prepay the principal of outstanding Swingline
Loans (with a corresponding reduction to the Total Revolving Loan
Commitment);
(iv) fourth, to prepay the principal of outstanding Revolving
Loans (with a corresponding reduction to the Total Non-Bridge Revolving
Loan Commitment);
(v) fifth, to cash collateralize Letter of Credit Outstandings
by depositing cash in the Letter of Credit Cash Collateral Account in
an amount equal to such Letter of Credit Outstandings (it being
understood that the Total Revolving Loan Commitment shall be reduced by
the amount of cash collateral required to be deposited by this clause
(v) as follows: (x) first, to reduce the Bridge Revolving Loan
Commitment to the fullest extent thereof and (y) second, to reduce the
remaining Total Non-Bridge Revolving Loan Commitment); and
(vi) sixth, to reduce the remaining (i.e., after giving effect
to all prior reductions thereto, including, without limitation, to the
reductions theretofore effected pursuant to the preceding clauses (i),
(iii), (iv), and (v)) Total Revolving Loan Commitment as follows: (x)
first, to reduce the Second Bridge Revolving Loan Commitment to the
fullest extent thereof, (y) second, to reduce the Bridge Revolving Loan
Commitment to the fullest extent thereof and (z) to reduce the
remaining Total Non-Bridge Revolving Loan Commitment (it being
understood and agreed that the amount of any such reduction shall be
deemed to be an application of proceeds for purposes of this clause
(vi) even though cash is not actually applied).
E. Subsection 4.02(B) of the Credit Agreement is hereby
amended by (i) renumbering clause (b) as clause (c) and (ii) inserting the
following clause (b) immediately after clause (a):
"(b) Each mandatory repayment of Loans pursuant to
Sections 4.02(A)(k) and 4.02(A)(l), inclusive, shall be applied:
(i) first, to reduce the principal of outstanding
Revolving Loans (but not to reduce the Revolving Loan
Commitments) as follows: (x) first; to the reduction of Second
Bridge Revolving Loans to the full extent thereof, (y) second,
to the reduction of Bridge Revolving Loans to the full extent
thereof and (z) third, to the reduction of any other Revolving
Loans to the full extent thereof;
8
(ii) second, provided all outstanding Revolving Loans
have been paid in full, to prepay the principal of outstanding
Term Loans, which prepayments of the Term Loans shall be
applied to reduce the then remaining Scheduled Term Loan
Repayments in inverse order of scheduled repayments; provided,
that at the time of any such prepayment there shall be a
corresponding reduction of Revolving Loan Commitments in an
amount equal to the amount of such prepayment as follows: (x)
first, to reduce the Second Bridge Revolving Loan Commitment
to the full extent thereof, and (y) second, the Bridge
Revolving Loan Commitment to the full extent thereof;
(iii) third, provided all outstanding Term Loans have
been paid in full, to reduce the Second Bridge Revolving Loan
Commitment (it being understood and agreed that the amount of
such reduction shall be deemed to be an application of
proceeds for purposes of this clause (iii) even though cash is
not actually applied);
(iv) fourth, provided the Second Bridge Revolving
Loan Commitment has been reduced to the full extent thereof,
to reduce the Total Bridge Revolving Loan Commitment (it being
understood and agreed that the amount of such reduction shall
be deemed to be an application of proceeds for purposes of
this clause (iv) even though cash is not actually applied);
(v) fifth, provided the Total Bridge Revolving Loan
Commitment has been reduced to the full extent thereof, to
cash collateralize Letter of Credit Outstandings by depositing
cash in the Letter of Credit Cash Collateral Account in an
amount equal to such Letter of Credit Outstandings (it being
understood that the Total Revolving Loan Commitment shall be
reduced by the amount of cash collateral required to be
deposited by this clause (v)); and
(vi) sixth, provided the Letter of Credit
Outstandings are fully collateralized, to reduce the remaining
(i.e., after giving effect to all prior reductions thereto,
including, without limitation, to the reductions theretofore
effected pursuant to the preceding clauses (ii), (iii), (iv)
and (v)) Total Non-Bridge Revolving Loan Commitment (it being
understood and agreed that the amount of such reduction shall
be deemed to be an application of proceeds for purposes of
this clause (vi) even though cash is not actually applied)."
1.5 AMENDMENTS TO SECTION 7: REPRESENTATIONS, WARRANTIES AND
AGREEMENTS
Section 7 of the Credit Agreement is hereby amended by
deleting subsection 7.08 in its entirety and substituting the following
therefore:
"7.08 USE OF PROCEEDS; MARGIN REGULATIONS. (a) All proceeds of
the Term Loans and up to $500,000 of the Revolving Loans incurred by
the Borrower on the
9
Initial Borrowing Date shall be used to finance, in part, the
Recapitalization Consideration, directly or indirectly to repay the
Refinanced Indebtedness, and to pay Transaction Fees and Expenses.
(b) All proceeds of Revolving Loans (other than Second Bridge
Revolving Loans) and Swingline Loans incurred after the Initial
Borrowing Date shall be used by the Borrower for general corporate and
working capital purposes of the Borrower and its Subsidiaries.
(c) All proceeds of Second Bridge Revolving Loans shall be
used by the Borrowers for working capital purposes of the Borrower and
its Subsidiaries and such other purposes that are approved by BNP in
its sole discretion.
(d) No part of the proceeds of any Loan will be used to
purchase or carry any Margin Stock or to extend credit for the purpose
of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the use of the proceeds thereof nor the occurrence of any
other Credit Event will violate or be inconsistent with the provisions
of Regulation T, U or X of the Board of Governors of the Federal
Reserve System."
1.6 AMENDMENTS TO SECTION 8: AFFIRMATIVE COVENANTS
Section 8.01 of the Credit Agreement is hereby amended by
deleting subsection 8.01(k) in its entirety and substituting the following
therefore:
"(k) Borrowing Base Certificates. (i) On the Initial Borrowing
Date, (ii) no later than 11:00 A.M. (New York time) on the fifteenth
and the thirtieth day after the end of each calendar month prior to the
Second Bridge Revolving Loan Termination Date and (iii) no later than
11:00 A.M. (New York time) on the thirtieth day after the end of each
calendar month thereafter, a borrowing base certificate of the borrower
in the form of Exhibit M (each a "BORROWING BASE CERTIFICATE"), with
respect to the Eligible Receivables and Eligible Inventory of the
Borrower and its Subsidiaries as of (x) in the case of clause (i),
April 30, 1999 (after giving effect to the Transaction), (y) in the
case of clause (ii), the fifteenth and the thirtieth day of such
calendar month and (z) in the case of clause (iii), the thirtieth day
of such calendar month, in all such cases certified by the chief
financial officer of other Authorized Officer of the Borrower."
1.7 AMENDMENTS TO SECTION 9: NEGATIVE COVENANTS
A. Section 9.07 of the Credit Agreement is hereby amended by
deleting the table contained in subclause 9.07(a) and substituting the following
therefore:
"Fiscal Year Ended March 31 Amount
2001 $250,000
2002 $250,000"
10
B. Section 9.08 of the Credit Agreement is hereby amended by
deleting the table contained therein and substituting the following therefore:
"Fiscal Quarter Ended Ratio
March 31, 2001 1.15:1.00
June 30, 2001 1.15:1.00
September 30, 2001 1.15:1.00
December 31, 2001 1.15:1.00
March 31, 2002 1.15:1.00
June 30, 2002 1.15:1.00"
C. Section 9.09 of the Credit Agreement is hereby amended by
deleting the table contained therein and substituting the following therefore:
"Fiscal Quarter Ended Ratio
March 31, 2001 6.25:1.00
June 30, 2001 6.50:1.00
September 30, 2001 6.50:1.00
December 31, 2001 6.75:1.00
March 31, 2002 6.75:1.00
June 30, 2002 7.00:1.00"
D. Section 9.10 of the Credit Agreement is hereby amended by
deleting the table contained therein and substituting the following therefore:
"Fiscal Quarter Ended Ratio
March 31, 2001 1.50:1.00
June 30, 2001 1.50:1.00
September 30, 2001 1.25:1.00
December 31, 2001 1.25:1.00
March 31, 2002 1.00:1.00
June 30, 2002 1.00:1.00"
E. Section 9.11 of the Credit Agreement is hereby amended by
deleting the table contained therein and substituting the following therefore:
11
"Fiscal Quarter Ended Amount
March 31, 2001 $11,000,000
June 30, 2001 $11,500,000
September 30, 2001 $12,000,000
December 31, 2001 $12,000,000
March 31, 2002 $13,000,000
June 30, 2002 $13,000,000"
1.8 AMENDMENTS TO SECTION 13: MISCELLANEOUS
A. Section 13.01 of the Credit Agreement is hereby amended by
inserting the parenthetical "(including, without limitation, the costs and
expenses incurred by Agent in connection with the Second Bridge Audit)"
immediately after the phrase "any amendment, waiver or consent relating hereto
or thereto" contained in subclause (i) of Section 13.01.
B. Section 13.06 of the Credit Agreement is hereby amended by
deleting the last sentence of subsection 13.06(b) in its entirety and
substituting the following therefore:
"Notwithstanding the foregoing, this subsection 13.06(b) shall
not apply to (x) any amount received by either BNP or BofA with respect
to the repayment of the principal amount of the Revolving Loans
pursuant to subsection 4.02(A)(i) or the HIG Guaranty or (y) any amount
received by BNP with respect to the repayment of the principal amount
of or interest on the Second Bridge Revolving Loans, including, without
limitation, any amount received in accordance with Section 7.4 of the
Security Agreement."
SECTION 2. ADDITIONAL REVOLVING NOTES
The Borrower agrees to execute and deliver to BNP (or to the
Agent for such Bank) an amended and restated Revolving Note, substantially in
the form of Exhibit B-2 to the Credit Agreement (each such Revolving Note an
"Additional Revolving Note") with appropriate insertions, to evidence the
Revolving Loan Commitment of such Bank after giving effect to the increase of
such Bank's Revolving Loan Commitment effective as of the Third Amendment
Effective Date (as defined in Section 5E of this Amendment).
SECTION 3. CONSENT TO ADMENDMENT OF SENIOR SUBORDINATED LOAN
AGREEMENT AND SENIOR SUBORDINATED NOTES
The Banks hereby consent to the amendment of the Senior Subordinated
Loan Agreement and Senior Subordinated Notes in the forms attached hereto as
Exhibit A (collectively, the "SENIOR SUBORDINATED LOAN DOCUMENT AMENDMENTS").
12
SECTION 4. AMENDMENT OF SECURITY AGREEMENT.
The Banks hereby consent to the Collateral Agent entering into an
Amendment to the Security Agreement, substantially in the form of Annex A
attached hereto (the "SECURITY AGREEMENT AMENDMENT") and any acknowledgement
and/or consent to the modification of section 7.4 of the Security Agreement
contained in the Security Agreement Amendment that Agent deems is necessary to
be entered into with any Credit Party or any party to the Stockholders Pledge
Agreement (collectively, the "ACKNOWLEDGEMENTS AND CONSENTS").
SECTION 5. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, the Borrower
represents and warrants to each Bank that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all
requisite corporate power and authority to enter into this Amendment, to issue
the Additional Revolving Notes and to carry out the transactions contemplated
by, and perform its obligations under, the Credit Agreement as amended by this
Amendment (the "AMENDED AGREEMENT") and the Additional Revolving Notes.
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment, the performance of the Amended Agreement and the issuance,
delivery and payment of the Additional Revolving Notes have been duly authorized
by all necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of
this Amendment, the performance by the Borrower of the Amended Agreement and the
issuance, delivery and payment of the Additional Revolving Notes by the Borrower
do not and will not (i) violate any provision of any law or any governmental
rule or regulation applicable to the Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of the Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on the Borrower or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any indenture, mortgage, deed of trust, credit agreement
or loan agreement, or any other material agreement, contract or instrument to
which the Borrower or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject (each such
indenture, mortgage, deed of trust, credit agreement, loan agreement, material
agreement, contract or instrument, a "CONTRACTUAL OBLIGATION"), (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of the Borrower or any of its Subsidiaries (other than Liens created
under any of the Credit Documents in favor of the Agent on behalf of the Banks),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Borrower or any of its
Subsidiaries.
13
D. GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower of this Amendment, the performance by the Borrower of the Amended
Agreement and the issuance, delivery and payment of the Additional Revolving
Notes by the Borrower do not and will not require any registration with, consent
or approval of, or notice to, or other action to, with or by, any federal, state
or other governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by the Borrower and are, and the
Additional Revolving Notes, when executed and delivered, will be the legally
valid and binding obligations of the Borrower, enforceable against the Borrower
in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 7 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Third Amendment Effective Date (as hereinafter
defined) to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. As of the date hereof after giving
effect hereto, there exists no Default or Event of Default under the Credit
Agreement.
SECTION 6. ACKNOWLEDGEMENT AND CONSENT
Each of Bioslim, Inc., Xebec Productions, Inc., Fox Marketing
Associates, Inc., Time Prophets, Inc., Thane Direct FSC, Inc., Thane Direct,
Inc. and Thane Direct Canada Inc. (each a "SUBSIDIARY GUARANTOR") hereby
acknowledges that such Subsidiary Guarantor has read this Amendment and consents
to the terms hereof and further hereby confirms and agrees that, notwithstanding
the effectiveness of this Amendment, the obligations of such Subsidiary
Guarantor under each of the Credit Documents to which such Subsidiary Guarantor
is a party shall not be impaired and each of the Credit Documents to which such
Subsidiary Guarantor is a party are, and shall continue to be, in full force and
effect and are hereby confirmed and ratified in all respects.
SECTION 7. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
1. On and after the Third Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder",
"hereof", "herein" or words of like import referring to the Credit
Agreement, and each reference in the other Credit Documents to the
"Credit Agreement", "thereunder", "thereof" or
14
words of like import referring to the Credit Agreement shall mean and
be a reference to the Amended Agreement.
2. Except as specifically amended by this Amendment, the
Credit Agreement and the other Credit Documents shall remain in full
force and effect and are hereby ratified and confirmed.
3. The execution, delivery and performance of this Amendment
shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy
of the Agent or any Bank under, the Credit Agreement or any of the
other Credit Documents.
B. FEES AND EXPENSES. The Borrower acknowledges that all
costs, fees and expenses as described in subsection 13.01 of the Credit
Agreement incurred by the Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrower.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon (i) the execution of a counterpart hereof by the Borrower, each
Subsidiary Guarantor and Required Banks, (ii) receipt by the Borrower and the
Agent of written or telephonic notification of such execution and authorization
of delivery thereof, (iii) the execution of a counterpart to the Security
Agreement Amendment by Borrower, each Subsidiary Guarantor and Collateral Agent,
(iv) the delivery to Agent of all Acknowledgements and Consents required by
Agent to be delivered by any Credit Party and any party to the Stockholders
Pledge Agreement, (v) receipt by the Agent of opinions of White & Case, LLP,
special counsel to the Borrower, in form and substance satisfactory to the
Agent, as to (a) the due organization and good standing of the Borrower, (b) the
due authorization, execution and delivery by the Borrower of the Third Amendment
and the Additional Revolving Notes, (c) the enforceability of this Amendment,
the Amended Agreement and the Additional Revolving Notes against the Borrower,
(d) the status of
15
Borrower's Obligations under the Amended Agreement as "Senior Indebtedness"
under the Senior Subordinated Loan Documents and (e) such other matters as Agent
acting on behalf of Lenders may reasonably request, (vi) the delivery to Agent
of copies of the executed Senior Subordinated Loan Document Amendment, in form
and substance satisfactory to Agent and (vii) receipt by the Agent of evidence
satisfactory to it that all outstanding statements of O'Melveny & Xxxxx LLP have
been paid in full (the date of satisfaction of such conditions being referred to
herein as the "THIRD AMENDMENT EFFECTIVE DATE").
[Remainder of page intentionally left blank]
16
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
Address:
00-000 Xxxxx Xxxxxxx XXXXX INTERNATIONAL, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxxxxx X. Xxx
Facsimile No.: (000) 000-0000 -----------------------------
Name: Xxxxxxx X. Xxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
8-140 Calle Tampico BIOSLIM, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxx Xxxxxx
Facsimile No.: (000) 000-0000 -----------------------------
Name: Xxxx Xxxxxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
00-000 Xxxxx Xxxxxxx XXXXX PRODUCTIONS, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxxxx XxXxxxx Hay
Facsimile No.: (000) 000-0000 -----------------------------
Name: Xxxxxx XxXxxxx Hay
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
0000 Xxxxx Xxxxxx XXX MARKETING ASSOCIATES, INC.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/ Xxxxxxx X. Xxx
Facsimile No.: -----------------------------
Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx TIME PROPHETS, INC.
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx X. Xxx
Facsimile No.: -----------------------------
Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT FSC, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx X. Xxx
Facsimile No.: (000) 000-0000 -----------------------------
Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx X. Xxx
Facsimile No.: (000) 000-0000 -----------------------------
Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
0000 Xxxxxxxx Xxxxxx Xxxx XXXXX XXXXXX XXXXXX INC.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Attention: By:/s/Xxxxxxx X. Xxx
Telephone No.: -----------------------------
Facsimile No.: Name: Xxxxxxx X. Xxx
Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address: BNP PARIBAS,
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx By:/s/ X.X. xx Xxxxxxxx
Xxxxxxx Xxxxxxx -----------------------------
Telephone: (000) 000-0000 Name: X.X. xx Xxxxxxxx
Facsimile: (000) 000-0000 Title: Managing Director
By:/s/ X. Xxxxxxx
-----------------------------
Name: X. Xxxxxxx
Title: Vice President
Address: XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as a Bank
Xxxxxxx Xxxxx Business Financial
Services Inc. By:
000 Xxxxx Xx Xxxxx Xx. -----------------------------
17th Floor Name:
Xxxxxxx, Xxxxxxxx 00000 Title:
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Address: BANK OF AMERICA N.A.,
as a Bank
Commercial Special Assets - West
315 Xxxxxxxxxx, 5th floor
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 By:/s/ Xxxx Xxxx
Attention: Xxxx Xxxx -----------------------------
Telephone: 000-000-0000 Name: Xxxx Xxxx
Facsimile: 000-000-0000 Title: Senior Vice President
EXECUTION
THANE INTERNATIONAL, INC.
FOURTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
This FOURTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
(this "AMENDMENT") is dated as of June 6, 2001 and entered into by and among
THANE INTERNATIONAL, INC., a Delaware corporation (the "BORROWER"), the
financial institutions listed on the signature pages hereof (each a "BANK" and
collectively, the "BANKS"), BNP PARIBAS (successor to Paribas), as agent for the
Banks (in such capacity, the "AGENT"), and, for purposes of Section 5 hereof,
the Subsidiary Guarantors (as defined in Section 5 hereof) listed on the
signature pages hereof, and is made with reference to that certain Credit
Agreement dated as of June 10, 1999 (as amended by that certain First Amendment
and Limited Waiver to Credit Agreement dated as of September 29, 2000, that
certain Second Amendment to Credit Agreement dated as of January 12, 2001, and
that certain Third Amendment to Credit Agreement dated as of April 24, 2001, the
"CREDIT AGREEMENT"), by and among the Borrower, the financial institutions party
thereto from time to time and the Agent. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
WHEREAS, the Borrower, the Banks and the Agent desire to amend
the Credit Agreement to (i) modify the financial covenants contained in Section
9.07 and (ii) make certain other amendments as set forth below;
WHEREAS, the Borrower failed to comply with certain
requirements set forth in Section 9.07 of the Credit Agreement for the fiscal
year ended on March 31, 2001 in the manner and to the extent previously reported
by the Borrower to the Banks (the "MARCH COVENANT FAILURE");
WHEREAS, in connection with the March Covenant Failure, the
Borrower and the Banks desire to waive any Default or Event of Default caused by
the failure of the Borrower to comply with the requirements contained in Section
9.07 of the Credit Agreement for the fiscal year ended on March 31, 2001, on the
terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 AMENDMENT TO SECTION 9: NEGATIVE COVENANTS
Section 9.07 of the Credit Agreement is hereby amended by deleting the
table contained in subclause 9.07(a) and substituting the following therefore:
"Fiscal Year Ended March 31 Amount
2002 $750,000
2003 $250,000"
SECTION 2. LIMITED WAIVER
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein
contained, the Banks hereby waive the requirement set forth in Section 9.07 of
the Credit Agreement that the Borrower shall not, and shall not permit any of
its Subsidiaries to, make any Capital Expenditures in excess of $250,000 for
the fiscal year ended on March 31, 2001.
SECTION 3. LIMITATION OF WAIVER
Without limiting the generality of the provisions of Section
13.12 of the Credit Agreement, the waivers set forth above shall be limited
precisely as written and relate solely to the noncompliance by the Borrower with
the provisions of Section 9.07 of the Credit Agreement in the manner and to the
extent described above, and nothing in this waiver shall be deemed to:
(a) constitute a waiver of compliance by the Borrower
with respect to (i) Section 9.07 of the Credit Agreement in any other
instance or (ii) any other term, provision or condition of the Credit
Agreement or any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Agent or any
Bank may now have or may have in the future under or in connection with
the Credit Agreement or any other instrument or agreement referred to
therein.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment and
to amend the Credit Agreement in the manner provided herein, the Borrower
represents and warrants to each Bank that the following statements are true,
correct and complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
2
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of
this Amendment and the performance by the Borrower of the Amended Agreement do
not and will not (i) violate any provision of any law or any governmental rule
or regulation applicable to the Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of the Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on the Borrower or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any indenture, mortgage, deed of trust, credit agreement
or loan agreement, or any other material agreement, contract or instrument to
which the Borrower or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject (each such
indenture, mortgage, deed of trust, credit agreement, loan agreement, material
agreement, contract or instrument, a "CONTRACTUAL OBLIGATION"), (iii) result in
or require the creation or imposition of any Lien upon any of the properties or
assets of the Borrower or any of its Subsidiaries (other than Liens created
under any of the Credit Documents in favor of the Agent on behalf of the Banks),
or (iv) require any approval of stockholders or any approval or consent of any
Person under any Contractual Obligation of the Borrower or any of its
Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower of this Amendment and the performance by the Borrower of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by the Borrower and when
executed and delivered will be the legally valid and binding obligations of the
Borrower, enforceable against the Borrower in accordance with their respective
terms, except as may be limited by bankruptcy, insolvency, reorganization,
moratorium or similar laws relating to or limiting creditors' rights generally
or by equitable principles relating to enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 7 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Fourth Amendment Effective Date (as hereinafter
defined) to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. As of the date hereof after giving
effect hereto, there exists no Default or Event of Default under the Credit
Agreement.
3
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Each of Bioslim, Inc., Xebec Productions, Inc., Fox Marketing
Associates, Inc., Time Prophets, Inc., Thane Direct FSC, Inc., Thane Direct,
Inc. and Thane Direct Canada Inc. (each a "SUBSIDIARY GUARANTOR") hereby
acknowledges that such Subsidiary Guarantor has read this Amendment and consents
to the terms hereof and further hereby confirms and agrees that, notwithstanding
the effectiveness of this Amendment, the obligations of such Subsidiary
Guarantor under each of the Credit Documents to which such Subsidiary Guarantor
is a party shall not be impaired and each of the Credit Documents to which such
Subsidiary Guarantor is a party are, and shall continue to be, in full force and
effect and are hereby confirmed and ratified in all respects.
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
1. On and after the Fourth Amendment Effective Date,
each reference in the Credit Agreement to "this Agreement",
"hereunder", "hereof", "herein" or words of like import referring to
the Credit Agreement, and each reference in the other Credit Documents
to the "Credit Agreement", "thereunder", "thereof" or words of like
import referring to the Credit Agreement shall mean and be a reference
to the Amended Agreement.
2. Except as specifically amended by this Amendment,
the Credit Agreement and the other Credit Documents shall remain in
full force and effect and are hereby ratified and confirmed.
3. The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a
waiver of any provision of, or operate as a waiver of any right, power
or remedy of the Agent or any Bank under, the Credit Agreement or any
of the other Credit Documents.
B. FEES AND EXPENSES. The Borrower acknowledges that all
costs, fees and expenses as described in subsection 13.01 of the Credit
Agreement incurred by the Agent and its counsel with respect to this Amendment
and the documents and transactions contemplated hereby shall be for the account
of the Borrower.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY,
4
AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE
STATE OF NEW YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS
PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon (i) the execution of a counterpart hereof by the Borrower, each
Subsidiary Guarantor and Required Banks, (ii) receipt by the Borrower and the
Agent of written or telephonic notification of such execution and authorization
of delivery thereof, and (iii) receipt by the Agent of evidence satisfactory to
it that all outstanding statements of O'Melveny & Xxxxx LLP have been paid in
full (the date of satisfaction of such conditions being referred to herein as
the "FOURTH AMENDMENT EFFECTIVE DATE").
[Remainder of page intentionally left blank]
5
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
Address:
00-000 Xxxxx Xxxxxxx XXXXX INTERNATIONAL, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxxxxx X. Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx X. Xxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
8-140 Calle Tampico BIOSLIM, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxx Xxxxxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxx Xxxxxx
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
00-000 Xxxxx Xxxxxxx XXXXX PRODUCTIONS, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxxxx XxXxxxx Hay
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxx XxXxxxx Hay
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
0000 Xxxxx Xxxxxx XXX MARKETING ASSOCIATES, INC.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
Facsimile No.: ----------------------------------
Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx TIME PROPHETS, INC.
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
Facsimile No.: ----------------------------------
Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT FSC, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx Xxx
Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address:
0000 Xxxxxxxx Xxxxxx Xxxx XXXXX XXXXXX XXXXXX INC.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Attention: By:/s/ Xxxxxxx Xxx
Telephone No.: ----------------------------------
Facsimile No.: Name: Xxxxxxx Xxx
Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address: BNP PARIBAS,
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxxxx By:/s/ Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx ----------------------------------
Telephone: (000) 000-0000 Name: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000 Title: Managing Director
By:/s/Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
Address: XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as a Bank
Xxxxxxx Xxxxx Business Financial
Services Inc. By:/s/Xxxxxxx Xxxxxx
000 Xxxxx Xx Xxxxx Xx. ----------------------------------
17th Floor Name: Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000 Title: Asst. Vice President
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
Address: BANK OF AMERICA N.A.,
as a Bank
Commercial Special Assets - West
315 Montgomery, 5th floor
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 By:/s/Xxxx Xxxx
Attention: Xxxx Xxxx ----------------------------------
Telephone: 000-000-0000 Name: Xxxx Xxxx
Facsimile: 000-000-0000 Title: Senior Vice President
EXECUTION
THANE INTERNATIONAL, INC.
FIFTH AMENDMENT AND LIMITED WAIVER
TO CREDIT AGREEMENT
This FIFTH AMENDMENT AND LIMITED WAIVER TO CREDIT AGREEMENT
(this "AMENDMENT") is dated as of September 30, 2001 and entered into by and
among THANE INTERNATIONAL, INC., a Delaware corporation (the "BORROWER"), the
financial institutions listed on the signature pages hereof (each a "BANK" and
collectively, the "BANKS") and BNP PARIBAS (successor to Paribas), as agent for
the Banks (the "AGENT"), and is made with reference to that certain Credit
Agreement dated as of June 10, 1999 (as amended by that certain First Amendment
and Limited Waiver to Credit Agreement dated as of September 29, 2000, that
certain Second Amendment to Credit Agreement dated as of January 12, 2001 and
that certain Third Amendment to Credit Agreement dated as of April 25, 2001, the
CREDIT AGREEMENT"), by and among the Borrower, the financial institutions party
thereto from time to time and the Agent. Capitalized terms used herein without
definition shall have the same meanings herein as set forth in the Credit
Agreement.
RECITALS
WHEREAS, the Borrower and the Banks desire to amend the Credit
Agreement to modify the covenant contained in Section 9.04(iii) regarding the
amount of Indebtedness evidenced by Capitalized Lease Obligations and to make
certain other amendments as set forth below;
WHEREAS, the Borrower failed to deliver to the Agent the
certified consolidated and consolidating financial statements and balance sheets
of the Borrower and its Subsidiaries and certain other information for the
fiscal year ended on March 31, 2001 in accordance with Section 8.01(c) of the
Credit Agreement (the "FISCAL YEAR 2001 DELIVERY FAILURE");
WHEREAS, in connection with the Fiscal Year 2001 Delivery
Failure, the Borrower and the Banks desire to waive any Default or Event of
Default caused by the failure of the Borrower to comply with the requirements
contained in Section 8.01(c) of the Credit Agreement for the fiscal year ended
on March 31, 2001, on the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the premises and the
agreements, provisions and covenants herein contained, the parties hereto agree
as follows:
SECTION 1. AMENDMENTS TO THE CREDIT AGREEMENT
1.1 PROVISIONS RELATING TO AMOUNT AND TERMS OF CREDIT
A. INDEBTEDNESS. Section 9.04 of the Credit Agreement is
hereby amended by deleting clause (iii) thereof and substituting therefor the
following:
"(iii) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations incurred to the extent
permitted pursuant to Section 9.07 and Indebtedness secured by Liens
permitted by Section 9.01(viii); provided that the aggregate amount of
Indebtedness evidenced by Capitalized Lease Obligations under all
Capital Leases when aggregated with the amount of Indebtedness secured
by Liens permitted by Section 9.01(viii), in each case, incurred after
the Effective Date, shall not exceed $3.3 million."
1.2 PROVISIONS RELATING TO DEFINED TERMS
ADDITIONAL DEFINITIONS. Section 11.01 of the Credit Agreement
is hereby amended by adding thereto the following definitions, which shall be
inserted in proper alphabetical order:
"FIFTH AMENDMENT" shall mean that certain Fifth Amendment and
Limited Waiver to this Agreement, dated as of September 30, 2001, by
and among the Borrower, the financial institutions party thereto, the
Subsidiary Guarantors and the Agent.
"FIFTH AMENDMENT EFFECTIVE DATE" has the meaning assigned to
that term in the Fifth Amendment.
SECTION 2. LIMITED WAIVER OF FISCAL YEAR 2001 DELIVERY
FAILURE.
Subject to the terms and conditions set forth herein and in
reliance on the representations and warranties of the Borrower herein contained,
the Banks hereby waive any Default or Event of Default caused by the failure of
the Borrower to deliver to Agent the certified consolidated and consolidating
balance sheets and financial statements of the Borrower and its Subsidiaries and
any other documentation required to be delivered by Borrower for the fiscal year
ended on March 31, 2001 pursuant to Section 8.01(c) of the Credit Agreement;
provided, however, that the Borrower shall deliver all such financial
statements, balance sheets and other documentation to the Agent no later than 10
Business Days after the Fifth Amendment Effective Date; provided, further, that
such financials statements, balance sheets and other documentation delivered to
the Agent shall contain no material changes from the drafts of such financial
statements, balance sheets and other documentation previously delivered by
Borrower to Agent and Banks on September 6, 2001.
2
SECTION 3. LIMITATION OF WAIVER
Without limiting the generality of the provisions of Section
13.12 of the Credit Agreement, the waivers set forth above shall be limited
precisely as written and relate solely to the noncompliance by the Borrower with
the provisions of Section 8.01(c) of the Credit Agreement in the manner and to
the extent described above, and nothing in this Waiver shall be deemed to:
(a) constitute a waiver of compliance by the Borrower with respect to
(i) Section 8.01(c) of the Credit Agreement in any other instance or
(ii) any other term, provision or condition of the Credit Agreement or
any other instrument or agreement referred to therein; or
(b) prejudice any right or remedy that Agent or any Bank may now have
or may have in the future under or in connection with the Credit
Agreement or any other instrument or agreement referred to therein.
SECTION 4. BORROWER'S REPRESENTATIONS AND WARRANTIES
In order to induce the Banks to enter into this Amendment and
to amend the Credit Agreement and to permit the limited waiver of certain
covenants thereunder in the manner provided herein, the Borrower represents and
warrants to each Bank that the following statements are true, correct and
complete:
A. CORPORATE POWER AND AUTHORITY. The Borrower has all
requisite corporate power and authority to enter into this Amendment and to
carry out the transactions contemplated by, and perform its obligations under,
the Credit Agreement as amended by this Amendment (the "AMENDED AGREEMENT").
B. AUTHORIZATION OF AGREEMENTS. The execution and delivery of
this Amendment and the performance of the Amended Agreement have been duly
authorized by all necessary corporate action on the part of the Borrower.
C. NO CONFLICT. The execution and delivery by the Borrower of
this Amendment and the performance by the Borrower of the Amended Agreement do
not and will not (i) violate any provision of any law or any governmental rule
or regulation applicable to the Borrower or any of its Subsidiaries, the
Certificate or Articles of Incorporation or Bylaws of the Borrower or any of its
Subsidiaries or any order, judgment or decree of any court or other agency of
government binding on the Borrower or any of its Subsidiaries, (ii) conflict
with, result in a breach of or constitute (with due notice or lapse of time or
both) a default under any indenture, mortgage, deed of trust, credit agreement
or loan agreement, or any other material agreement, contract or instrument to
which Borrower or any of its Subsidiaries is a party or by which it or any of it
property or assets is bound or to which it may be subject (each such indenture,
mortgage, deed of trust, credit agreement, loan agreement, material agreement,
contract or instrument, a "CONTRACTUAL OBLIGATION"),
3
(iii) result in or require the creation or imposition of any Lien upon any of
the properties or assets of the Borrower or any of its Subsidiaries (other than
Liens created under any of the Credit Documents in favor of Agent on behalf of
the Banks), or (iv) require any approval of stockholders or any approval or
consent of any Person under any Contractual Obligation of the Borrower or any of
its Subsidiaries.
D. GOVERNMENTAL CONSENTS. The execution and delivery by the
Borrower of this Amendment and the performance by the Borrower of the Amended
Agreement do not and will not require any registration with, consent or approval
of, or notice to, or other action to, with or by, any federal, state or other
governmental authority or regulatory body.
E. BINDING OBLIGATION. This Amendment and the Amended
Agreement have been duly executed and delivered by the Borrower and are the
legally valid and binding obligations of the Borrower, enforceable against the
Borrower in accordance with their respective terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws relating to
or limiting creditors' rights generally or by equitable principles relating to
enforceability.
F. INCORPORATION OF REPRESENTATIONS AND WARRANTIES FROM CREDIT
AGREEMENT. The representations and warranties contained in Section 7 of the
Credit Agreement are and will be true, correct and complete in all material
respects on and as of the Fifth Amendment Effective Date (as hereinafter
defined) to the same extent as though made on and as of that date, except to the
extent such representations and warranties specifically relate to an earlier
date, in which case they were true, correct and complete in all material
respects on and as of such earlier date.
G. ABSENCE OF DEFAULT. As of the date hereof after giving
effect hereto, there exists no Default or Event of Default under the Credit
Agreement.
SECTION 5. ACKNOWLEDGEMENT AND CONSENT
Each of Bioslim, Inc., Xebec Productions, Inc., Fox Marketing
Associates, Inc., Time Prophets, Inc., Thane Direct FSC, Inc., Thane Direct,
Inc. and Thane Direct Canada Inc. (each a "SUBSIDIARY GUARANTOR") hereby
acknowledge that such Subsidiary Guarantor has read this Amendment and consents
to the terms hereof and further hereby confirms and agrees that, notwithstanding
the effectiveness of this Amendment, the obligations of such Subsidiary
Guarantor under each of the Credit Documents to which such Subsidiary Guarantor
is a party shall not be impaired and each of the Credit Documents to which such
Subsidiary Guarantor is a party are, and shall continue to be, in full force and
effect and are hereby confirmed and ratified in all respects.
4
SECTION 6. MISCELLANEOUS
A. REFERENCE TO AND EFFECT ON THE CREDIT AGREEMENT AND THE
OTHER CREDIT DOCUMENTS.
(i) On and after the Fifth Amendment Effective Date, each
reference in the Credit Agreement to "this Agreement", "hereunder", "hereof",
"herein" or words of like import referring to the Credit Agreement, and each
reference in the other Credit Documents to the "Credit Agreement", "thereunder",
"thereof" or words of like import referring to the Credit Agreement shall mean
and be a reference to the Amended Agreement.
(ii) Except as specifically amended by this Amendment, the
Credit Agreement and the other Credit Documents shall remain in full force and
effect and are hereby ratified and confirmed.
(iii) The execution, delivery and performance of this
Amendment shall not, except as expressly provided herein, constitute a waiver of
any provision of, or operate as a waiver of any right, power or remedy of Agent
or any Bank under, the Credit Agreement or any of the other Credit Documents.
B. FEES AND EXPENSES. The Borrower acknowledges that all
costs, fees and expenses as described in Section 13.01 of the Credit Agreement
incurred by Agent and its counsel with respect to this Amendment and the
documents and transactions contemplated hereby shall be for the account of the
Borrower.
C. HEADINGS. Section and subsection headings in this Amendment
are included herein for convenience of reference only and shall not constitute a
part of this Amendment for any other purpose or be given any substantive effect.
D. APPLICABLE LAW. THIS AMENDMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW
YORK (INCLUDING WITHOUT LIMITATION SECTION 5-1401 OF THE GENERAL OBLIGATIONS LAW
OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES.
E. COUNTERPARTS; EFFECTIVENESS. This Amendment may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument; signature pages may be detached from multiple separate
counterparts and attached to a single counterpart so that all signature pages
are physically attached to the same document. This Amendment shall become
effective upon (i) the execution of a counterpart hereof by Borrower, each
Subsidiary Guarantor and Required Banks and receipt by the Borrower and Agent of
written or telephonic notification of such execution and authorization of
delivery thereof, (ii) receipt by the Borrower and the Agent of written or
telephonic notification of such execution and
5
authorization of delivery thereof, and (iii) receipt by Agent of evidence
satisfactory to it that all outstanding statements of O'Melveny & Xxxxx LLP have
been paid in full (the date of satisfaction of such conditions being referred to
herein as the "FIFTH AMENDMENT EFFECTIVE DATE"); provided that upon the Fifth
Amendment Effective Date, the amendment to Section 9.04(iii) to the Credit
Agreement contained in Section 1.1A of this Amendment shall become effective as
of May 31, 2001 and any Default or Event of Default that arose or would
otherwise be deemed to have occurred during the period from May 31, 2001 to the
Fifth Amendment Effective Date as a result of the Borrower incurring
Indebtedness evidenced by Capitalized Lease Obligations in excess of $1,000,000
but less than $3,300,000 shall be deemed not to have occurred.
[Remainder of this page intentionally left blank.]
6
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
Address:
00-000 Xxxxx Xxxxxxx XXXXX INTERNATIONAL, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx Xxx
Title: CEO
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
B-1
Address:
8-140 Calle Tampico BIOSLIM, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/ Xxxxxxx Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
2
Address:
00-000 Xxxxx Xxxxxxx XXXXX PRODUCTIONS, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxx XxXxxxx Hay
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxx XxXxxxx Hay
Title: President
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
3
Address:
0000 Xxxxx Xxxxxx FOX MARKETING ASSOCIATES, INC.
Xxxxx Xxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
Facsimile No.: ----------------------------------
Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
4
Address:
000 Xxxx Xxxxx Xxxxxx, 0xx Xxxxx TIME PROPHETS, INC.
Xxxxxxx, Xxxxxxxxxx 00000
Attention:
Telephone No.: By:/s/Xxxxxxx Xxx
Facsimile No.: ----------------------------------
Name: Xxxxxxx Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
5
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT FSC, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx X. Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
6
Address:
00-000 Xxxxx Xxxxxxx XXXXX DIRECT, INC.
Xx Xxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxx
Telephone No.: (000) 000-0000 By:/s/Xxxxxxx X. Xxx
Facsimile No.: (000) 000-0000 ----------------------------------
Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
7
Address:
0000 Xxxxxxxx Xxxxxx Xxxx XXXXX XXXXXX XXXXXX INC.
Xxxxxxx, Xxxxxxx
Xxxxxx X0X0X0
Attention: By:/s/Xxxxxxx X. Xxx
Telephone No.: ----------------------------------
Facsimile No.: Name: Xxxxxxx X. Xxx
Title: Director
with a copy to:
HIG Infomercial Company
c/o HIG Capital Management, Inc.
0000 Xxxxxxxx Xxx Xxxxx
00xx Xxxxx
Xxxxx, Xxxxxxx 00000
Attention: Xxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
8
Address: BNP PARIBAS,
Individually and as Agent
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx Xxxxxx By:/s/Xxxxxxx X. Xxxxxxx
Xxxxxxx Xxxxxxx ----------------------------------
Telephone: (000) 000-0000 Name: Xxxxxxx X. Xxxxxxx
Facsimile: (000) 000-0000 Title: Managing Director
By:/s/Xxxxxx Xxxxxxx
----------------------------------
Name: Xxxxxx Xxxxxxx
Title: Vice President
9
Address: XXXXXXX XXXXX BUSINESS FINANCIAL
SERVICES INC., as a Bank
Xxxxxxx Xxxxx Business Financial
Services Inc. By:/s/Xxxxxxx X. Xxxxx
000 Xxxxx Xx Xxxxx Xx. ----------------------------------
17th Floor Name: Xxxxxxx X. Xxxxx
Xxxxxxx, Xxxxxxxx 00000 Title: Sr. Relationship Manager
Attention: Xxxxxx Xxxxx
Telephone: 000-000-0000
Facsimile: 000-000-0000
10
Address: BANK OF AMERICA N.A.,
as a Bank
Commercial Special Assets - West
315 Xxxxxxxxxx, 5th floor
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000 By:/s/ Xxxx Xxxx
Attention: Xxxx Xxxx ----------------------------------
Telephone: 000-000-0000 Name: Xxxx Xxxx
Facsimile: 000-000-0000 Title: Senior Vice President
11
