Exhibit 10.11
CREDIT AGREEMENT, dated as of the 14th day of February, 1997, by and among
AMERICAN BUSINESS INFORMATION, INC., a corporation organized under the laws of
Delaware (the "Borrower"), the Lenders who are or may become a party to this
Agreement, and FIRST UNION NATIONAL BANK OF NORTH CAROLINA, as Agent for the
Lenders.
STATEMENT OF PURPOSE
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The Borrower has entered into the Agreement and Plan of Reorganization
dated as of February 14, 1997 by and among the Borrower; Info USA, Inc. (the
"Merger Sub"); DBA Holdings, Inc. ("DBA"); Xxxx Xxxxxxx; Xxxx Xxxxxxx and Xxxxxx
Hordes, as Trustees of the Xxxx X. Xxxxxxx Retained Annuity Trust; and Trustees
of the Database America Companies Retirement Trust (the "Acquisition
Agreement"), pursuant to which DBA will merge with and into the Merger Sub and
all of the outstanding common stock of DBA will be exchanged for a combination
of cash and common stock in the Borrower (the "Acquisition and Merger"). The
Borrower has requested, and the Lenders have agreed, to extend a credit facility
to the Borrower on the terms and conditions of this Agreement in order to
finance a portion of the costs of the Acquisition and Merger, to refinance
certain existing Debt and for working capital purposes.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, such parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
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SECTION 1.1 Definitions. The following terms when used in this
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Agreement shall have the meanings assigned to them below:
"Acquisition and Merger" shall have the meaning assigned thereto in the
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Statement of Purpose hereof.
"Acquisition Agreement" shall have the meaning assigned thereto in the
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Statement of Purpose hereof.
"Affiliate" means, with respect to any Person, any other Person (other than
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a Subsidiary) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person or any of its Subsidiaries. The term "control" means (a) the power to
vote five percent (5%) or more of the securities or other equity interests of a
Person having ordinary voting power, or (b) the possession, directly or
indirectly, of any other power to direct or cause the direction of the
management and policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
"Agent" means First Union in its capacity as Agent hereunder, and any
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successor thereto appointed pursuant to Section 12.9.
"Agent's Office" means the office of the Agent specified in or determined
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in accordance with the provisions of Section 13.1.
"Aggregate Commitment" means the aggregate amount of the Lenders'
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Commitments hereunder, as such amount may be reduced or modified at any time or
from time to time pursuant to the terms hereof. On the Closing Date, the
Aggregate Commitment shall be Sixty-five Million and No/100 Dollars
($65,000,000).
"Agreement" means this Credit Agreement, as amended, amended and restated,
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modified or supplemented from time to time.
"Application" means an application, in the form specified by the Issuing
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Lender from time to time, requesting the Issuing Lender to issue a Letter of
Credit.
"Applicable Law" means all applicable provisions of constitutions,
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statutes, laws, rules, treaties, regulations and orders of all Governmental
Authorities and all orders and decrees of all courts and arbitrators.
"Applicable Margin" shall have the meaning assigned thereto in Section
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4.1(c).
"Assignment and Acceptance" shall have the meaning assigned thereto in
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Section 13.10.
"Available Commitment" means, as to any Lender at any time, an amount equal
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to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's
Extensions of Credit.
"Base Rate" means, at any time, the higher of (a) the Prime Rate or (b) the
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Federal Funds Rate plus 1/2 of 1%; each change in the Base Rate shall take
effect simultaneously with the corresponding change or changes in the Prime
Rate or the Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate based upon the
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Base Rate as provided in Section 4.1(a).
"Borrower" means American Business Information, Inc., in its capacity as
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borrower hereunder.
"Business Day" means (a) for all purposes other than as set forth in clause
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(b) below, any day other than a Saturday, Sunday or legal holiday on which banks
in Xxxxxxxxx, Xxxxx Xxxxxxxx, Xxx Xxxx, Xxx Xxxx and Omaha, Nebraska, are open
for the conduct of their commercial banking business, and (b) with respect to
all notices and determinations in connection with, and payments of
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principal and interest on, any LIBOR Rate Loan, any day that is a Business Day
described in clause (a) and that is also a day for trading by and between banks
in Dollar deposits in the London interbank market.
"Capital Lease" means, with respect to the Borrower and its Subsidiaries,
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any lease of any property that should, in accordance with GAAP, be classified
and accounted for as a capital lease on a Consolidated balance sheet of the
Borrower and its Subsidiaries.
"Change in Control" shall have the meaning assigned thereto in Section
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11.1(h).
"Closing Date" means the date of this Agreement.
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"Code" means the Internal Revenue Code of 1986, and the rules and
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regulations thereunder, each as amended or supplemented from time to time.
"Commitment" means, as to any Lender, the obligation of such Lender to make
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Loans to and issue or participate in Letters of Credit issued for the account of
the Borrower hereunder in an aggregate principal or face amount at any time
outstanding not to exceed the amount set forth opposite such Lender's name on
Schedule 1 hereto, as the same may be reduced or modified at any time or from
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time to time pursuant to the terms hereof.
"Commitment Fee Rate" shall have the meaning assigned thereto in Section
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4.3.
"Commitment Percentage" means, as to any Lender at any time, the ratio of
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(a) the amount of the Commitment of such Lender to (b) the Aggregate Commitment
of all of the Lenders.
"Consolidated" means, when used with reference to financial statements or
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financial statement items of the Borrower and its Subsidiaries, such statements
or items on a consolidated basis in accordance with applicable principles of
consolidation under GAAP.
"Contingent Obligation" means, with respect to the Borrower and its
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Subsidiaries, without duplication, any obligation, contingent or otherwise, of
any such Person pursuant to which such Person has directly or indirectly
guaranteed any Debt or other obligation of any other Person and, without
limiting the generality of the foregoing, any obligation, direct or indirect,
contingent or otherwise, of any such Person (a) to purchase or pay (or advance
or supply funds for the purchase or payment of) such Debt or other obligation
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay, or to
maintain financial statement condition or otherwise) or (b) entered into for the
purpose of assuring in any other manner the obligee of such Debt or other
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obligation of the payment thereof or to protect such obligee against loss in
respect thereof (in whole or in part); provided, that the term Contingent
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Obligation shall not include endorsements for collection or deposit in the
ordinary course of business. The amount of any Contingent Obligations shall be
deemed to be an amount equal to the maximum reasonably anticipated liability in
respect thereof determined by the Borrower in good faith.
"Credit Facility" means the collective reference to the Revolving Credit
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Facility and the L/C Facility.
"DBA" means DBA Holdings, Inc., a New Jersey corporation.
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"Debt" means, with respect to any Person and its Subsidiaries at any date,
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the sum, without duplication, of the following calculated in accordance with
GAAP: (a) all indebtedness for borrowed money including but not limited to
obligations evidenced by bonds, debentures, notes or other similar instruments
of any such Person, (b) all obligations to pay the deferred purchase price of
property or services of any such Person (including, without limitation, all
obligations under non-competition agreements), except trade payables arising in
the ordinary course of business and paid in accordance with standard business
practices in the ordinary course of business, (c) all obligations of any such
Person as lessee under Capital Leases, (d) all Debt of any other Person secured
by a Lien on any asset of such Person, (e) all Contingent Obligations of any
such Person, (f) all obligations, contingent or otherwise, of any such Person
relative to the face amount of letters of credit, whether or not drawn,
including without limitation any Reimbursement Obligation, (g) all contractual
obligations to redeem, repurchase, exchange, defease or otherwise make payments
in respect of capital stock or other securities of such Person and (h) all
termination payments which are due and payable by any such Person pursuant to
Hedging Agreements. The amount of any Contingent Obligations or other Debt of
unspecified amount shall be deemed to be an amount equal to the maximum
reasonably anticipated liability in respect thereof determined by the Borrower
in good faith. Debt shall exclude any liability or obligation described above to
the extent the Borrower or any of its Subsidiaries has placed funds in an escrow
account to cover such liability or obligation, pursuant to an escrow agreement
with terms and conditions satisfactory to the Agent.
"Default" means any of the events specified in Section 11.1 which with the
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passage of time, the giving of notice or any other condition, would constitute
an Event of Default.
"Disclosure Letter" means the Disclosure Letter of even date from the
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Borrower to the Agent and the Lenders setting forth certain information required
pursuant to Article VI hereof.
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"Dollars" or "$" means, unless otherwise qualified, dollars in lawful
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currency of the United States.
"EBITDA" means, with respect to the Borrower and its Subsidiaries for any
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period, the sum of (a) Net Income for such period, plus (b) the sum of the
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following to the extent deducted in the determination of Net Income: (i) income
and franchise taxes, (ii) Interest Expense, (iii) amortization, depreciation and
other non-cash charges (including amortization of goodwill, transaction
expenses, covenants not to compete and other intangible assets) and (iv) the
after tax effect of any and all charges related to the Employment Termination
Agreements referred to in the Acquisition Agreement and the "bonus pool"
payments made in connection with the Acquisition and Merger (which payments
shall be in an amount not to exceed $21,500,000), less (c) any items of gain
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which were included in determining Net Income and were not realized in the
ordinary course of business, all determined for such period on a Consolidated
basis in accordance with GAAP.
"Eligible Assignee" means, with respect to any assignment of the rights,
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interest and obligations of a Lender hereunder, a Person that is at the time of
such assignment (a) a commercial bank organized under the laws of the United
States or any state thereof, having combined capital and surplus in excess of
$500,000,000, (b) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and that has total assets in excess of $1,000,000,000, (c)
already a Lender hereunder (whether as an original party to this Agreement or as
the assignee of another Lender), (d) the successor (whether by transfer of
assets, merger or otherwise) to all or substantially all of the commercial
lending business of the assigning Lender, or (e) any other Person that has been
approved in writing as an Eligible Assignee by the Borrower and the Agent.
"Employee Benefit Plan" means any employee benefit plan within the meaning
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of Section 3(3) of ERISA which (a) is maintained for employees of the Borrower
or any ERISA Affiliate or (b) has at any time within the preceding six years
been maintained for the employees of the Borrower or any current or former ERISA
Affiliate.
"Environmental Laws" means any and all federal, state and local laws,
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statutes, ordinances, rules, regulations, permits, licenses, approvals,
interpretations and orders of courts or Governmental Authorities, relating to
the protection of human health or the environment, including, but not limited
to, requirements pertaining to the manufacture, processing, distribution, use,
treatment, storage, disposal, transportation, handling, reporting, licensing,
permitting, investigation or remediation of Hazardous Materials.
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"ERISA" means the Employee Retirement Income Security Act of 1974, and the
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rules and regulations thereunder, each as amended or modified from time to time.
"ERISA Affiliate" means any Person who together with the Borrower is
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treated as a single employer within the meaning of Section 414(b), (c), (m) or
(o) of the Code or Section 4001(b) of ERISA.
"Eurodollar Reserve Requirements" means, for any day, the percentage
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(expressed as a decimal and rounded upwards, if necessary, to the next higher
1/100th of 1%) which is in effect for such day as prescribed by the Federal
Reserve Board (or any successor) for determining the maximum reserve requirement
(including without limitation any basic, supplemental or emergency reserves) in
respect of Eurocurrency liabilities or any similar category of liabilities for a
member bank of the Federal Reserve System in New York City.
"Event of Default" means any of the events specified in Section 11.1;
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provided, that any requirement for passage of time, giving of notice, or any
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other condition, has been satisfied.
"Extensions of Credit" means, as to any Lender at any time, an amount equal
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to the sum of (a) the aggregate principal amount of all Loans made by such
Lender then outstanding and (b) such Lender's Commitment Percentage of the L/C
Obligations then outstanding.
"FDIC" means the Federal Deposit Insurance Corporation, or any successor
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thereto.
"Federal Funds Rate" means, the rate per annum (rounded upwards, if
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necessary, to the next higher 1/100th of 1%) representing the daily effective
federal funds rate as quoted by the Agent and confirmed in Federal Reserve Board
Statistical Release H.15 (519) or any successor or substitute publication
selected by the Agent. If, for any reason, such rate is not available, then
"Federal Funds Rate" shall mean a daily rate which is determined, in the opinion
of the Agent, to be the rate at which federal funds are being offered for sale
in the national federal funds market at 9:00 a.m. (Charlotte time). Rates for
weekends or holidays shall be the same as the rate for the most immediate
preceding Business Day.
"First Union" means First Union National Bank of North Carolina, a national
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banking association, and its successors.
"Fiscal Year" means the fiscal year of the Borrower and its Subsidiaries
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ending on December 31.
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"GAAP" means generally accepted accounting principles, as recognized by the
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American Institute of Certified Public Accountants and the Financial Accounting
Standards Board, consistently applied and maintained on a consistent basis for
the Borrower and its Subsidiaries throughout the period indicated and consistent
with the prior financial practice of the Borrower and its Subsidiaries.
"Governmental Approvals" means all authorizations, consents, approvals,
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licenses and exemptions of, registrations and filings with, and reports to, all
Governmental Authorities.
"Governmental Authority" means any nation, province, state or political
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subdivision thereof, and any government or any Person exercising executive,
legislative, regulatory or administrative functions of or pertaining to
government, and any corporation or other entity owned or controlled, through
stock or capital owner ship or otherwise, by any of the foregoing.
"Hazardous Materials" means any substances or materials (a) which are or
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become defined as hazardous wastes, hazardous substances, pollutants,
contaminants, chemical substances or mixtures or toxic substances under any
Environmental Law, (b) which are toxic, explosive, corrosive, flammable,
infectious, radioactive, carcinogenic, mutagenic or otherwise harmful to human
health or the environment and are or become regulated by any Governmental
Authority, (c) the presence of which require investigation or remediation under
any Environmental Law or common law, (d) the discharge or emission or release of
which requires a permit or license under any Environmental Law or other
Governmental Approval, (e) which are deemed to constitute a nuisance, a trespass
or pose a health or safety hazard to persons or neighboring properties, (f)
which are materials consisting of underground or aboveground storage tanks,
whether empty, filled or partially filled with any substance, or (g) which
contain, without limitation, asbestos, polychlorinated biphenyls, urea
formaldehyde foam insulation, petroleum hydrocarbons, petroleum derived
substances or waste, crude oil, nuclear fuel, natural gas or synthetic gas.
"Hedging Agreement" means any agreement with respect to an interest rate
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swap, collar, cap, floor or a forward rate agreement or other agreement
regarding the hedging of interest rate risk exposure executed in connection with
hedging the interest rate exposure of the Borrower under this Agreement, and any
confirming letter executed pursuant to such hedging agreement, all as amended,
amended and restated, modified or supplemented from time to time.
"Interest Expense" means, with respect to the Borrower and its Subsidiaries
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for any period, the gross interest expense (including without limitation,
interest expense attributable to Capital Leases and all net obligations pursuant
to Hedging Agreements) of the
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Borrower and its Subsidiaries, all determined for such period on a Consolidated
basis in accordance with GAAP.
"Interest Period" shall have the meaning assigned thereto in Section
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4.1(b).
"Issuing Lender" means First Union, in its capacity as issuer of any Letter
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of Credit, or any successor thereto.
"L/C Commitment" means Five Million and No/100 Dollars ($5,000,000).
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"L/C Facility" means the letter of credit facility established pursuant to
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Article III hereof.
"L/C Obligations" means at any time, an amount equal to the sum of (a) the
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aggregate undrawn and unexpired amount of the then outstanding Letters of Credit
and (b) the aggregate amount of drawings under Letters of Credit which have not
then been reimbursed pursuant to Section 3.5.
"L/C Participants" means the collective reference to all the Lenders other
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than the Issuing Lender.
"Lender" means each Person executing this Agreement as a Lender set forth
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on the signature pages hereto and each Person that hereafter becomes a party to
this Agreement as a Lender pursuant to Section 13.10.
"Lending Office" means, with respect to any Lender, the office of such
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Lender maintaining such Lender's Commitment Percentage of the Loans.
"Letters of Credit" shall have the meaning assigned thereto in Section
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3.1(a).
"Leverage Ratio" means the ratio calculated pursuant to Section 9.1 hereof.
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"LIBOR Rate" means the rate for deposits in Dollars for a period equal to
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the Interest Period selected which appears on the Telerate Page 3750 at
approximately 11:00 a.m. London time, two (2) Business Days prior to the
commencement of the applicable Interest Period (rounded upward, if necessary, to
the nearest one-sixteenth of one percent (1/16%)). In the event that such rate
does not appear on Telerate Page 3750, the rate shall be determined by the Agent
to be the arithmetic average (rounded upward, if necessary, to the nearest one-
sixteenth of one percent (1/16%)) of the rate per annum at which Dollars in the
amount of $5,000,000 would be offered to the Agent at approximately 11:00 a.m.
London time, two (2) Business Days prior to the commencement of the applicable
Interest Period for settlement in immediately available funds by
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leading banks in the London interbank market for a period equal to the Interest
Period selected.
"LIBOR Rate Loan" means any Loan bearing interest at a rate based upon the
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LIBOR Rate as provided in Section 4.1(a).
"Lien" means, with respect to any asset, any mortgage, lien, pledge,
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charge, security interest or encumbrance of any kind in respect of such asset.
For the purposes of this Agreement, a Person shall be deemed to own subject to a
Lien any asset which it has acquired or holds subject to the interest of a
vendor or lessor under any conditional sale agreement, Capital Lease or other
title retention agreement relating to such asset.
"Loan" means any revolving loan made to the Borrower pursuant to Section
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2.1, and all such Loans collectively as the context requires.
"Loan Documents" means, collectively, this Agreement, the Disclosure
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Letter, the Notes, the Subsidiary Guaranty, any Hedging Agreement executed
between the Borrower and any Lender and each other document, instrument and
agreement executed and delivered by the Borrower or its Subsidiaries in
connection with this Agreement or otherwise referred to herein or contemplated
hereby, all as may be amended, amended and restated, modified or supplemented
from time to time.
"Material Adverse Effect" means, with respect to the Borrower and its
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Subsidiaries, taken as a whole, a material adverse effect on the properties,
business, prospects, operations or condition (financial or otherwise) of any
such Person or the ability of any such Person to perform its obligations under
the Loan Documents or Material Contracts, in each case to which it is a party.
"Material Contract" means (a) any contract or other agreement, written or
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oral, of the Borrower or any of its Subsidiaries involving monetary liability of
or to any such Person in an amount in excess of $1,000,000 per annum, or (b) any
other contract or agreement, written or oral, of the Borrower or any of its
Subsidiaries the failure to comply with which could reasonably be expected to
have a Material Adverse Effect.
"Material Subsidiary" means any Subsidiary of the Borrower, which
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Subsidiary has, on an actual or pro forma basis, (a) revenues at least equal to
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five percent (5%) of the Consolidated revenues of the Borrower and its
Subsidiaries, calculated for the period of four (4) fiscal quarters ending on or
immediately prior to any date of determination or (b) assets with a fair
saleable value at least equal to five percent (5%) of the fair saleable value of
the Consolidated assets of the Borrower and its Subsidiaries.
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"Multiemployer Plan" means a "multiemployer plan" as defined in Section
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4001(a)(3) of ERISA to which the Borrower or any ERISA Affiliate is making, or
is accruing an obligation to make, contributions within the preceding six years.
"Net Income" means, with respect to the Borrower and its Subsidiaries for
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any period, the Consolidated net income (or loss) of the Borrower and its
Subsidiaries for such period determined in accordance with GAAP; provided, that
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there shall be excluded from net income (or loss) the income (or loss) of any
Person (other than a Wholly-Owned Subsidiary of such Person) in which such
Person has an ownership interest unless received by such Person in a cash
distribution.
"Notes" means the separate Revolving Credit Notes made by the Borrower
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payable to the order of each Lender, substantially in the form of Exhibit A
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hereto, evidencing the Revolving Credit Facility, and any amendments and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extension thereof, in whole or in part; "Note" means
any of such Notes.
"Notice of Account Designation" shall have the meaning assigned thereto in
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Section 5.2(f)(i).
"Notice of Borrowing" shall have the meaning assigned thereto in Section
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2.2(a).
"Notice of Conversion/Continuation" shall have the meaning assigned thereto
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in Section 4.2.
"Notice of Prepayment" shall have the meaning assigned thereto in Section
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2.3(c).
"Obligations" means, in each case, whether now in existence or hereafter
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arising: (a) the principal of and interest on (including interest accruing after
the filing of any bankruptcy or similar petition) the Loans, (b) the L/C
Obligations, (c) all payment and other obligations owing by the Borrower to any
Lender or the Agent under any Hedging Agreement permitted pursuant to Section
10.1 and (d) all other fees and commissions (including attorney's fees),
charges, indebtedness, loans, liabilities, financial accommodations,
obligations, covenants and duties owing by the Borrower to the Lenders or the
Agent under or in respect of this Agreement, any Letter of Credit or any of the
other Loan Documents, of every kind, nature and description, direct or indirect,
absolute or contingent, due or to become due, contractual or tortious,
liquidated or unliquidated, and whether or not evidenced by any note, and
whether or not for the payment of money.
"Officer's Compliance Certificate" shall have the meaning assigned thereto
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in Section 7.2.
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"Other Taxes" shall have the meaning assigned thereto in Section 4.11(b).
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"PBGC" means the Pension Benefit Guaranty Corporation or any successor
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agency.
"Pension Plan" means any Employee Benefit Plan, other than a Multiemployer
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Plan, which is subject to the provisions of Title IV of ERISA or Section 412 of
the Code and which (a) is maintained for employees of the Borrower or any ERISA
Affiliates or (b) has at any time within the preceding six years been maintained
for the employees of the Borrower or any of their current or former ERISA
Affiliates.
"Person" means an individual, corporation, partnership, limited liability
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company, association, trust, business trust, joint venture, joint stock company,
pool, syndicate, sole proprietorship, unincorporated organization, Governmental
Authority or any other form of entity or group thereof.
"Prime Rate" means, at any time, the rate of interest per annum publicly
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announced from time to time by First Union as its prime rate. Each change in
the Prime Rate shall be effective as of the opening of business on the day such
change in the Prime Rate occurs. The parties hereto acknowledge that the rate
announced publicly by First Union as its Prime Rate is an index or base rate and
shall not necessarily be its lowest or best rate charged to its customers or
other banks.
"Register" shall have the meaning assigned thereto in Section 13.10(d).
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"Reimbursement Obligation" means the obligation of the Borrower to
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reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"Required Lenders" means, at any date, any combination of holders of at
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least sixty-six and two-thirds percent (66-2/3%) of the aggregate unpaid
principal amount of the Notes, or if no amounts are outstanding under the Notes,
any combination of Lenders whose Commitment Percentages aggregate at least
sixty-six and two- thirds percent (66-2/3%).
"Revolving Credit Facility" means the revolving credit facility established
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pursuant to Article II hereof.
"Solvent" means, as to the Borrower and its Subsidiaries on a particular
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date, that any such Person (a) has capital sufficient to carry on its business
and transactions and all business and transactions in which it is about to
engage and is able to pay its debts as they mature, (b) owns property having a
value, both at fair valuation and at present fair saleable value, greater than
the
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amount required to pay its probable liabilities (including contingencies), and
(c) does not believe that it will incur debts or liabilities beyond its ability
to pay such debts or liabilities as they mature.
"Subsidiary" means as to any Person, any corporation, partnership or
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other entity of which more than fifty percent (50%) of the outstanding capital
stock or other ownership interests having ordinary voting power to elect a
majority of the board of directors or other managers of such corporation,
partnership or other entity is at the time, directly or indirectly, owned by or
the management is otherwise controlled by such Person (irrespective of whether,
at the time, capital stock of any other class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency). Unless otherwise qualified references to "Subsidiary" or
"Subsidiaries" herein shall refer to those of the Borrower.
"Subsidiary Guaranty" means the Unconditional Guaranty Agreement of even
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date executed by the Subsidiary Guarantors in favor of the Agent, for the
benefit of itself and the Lenders, substantially in the form of Exhibit H, as
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amended, amended and restated, modified or supplemented from time to time.
"Subsidiary Guarantors" means American Business Information Marketing,
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Inc., a Delaware corporation; CD Rom Technologies, Inc., a Delaware corporation;
Contacts Influential, Inc., a Delaware corporation; County Data Corp., a Vermont
corporation; Info USA, Inc., a Delaware corporation; and any additional
Subsidiaries of the Borrower who become party to the Subsidiary Guaranty
pursuant to the requirements of Section 8.11.
"Tangible Net Worth" means, with respect to the Borrower and its
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Subsidiaries at any date, Consolidated stockholders' equity minus Consolidated
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intangible assets, including, without limitation, goodwill, all calculated in
accordance with GAAP.
"Taxes" shall have the meaning assigned thereto in Section 4.11(a).
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"Termination Date" means the earliest of the dates referred to in Section
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2.6.
"Termination Event" means: (a) a "Reportable Event" described in Section
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4043 of ERISA, or (b) the withdrawal of the Borrower or any ERISA Affiliate from
a Pension Plan during a plan year in which it was a "substantial employer" as
defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination under Section 4041 of
ERISA, or (d) the institution of proceedings to terminate, or the appointment of
a trustee with respect to, any Pension Plan by the
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PBGC, or (e) any other event or condition which would constitute grounds under
Section 4042(a) of ERISA for the termination of, or the appointment of a trustee
to administer, any Pension Plan, or (f) the partial or complete withdrawal of
the Borrower or any ERISA Affiliate from a Multiemployer Plan, or (g) the
imposition of a Lien pursuant to Section 412 of the Code or Section 302 of
ERISA, or (h) any event or condition which results in the reorganization or
insolvency of a Multiemployer Plan under Sections 4241 or 4245 of ERISA, or (i)
any event or condition which results in the termination of a Multiemployer Plan
under Section 4041A of ERISA or the institution by PBGC of proceedings to
terminate a Multiemployer Plan under Section 4042 of ERISA.
"UCC" means the Uniform Commercial Code as in effect in the State of North
---
Carolina.
"Uniform Customs" the Uniform Customs and Practice for Documentary Credits
---------------
(1994 Revision), International Chamber of Commerce Publication No. 500.
"United States" means the United States of America.
-------------
"Wholly-Owned" means, with respect to a Subsidiary, a Subsidiary all of the
------------
shares of capital stock or other ownership interests of which are, directly or
indirectly, owned or controlled by the Borrower and/or one or more of its
Wholly-Owned Subsidiaries.
SECTION 1.2 General. Unless otherwise specified, a reference in this
-------
Agreement to a particular section, subsection, Schedule or Exhibit is a
reference to that section, subsection, Schedule or Exhibit of this Agreement.
Wherever from the context it appears appropriate, each term stated in either the
singular or plural shall include the singular and plural, and pronouns stated in
the masculine, feminine or neuter gender shall include the masculine, the
feminine and the neuter. Any reference herein to "Charlotte time" shall refer
to the applicable time of day in Charlotte, North Carolina.
SECTION 1.3 Other Definitions and Provisions.
--------------------------------
(a) Use of Capitalized Terms. Unless otherwise defined therein, all
------------------------
capitalized terms defined in this Agreement shall have the defined meanings when
used in this Agreement, the Notes and the other Loan Documents or any
certificate, report or other document made or delivered pursuant to this
Agreement.
(b) Miscellaneous. The words "hereof", "herein" and "hereunder" and words
-------------
of similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement.
13
ARTICLE II
REVOLVING CREDIT FACILITY
-------------------------
SECTION 2.1 Revolving Credit Loans. Subject to the terms and conditions
----------------------
of this Agreement, each Lender severally agrees to make Loans to the Borrower
from time to time from the Closing Date through the Termination Date as
requested by the Borrower in accordance with the terms of Section 2.2; ;
provided, that (a) the aggregate principal amount of all outstanding Loans
--------
(after giving effect to any amount requested) shall not exceed the Aggregate
Commitment less the L/C Obligations and (b) the principal amount of outstanding
Loans from any Lender to the Borrower shall not at any time exceed such Lender's
Commitment. Each Loan by a Lender shall be in a principal amount equal to such
Lender's Commitment Percentage of the aggregate principal amount of Loans
requested on such occasion. Subject to the terms and conditions hereof, the
Borrower may borrow, repay and reborrow Loans hereunder until the Termination
Date.
SECTION 2.2 Procedure for Advances of Loans.
-------------------------------
(a) Requests for Borrowing. The Borrower shall give the Agent irrevocable
----------------------
prior written notice in the form attached hereto as Exhibit B (a "Notice of
---------
Borrowing") not later than 11:00 a.m. (Charlotte time) (i) on the same Business
Day as each Base Rate Loan and (ii) at least three (3) Business Days before each
LIBOR Rate Loan, of its intention to borrow, specifying (A) the date of such
borrowing, which shall be a Business Day, (B) the amount of such borrowing,
which shall be (x) with respect to Base Rate Loans in an aggregate principal
amount of $1,000,000 or a whole multiple of $500,000 in excess thereof and (y)
with respect to LIBOR Rate Loans in an aggregate principal amount of $5,000,000
or a whole multiple of $1,000,000 in excess thereof, (C) whether the Loans are
to be LIBOR Rate Loans or Base Rate Loans and (D) in the case of a LIBOR Rate
Loan, the duration of the Interest Period applicable thereto. Notices received
after 11:00 a.m. (Charlotte time) shall be deemed received on the next Business
Day. The Agent shall promptly notify the Lenders of each Notice of Borrowing.
(b) Disbursement of Loans. Not later than 2:00 p.m. (Charlotte time) on
---------------------
the proposed borrowing date, each Lender will make available to the Agent, for
the account of the Borrower, at the office of the Agent in funds immediately
available to the Agent, such Lender's Commitment Percentage of the Loans to be
made on such borrowing date. The Borrower hereby irrevocably authorizes the
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.2 in immediately available funds by crediting such proceeds to a
deposit account of the Borrower maintained with the Agent or by wire transfer to
such account as may be agreed upon by the Borrower and the Agent from time to
time. Subject to Section 4.7 hereof, the Agent shall not be obligated to
14
disburse the portion of the proceeds of any Loan requested pursuant to this
Section 2.2 to the extent that any Lender has not made available to the Agent
its Commitment Percentage of such Loan.
SECTION 2.3 Repayment of Loans.
------------------
(a) Repayment on Termination Date. The Borrower shall repay the
-----------------------------
outstanding principal amount of all Loans in full, together with all accrued but
unpaid interest thereon, on the Termination Date.
(b) Mandatory Repayment of Excess Loans. If at any time the outstanding
-----------------------------------
principal amount of all Loans exceeds the Aggregate Commitment less the L/C
Obligations, the Borrower shall repay immediately upon notice from the Agent, by
payment to the Agent for the account of the Lenders, the Loans in an amount
equal to such excess. Each such repayment shall be accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.
(c) Optional Repayments. The Borrower may at any time and from time to
-------------------
time repay the Loans, in whole or in part, upon prior written notice, which
notice shall be irrevocable, not later than 11:00 a.m. (Charlotte time) at least
three (3) Business Days prior to the repayment of any LIBOR Rate Loan and one
(1) Business Day prior to the repayment of any Base Rate Loan, in the form
attached hereto as Exhibit C (a "Notice of Prepayment") specifying the date and
---------
amount of repayment and whether the repayment is of LIBOR Rate Loans, Base Rate
Loans, or a combination thereof, and, if of a combination thereof, the amount
allocable to each. Upon receipt of such notice, the Agent shall promptly notify
each Lender. If any such notice is given, the amount specified in such notice
shall be due and payable on the date set forth in such notice. Partial
repayments shall be in an aggregate amount of $1,000,000 or a whole multiple of
$500,000 in excess thereof with respect to Base Rate Loans and $5,000,000 or a
whole multiple of $1,000,000 in excess thereof with respect to LIBOR Rate Loans.
Each such repayment shall be accompanied by any amount required to be paid
pursuant to Section 4.9 hereof.
(d) Limitation on Repayment of LIBOR Rate Loans. The Borrower may not
-------------------------------------------
repay any LIBOR Rate Loan on any day other than on the last day of the Interest
Period applicable thereto unless such repayment is accompanied by any amount
required to be paid pursuant to Section 4.9 hereof.
SECTION 2.4 Revolving Credit Notes. Each Lender's Loans and the
----------------------
obligation of the Borrower to repay such Loans shall be evidenced by a Note
executed by the Borrower payable to the order of such Lender representing the
Borrower's obligation to pay such Lender's Commitment or, if less, the aggregate
unpaid principal amount of all Loans made and to be made by such Lender to the
Borrower hereunder, plus interest and all other fees, charges and
15
other amounts due thereon. Each Note shall be dated the date hereof and shall
bear interest on the unpaid principal amount thereof at the applicable interest
rate per annum specified in Section 4.1.
SECTION 2.5 Permanent Reduction of the Aggregate Commitment. The
-----------------------------------------------
Borrower shall have the right at any time and from time to time, upon at least
five (5) Business Days prior written notice to the Agent, to permanently reduce,
in whole at any time or in part from time to time, without premium or penalty,
the Aggregate Commitment in an aggregate principal amount not less than
$5,000,000 or any whole multiple thereof. Each such permanent reduction shall
be accompanied by a payment of principal sufficient to reduce the aggregate
outstanding Extensions of Credit of the Lenders after such reduction to the
Aggregate Commitment as so reduced. Any reduction of the Aggregate Commitment
to zero shall be accompanied by payment of all outstanding Obligations (and
furnishing of cash collateral satisfactory to the Agent for all L/C Obligations)
and, if such reduction is permanent, termination of the Commitments and Credit
Facility. Such cash collateral shall be applied in accordance with Section
11.2(b). If the reduction of the Aggregate Commitment requires the repayment of
any LIBOR Rate Loan, such reduction may be made only on the last day of the then
current Interest Period applicable thereto unless such repayment is accompanied
by any amount required to be paid pursuant to Section 4.9 hereof.
SECTION 2.6 Termination of Credit Facility. The Credit Facility shall
-------------------------------
terminate on the earliest of (a) February 14, 2000, (b) the date of reduction
of the Aggregate Commitment to zero by the Borrower pursuant to Section 2.5, and
(c) the date of termination by the Agent on behalf of the Lenders pursuant to
Section 11.2(a); provided, that not earlier than the one hundred and twentieth
--------
(120th) day and not later than the ninetieth (90th) day prior to the first
anniversary and the second anniversary, respectively, of the Closing Date (the
"Extension Date"), the Borrower may, by written notice (an "Extension Request")
given to the Agent, request that the date set forth in clause (a) above be
extended to February 14, 2001. The Agent shall promptly advise each Lender of
its receipt of any Extension Request and furnish each Lender with a copy
thereof. Each Lender may, in its sole discretion, consent to the requested
extension by giving written notice thereof to the Agent not later than the
Business Day (the "Extension Confirmation Date") immediately preceding the date
which is thirty (30) days after receipt of the Extension Request. No Lender
shall be under any obligation or commitment to extend such date and no such
obligation or commitment on the part of any Lender shall be inferred from the
provisions of this Section 2.6. Failure on the part of any Lender to respond to
an Extension Request by the applicable Extension Confirmation Date shall be
deemed to be a denial of such request by such Lender. The requested extension
shall not be granted unless 100% of the Lenders shall have
16
consented in writing to such extension. In the event that the Agent determines,
in its sole and absolute discretion, to approve the requested extension, the
Agent shall use its best efforts to assist the Borrower in obtaining the
approval of 100% of the Lenders; provided, that the Agent shall incur no
-------
liability whatsoever for the-failure of any Lender to approve such extension.
SECTION 2.7 Use of Proceeds. The Borrower shall use the proceeds of the
---------------
Loans (a) to finance a portion of the costs of the Acquisition and Merger, (b)
to refinance certain existing Debt and (c) for working capital and general
corporate requirements of the Borrower and its Subsidiaries (including
acquisitions and investments permitted pursuant to Section 10.4 (a) through (e)
hereof), including the payment of certain fees and expenses incurred in
connection with the transactions.
ARTICLE III
LETTER OF CREDIT FACILITY
-------------------------
SECTION 3.1 L/C Commitment. Subject to the terms and conditions hereof,
--------------
the Issuing Lender, in reliance on the agreements of the other Lenders set forth
in Section 3.4(a), agrees to issue standby letters of credit ("Letters of
Credit") for the account of the Borrower on any Business Day from the Closing
Date through but not including the Termination Date in such form as may be
approved from time to time by the Issuing Lender; provided, that the Issuing
--------
Lender shall have no obligation to issue any Letter of Credit if, after giving
effect to such issuance, (a) the L/C Obligations would exceed the L/C Commitment
or (b) the Available Commitment of any Lender would be less than zero. Each
Letter of Credit shall (i) be denominated in Dollars in a minimum amount of
$250,000, (ii) be a standby letter of credit issued to support obligations of
the Borrower or any of its Subsidiaries, contingent or otherwise, incurred in
the ordinary course of business, (iii) expire on a date satisfactory to the
Issuing Lender, which date shall be no later than the Termination Date and (iv)
be subject to the Uniform Customs and, to the extent not inconsistent therewith,
the laws of the State of North Carolina. The Issuing Lender shall not at any
time be obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law. References herein to "issue" and
derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.
SECTION 3.2 Procedure for Issuance of Letters of Credit. The Borrower
-------------------------------------------
may from time to time request that the Issuing Lender issue a Letter of Credit
by delivering to the Issuing Lender at the Agent's Office an Application
therefor, completed to the
17
satisfaction of the Issuing Lender, and such other certificates, documents and
other papers and information as the Issuing Lender may request. Upon receipt of
any Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 3.1 and Article V hereof, promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing Lender be required to issue
any Letter of Credit earlier than three Business Days after its receipt of the
Application therefor and all such other certificates, documents and other papers
and information relating thereto) by issuing the original of such Letter of
Credit to the beneficiary thereof or as otherwise may be agreed by the Issuing
Lender and the Borrower. The Issuing Lender shall furnish to the Borrower a copy
of such Letter of Credit and furnish to each Lender a copy of such Letter of
Credit and the amount of each Lender's L/C Participation therein, all promptly
following the issuance of such Letter of Credit.
SECTION 3.3 Commissions and Other Charges.
-----------------------------
(a) The Borrower shall pay to the Agent, for the account of the Issuing
Lender and the L/C Participants, a letter of credit fee with respect to each
Letter of Credit in an amount equal to the product of (i) a per annum fee equal
to the Applicable Margin in effect with respect to LIBOR Rate Loans as set forth
in Section 4.1(c) and (ii) the face amount of such Letter of Credit. Such fee
shall be payable quarterly in arrears on the last Business Day of each calendar
quarter of the Borrower and on the Termination Date. The Agent shall, promptly
following its receipt thereof, distribute to the Issuing Lender and L/C
Participants all commissions received by the Agent in accordance with their
respective Commitment Percentages.
(b) The Borrower shall pay to the Issuing Lender a fronting fee with
respect to each Letter of Credit in an amount equal to the product of (i) 0.125%
(on a per annum basis) and (ii) the face amount of such Letter of Credit. Such
fee shall be payable quarterly in arrears on the last Business Day of each
calendar quarter of the Borrower as long as such Letter of Credit is
outstanding.
(c) In addition to the foregoing fees, the Borrower shall pay or reimburse
the Issuing Lender for such normal and customary costs and expenses as are
incurred or charged by the Issuing Lender in issuing, effecting payment under,
amending or otherwise administering any Letter of Credit.
SECTION 3.4 L/C Participations.
------------------
(a) The Issuing Lender irrevocably agrees to grant and hereby grants to
each L/C Participant, and, to induce the Issuing Lender
18
to issue Letters of Credit hereunder, each L/C Participant irrevocably agrees to
accept and purchase and hereby accepts and purchases from the Issuing Lender, on
the terms and conditions hereinafter stated, for such L/C Participant's own
account and risk an undivided interest equal to such L/C Participant's
Commitment Percentage in the Issuing Lender's obligations and rights under each
Letter of Credit issued hereunder and the amount of each draft paid by the
Issuing Lender thereunder. Each L/C Participant unconditionally and irrevocably
agrees with the Issuing Lender that, if a draft is paid under any Letter of
Credit for which the Issuing Lender is not reimbursed in full by the Borrower in
accordance with the terms of this Agreement, such L/C Participant shall pay to
the Issuing Lender upon demand at the Issuing Lender's address for notices
specified herein an amount equal to such L/C Participant's Commitment Percentage
of the amount of such draft, or any part thereof, which is not so reimbursed.
(b) Upon becoming aware of any amount required to be paid by any L/C
Participant to the Issuing Lender pursuant to Section 3.4(a) in respect of any
unreimbursed portion of any payment made by the Issuing Lender under any Letter
of Credit, the Issuing Lender shall notify each L/C Participant of the amount
and due date of such required payment and such L/C Participant shall pay to the
Issuing Lender the amount specified on the applicable due date. If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily average Federal
Funds Rate as determined by the Agent during the period from and including the
date such payment is due to the date on which such payment is immediately
available to the Issuing Lender, times (iii) a fraction the numerator of which
is the number of days that elapse during such period and the denominator of
which is 360. A certificate of the Issuing Lender with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
With respect to payment to the Issuing Lender of the unreimbursed amounts
described in this Section 3.4(b), if the L/C Participants receive notice that
any such payment is due (A) prior to 1:00 p.m. (Charlotte time) on any Business
Day, such payment shall be due that Business Day, and (B) after 1:00 p.m.
(Charlotte time) on any Business Day, such payment shall be due on the following
Business Day.
(c) Whenever, at any time after the Issuing Lender has made payment under
any Letter of Credit and has received from any L/C Participant its Commitment
Percentage of such payment in accordance with this Section 3.4, the Issuing
Lender receives any payment related to such Letter of Credit (whether directly
from the Borrower or otherwise, or any payment of interest on account thereof,
the Issuing Lender will distribute to such L/C Participant its pro rata share
--- ----
thereof; provided, that in the event that any such payment received by the
--------
Issuing Lender shall be required to be
19
returned by the Issuing Lender, such L/C Participant shall return to the Issuing
Lender the portion thereof previously distributed by the Issuing Lender to it.
SECTION 3.5 Reimbursement Obligation of the Borrower. The Borrower
----------------------------------------
agrees to reimburse the Issuing Lender on each date on which the Issuing Lender
notifies the Borrower of the date and amount of a draft paid under any Letter of
Credit for the amount of (a) such draft so paid and (b) any taxes, fees, charges
or other costs or expenses incurred by the Issuing Lender in connection with
such payment. Each such payment shall be made to the Issuing Lender at its
address for notices specified herein in lawful money of the United States and in
immediately available funds. Interest shall be payable on any and all amounts
remaining unpaid by the Borrower under this Article III from the date such
amounts become payable (whether at stated maturity, by acceleration or
otherwise) until payment in full (including without limitation as a result of
the extension of a Base Rate Loan pursuant to the following sentence) at the
rate which would be payable on any outstanding Base Rate Loans which were then
overdue. If the Borrower fails to timely reimburse the Issuing Lender on the
date the Borrower receives the notice referred to in this Section 3.5, the
Borrower shall be deemed to have timely given a Notice of Borrowing hereunder to
the Agent requesting the Lenders to make a Base Rate Loan on such date in an
amount equal to the amount of such drawing and, subject to the satisfaction or
waiver of the conditions precedent specified in Article V, the Lenders shall
make Base Rate Loans in such amount, the proceeds of which shall be applied to
reimburse the Issuing Lender for the amount of the related drawing and costs and
expenses.
SECTION 3.6 Obligations Absolute. The Borrower's obligations under this
--------------------
Article III (including without limitation the Reimbursement Obligation) shall be
absolute and unconditional under any and all circumstances and irrespective of
any set-off, counterclaim or defense to payment which the Borrower may have or
have had against the Issuing Lender or any beneficiary of a Letter of Credit.
The Borrower also agrees with the Issuing Lender that the Issuing Lender shall
not be responsible for, and the Borrower's Reimbursement Obligation under
Section 3.5 shall not be affected by, among other things, the validity or
genuineness of documents or of any endorsements thereon, even though such
documents shall in fact prove to be invalid, fraudulent or forged, or any
dispute between or among the Borrower and any beneficiary of any Letter of
Credit or any other party to which such Letter of Credit may be transferred or
any claims whatsoever of the Borrower against any beneficiary of such Letter of
Credit or any such transferee. The Issuing Lender shall not be liable for any
error, omission, interruption or delay in transmission, dispatch or delivery of
any message or advice, however transmitted, in connection with any Letter of
Credit, except for errors or omissions caused by the Issuing Lender's gross
negligence or willful misconduct. The
20
Borrower agrees that any action taken or omitted by the Issuing Lender under or
in connection with any Letter of Credit or the related drafts or documents, if
done in the absence of gross negligence or willful misconduct and in accordance
with the standards of care specified in the Uniform Customs and, to the extent
not inconsistent therewith, the UCC, shall be binding on the Borrower and shall
not result in any liability of the Issuing Lender to the Borrower. The
responsibility of the Issuing Lender to the Borrower in connection with any
draft presented for payment under any Letter of Credit shall, in addition to any
payment obligation expressly provided for in such Letter of Credit, be limited
to determining that the documents (including each draft) delivered under such
Letter of Credit in connection with such presentment are in conformity with such
Letter of Credit.
SECTION 3.7 Effect of Application. To the extent that any provision of
---------------------
any Application related to any Letter of Credit is inconsistent with the
provisions of this Article III, the provisions of this Article III shall apply.
ARTICLE IV
GENERAL LOAN PROVISIONS
-----------------------
SECTION 4.1 Interest.
--------
(a) Interest Rate Options. Subject to the provisions of this Section 4.1,
---------------------
at the election of the Borrower, the aggregate principal balance of the Notes or
any portion thereof shall bear interest at the Base Rate or the LIBOR Rate,
plus, in each case, the Applicable Margin as set forth below; provided, that the
---- --------
LIBOR Rate shall not be available (a) at any time prior to the third Business
Day after the Closing Date or (b) at any time prior to the completion of the
syndication of the Credit Facility on terms and conditions reasonably
satisfactory to the Agent, unless the Borrower is in compliance, in the
reasonable discretion of the Agent, with the terms and conditions set forth in
the first full paragraph of page 2 of the Commitment Letter dated January 31,
1997 between the Borrower and the Agent. The Borrower shall select the rate of
interest and Interest Period, if any, applicable to any Loan at the time a
Notice of Borrowing is given pursuant to Section 2.2 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 4.2. Each Loan or portion
thereof bearing interest based on the Base Rate shall be a "Base Rate Loan" and
each Loan or portion thereof bearing interest based on the LIBOR Rate shall be a
"LIBOR Rate Loan". Any Loan or any portion thereof as to which the Borrower has
not duly specified an interest rate as provided herein shall be deemed a Base
Rate Loan.
(b) Interest Periods. In connection with each LIBOR Rate Loan, the
----------------
Borrower, by giving notice at the times described in Section 4.1(a), shall elect
an interest period (each, an "Interest
21
Period") to be applicable to such Loan, which Interest Period shall be a period
of one (1), two (2), three (3), or six (6) months; provided, that until the
--------
completion of the syndication of the Credit Facility on terms and conditions
reasonably satisfactory to the Agent, the Borrower shall only be permitted to
select Interest Periods of one (1) month; provided further, that:
-------- -------
(i) the Interest Period shall commence on the date of advance of or
conversion to any LIBOR Rate Loan and, in the case of immediately successive
Interest Periods, each successive Interest Period shall commence on the date on
which the next preceding Interest Period expires;
(ii) if any Interest Period would otherwise expire on a day that is
not a Business Day, such Interest Period shall expire on the next succeeding
Business Day; provided, that if any Interest Period would otherwise expire on a
--------
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the next
preceding Business Day;
(iii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically corresponding day
in the calendar month at the end of such Interest Period) shall end on the last
Business Day of the relevant calendar month at the end of such Interest Period;
(iv) no Interest Period shall extend beyond the Termination Date; and
(v) there shall be no more than seven (7) Interest Periods
outstanding at any time.
(c) Applicable Margin. The Applicable Margin provided for in Section
-----------------
4.1(a) with respect to the Loans (the "Applicable Margin") shall for each fiscal
quarter be determined by reference to the Leverage Ratio as of the end of the
fiscal quarter immediately preceding the delivery of the applicable Officer's
Compliance Certificate (or, with respect to the Closing Date, the Financial
Condition Certificate delivered pursuant to Section 5.2(d)(ii)) as follows:
Applicable Margin Per Annum
Leverage Ratio Base Rate + LIBOR Rate +
-------------- ---------------------------
Greater than or equal
to 2.00 to 1.00 0.00% 0.625%
Greater than or equal
to 1.00 to 1.00 but less
than 2.00 to 1.00 0.00% 0.500%
Less than 1.00 to 1.00 0.00% 0.375%
22
Adjustments, if any, in the Applicable Margin shall be made by the Agent on the
tenth (10th) Business Day after receipt by the Agent of quarterly financial
statements for the Borrower and its Subsidiaries and the accompanying Officer's
Compliance Certificate setting forth the Leverage Ratio of the Borrower and its
Subsidiaries as of the most recent fiscal quarter end. Subject to Section
4.1(d), in the event the Borrower fails to deliver such financial statements and
certificate within the time required by Section 7.2 hereof, the Applicable
Margin shall be the highest Applicable Margin set forth above until the delivery
of such financial statements and certificate. Notwithstanding the foregoing,
for the period from and including the Closing Date through and including the
tenth (10th) Business Day following the delivery of the financial statements and
Officer's Compliance Certificate for the fiscal quarter ending March 31, 1997,
the Applicable Margin shall be 0.00% for Base Rate Loans and 0.500% for LIBOR
Loans; provided, that in the event the Borrower fails to make the payments
--------
required pursuant to the promissory notes in favor of the phantom stock holders
described in Schedule 6.1(t) on or prior to March 1, 1997, the Applicable Margin
---------------
shall be calculated pursuant to the Leverage Ratio as set forth above.
(d) Default Rate. Upon the occurrence and during the continuance of an
------------
Event of Default, (i) the Borrower shall no longer have the option to request
LIBOR Rate Loans, (ii) all outstanding LIBOR Rate Loans shall bear interest at a
rate per annum two percent (2%) in excess of the rate then applicable to LIBOR
Rate Loans until the end of the applicable Interest Period and thereafter at a
rate equal to two percent (2%) in excess of the rate then applicable to Base
Rate Loans, and (iii) all outstanding Base Rate Loans shall bear interest at a
rate per annum equal to two percent (2%) in excess of the rate then applicable
to Base Rate Loans; provided, that with respect to subclauses (ii) and (iii),
--------
such rates shall not be applicable upon the occurrence and during the
continuance of an Event of Default set forth in Sections 11.1 (c) through (m)
until the Agent, with the consent or at the request of the Required Lenders,
shall have provided notice to the Borrower. Interest shall continue to accrue
on the Notes after the filing by or against the Borrower of any petition seeking
any relief in bankruptcy or under any act or law pertaining to insolvency or
debtor relief, whether state, federal or foreign.
(e) Interest Payment and Computation. Interest on each Base Rate Loan
--------------------------------
shall be payable in arrears on the last Business Day of each calendar quarter
commencing March 31, 1997. Interest on each LIBOR Rate Loan shall be payable on
the last day of each Interest Period applicable thereto, and if such Interest
Period extends over three (3) months, at the end of each three (3) month
interval during such Interest Period. All interest rates, fees and commissions
provided hereunder shall be computed on the basis of a 360-day year (or, with
respect to the Base Rate, a 365/366-day year) and assessed for the actual number
of days elapsed.
23
(f) Maximum Rate. In no contingency or event whatsoever shall the
------------
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. In the event that such a court determines that the Lenders
have charged or received interest hereunder in excess of the highest applicable
rate, the rate in effect hereunder shall automatically be reduced to the maximum
rate permitted by Applicable Law and the Lenders shall at the Agent's option
promptly refund to the Borrower any interest received by Lenders in excess of
the maximum lawful rate or shall apply such excess to the principal balance of
the Obligations. It is the intent hereof that the Borrower not pay or contract
to pay, and that neither the Agent nor any Lender receive or contract to
receive, directly or indirectly in any manner whatsoever, interest in excess of
that which may be paid by the Borrower under Applicable Law.
SECTION 4.2 Notice and Manner of Conversion or Continuation of Loans.
--------------------------------------------------------
Provided that no Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time all or any portion of
its outstanding Base Rate Loans in a principal amount equal to $5,000,000 or any
whole multiple of $1,000,000 in excess thereof into one or more LIBOR Rate Loans
or (b) upon the expiration of any Interest Period, (i) convert all or any part
of its outstanding LIBOR Rate Loans in a principal amount equal to $1,000,000 or
a whole multiple of $500,000 in excess thereof into Base Rate Loans or (ii)
continue such LIBOR Rate Loans as LIBOR Rate Loans. Whenever the Borrower
desires to convert or continue Loans as provided above, the Borrower shall give
the Agent irrevocable prior written notice in the form attached as Exhibit D (a
---------
"Notice of Conversion/ Continuation") not later than 11:00 a.m. (Charlotte time)
three (3) Business Days before the day on which a proposed conversion or
continuation of such Loan is to be effective specifying (A) the Loans to be
converted or continued, and, in the case of any LIBOR Rate Loan to be converted
or continued, the last day of the Interest Period thereof, (B) the effective
date of such conversion or continuation (which shall be a Business Day), (C) the
principal amount of such Loans to be converted or continued, and (D) the
Interest Period to be applicable to such converted or continued LIBOR Rate Loan.
The Agent shall promptly notify the Lenders of such Notice of
Conversion/Continuation.
SECTION 4.3 Fees.
----
(a) Commitment Fee. The Borrower shall pay to the Agent, for the account
--------------
of the Lenders, a non-refundable commitment fee at a rate per annum equal to the
commitment fee rate set forth below (the "Commitment Fee Rate") on the average
daily unused portion of the Aggregate Commitment (for the purposes hereof, the
Aggregate Commitment shall be deemed used to the extent of any issued Letters
24
of Credit). The Commitment Fee Rate shall be determined by reference to the
Leverage Ratio as of the end of the fiscal quarter immediately preceding the
delivery of the applicable Officer's Compliance Certificate (or, with respect to
the Closing Date, the Financial Condition Certificate delivered pursuant to
Section 5.2(d)(ii)) as follows:
Leverage Ratio Commitment Fee Rate
-------------- -------------------
Greater than or equal
to 2.00 to 1.00 0.25%
Greater than or equal
to 1.00 to 1.00 but less
than 2.00 to 1.00 0.20%
Less than 1.00 to 1.00 0.15%
Adjustments, if any, in the Commitment Fee Rate shall be made by the Agent on
the tenth (10th) Business Day after receipt by the Agent of quarterly financial
statements for the Borrower and its Subsidiaries and the accompanying Officer's
Compliance Certificate setting forth the Leverage Ratio of the Borrower and its
Subsidiaries as of the most recent fiscal quarter end. In the event the
Borrower fails to deliver such financial statements and certificate within the
time required by Section 7.2 hereof, the Commitment Fee Rate shall be the
highest Commitment Fee Rate set forth above until the delivery of such financial
statements and certificate. The commitment fee shall be payable in arrears on
the last Business Day of each calendar quarter during the term of this Agreement
commencing March 31, 1997, and on the Termination Date. Such commitment fee
shall be distributed by the Agent to the Lenders pro rata in accordance with the
--- ----
Lenders' respective Commitment Percentages.
(b) Agent's and Other Fees. In order to compensate the Agent for
----------------------
structuring and syndicating the Loans and for its obligations and
responsibilities hereunder, the Borrower agrees to pay to the Agent, for its
account, the fees set forth in the separate fee letter agreement executed by the
Borrower and the Agent dated January 31, 1997.
SECTION 4.4 Manner of Payment. Each payment by the Borrower on account
-----------------
of the principal of or interest on the Loans or of any fee, commission or other
amounts (including the Reimbursement Obligation) payable to the Lenders under
this Agreement or any Note shall be made not later than 1:00 p.m. (Charlotte
time) on the date specified for payment under this Agreement to the Agent at the
Agent's Office for the account of the Lenders (other than as set forth below)
pro rata in accordance with their respective Commitment Percentages, in Dollars,
--- ----
in immediately available funds and shall be made without any set-off,
counterclaim
25
or deduction whatsoever. Any payment received after such time but before 2:00
p.m. (Charlotte time) on such day shall be deemed a payment on such date for the
purposes of Section 11.1, but for all other purposes shall be deemed to have
been made on the next succeeding Business Day. Any payment received after 2:00
p.m. (Charlotte time) shall be deemed to have been made on the next succeeding
Business Day for all purposes. Upon receipt by the Agent of each such payment,
the Agent shall distribute to each Lender at its address for notices set forth
herein its pro rata share of such payment in accordance with such Lender's
--- -----
Commitment Percentage and shall wire advice of the amount of such credit to each
Lender. Each payment to the Agent of the Issuing Lender's fees or L/C
Participants' commissions shall be made in like manner, but for the account of
the Issuing Lender or the L/C Participants, as the case may be. Each payment to
the Agent of Agent's fees or expenses shall be made for the account of the Agent
and any amount payable to any Lender under Sections 4.8, 4.9, 4.10, 4.11 or 13.2
shall be paid to the Agent for the account of the applicable Lender.
SECTION 4.5 Crediting of Payments and Proceeds. In the event that the
----------------------------------
Borrower shall fail to pay any of the Obligations when due and the Obligations
have been accelerated pursuant to Section 11.2, all payments received by the
Lenders upon the Notes and the other Obligations and all net proceeds from the
enforcement of the Obligations shall be applied first to all expenses then due
and payable by the Borrower hereunder, then to all indemnity obligations then
due and payable by the Borrower hereunder, then to all Agent's fees then due and
payable, then to all commitment and other fees and commissions then due and
payable, then to accrued and unpaid interest on the Notes, the Reimbursement
Obligation and any termination payments due in respect of a Hedging Agreement
with any Lender permitted pursuant to Section 10.1 (pro rata in accordance with
--- ----
all such amounts due), then to the principal amount of the Notes and
Reimbursement Obligation and then to the cash collateral account described in
Section 11.2(b) hereof to the extent of any L/C Obligations then outstanding, in
that order.
SECTION 4.6 Adjustments. If any Lender (a "Benefitted Lender") shall at
-----------
any time receive any payment of all or part of its Extensions of Credit, or
interest thereon, or if any Lender shall at any time receive any collateral in
respect to its Extensions of Credit (whether voluntarily or involuntarily, by
set-off or otherwise) in a greater proportion than any such payment to and
collateral received by any other Lender, if any, in respect of such other
Lender's Extensions of Credit, or interest thereon, such Benefitted Lender shall
purchase for cash from the other Lenders such portion of each such other
Lender's Extensions of Credit, or shall provide such other Lenders with the
benefits of any such collateral, or the proceeds thereof, as shall be necessary
to cause such Benefitted Lender to share the excess payment or benefits of such
collateral or proceeds ratably with each of the Lenders;
26
provided, that if all or any portion of such excess payment or benefits is
--------
thereafter recovered from such Benefitted Lender, such purchase shall be
rescinded, and the purchase price and benefits returned to the extent of such
recovery, but without interest. The Borrower agrees that each Lender so
purchasing a portion of another Lender's Extensions of Credit may exercise all
rights of payment (including, without limitation, rights of set-off) with
respect to such portion as fully as if such Lender were the direct holder of
such portion.
SECTION 4.7 Nature of Obligations of Lenders Regarding Extensions of
--------------------------------------------------------
Credit; Assumption by the Agent. The obligations of the Lenders under this
-------------------------------
Agreement to make the Loans and issue or participate in Letters of Credit are
several and are not joint or joint and several. Unless the Agent shall have
received notice from a Lender prior to a proposed borrowing date that such
Lender will not make available to the Agent such Lender's ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Agent may assume that such Lender has made
such portion available to the Agent on the proposed borrowing date in accordance
with Section 2.2(b) and the Agent may, in reliance upon such assumption, make
available to the Borrower on such date a corresponding amount. If such amount
is made available to the Agent on a date after such borrowing date, such Lender
shall pay to the Agent on demand an amount, until paid, equal to the product of
(a) the amount of such Lender's Commitment Percentage of such borrowing, times
(b) the daily average Federal Funds Rate during such period as determined by the
Agent, times (c) a fraction the numerator of which is the number of days that
elapse from and including such borrowing date to the date on which such Lender's
Commitment Percentage of such borrowing shall have become immediately available
to the Agent and the denominator of which is 360. A certificate of the Agent
with respect to any amounts owing under this Section shall be conclusive, absent
manifest error. If such Lender's Commitment Percentage of such borrowing is not
made available to the Agent by such Lender within three (3) Business Days after
such borrowing date, the Agent shall be entitled to recover such amount made
available by the Agent with interest thereon at the rate per annum applicable to
Base Rate Loans hereunder, on demand, from the Borrower. The failure of any
Lender to make its Commitment Percentage of any Loan available shall not relieve
it or any other Lender of its obligation, if any, hereunder to make its
Commitment Percentage of such Loan available on such borrowing date, but no
Lender shall be responsible for the failure of any other Lender to make its
Commitment Percentage of such Loan available on the borrowing date.
SECTION 4.8 Changed Circumstances.
---------------------
(a) Circumstances Affecting LIBOR Rate Availability. If with respect to
-----------------------------------------------
any Interest Period the Agent or any Lender (after
27
consultation with Agent) shall determine that, by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars, in the applicable amounts are not being quoted via Telerate Page
3750 or offered to the Agent or such Lender for such Interest Period, then the
Agent shall forthwith give notice thereof to the Borrower. Thereafter, until the
Agent notifies the Borrower that such circumstances no longer exist, the
obligation of the Lenders to make LIBOR Rate Loans and the right of the Borrower
to convert any Loan to or continue any Loan as a LIBOR Rate Loan shall be
suspended, and the Borrower shall repay in full (or cause to be repaid in full)
the then outstanding principal amount of each such LIBOR Rate Loan together with
accrued interest thereon, on the last day of the then current Interest Period
applicable to such LIBOR Rate Loan or convert the then outstanding principal
amount of each such LIBOR Rate Loan to a Base Rate Loan as of the last day of
such Interest Period.
(b) Laws Affecting LIBOR Rate Availability. If, after the date hereof, the
--------------------------------------
introduction of, or any change in, any Applicable Law or any change in the
interpretation or administration thereof by any Governmental Authority, central
bank or comparable agency charged with the interpretation or administration
thereof, or compliance by any Lender (or any of their respective Lending
Offices) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank or comparable agency, shall
make it unlawful or impossible for any of the Lenders (or any of their
respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan, such Lender shall promptly give notice thereof to
the Agent and the Agent shall promptly give notice to the Borrower and the other
Lenders. Thereafter, until the Agent notifies the Borrower that such
circumstances no longer exist, (i) the obligations of the Lenders to make LIBOR
Rate Loans and the right of the Borrower to convert any Loan or continue any
Loan as a LIBOR Rate Loan shall be suspended and thereafter the Borrower may
select only Base Rate Loans hereunder, and (ii) if any of the Lenders may not
lawfully continue to maintain a LIBOR Rate Loan to the end of the then current
Interest Period applicable thereto as a LIBOR Rate Loan, the applicable LIBOR
Rate Loan shall immediately be converted to a Base Rate Loan for the remainder
of such Interest Period.
(c) Increased Costs. If, after the date hereof, the introduction of, or
---------------
any change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:
(i) shall subject any of the Lenders (or any of their respective
Lending Offices) to any tax, duty or other charge with
28
respect to any Note, Letter of Credit or Application or shall change the basis
of taxation of payments to any of the Lenders (or any of their respective
Lending Offices) of the principal of or interest on any Note, Letter of Credit
or Application or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of tax on the overall net income of any of the
Lenders or any of their respective Lending Offices imposed by the jurisdiction
in which such Lender is organized or is or should be qualified to do business or
such Lending Office is located); or
(ii) shall impose, modify or deem applicable any reserve (including,
without limitation, any imposed by the Board of Governors of the Federal Reserve
System but excluding any such reserve included in the definition of Eurodollar
Reserve Requirement), special deposit, insurance or capital or similar
requirement against assets of, deposits with or for the account of, or credit
extended by any of the Lenders (or any of their respective Lending Offices) or
shall impose on any of the Lenders (or any of their respective Lending Offices)
or the foreign exchange and interbank markets any other condition affecting any
Note;
and the result of any of the foregoing is to increase the costs to any of the
Lenders of maintaining any LIBOR Rate Loan or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or Letter of Credit or Application, then such
Lender shall promptly notify the Agent, and the Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within thirty (30)
days after such notice by the Agent, the Borrower shall pay to such Lender such
additional amount or amounts as will compensate such Lender or Lenders for such
increased cost or reduction. The Agent will promptly notify the Borrower of any
event of which it has knowledge which will entitle such Lender to compensation
pursuant to this Section 4.8(c); provided, that the Agent shall incur no
--------
liability whatsoever to the Lenders or the Borrower in the event it fails to do
so. The amount of such compensation shall be determined, in the applicable
Lender's sole discretion, based upon the assumption that such Lender funded its
Commitment Percentage of the LIBOR Rate Loans in the London interbank market and
using any reasonable attribution or averaging methods which such Lender deems
appropriate and practical. A certificate of such Lender setting forth the basis
for determining such amount or amounts necessary to compensate such Lender shall
be forwarded to the Borrower through the Agent and shall be conclusively
presumed to be correct save for manifest error.
(d) Eurodollar Reserve Requirements. In the event that any Lender shall
-------------------------------
determine at any time that by reason of Regulation D, such Lender is required to
maintain Eurodollar Reserve Requirements during any period that it has any LIBOR
Rate Loans outstanding,
29
then such Lender shall promptly notify the Borrower by written notice (or
telephonic notice promptly confirmed in writing) specifying the additional
amounts reasonably determined by the Lender to be required to indemnify such
Lender against the cost of maintaining such Eurodollar Reserve Requirements
(such written notice to provide a computation of such additional amounts) and
the Borrower shall, within thirty (30) days after such notice, pay to such
Lender such specified amounts as additional interest. A certificate of such
Lender setting forth the basis for determining such amount or amounts shall be
conclusively presumed to be correct save for manifest error.
SECTION 4.9 Indemnity. The Borrower hereby indemnifies each of the
---------
Lenders against any loss or expense which may arise or be attributable to each
Lender's obtaining, liquidating or employing deposits or other funds acquired to
effect, fund or maintain any Loan (a) as a consequence of any failure by the
Borrower to make any payment when due of any amount due hereunder in connection
with a LIBOR Rate Loan, (b) due to any failure of the Borrower to borrow on a
date specified therefor in a Notice of Borrowing or Notice of
Continuation/Conversion or (c) due to any payment, prepayment or conversion of
any LIBOR Rate Loan on a date other than the last day of the Interest Period
therefor. The amount of such loss or expense shall be determined, in the
applicable Lender's sole discretion, based upon the assumption that such Lender
funded its Commitment Percentage of the LIBOR Rate Loans in the London interbank
market and using any reasonable attribution or averaging methods which such
Lender deems appropriate and practical. A certificate of such Lender setting
forth the basis for determining such amount or amounts necessary to compensate
such Lender shall be forwarded to the Borrower through the Agent and shall be
conclusively presumed to be correct save for manifest error.
SECTION 4.1 Capital Requirements. If either (a) the introduction of, or
--------------------
any change in, or in the interpretation of, any Applicable Law or (b) compliance
with any guideline or request from any central bank or comparable agency or
other Governmental Authority (whether or not having the force of law), has or
would have the effect of reducing the rate of return on the capital of, or has
affected or would affect the amount of capital required to be maintained by, any
Lender or any corporation controlling such Lender as a consequence of, or with
reference to the Commitments and other commitments of this type, below the rate
which the Lender or such other corporation could have achieved but for such
introduction, change or compliance, then within thirty (30) days after written
demand by any such Lender, the Borrower shall pay to such Lender from time to
time as specified by such Lender additional amounts sufficient to compensate
such Lender or other corporation for such reduction. A certificate as to such
amounts submitted to the Borrower and the Agent by such Lender, shall, in
30
the absence of manifest error, be presumed to be correct and binding for all
purposes.
SECTION 4.1 Taxes.
-----
(a) Payments Free and Clear. Any and all payments by the Borrower
-----------------------
hereunder or under the Notes or the Letters of Credit shall be made free and
clear of and without deduction for any and all present or future taxes, levies,
imposts, deductions, charges or withholding, and all liabilities with respect
thereto excluding, (i) in the case of each Lender and the Agent, income and
franchise taxes imposed by the jurisdiction under the laws of which such Lender
or the Agent (as the case may be) is organized or is or should be qualified to
do business or any political subdivision thereof and (ii) in the case of each
Lender, income and franchise taxes imposed by the jurisdiction of such Lender's
Lending Office or any political subdivision thereof (all such non-excluded
taxes, levies, imposts, deductions, charges, withholdings and liabilities being
hereinafter referred to as "Taxes"). If the Borrower shall be required by law
to deduct any Taxes from or in respect of any sum payable hereunder or under any
Note or Letter of Credit to any Lender or the Agent, (A) the sum payable shall
be increased as may be necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section
4.11) such Lender or the Agent (as the case may be) receives an amount equal to
the amount such party would have received had no such deductions been made, (B)
the Borrower shall make such deductions, (C) the Borrower shall pay the full
amount deducted to the relevant taxing authority or other authority in
accordance with applicable law, and (D) the Borrower shall deliver to the Agent
evidence of such payment to the relevant taxing authority or other authority in
the manner provided in Section 4.11(d).
(b) Stamp and Other Taxes. In addition, the Borrower shall pay any
---------------------
present or future stamp, registration, recordation or documentary taxes or any
other similar fees or charges or excise or property taxes, levies of the United
States or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereto (hereinafter referred to as
"Other Taxes").
(c) Indemnity. The Borrower shall indemnify each Lender and the Agent
---------
for the full amount of Taxes and Other Taxes (including, without limitation, any
Taxes and Other Taxes imposed by any jurisdiction on amounts payable under this
Section 4.11) paid by such Lender or the Agent (as the case may be) and any
liability (including penalties, interest and expenses) arising
31
therefrom or with respect thereto, whether or not such Taxes or Other Taxes were
correctly or legally asserted. In the event the Borrower believes that any such
Taxes or Other Taxes were incorrectly or illegally asserted, the Agent and each
of the Lenders hereby agrees to take reasonable steps to assist the Borrower in
asserting a claim against the applicable Governmental Authority for such Taxes
or Other Taxes. Such indemnification shall be made within thirty (30) days from
the date such Lender or the Agent (as the case may be) makes written demand
therefor.
(d) Evidence of Payment. Within thirty (30) days after the date of
-------------------
any payment of Taxes or Other Taxes, the Borrower shall furnish to the Agent, at
its address referred to in Section 13.1, the original or a certified copy of a
receipt evidencing payment thereof or other evidence of payment satisfactory to
the Agent.
(e) Delivery of Tax Forms. Each Lender organized under the laws of a
---------------------
jurisdiction other than the United States or any state thereof shall deliver to
the Borrower, with a copy to the Agent, on the Closing Date or concurrently with
the delivery of the relevant Assignment and Acceptance, as applicable, (i) two
United States Internal Revenue Service Forms 4224 or Forms 1001, as applicable
(or successor forms) properly completed and certifying in each case that such
Lender is entitled to a complete exemption from withholding or deduction for or
on account of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States backup withholding taxes. Each
such Lender further agrees to deliver to the Borrower, with a copy to the Agent,
a Form 1001 or 4224 and Form W-8 or W-9, or successor applicable forms or manner
of certification, as the case may be, on or before the date that any such form
expires or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form previously delivered by it to the Borrower,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes (unless in any such case an event (including
without limitation any change in treaty, law or regulation) has occurred prior
to the date on which any such delivery would otherwise be required which renders
such forms inapplicable or the exemption to which such forms relate unavailable
and such Lender notifies the Borrower and the Agent that it is not entitled to
receive payments without deduction or withholding of United States federal
income taxes) and, in the case of a Form W-8 or W-9, establishing an exemption
from United States backup withholding tax.
(f) Survival. Without prejudice to the survival of any other
--------
agreement of the Borrower hereunder, the agreements and obligations of the
Borrower contained in this Section 4.11 shall survive the payment in full of the
Obligations and the termination of the Commitments.
32
SECTION 4.1 Affected Lenders. If (a) any Lender requests compensation
----------------
pursuant to Section 4.8(c), 4.8(d), 4.10 or 4.11, (b) the obligation of the
Lenders to make LIBOR Rate Loans or to continue, or to convert Base Rate Loans
into, LIBOR Rate Loans shall be suspended pursuant to Section 4.8(a) or (b) due
to an event affecting any Lender or (c) any Lender shall deny the request of the
Borrower to extend the Termination Date pursuant to the provisions of Section
2.6, then, so long as there does not then exist any Default or Event of Default,
the Borrower may demand that such Lender (the "Affected Lender"), and upon such
demand the Affected Lender shall promptly, assign its Commitment to an Eligible
Assignee selected by the Borrower, subject to and in accordance with the
provisions of Section 13.10(b), for a purchase price equal to the aggregate
principal balance of Extensions of Credit then owing to the Affected Lender plus
any accrued but unpaid interest thereon, accrued but unpaid fees and any other
amounts owing to the Affected Lender hereunder. The Agent shall cooperate in
effectuating the replacement of an Affected Lender under this Section, but at no
time shall the Agent be obligated in any way whatsoever to initiate any such
replacement. The exercise by the Borrower of its rights under this Section
shall be at the Borrower's sole cost and expense (including with respect to the
assignment fee required pursuant to Section 13.10(b)(v)), and at no cost or
expense to the Agent, the Affected Lender or any of the other Lenders.
SECTION 4.1 Similarly Situated Loans. In no event shall any Lender be
------------------------
entitled to any compensation or other amounts under Sections 4.8 through 4.11 to
the extent such Lender was compensated for such cost under another of such
Sections. In calculating or demanding compensation or other amounts due under
Sections 4.8 and 4.10, each Lender agrees that it shall use its best efforts to
treat its Loans under this Agreement in the same manner as it generally treats
all similarly situated loans then outstanding from such Lender to other
borrowers.
ARTICLE V
CLOSING; CONDITIONS OF CLOSING AND BORROWING
--------------------------------------------
SECTION 5.1 Closing. The closing shall take place at the offices of
-------
Borrower on February 14, 1997, or at such other place or on such other date as
the parties hereto shall mutually agree.
SECTION 5.2 Conditions to Closing and Initial Extensions of Credit. The
------------------------------------------------------
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue the initial Letter of Credit is subject to the satisfaction of each of
the following conditions:
(a) Executed Loan Documents. This Agreement, the Notes and the
-----------------------
Subsidiary Guaranty shall have been duly authorized,
33
executed and delivered to the Agent by the parties thereto, shall be in full
force and effect and no default shall exist thereunder, and the Borrower shall
have delivered original counterparts thereof to the Agent.
(b) Closing Certificates; etc.
--------------------------
(i) Officers's Certificate of the Borrower. The Agent shall have
--------------------------------------
received a certificate from the chief executive officer or chief financial
officer of the Borrower, in form and substance satisfactory to the Agent, to the
effect that all representations and warranties of the Borrower contained in this
Agreement and the other Loan Documents are true, correct and complete in all
material respects; that the Borrower is not in violation of any of the covenants
contained in this Agreement and the other Loan Documents; that, after giving
effect to the transactions contemplated by this Agreement, no Default or Event
of Default has occurred and is continuing; and that the Borrower has satisfied
each of the closing conditions.
(ii) Certificate of Secretary of the Borrower and each Subsidiary
------------------------------------------------------------
Guarantor. The Agent shall have received a certificate of the secretary or
---------
assistant secretary of the Borrower and each Subsidiary Guarantor certifying
that attached thereto is a true and complete copy of the articles of
incorporation of the Borrower or such Subsidiary Guarantor, as applicable, and
all amendments thereto, certified as of a recent date by the appropriate
Governmental Authority in its jurisdiction of incorporation; that attached
thereto is a true and complete copy of the bylaws of the Borrower or such
Subsidiary Guarantor, as applicable, as in effect on the date of such
certification; that attached thereto is a true and complete copy of resolutions
duly adopted by the Board of Directors of the Borrower or such Subsidiary
Guarantor, as applicable, authorizing the execution, delivery and performance of
this Agreement and the other Loan Documents to which it is a party and, with
respect to the Borrower, the borrowings contemplated hereunder; and as to the
incumbency and genuineness of the signature of each officer of the Borrower or
such Subsidiary Guarantor, as applicable, executing Loan Documents to which it
is a party.
(iii) Certificates of Good Standing. The Agent shall have
-----------------------------
received long-form certificates as of a recent date of the good standing of the
Borrower and each Subsidiary Guarantor under the laws of its jurisdiction of
organization and each other jurisdiction reasonably requested by the Agent and a
certificate of the relevant taxing authorities of such jurisdictions certifying
that such Person has filed required tax returns and owes no delinquent taxes.
(iv) Opinions of Counsel. The Agent shall have received
-------------------
favorable opinions of counsel to the Borrower and
34
Subsidiary Guarantors addressed to the Agent and the Lenders with respect to the
Borrower, the Subsidiary Guarantors, the Loan Documents and such other matters
as the Lenders shall request.
(v) Tax Forms. The Agent shall have received copies of the United
---------
States Internal Revenue Service forms required by Section 4.11(e) hereof.
(c) Consents; Defaults.
------------------
(i) Governmental and Third Party Approvals. All necessary
--------------------------------------
approvals, authorizations and consents, if any be required, of any Person and of
all Governmental Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement, the other Loan Documents and the
Acquisition and Merger shall have been obtained.
(ii) No Injunction, Etc. No action, proceeding, investigation,
-------------------
regulation or legislation shall have been instituted, threatened or proposed
before any Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of this
Agreement, the other Loan Documents, the Acquisition and Merger or the
consummation of the transactions contemplated hereby or thereby, or which, in
the Agent's discretion, would make it inadvisable to consummate the transactions
contemplated by this Agreement and such other Loan Documents.
(iii) No Event of Default. No Default or Event of Default shall have
-------------------
occurred and be continuing.
(d) Financial Matters.
-----------------
(i) Financial Statements. The Agent shall have received the most
--------------------
recent audited Consolidated financial statements of the Borrower and its
Subsidiaries and of DBA and its Subsidiaries, all prepared in accordance with
GAAP. Without limitation of the foregoing, the Agent and each Lender shall have
received audited financial statements of the Borrower and its Subsidiaries for
the Fiscal Year ended December 31, 1995 and for DBA and its Subsidiaries for the
Fiscal Year ended January 31, 1996 and unaudited financial statements for the
Borrower and its Subsidiaries for the nine month period ending September 30,
1996 and for DBA and its Subsidiaries for the eleven month period ending
December 31, 1996.
(ii) Financial Condition Certificate. The Borrower shall have
-------------------------------
delivered to the Agent a certificate, in form and substance satisfactory to the
Agent, and certified by the chief executive officer or chief financial officer
of the Borrower, that (A) the Borrower and each of its Subsidiaries are each
Solvent, (B) attached thereto is a pro forma balance sheet of the Borrower and
--- -----
35
its Subsidiaries setting forth on a pro forma basis the financial condition of
--- -----
the Borrower and its Subsidiaries on a Consolidated basis as of January 31, 1997
and reflecting on a pro forma basis the effect of the transactions contemplated
--- -----
herein (including the Acquisition and Merger), including all fees and expenses
in connection therewith, evidencing compliance on a pro forma basis with the
--- -----
covenants contained in Articles IX and X hereof and calculating on a pro forma
--- -----
basis the Applicable Margin pursuant to Section 4.1(c), representing the good
faith estimates and calculations of the Borrower and senior management as to the
financial information contained therein and (C) attached thereto are the
financial projections previously delivered to the Agent representing the good
faith opinions of the Borrower and senior management thereof as to the projected
results contained therein.
(iii) Payment at Closing. There shall have been paid by the
------------------
Borrower to the Agent and the Lenders the fees set forth or referenced in
Section 4.3 and any other accrued and unpaid fees or commissions due hereunder
(including, without limitation, legal fees and expenses), with respect to which
the Borrower has received a statement in reasonable detail at least one Business
Day prior to the Closing Date, and to any other Person such amount as may be due
thereto in connection with the transactions contemplated hereby, including all
taxes, fees and other charges in connection with the execution, delivery,
recording, filing and registration of any of the Loan Documents.
(e) Acquisition and Merger.
----------------------
(i) Acquisition Agreement. The Borrower shall have delivered to
---------------------
the Agent a true, correct and complete copy of the Acquisition Agreement.
(ii) Consummation of Acquisition and Merger. The Acquisition and
--------------------------------------
Merger shall have been consummated on terms and conditions satisfactory in form
and substance to the Agent.
(f) Miscellaneous.
-------------
(i) Notice of Borrowing. The Agent shall have received a Notice of
-------------------
Borrowing from the Borrower in accordance with Section 2.2(a), and a written
notice in the form attached hereto as Exhibit E (a "Notice of Account
---------
Designation") specifying the account or accounts to which the proceeds of any
Loans made after the Closing Date are to be disbursed.
(ii) Proceedings and Documents. All opinions, certificates and
-------------------------
other instruments and all proceedings in connection with the transactions
contemplated by this Agreement (including the Acquisition and Merger) shall be
satisfactory in form and substance to the Lenders. The Lenders shall have
received copies of all other instruments and other evidence as the Lenders may
36
reasonably request, in form and substance satisfactory to the Lenders, with
respect to the transactions contemplated by this Agreement and the Acquisition
and Merger and the taking of all actions in connection therewith.
(iii) Due Diligence and Other Documents. The Borrower shall have
---------------------------------
delivered to the Agent such other documents, certificates and opinions as the
Agent reasonably requests, certified by a secretary or assistant secretary of
the Borrower as a true and correct copy thereof.
SECTION 5.3 Conditions to All Loans and Letters of Credit. The
---------------------------------------------
obligations of the Lenders to make any Loan or issue any Letter of Credit are
subject to the satisfaction of the following conditions precedent on the
relevant borrowing or issue date, as applicable:
(a) Continuation of Representations and Warranties. The
----------------------------------------------
representations and warranties contained in Article VI shall be true and correct
in all material respects on and as of such borrowing date with the same effect
as if made on and as of such date, except to the extent that such
representations and warranties expressly relate to an earlier date (in which
case such representations and warranties shall have been true and correct in
all material respects on and as of such earlier date).
(b) No Existing Default. No Default or Event of Default shall have
-------------------
occurred and be continuing hereunder (i) on the borrowing date with respect to
such Loan or after giving effect to the Loans to be made on such date or (ii) on
the issue date with respect to such Letter of Credit or after giving affect to
such Letters of Credit on such date.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF THE BORROWER
----------------------------------------------
SECTION 6.1 Representations and Warranties. To induce the Agent to
------------------------------
enter into this Agreement and the Lenders to make the Loans or issue or
participate in the Letters of Credit, the Borrower hereby represents and
warrants to the Agent and Lenders that:
(a) Organization; Power; Qualification. Each of the Borrower and its
----------------------------------
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its incorporation or formation, has the power and
authority to own its properties and to carry on its business as now being and
hereafter proposed to be conducted and is duly qualified and authorized to do
business in each jurisdiction in which the character of its properties or the
nature of its business requires such qualification and authorization, except
where the failure to so qualify
37
could not reasonably be expected to have a Material Adverse Effect. The
jurisdictions in which the Borrower and its Subsidiaries are organized and
qualified to do business as of the Closing Date are described on Schedule 6.1(a)
---------------
of the Disclosure Letter.
(b) Ownership. Each Subsidiary of the Borrower, as of the Closing
---------
Date, is listed on Schedule 6.1(b) of the Disclosure Letter. The capitalization
---------------
of the Borrower and its Subsidiaries, as of the Closing Date, consists of the
number of shares, authorized, issued and outstanding, of such classes and
series, with or without par value, described on Schedule 6.1(b) of the
---------------
Disclosure Letter. All outstanding shares have been duly authorized and validly
issued and are fully paid and nonassessable. The share holders of the
Subsidiaries of the Borrower, as of the Closing Date, and the number of shares
owned by each are described on Schedule 6.1(b) of the Disclosure Letter. As of
---------------
the Closing Date, there are no outstanding stock purchase warrants,
subscriptions, options, securities, instruments or other rights of any type or
nature whatsoever, which are convertible into, exchangeable for or otherwise
provide for or permit the issuance of capital stock of the Borrower or its
Subsidiaries, except as described on Schedule 6.1(b) of the Disclosure Letter.
---------------
(c) Authorization of Agreement, Loan Documents and Borrowing. Each of
--------------------------------------------------------
the Borrower and its Subsidiaries has the right, power and authority and has
taken all necessary corporate and other action to authorize the execution,
delivery and performance of this Agreement and each of the other Loan Documents
to which it is a party in accordance with their respective terms. This Agreement
and each of the other Loan Documents have been duly executed and delivered by
the duly authorized officers of the Borrower and each of its Subsidiaries party
thereto, and each such document constitutes the legal, valid and binding
obligation of the Borrower and each of its Subsidiaries party thereto,
enforceable in accordance with its terms, except as such enforcement may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar state
or federal debtor relief laws from time to time in effect which affect the
enforcement of creditors' rights in general and by the availability of equitable
remedies.
(d) Compliance of Agreement, Loan Documents and Borrowing with Laws,
----------------------------------------------------------------
Etc. The execution, delivery and performance by the Borrower and its
----
Subsidiaries of the Loan Documents to which each such Person is a party, in
accordance with their respective terms, the borrowings hereunder and the
transactions contemplated hereby do not and will not, by the passage of time,
the giving of notice or otherwise, (i) require any Governmental Approval or
violate any Applicable Law relating to the Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries or any material indenture, agreement or
other
38
instrument to which such Person is a party or by which any of its properties may
be bound or any Governmental Approval relating to such Person, or (iii) result
in or require the creation or imposition of any Lien upon or with respect to any
property now owned or hereafter acquired by such Person other than Liens arising
under the Loan Documents.
(e) Compliance with Law; Governmental Approvals. Each of the Borrower
-------------------------------------------
and its Subsidiaries (i) has all Governmental Approvals required by any
Applicable Law for it to conduct its business, each of which is in full force
and effect, is final and not subject to review on appeal and is not the subject
of any pending or, to the best of its knowledge, threatened attack by direct or
collateral proceeding, except for such Governmental Approvals the absence of
which could not reasonably be expected to have a Material Adverse Effect and
(ii) is in compliance with each Governmental Approval applicable to it and in
compliance with all other Applicable Laws relating to it or any of its
respective properties, except in each case where the failure to so comply could
not reasonably be expected to have a Material Adverse Effect.
(f) Tax Returns and Payments. Each of the Borrower and its
------------------------
Subsidiaries has duly filed or caused to be filed all federal, state, local and
other tax returns required by Applicable Law to be filed, and has paid, or made
adequate provision for the payment of, all federal, state, local and other
taxes, assessments and governmental charges or levies upon it and its property,
income, profits and assets which are due and payable, except any nonpayment
permitted under Section 8.5, the result of which could reasonably be expected to
have a Material Adverse Effect. No Governmental Authority has asserted any Lien
or other claim against the Borrower or Subsidiary thereof with respect to unpaid
taxes which has not been discharged or resolved which could reasonably be
expected to have a Material Adverse Effect. The charges, accruals and reserves
on the books of the Borrower and any of its Subsidiaries in respect of federal,
state, local and other taxes for all Fiscal Years and portions thereof since the
organization of the Borrower and any of its Subsidiaries are in the judgment of
the Borrower adequate, and the Borrower does not anticipate any additional taxes
or assessments for any of such years, the result of which could reasonably be
expected to have a Material Adverse Effect.
(g) Intellectual Property Matters. Each of the Borrower and its
-----------------------------
Subsidiaries owns or possesses rights to use all franchises, licenses,
copyrights, copyright applications, patents, patent rights or licenses, patent
applications, trademarks, trademark rights, trade names, trade name rights,
copyrights and rights with respect to the foregoing which are required to
conduct its business, except where the failure to so own or possess such rights
could not reasonably be expected to have a Material Adverse Effect. No event has
occurred which permits, or after notice or lapse of time or both would permit,
the revocation or termination of any
39
such rights, and neither the Borrower nor any Subsidiary thereof is liable to
any Person for infringement under Applicable Law with respect to any such rights
as a result of its business operations, the result of which could reasonably be
expected to have a Material Adverse Effect.
(h) Environmental Matters. Except for matters existing on the Closing
---------------------
Date and set forth on Schedule 6.1(h) of the Disclosure Letter and except for
---------------
matters which, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect,
(i) The properties of the Borrower and its Subsidiaries do not
contain, and to the Borrower's knowledge have not previously contained, any
Hazardous Materials in amounts or concentrations which (A) constitute or
constituted a violation of, or (B) could give rise to liability under,
applicable Environmental Laws;
(ii) Such properties and all operations conducted in connection
therewith are in compliance, and have been in compliance, with all applicable
Environmental Laws, and there is no contamination at, under or about such
properties or such operations which could interfere with the continued operation
of such properties or impair the fair saleable value thereof;
(iii) Neither the Borrower nor any Subsidiary thereof has received
any notice of violation, alleged violation, non compliance, liability or
potential liability regarding environmental matters or compliance with
Environmental Laws with regard to any of their properties or the operations
conducted in connection therewith, nor does the Borrower or any Subsidiary
thereof have knowledge or reason to believe that any such notice will be
received or is being threatened;
(iv) Hazardous Materials have not been transported or disposed of
from the properties of the Borrower and its Subsidiaries in violation of, or in
a manner or to a location which could give rise to liability under,
Environmental Laws, nor have any Hazardous Materials been generated, treated,
stored or disposed of at, on or under any of such properties in violation of, or
in a manner that could give rise to liability under, any applicable
Environmental Laws;
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary thereof is or will be
named as a party with respect to such properties or operations conducted in
connection therewith, nor are there any consent decrees or other decrees,
consent orders, administrative orders or other orders, or other administrative
or judicial requirements outstanding under any
40
Environmental Law with respect to such properties or such operations; and
(vi) There has been no release, or to the best of the Borrower's
knowledge, the threat of release, of Hazardous Materials at or from such
properties, in violation of or in amounts or in a manner that could give rise to
liability under Environmental Laws.
(i) ERISA. Except as disclosed on Schedule 6.1(i) of the Disclosure
----- ---------------
Letter:
(i) As of the Closing Date, neither the Borrower nor any ERISA
Affiliate maintains or contributes to, or has any obligation under, any Employee
Benefit Plans;
(ii) the Borrower and each ERISA Affiliate is in material
compliance with all applicable provisions of ERISA and the regulations and
published interpretations thereunder with respect to all Employee Benefit Plans
except for any required amendments for which the remedial amendment period as
defined in Section 401(b) of the Code has not yet expired. Each Employee
Benefit Plan that is intended to be qualified under Section 401(a) of the Code
has been determined by the Internal Revenue Service to be so qualified, and each
trust related to such plan has been determined to be exempt under Section 501(a)
of the Code. No material liability has been incurred by the Borrower or any
ERISA Affiliate which remains unsatisfied for any taxes or penalties with
respect to any Employee Benefit Plan or any Multiemployer Plan;
(iii) No Pension Plan has been terminated, nor has any accumulated
funding deficiency (as defined in Section 412 of the Code) been incurred
(without regard to any waiver granted under Section 412 of the Code), nor has
any funding waiver from the Internal Revenue Service been received or requested
with respect to any Pension Plan, nor has the Borrower or any ERISA Affiliate
failed to make any contributions or to pay any amounts due and owing as required
by Section 412 of the Code, Section 302 of ERISA or the terms of any Pension
Plan prior to the due dates of such contributions under Section 412 of the Code
or Section 302 of ERISA, nor has there been any event requiring any disclosure
under Section 4041(c)(3)(C) or 4063(a) of ERISA with respect to any Pension
Plan;
(iv) Neither the Borrower nor any ERISA Affiliate has: (A)
engaged in a nonexempt prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Code, (B) incurred any liability to the PBGC which
remains outstanding other than the payment of premiums and there are no premium
payments which are due and unpaid, (C) failed to make a required contribution
or payment to a Multiemployer Plan, or (D) failed to make a
41
required installment or other required payment under Section 412 of the Code;
(v) No Termination Event has occurred or is reasonably expected
to occur; and
(vi) No proceeding, claim, lawsuit and/or investigation is
existing or, to the best knowledge of the Borrower after due inquiry, threatened
concerning or involving any (A) employee welfare benefit plan (as defined in
Section 3 (1) of ERISA) currently maintained or contributed to by the Borrower
or any ERISA Affiliate, (B) Pension Plan or (C) Multiemployer Plan.
(j) Margin Stock. Neither the Borrower nor any Subsidiary thereof is
------------
engaged principally or as one of its activities in the business of extending
credit for the purpose of "purchasing" or "carrying" any "margin stock" (as each
such term is defined or used in Regulations G and U of the Board of Governors of
the Federal Reserve System). No part of the proceeds of any of the Loans or
Letters of Credit will be used for purchasing or carrying margin stock or for
any purpose which violates, or which would be inconsistent with, the provisions
of Regulation G, T, U or X of such Board of Governors.
(k) Government Regulation. Neither the Borrower nor any Subsidiary
---------------------
thereof is an "investment company" or a company "controlled" by an "investment
company" (as each such term is defined or used in the Investment Company Act of
1940, as amended) and neither the Borrower nor any Subsidiary thereof is, or
after giving effect to any Loan will be, subject to regulation under the Public
Utility Holding Company Act of 1935 or the Interstate Commerce Act, each as
amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.
(l) Material Contracts. Schedule 6.1(l) of the Disclosure Letter sets
------------------ ---------------
forth a complete and accurate list of all Material Contracts of the Borrower and
its Subsidiaries in effect as of the Closing Date not listed on any other
Schedule hereto or to the Disclosure Letter; other than as set forth in Schedule
--------
6.1(l) of the Disclosure Letter, each Material Contract is, and after giving
------
effect to the consummation of the transactions contemplated by the Loan
Documents will be, in full force and effect in all material respects in
accordance with the terms thereof. The Borrower and its Subsidiaries have
delivered to the Agent a true and complete copy of each Material Contract
required to be listed on Schedule 6.1(l) of the Disclosure Letter.
---------------
(m) Employee Relations. Each of the Borrower and its Subsidiaries has
------------------
a stable work force in place and as of the Closing Date is not, except as set
forth on Schedule 6.1(m) of the Disclosure Letter, party to any collective
---------------
bargaining agreement nor
42
has any labor union been recognized as the representative of its employees. The
Borrower knows of no pending, threatened or contemplated strikes, work stoppage
or other collective labor disputes involving its employees or those of its
Subsidiaries.
(n) Burdensome Provisions. Neither the Borrower nor any Subsidiary
---------------------
thereof is a party to any indenture, agreement, lease or other instrument, or
subject to any corporate or partnership restriction, Governmental Approval or
Applicable Law which is so unusual or burdensome as in the foreseeable future
could reasonably be expected to have a Material Adverse Effect. The Borrower
and its Subsidiaries do not presently anticipate that future expenditures
needed to meet the provisions of any statutes, orders, rules or regulations of a
Governmental Authority will be so burdensome as to have a Material Adverse
Effect.
(o) Financial Statements. The (i) Consolidated balance sheets of the
--------------------
Borrower and its Subsidiaries as of December 31, 1995 and the related statements
of income and retained earnings and cash flows for the Fiscal Years then ended
and (ii) unaudited Consolidated balance sheet of the Borrower and its
Subsidiaries as of September 30, 1996 and related unaudited interim statements
of revenue and retained earnings, copies of which have been furnished to the
Agent and each Lender, are complete and correct and fairly present the assets,
liabilities and financial position of the Borrower and its Subsidiaries as at
such dates, and the results of the operations and cash flows for the periods
then ended. All such financial statements, including the related notes thereto,
have been prepared in accordance with GAAP, except in the case of the unaudited
financial statements, for year-end adjustments and the absence of footnotes.
The Borrower and its Subsidiaries have no Debt, obligation or other unusual
forward or long-term commitment which is not fairly reflected in the foregoing
financial statements or in the notes thereto.
(p) No Material Adverse Change. Since December 31, 1995, there has
--------------------------
been no Material Adverse Effect and no event has occurred or condition arisen
that could reasonably be expected to have a Material Adverse Effect.
(q) Solvency. As of the Closing Date and after giving effect to each
--------
Loan made hereunder, the Borrower and each of its Material Subsidiaries will be
Solvent.
(r) Titles to Properties. Each of the Borrower and its Subsidiaries
--------------------
has such title to the real property owned by it as is necessary or desirable to
the conduct of its business and valid and legal title to all of its personal
property and assets, including, but not limited to, those reflected on the
balance sheets of the Borrower and its Subsidiaries delivered pursuant to
Section 6.1(o), except those which have been disposed of by the Borrower or its
Subsidiaries subsequent to such date which dispositions have been
43
in the ordinary course of business or as otherwise expressly permitted
hereunder.
(s) Liens. None of the properties and assets of the Borrower or any
-----
Subsidiary thereof is subject to any Lien, except Liens permitted pursuant to
Section 10.3. No financing statement under the Uniform Commercial Code of any
state which names the Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.3 hereof.
(t) Debt and Contingent Obligations. Schedule 6.1(t) of the
------------------------------- ---------------
Disclosure Letter is a complete and correct listing of all Debt and Contingent
Obligations of the Borrower and its Subsidiaries in excess of $250,000 as of the
Closing Date. The Borrower and its Subsidiaries have performed and are in
compliance with all of the terms of such Debt and Contingent Obligations and all
instruments and agreements relating thereto, and no default or event of default,
or event or condition which with notice or lapse of time or both would
constitute such a default or event of default on the part of the Borrower or its
Subsidiaries exists with respect to any such Debt or Contingent Obligation.
(u) Litigation. Except for matters existing on the Closing Date and
----------
set forth on Schedule 6.1(u) of the Disclosure Letter and except for matters
---------------
which, if adversely determined, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect, there are no actions,
suits or proceedings pending nor, to the knowledge of the Borrower, threatened
against or in any other way relating adversely to or affecting the Borrower or
any Subsidiary thereof or any of their respective properties in any court or
before any arbitrator of any kind or before or by any Governmental Authority.
(v) Absence of Defaults. No event has occurred or is continuing which
-------------------
constitutes a Default or an Event of Default.
(w) Accuracy and Completeness of Information. All written
----------------------------------------
information, reports and other papers and data produced by or on behalf of the
Borrower or any Subsidiary thereof and furnished to the Lenders were, at the
time the same were so furnished, complete and correct in all material respects
to the extent necessary to give the recipient a true and accurate knowledge of
the subject matter. No document furnished or written statement made to the
Agent or the Lenders by the Borrower or any Subsidiary thereof in connection
with the negotiation, preparation or execution of this Agreement or any of the
Loan Documents contains or will contain any untrue statement of a fact material
to
44
the creditworthiness of the Borrower or its Subsidiaries or omits or will omit
to state a material fact necessary in order to make the statements contained
therein not misleading. The Borrower is not aware of any facts which it has not
disclosed in writing to the Agent having a Material Adverse Effect, or insofar
as the Borrower can now foresee, could reasonably be expected to have a Material
Adverse Effect.
(x) Acquisition Agreement. The Borrower has delivered to the Agent a
---------------------
true, complete and correct copy of the Acquisition Agreement, together with all
amendments and modifications thereto. Each of the representations and warranties
contained in Article III of the Acquisition Agreement is true and correct in all
material respects.
SECTION 6.2 Survival of Representations and Warranties, Etc. All
------------------------------------------------
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the
Loan Documents (including but not limited to any such representation or warranty
made in or in connection with any amendment thereto) shall constitute
representations and warranties made under this Agreement. All representations
and warranties made under this Agreement shall be made or deemed to be made at
and as of the Closing Date, shall survive the Closing Date and shall not be
waived by the execution and delivery of this Agreement, any investigation made
by or on behalf of the Lenders or any borrowing hereunder.
ARTICLE VII
FINANCIAL INFORMATION AND NOTICES
---------------------------------
Until all the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower will
furnish or cause to be furnished to the Agent at the Agent's Office (and, with
respect to the items referred to in Sections 7.1(a) and (b) and 7.4(b), to the
Lenders at their respective addresses as set forth on Schedule 1), or such other
----------
office as may be designated by the Agent and Lenders from time to time:
SECTION 7.1 Financial Statements and Projections.
------------------------------------
(a) Quarterly Financial Statements. As soon as practicable and in any
------------------------------
event within sixty (60) days after the end of each fiscal quarter, an unaudited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such fiscal quarter and unaudited Consolidated statements of income, retained
earnings and cash flows for the fiscal quarter then ended and that portion of
the Fiscal Year then ended, including the notes thereto,
45
all in reasonable detail setting forth in comparative form the corresponding
figures for the preceding Fiscal Year and prepared by the Borrower in accordance
with GAAP, except for year end adjustments and the absence of footnotes, and,
if applicable, containing disclosure of the effect on the financial position or
results of operations of any change in the application of accounting principles
and practices during the period, and certified by the chief financial officer of
the Borrower to present fairly in all material respects the financial condition
of the Borrower and its Subsidiaries as of their respective dates and the
results of operations of the Borrower and its Subsidiaries for the respective
periods then ended, subject to normal year end adjustments.
(b) Annual Financial Statements. As soon as practicable and in any
---------------------------
event within one hundred (100) days after the end of each Fiscal Year (including
without limitation, the Fiscal Year ended December 31, 1996), an audited
Consolidated balance sheet of the Borrower and its Subsidiaries as of the close
of such Fiscal Year and audited Consolidated statements of income, retained
earnings and cash flows for the Fiscal Year then ended, including the notes
thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding Fiscal Year and prepared by Coopers &
Xxxxxxx, or other independent certified public accounting firm with nationally
recognized standing, in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of operation of
any change in the application of accounting principles and practices during the
year, and accompanied by a report thereon by such certified public accountants
that is not qualified with respect to scope limitations imposed by the Borrower
or any of its Subsidiaries or with respect to accounting principles followed by
the Borrower or any of its Subsidiaries not in accordance with GAAP.
(c) Annual Business Plan and Financial Projections. As soon as
----------------------------------------------
practicable and in any event within sixty (60) days after the beginning of each
Fiscal Year, a business plan of the Borrower and its Subsidiaries in form and
substance reasonably satisfactory to the Agent.
(d) DBA Financial Statements. As soon as practicable and in any event
------------------------
within ninety (90) days after the end of the fiscal year ended January 31, 1997,
an audited Consolidated balance sheet of DBA and its Subsidiaries as of the
close of such fiscal year and audited Consolidated statements of income,
retained earnings and cash flows for the fiscal year then ended, including the
notes thereto, all in reasonable detail setting forth in comparative form the
corresponding figures for the preceding fiscal year and prepared by BDO Xxxxxxx,
LLP, or other independent certified public accounting firm with nationally
recognized standing, in accordance with GAAP and, if applicable, containing
disclosure of the effect on the financial position or results of
46
operation of any change in the application of accounting principles and
practices during the year, and accompanied by a report thereon by such certified
public accountants that is not qualified with respect to scope limitations
imposed by DBA or any of its Subsidiaries or with respect to accounting
principles followed by DBA or any of its Subsidiaries not in accordance with
GAAP.
SECTION 7.2 Officer's Compliance Certificate. At each time financial
--------------------------------
statements are delivered pursuant to Sections 7.1 (a) or (b), a certificate of
the chief financial officer or the treasurer of the Borrower in the form of
Exhibit F attached hereto (an "Officer's Compliance Certificate").
---------
SECTION 7.3 Accountants' Certificate. At each time financial statements
------------------------
are delivered pursuant to Section 7.1(b), a certificate of the independent
public accountants certifying such financial statements addressed to the Agent
for the benefit of the Lenders:
(a) stating that in making the examination necessary for the
certification of such financial statements, they obtained no knowledge of any
Default or Event of Default or, if such is not the case, specifying such Default
or Event of Default and its nature and period of existence; and
(b) including the calculations prepared by such accountants required
to establish whether or not the Borrower and its Subsidiaries are in compliance
with the financial covenants set forth in Article IX hereof as at the end of
each respective period.
SECTION 7.4 Other Reports.
-------------
(a) Promptly upon receipt thereof, copies of all reports, if any,
submitted to the Borrower or its Board of Directors by its independent public
accountants in connection with their auditing function, including, without
limitation, any final management report and any management responses thereto;
(b) Promptly but in any event within ten (10) Business Days after the
filing thereof, a copy of (i) each report or other filing made by the Borrower
or any of its Subsidiaries with the Securities and Exchange Commission ("SEC")
and required by the SEC to be delivered to the shareholders of the Borrower or
any of its Subsidiaries, and (ii) each report made by the Borrower or any of its
Subsidiaries to the SEC on Form 8-K and each final registration statement of the
Borrower or any of its Subsidiaries filed with the SEC; and
(c) Such other information regarding the operations, business affairs
and financial condition of the Borrower or any of its Subsidiaries as the Agent
or any Lender may reasonably request.
47
SECTION 7.5 Notice of Litigation and Other Matters. Prompt (but in no
--------------------------------------
event later than ten (10) days after the Chief Executive Officer, Chief
Operating Officer or Chief Financial Officer of the Borrower obtains knowledge
thereof) telephonic and written notice of:
(a) the commencement of all proceedings and investigations by or
before any Governmental Authority and all actions and proceedings in any court
or before any arbitrator against or involving the Borrower or any Subsidiary
thereof or any of their respective properties, assets or businesses;
(b) any notice of any violation received by the Borrower or any
Subsidiary thereof from any Governmental Authority including, without
limitation, any notice of violation of Environmental Laws, which individually or
together with all such other notices of violation, could reasonably be expected
to have a Material Adverse Effect;
(c) any labor controversy that has resulted in, or threatens to result
in, a strike or other work action against the Borrower or any Subsidiary
thereof;
(d) any attachment, judgment, lien, levy or order exceeding $1,000,000
that may be assessed against or threatened against the Borrower or any
Subsidiary thereof;
(e) any Default or Event of Default;
(f) any event which constitutes or which with the passage of time or
giving of notice or both would constitute a default or event of default under
any Material Contract to which the Borrower or any of its Subsidiaries is a
party or by which the Borrower or any Subsidiary thereof or any of their
respective properties may be bound, the result of which could reasonably be
expected to have a Material Adverse Effect; and
(g) (i) any unfavorable determination letter from the Internal Revenue
Service regarding the qualification of an Employee Benefit Plan under Section
401(a) of the Code (along with a copy thereof), (ii) all notices received by the
Borrower or any ERISA Affiliate of the PBGC's intent to terminate any Pension
Plan or to have a trustee appointed to administer any Pension Plan, (iii) all
notices received by the Borrower or any ERISA Affiliate from a Multiemployer
Plan sponsor concerning the imposition or amount of withdrawal liability
pursuant to Section 4202 of ERISA and (iv) the Borrower obtaining knowledge or
reason to know that the Borrower or any ERISA Affiliate has filed or intends to
file a notice of intent to terminate any Pension Plan under a distress
termination within the meaning of Section 4041(c) of ERISA.
48
SECTION 7.6 Accuracy of Information. All written information, reports,
-----------------------
statements and other papers and data furnished by or on behalf of the Borrower
to the Agent or any Lender (other than financial forecasts) whether pursuant to
this Article VII or any other provision of this Agreement, or any other Loan
Document, shall be, at the time the same is so furnished, complete and correct
in all material respects to the extent necessary to give the Agent or any Lender
complete, true and accurate knowledge of the subject matter based on the
Borrower's knowledge thereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
---------------------
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner provided for in Section 13.11, the Borrower will, and
will cause each of its Subsidiaries to:
SECTION 8.1 Preservation of Corporate Existence and Related Matters.
-------------------------------------------------------
Except as permitted by Section 10.5, preserve and maintain its separate
corporate existence and all rights, franchises, licenses and privileges
necessary to the conduct of its business, and qualify and remain qualified as a
foreign corporation and authorized to do business in each jurisdiction in which
the failure to so qualify could reasonably be expected to have a Material
Adverse Effect.
SECTION 8.2 Maintenance of Property. Protect and preserve all properties
-----------------------
useful in and material to its business, including copyrights, patents, trade
names and trademarks; maintain in good working order and condition all
buildings, equipment and other tangible real and personal property; and from
time to time make or cause to be made all renewals, replacements and additions
to such property necessary for the conduct of its business, so that the business
carried on in connection therewith may be properly and advantageously conducted
at all times; except in each case where the failure to take such action could
not reasonably be expected to have a Material Adverse Effect.
SECTION 8.3 Insurance. Maintain insurance with financially sound and
---------
reputable insurance companies against such risks and in such amounts as are
customarily maintained by similar businesses and as may be required by
Applicable Law, and on the Closing Date and from time to time thereafter deliver
to the Agent upon its request a detailed list of the material policies of
insurance then in effect, stating the names of the insurance companies, the
amounts and rates of the insurance, the dates of the expiration thereof and the
properties and risks covered thereby.
49
SECTION 8.4 Accounting Methods and Financial Records. Maintain a system
----------------------------------------
of accounting, and keep such books, records and accounts (which shall be true
and complete in all material respects) as may be required or as may be necessary
to permit the preparation of financial statements in accordance with GAAP and in
compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.
SECTION 8.5 Payment and Performance of Obligations. (a) Pay and perform
--------------------------------------
all Obligations under this Agreement and the other Loan Documents and (b) pay or
perform all material taxes, assessments and other governmental charges that may
be levied or assessed upon it or any of its property; provided, that the
--------
Borrower or such Subsidiary may contest any item described in clause (b) of this
Section 8.5 in good faith so long as adequate reserves are maintained with
respect thereto in accordance with GAAP.
SECTION 8.6 Compliance With Laws and Approvals. Observe and remain in
----------------------------------
compliance in all material respects with all Applicable Laws and maintain in
full force and effect in all material respects all Governmental Approvals, in
each case applicable to the conduct of its business.
SECTION 8.7 Environmental Laws. In addition to and without limiting the
------------------
generality of Section 8.6, (a) comply with, and use its best efforts to ensure
such compliance by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and use its best
efforts to ensure that all tenants and subtenants obtain and comply with and
maintain, any and all licenses, approvals, notifications, registrations or
permits required by applicable Environmental Laws, except where the failure to
do so could not reasonably be expected to have a Material Adverse Effect, (b)
conduct and complete all investigations, studies, sampling and testing, and all
remedial, removal and other actions required under Environmental Laws, and
promptly comply with all lawful orders and directives of any Governmental
Authority regarding Environmental Laws, except where the failure to do so could
not reasonably be expected to have a Material Adverse Effect and (c) defend,
indemnify and hold harmless the Agent and the Lenders, and their respective
parents, Subsidiaries, Affiliates, employees, agents, officers and directors,
from and against any claims, demands, penalties, fines, liabilities,
settlements, damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way relating to the
violation of, noncompliance with or liability under any Environmental Laws
applicable to the operations of the Borrower or such Subsidiary, or any orders,
requirements or demands of Governmental Authorities related thereto, including,
without limitation, reasonable attorney's and consultant's fees, investigation
and laboratory fees, response costs, court costs and litigation expenses, except
to the extent that any of the foregoing
50
directly result from the gross negligence or willful misconduct of the party
seeking indemnification therefor.
SECTION 8.8 Compliance with ERISA. In addition to and without limiting
---------------------
the generality of Section 8.6, (a) comply with all applicable provisions of
ERISA and the regulations and published interpretations thereunder with respect
to all Employee Benefit Plans, (b) not take any action or fail to take action
the result of which could be a liability to the PBGC or to a Multiemployer Plan,
(c) not participate in any prohibited transaction that could result in any civil
penalty under ERISA or tax under the Code, (d) operate each Employee Benefit
Plan in such a manner that will not incur any tax liability under Section 4980B
of the Code or any liability to any qualified beneficiary as defined in Section
4980B of the Code and (e) furnish to the Agent upon the Agent's request such
additional information about any Employee Benefit Plan as may be reasonably
requested by the Agent, except, in each case, where the failure to do so could
not reasonably be expected to have a Material Adverse Effect.
SECTION 8.9 Compliance With Agreements. Comply in all respects with
--------------------------
each material term, condition and provision of all leases, agreements and other
instruments entered into in the conduct of its business including, without
limitation, any Material Contract, except where the failure to do so could not
reasonably be expected to have a Material Adverse Effect; provided, that the
--------
Borrower or such Subsidiary may contest any such lease, agreement or other
instrument in good faith through applicable proceedings so long as adequate
reserves are maintained in accordance with GAAP.
SECTION 8.10 Visits and Inspections. Permit representatives of the Agent
----------------------
or any Lender, from time to time, during normal business hours and upon
reasonable notice, to visit and inspect its properties; inspect, audit and make
extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business prospects.
SECTION 8.11 Additional Subsidiary Guarantors. Upon the creation of any
--------------------------------
Material Subsidiary permitted by this Agreement or upon any Subsidiary becoming
a Material Subsidiary, cause to be executed and delivered to the Agent within
ten (10) Business Days after the creation of such Subsidiary: (a) the Supplement
attached to the Subsidiary Guaranty, executed by such new Subsidiary, (b) the
closing documents and certificates required of each of the Subsidiary Guarantors
pursuant to Section 5.2(b) hereof with respect to such new Subsidiary and (c)
such other documents reasonably requested by the Agent in order that such new
Subsidiary shall become bound by all of the terms, covenants and agreements
contained in the Subsidiary Guaranty. Upon satisfaction of the
51
conditions set forth in this Section 8.11, such new Subsidiary shall become a
Subsidiary Guarantor as if an original signatory to the Subsidiary Guaranty.
SECTION 8.12 Further Assurances. Make, execute and deliver all such
------------------
additional and further acts, things, deeds and instruments as the Agent or any
Lender may reasonably require to document and consummate the transactions
contemplated hereby and to vest completely in and insure the Agent and the
Lenders their respective rights under this Agreement, the Notes, the Letters of
Credit and the other Loan Documents.
ARTICLE IX
FINANCIAL COVENANTS
-------------------
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower and its
Subsidiaries on a Consolidated basis will not:
SECTION 9.1 Leverage Ratio. As of the end of any fiscal quarter, permit
--------------
the ratio of (a) the Consolidated Debt of the Borrower and its Subsidiaries as
of such date to (b) EBITDA for the period of four (4) consecutive fiscal
quarters ending on such date, to exceed 2.50 to 1.00. For the purposes of this
Section 9.1, EBITDA for each of the fiscal quarters ending on or prior to March
31, 1997, shall be calculated on a pro forma basis to combine the EBITDA of the
--- -----
Borrower and its Subsidiaries with the EBITDA of DBA and its Subsidiaries.
SECTION 9.2 Interest Coverage Ratio. As of the end of any fiscal
-----------------------
quarter, permit the ratio of (a) EBITDA for the period of four (4) consecutive
fiscal quarters ending on such date to (b) Consolidated Interest Expense of the
Borrower and its Subsidiaries for such period of four (4) fiscal quarters, to be
less than 4.00 to 1.00; provided, that (a) for the fiscal quarter ending March
--------
31, 1997, such calculation shall be made only for such fiscal quarter, (b) for
the fiscal quarter ending June 30, 1997, such calculation shall be made for the
period of two (2) fiscal quarters ending on such date and (c) for the fiscal
quarter ending September 30, 1997, such calculation shall be made for the period
of three (3) fiscal quarters ending on such date. For the purposes of this
Section 9.2, EBITDA for the fiscal quarter ending on March 31, 1997, shall be
calculated on a pro forma basis to combine the EBITDA of the Borrower and its
--- -----
Subsidiaries with the EBITDA of DBA and its Subsidiaries
SECTION 9.3 Minimum Tangible Net Worth. Permit, at any time, Tangible
--------------------------
Net Worth to be less than (a) $17,300,000 plus (b)
----
52
50% of cumulative quarterly Consolidated Net Income (prior to the impact of non-
cash charges related to the write down of intangibles) of the Borrower and its
Subsidiaries commencing on January 1, 1997 (without deduction for any quarterly
losses) plus (c) 50% of the net proceeds received by the Borrower or any of its
Subsidiaries of any public equity issuance by the Borrower or any of its
Subsidiaries subsequent to the Closing Date.
ARTICLE X
NEGATIVE COVENANTS
------------------
Until all of the Obligations have been finally and indefeasibly paid and
satisfied in full and the Commitments terminated, unless consent has been
obtained in the manner set forth in Section 13.11 hereof, the Borrower has not
and will not permit any of its Subsidiaries to:
SECTION 10.1 Limitations on Debt. Create, incur, assume or suffer to
-------------------
exist any Debt except:
(a) the Obligations;
(b) Debt incurred in connection with a Hedging Agreement with a
counterparty and upon terms and conditions reasonably satisfactory to the Agent;
(c) Debt existing on the Closing Date, as set forth on Schedule
--------
6.1(t) of the Disclosure Letter and the renewal and refinancing (but not the
------
increase) thereof;
(d) Debt of the Borrower and its Subsidiaries incurred in connection
with Capitalized Leases in an aggregate amount not to exceed $1,000,000 on any
date of determination;
(e) purchase money Debt of the Borrower and its Subsidiaries in an
aggregate amount not to exceed $1,000,000 on any date of determination;
(f) Debt of the Borrower and its Subsidiaries owing to sellers in
connection with acquisitions permitted pursuant to Section 10.4(d) in an
aggregate amount not to exceed $10,000,000 on any date of determination;
provided, that such Debt shall be subordinated substantially in accordance with
--------
the terms and provisions set forth on Exhibit J attached hereto and incorporated
---------
herein by reference;
(g) intercompany Debt; provided, that the aggregate amount of Debt
--------
owing from any Subsidiary which is not a Subsidiary Guarantor to the Borrower or
any Subsidiary Guarantor shall not exceed $5,000,000 on any date of
determination;
53
(h) Debt of the Borrower and its Subsidiaries not otherwise permitted
hereby in an aggregate amount not to exceed $1,000,000 on any date of
determination; and
(i) Debt consisting of Contingent Obligations permitted by Section
10.2;
provided, that none of the Debt permitted to be incurred by this Section shall
--------
restrict, limit or otherwise encumber (by covenant or otherwise) the ability of
any Subsidiary of the Borrower to make any payment to the Borrower or any of its
Subsidiaries (in the form of dividends, intercompany advances or otherwise) for
the purpose of enabling the Borrower to pay the Obligations.
SECTION 10.2 Limitations on Contingent Obligations. Create, incur,
-------------------------------------
assume or suffer to exist any Contingent Obligations except:
(a) Contingent Obligations in favor of the Agent for the benefit of
the Agent and the Lenders;
(b) Contingent Obligations existing on the Closing Date and not
otherwise permitted under this Section 10.2, as set forth on Schedule 6.1(t) of
---------------
the Disclosure Letter and the renewal and refinancing (but not the increase)
thereof;
(c) Contingent Obligations with respect to Debt permitted pursuant to
Section 10.1; and
(d) Contingent Obligations in an amount not to exceed $1,000,000 on
any date of determination.
SECTION 10.3 Limitations on Liens. Create, incur, assume or suffer to
--------------------
exist, any Lien on or with respect to any of its assets or properties (including
without limitation shares of capital stock or other ownership interests), real
or personal, whether now owned or hereafter acquired, except:
(a) Liens of the Agent for the benefit of the Agent and the Lenders;
(b) Liens not otherwise permitted by this Section 10.3 and in
existence on the Closing Date and described on Schedule 10.3 of the Disclosure
-------------
Letter;
(c) Liens for taxes, assessments and other governmental charges or
levies (excluding any Lien imposed pursuant to any of the provisions of ERISA or
Environmental Laws) not yet due or as to which the period of grace (not to
exceed thirty (30) days), if any, related thereto has not expired or which are
being contested in good faith and by appropriate proceedings if adequate
reserves are maintained to the extent required by GAAP;
54
(d) the claims of materialmen, mechanics, carriers, warehousemen,
processors or landlords for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;
(e) Liens consisting of deposits or pledges made in the ordinary
course of business in connection with, or to secure payment of, obligations
under workers' compensation, unemployment insurance or similar legislation;
(f) Liens constituting encumbrances in the nature of zoning
restrictions, easements and rights or restrictions of record on the use of real
property, which in the aggregate are not substantial in amount and which do not,
in any case, detract from the value of such property or impair the use thereof
in the ordinary conduct of business;
(g) Liens securing Debt permitted under Sections 10.1(d) and (e);
provided, that (i) such Liens shall be created substantially simultaneously with
--------
the lease or acquisition of the related asset, (ii) such Liens do not at any
time encumber any property other than the property financed by such Debt, (iii)
the amount of Debt secured thereby is not increased and (iv) the principal
amount of Debt secured by any such Lien shall at no time exceed ninety percent
(90%) of the original lease payment amount or purchase price of such property at
the time it was leased or acquired;
(h) Liens on any "margin stock" (as defined in Regulations G and U of
the Board of Governors of the Federal Reserve System) owned by the Borrower or
any of its Subsidiaries, to the extent that the value of such margin stock is
equal to or greater than 25% of the value of the total assets of the Borrower
and its Subsidiaries;
(i) any Lien existing on property of a Person immediately prior to
its being consolidated with or merged into the Borrower or a Subsidiary or its
becoming a Subsidiary, or any Lien existing on any property acquired by the
Borrower or any Subsidiary at the time such property is so acquired (so long as
the Debt secured thereby shall have been assumed and is otherwise permitted
under Section 9.1 or 9.2); provided, that (i) no such Lien shall have been
--------
created or assumed in contemplation of such consolidation or merger or such
Person's becoming a Subsidiary or such acquisition of property, and (ii) each
such Lien shall extend solely to the item or items of property so acquired;
(j) leases or subleases and licenses or sublicenses granted to another
Person in the ordinary course of the Borrower's business and not interfering in
any material respect with the business of the Borrower and its Subsidiaries,
taken as a whole;
55
(k) Liens arising from judgments, decrees or attachments in
circumstances not constituting an Event of Default under Section 11.1(m);
(l) Liens which constitute rights of set-off of a customary nature or
banker's Liens with respect to amounts on deposit, whether arising by operation
of law or by contract in connection with arrangements entered into with banks in
the ordinary course of business; and
(m) Liens securing Debt permitted under Section 10.1(h).
SECTION 10.4 Limitations on Loans, Advances, Investments and Acquisitions.
------------------------------------------------------------
Purchase, own, invest in or otherwise acquire, directly or indirectly, any
capital stock, interests in any partnership or joint venture (including without
limitation the creation or capitalization of any Subsidiary), evidence of Debt
or other obligation or security, substantially all or a portion of the business
or assets of any other Person or any other investment or interest whatsoever in
any other Person, or make or permit to exist, directly or indirectly, any loans,
advances or extensions of credit to, or any investment in cash or by delivery of
property in, any Person, or enter into, directly or indirectly, any commitment
or option in respect of the foregoing except:
(a) investments in Subsidiaries existing on the Closing Date or formed
at any time thereafter, or acquired in compliance with clause (d) of this
Section 10.4; and the existing loans, advances and investments described on
Schedule 10.4 of the Disclosure Letter;
-------------
(b) investments in (i) marketable direct obligations issued or
unconditionally guaranteed by the United States of America or any agency thereof
maturing within 120 days from the date of acquisition thereof, (ii) commercial
paper maturing no more than 120 days from the date of creation thereof and
currently having the highest rating obtainable from either Standard & Poor's
Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or Xxxxx'x
Investors Service, Inc., (iii) certificates of deposit maturing no more than 120
days from the date of creation thereof issued by commercial banks incorporated
under the laws of the United States of America, each having combined capital,
surplus and undivided profits of not less than $500,000,000 and having a rating
of "A" or better by a nationally recognized rating agency; provided, that the
--------
aggregate amount invested in such certificates of deposit shall not at any time
exceed $5,000,000 for any one such certificate of deposit and $10,000,000 for
any one such bank, or (iv) time deposits maturing no more than 30 days from the
date of creation thereof with commercial banks or savings banks or savings and
loan associations each having membership either in the FDIC or the deposits of
which are insured by the FDIC and in amounts not exceeding the maximum amounts
of insurance thereunder;
56
(c) the Acquisition and Merger;
(d) investments by the Borrower or any of its Subsidiaries in the
form of acquisitions of all or substantially all of the business or a line of
business (whether by the acquisition of capital stock, assets or any combination
thereof) of any other Person if such acquisition meets all of the following
requirements: (i) the Person whose equity interest is to be acquired shall be
or, as a result of such acquisition shall become, a Wholly-Owned Subsidiary of
the Borrower and no Change in Control shall have been effected thereby, (ii) the
Person whose equity interest is to be acquired shall engage in a business or the
assets being acquired are to be used in a business described in Section 10.11,
(iii) evidence of approval of the acquisition by the board of directors or
equivalent governing body of the acquired Person, including, without limitation,
resolutions duly adopted by the board of directors or equivalent governing body
of the acquired Person authorizing the acquisition and the execution, delivery
and performance of any transactions contemplated thereby, shall have been
delivered to the Agent, (iv) the Borrower shall have demonstrated pro forma
--- -----
compliance with each covenant contained in Articles VIII, IX and X hereof prior
to consummating the acquisition and no Default or Event of Default shall have
occurred and be continuing both before and after giving effect to the
acquisition, (v) a description of the acquisition and the governing
documentation shall have been delivered to the Agent at least fifteen (15)
Business Days prior to the consummation of the acquisition and a copy of the
final governing documentation shall be delivered within a reasonable time after
the acquisition, (vi) the Borrower shall comply and cause of each of its
Subsidiaries to comply with Section 8.11 and (vii) the fair market value of all
consideration paid (including, without limitation, cash consideration paid, Debt
assumed and the value of any stock transferred in any "pooling of interests" or
otherwise) in connection with all such acquisitions in the aggregate shall not
exceed $50,000,000 in any Fiscal Year;
(g) loans and advances to employees in the ordinary course of business in
an aggregate amount not to exceed $250,000 at any time; and
(f) investments by the Borrower (i) pursuant to its investment policy in
effect on the Closing Date and attached hereto as Exhibit I, as amended from
---------
time to time with the consent of the Required Lenders, (ii) in publicly traded
common stock and (iii) in non-publicly traded common stock or investment funds;
provided, that (A) aggregate investments (calculated on a cost basis) pursuant
--------
to this clause (f) shall not exceed $20,000,000 on any date of determination,
(B) aggregate investments (calculated on a cost basis) pursuant to subclauses
(ii) and (iii) of this clause (f) shall not exceed $12,000,000 on any date of
determination, (C) investments (calculated on a cost basis) pursuant to
subclause (iii) of this clause (f) shall not exceed $4,000,000 on any date of
57
determination and (D) investments pursuant to subclauses (ii) and (iii) of this
clause (f) shall be in Persons engaged in a business described in Section 10.11.
SECTION 10.5 Limitations on Mergers and Liquidation. Merge, consolidate
--------------------------------------
or enter into any similar combination with any other Person or liquidate, wind-
up or dissolve itself (or suffer any liquidation or dissolution) except:
(a) the Acquisition and Merger;
(b) any Subsidiary of the Borrower may merge with or wind-up into the
Borrower or any Subsidiary Guarantor; and
(c) any Wholly-Owned Subsidiary may merge into the Person such Wholly-
Owned Subsidiary was formed to acquire in connection with an acquisition
permitted by Section 10.4(d); provided, that the surviving entity shall be or
--------
become a Subsidiary Guarantor.
SECTION 10.6 Limitations on Sale of Assets. Convey, sell, lease, assign,
-----------------------------
transfer or otherwise dispose of any of its property, business or assets
(including, without limitation, the sale of any receivables and leasehold
interests and any sale-leaseback or similar transaction), whether now owned or
hereafter acquired except:
(a) the sale of inventory in the ordinary course of business;
(b) the sale of obsolete assets or assets no longer used or usable in
the business of the Borrower or any of its Subsidiaries;
(c) the transfer of assets to the Borrower or any Subsidiary Guarantor
pursuant to Section 10.5;
(d) the sale or discount without recourse of accounts receivable
arising in the ordinary course of business in connection with the compromise or
collection thereof;
(e) transfers consisting of the granting of non-exclusive licenses and
similar arrangements for the use of the property of the Borrower and its
Subsidiaries in the ordinary course of business;
(f) transfers constituting investments permitted under Section 10.4 or
the liquidation of such investments (except to the extent that any such
liquidation is prohibited pursuant to Section 10.5);
58
(g) transfers from any Subsidiary to any other Subsidiary or the
Borrower; and
(h) other transfers not otherwise permitted by this Section 10.6 not
exceeding an amount equal to five percent (5%) of Consolidated Tangible Net
Worth (calculated as of the end of the Fiscal Year most recently ended) in any
Fiscal Year.
SECTION 10.7 Limitations on Dividends and Distributions. Declare or pay
------------------------------------------
any dividends upon any of its capital stock; purchase, redeem, retire or
otherwise acquire, directly or indirectly, any shares of its capital stock, or
make any distribution of cash, property or assets among the holders of shares
of its capital stock; provided, that:
--------
(a) the Borrower and its Subsidiaries may pay cash dividends or redeem
capital stock, in an aggregate amount during any period of four (4) fiscal
quarters not to exceed the lesser of: (i) $5,000,000 or (ii) 25% of the
Consolidated Net Income of the Borrower and its Subsidiaries for such period of
four (4) fiscal quarters;
(b) the Borrower or any Subsidiary may pay dividends in shares of its
own capital stock; and
(c) any Subsidiary may pay dividends to the Borrower or any
Subsidiary.
SECTION 10.8 Transactions with Affiliates. To the extent not otherwise
----------------------------
expressly permitted herein, directly or indirectly: (a) make any loan or advance
to, or purchase or assume any note or other obligation to or from, any of its
officers, directors, shareholders or other Affiliates, or to or from any member
of the immediate family of any of its officers, directors, shareholders or other
Affiliates, or subcontract any operations to any of its Affiliates, or (b) enter
into, or be a party to, any transaction with any of its Affiliates, except
pursuant to the reasonable requirements of its business and upon fair and
reasonable terms that are no less favorable to it than it would obtain in a
comparable arm's length transaction with a Person not its Affiliate.
SECTION 10.9 Certain Accounting Changes. Change its Fiscal Year end, or
--------------------------
make any change in its accounting treatment and reporting practices except as
required or permitted by GAAP.
SECTION 10.10 Restrictive Agreements. Enter into any Debt which contains
----------------------
any negative pledge on assets other than the assets or properties securing such
Debt or any covenants more restrictive than the provisions of Articles VIII, IX
and X hereof, or which restricts, limits or otherwise encumbers its ability to
incur Liens
59
on or with respect to any of its assets or properties other than the assets or
properties securing such Debt.
SECTION 10.10 Conduct of Business. Not engage in any material line of
-------------------
business substantially different from those businesses in which it engages as of
the Closing Date, or lines of business reasonably related or incidental thereto.
ARTICLE XI
DEFAULT AND REMEDIES
--------------------
SECTION 11.1 Events of Default. Each of the following shall constitute
-----------------
an Event of Default, whatever the reason for such event and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment or order of any court or any order, rule or regulation of any
Governmental Authority or otherwise:
(a) Default in Payment of Principal of Loans and Reimbursement
----------------------------------------------------------
Obligation. The Borrower shall default in any payment of principal of any Loan,
----------
Note or Reimbursement Obligation when and as due (whether at maturity, by reason
of acceleration or otherwise).
(b) Other Payment Default. The Borrower shall default in the payment
---------------------
when and as due (whether at maturity, by reason of acceleration or otherwise) of
interest on any Loan, Note or Reimbursement Obligation or the payment of any
other Obligation, and such default shall continue unremedied for five (5)
Business Days.
(c) Misrepresentation. Any representation or warranty made or deemed
-----------------
to be made by the Borrower or any of its Subsidiaries under this Agreement,
any Loan Document or any amendment hereto or thereto, shall at any time prove to
have been incorrect or misleading in any material respect when made or deemed
made.
(d) Default in Performance of Certain Covenants. The Borrower shall
-------------------------------------------
default in the performance or observance of any covenant or agreement contained
in Sections 7.2, 7.5(e) or Articles IX or X of this Agreement.
(e) Default in Performance of Other Covenants and Conditions. The
--------------------------------------------------------
Borrower or any Subsidiary thereof shall default in the performance or
observance of any term, covenant, condition or agreement contained in this
Agreement (other than as specifically provided for otherwise in this Section
11.1) or any other Loan Document and such default shall continue for a period of
thirty (30) days after written notice thereof has been given to the Borrower by
the Agent.
60
(f) Debt Cross-Default. The Borrower or any of its Subsidiaries shall
------------------
(i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $1,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $1,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).
(g) Other Cross-Defaults. The Borrower or any of its Subsidiaries
--------------------
shall default in the payment when due (the aggregate outstanding amount of which
is in excess of $2,000,000) under any Material Contract unless, but only as long
as, the existence of any such default is being contested by the Borrower or such
Subsidiary in good faith by appropriate proceedings and adequate reserves in
respect thereof have been established on the books of the Borrower or such
Subsidiary to the extent required by GAAP.
(h) Change in Control. Any person or group of persons (within the
-----------------
meaning of Section 13(d) of the Securities Exchange Act of 1934, as amended),
shall obtain ownership or control in one or more series of transactions of more
than thirty percent (30%) of the common stock or thirty percent (30%) of the
voting power of the Borrower entitled to vote in the election of members of the
board of directors of the Borrower (any such event, a "Change in Control").
(i) Voluntary Bankruptcy Proceeding. The Borrower or any Subsidiary
-------------------------------
thereof shall (i) commence a voluntary case under the federal bankruptcy laws
(as now or hereafter in effect), (ii) file a petition seeking to take advantage
of any other laws, domestic or foreign, relating to bankruptcy, insolvency,
reorganization, winding up or composition for adjustment of debts, (iii) consent
to or fail to contest in a timely and appropriate manner any petition filed
against it in an involuntary case under such bankruptcy laws or other laws, (iv)
apply for or consent to, or fail to contest in a timely and appropriate manner,
the appointment of, or the taking of possession by, a receiver, custodian,
trustee, or liquidator of itself or of a substantial part of its property,
domestic or foreign, (v) admit in writing its inability to pay its debts as they
become due, (vi) make a general assignment for the benefit of creditors, or
(vii) take any corporate action for the purpose of authorizing any of the
foregoing.
61
(j) Involuntary Bankruptcy Proceeding. A case or other proceeding
---------------------------------
shall be commenced against the Borrower or any Subsidiary thereof in any court
of competent jurisdiction seeking (i) relief under the federal bankruptcy laws
(as now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Subsidiary thereof or for all or any
substantial part of their respective assets, domestic or foreign, and such case
or proceeding shall continue without dismissal or stay for a period of sixty
(60) consecutive days, or an order granting the relief requested in such case or
proceeding (including, but not limited to, an order for relief under such
federal bankruptcy laws) shall be entered.
(k) Failure of Agreements. Any provision of the Subsidiary Guaranty
---------------------
shall for any reason cease to be valid and binding on the Subsidiary Guarantors
party thereto or any such Person shall so state in writing, other than in
accordance with the express terms thereof.
(l) Termination Event. The occurrence of any of the following events:
-----------------
(i) the Borrower or any ERISA Affiliate fails to make full payment when due of
all amounts which, under the provisions of any Pension Plan or Section 412 of
the Code, the Borrower or any ERISA Affiliate is required to pay as
contributions thereto, (ii) an accumulated funding deficiency in excess of
$1,000,000 occurs or exists, whether or not waived, with respect to any Pension
Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA Affiliate as
employers under one or more Multiemployer Plan makes a complete or partial
withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$1,000,000.
(m) Judgment. A judgment or order for the payment of money which
--------
causes the aggregate amount of all such judgments to exceed $1,000,000 in any
Fiscal Year shall be entered against the Borrower or any of its Subsidiaries by
any court and such judgment or order shall continue without discharge or stay
for a period of thirty (30) days.
SECTION 11.2 Remedies. Upon the occurrence of an Event of Default, with
--------
the consent of the Required Lenders, the Agent may, or upon the request of the
Required Lenders, the Agent shall, by notice to the Borrower:
(a) Acceleration; Termination of Facilities. Declare the principal of
---------------------------------------
and interest on the Loans, the Notes and the Reimbursement Obligations at the
time outstanding, and all other amounts owed to the Lenders and to the Agent
under this Agreement
62
or any of the other Loan Documents and all other Obligations (including, without
limitation, all L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder), to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Credit Facility and any right of the Borrower to request
borrowings or Letters of Credit thereunder; provided, that upon the occurrence
--------
of an Event of Default specified in Section 11.1(i) or (j), the Credit Facility
shall be automatically terminated and all Obligations shall automatically
become due and payable.
(b) Letters of Credit. With respect to all Letters of Credit with
-----------------
respect to which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to deposit in a cash collateral account opened by the Agent an amount equal
to the aggregate then undrawn and unexpired amount of such Letters of Credit.
Amounts held in such cash collateral account shall be applied by the Agent to
the payment of drafts drawn under such Letters of Credit, and the unused portion
thereof after all such Letters of Credit shall have expired or been fully drawn
upon, if any, shall be applied to repay the other Obligations. After all such
Letters of Credit shall have expired or been fully drawn upon, the Reimbursement
Obligation shall have been satisfied and all other Obligations shall have been
paid in full, the balance, if any, in such cash collateral account shall be
returned to the Borrower.
(c) Rights of Collection. Exercise on behalf of the Lenders all of
--------------------
its other rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower's Obligations.
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc. The
------------------------------------------------
enumeration of the rights and remedies of the Agent and the Lenders set forth in
this Agreement is not intended to be exhaustive and the exercise by the Agent
and the Lenders of any right or remedy shall not preclude the exercise of any
other rights or remedies, all of which shall be cumulative, and shall be in
addition to any other right or remedy given hereunder or under the Loan
Documents or that may now or hereafter exist in law or in equity or by suit or
otherwise. No delay or failure to take action on the part of the Agent or any
Lender in exercising any right, power or privilege shall operate as a waiver
thereof, nor shall any single or partial exercise of any such right, power or
privilege preclude other or further exercise thereof or the exercise of any
other right, power or privilege or shall be construed to be a waiver of any
Event of Default. No course of dealing between the
63
Borrower, the Agent and the Lenders or their respective agents or employees
shall be effective to change, modify or discharge any provision of this
Agreement or any of the other Loan Documents or to constitute a waiver of any
Event of Default.
ARTICLE XII
THE AGENT
---------
SECTION 12.1 Appointment. Each of the Lenders hereby irrevocably
-----------
designates and appoints First Union as Agent of such Lender under this Agreement
and the other Loan Documents and each such Lender irrevocably authorizes First
Union as Agent for such Lender, to take such action on its behalf under the
provisions of this Agreement and the other Loan Documents and to exercise such
powers and perform such duties as are expressly delegated to the Agent by the
terms of this Agreement and such other Loan Documents, together with such other
powers as are reasonably incidental thereto. Notwithstanding any provision to
the contrary elsewhere in this Agreement or such other Loan Documents, the Agent
shall not have any duties or responsibilities, except those expressly set forth
herein and therein, or any fiduciary relationship with any Lender, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or the other Loan Documents or
otherwise exist against the Agent.
SECTION 12.2 Delegation of Duties. The Agent may execute any of its
--------------------
respective duties under this Agreement and the other Loan Documents by or
through agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Agent shall not be
responsible for the negligence or misconduct of any agents or attorneys-in-fact
selected by the Agent with reasonable care.
SECTION 12.3 Exculpatory Provisions. Neither the Agent nor any of its
----------------------
officers, directors, employees, agents, attorneys-in-fact, Subsidiaries or
Affiliates shall be (a) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or the
other Loan Documents (except for actions occasioned solely by its or such
Person's own gross negligence or willful misconduct), or (b) responsible in any
manner to any of the Lenders for any recitals, statements, representations or
warranties made by the Borrower or any of its Subsidiaries or any officer
thereof contained in this Agreement or the other Loan Documents or in any
certificate, report, statement or other document referred to or provided for in,
or received by the Agent under or in connection with, this Agreement or the
other Loan Documents or for the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or the other Loan Documents or
for any failure of the Borrower or any of its
64
Subsidiaries to perform its obligations hereunder or thereunder. The Agent shall
not be under any obligation to any Lender to ascertain or to inquire as to the
observance or performance of any of the agreements contained in, or conditions
of, this Agreement, or to inspect the properties, books or records of the
Borrower or any of its Subsidiaries.
SECTION 12.4 Reliance by the Agent. The Agent shall be entitled to rely,
---------------------
and shall be fully protected in relying, upon any note, writing, resolution,
notice, consent, certificate, affidavit, letter, cablegram, telegram, telecopy,
telex or teletype message, statement, order or other document or conversation
believed by it to be genuine and correct and to have been signed, sent or made
by the proper Person or Persons and upon advice and statements of legal counsel
(including, without limitation, counsel to the Borrower), independent
accountants and other experts selected by the Agent. The Agent may deem and
treat the payee of any Note as the owner thereof for all purposes unless such
Note shall have been transferred in accordance with Section 13.10 hereof. The
Agent shall be fully justified in failing or refusing to take any action under
this Agreement and the other Loan Documents unless it shall first receive such
advice or concurrence of the Required Lenders (or, when expressly required
hereby or by the relevant other Loan Document, all the Lenders) as it deems
appropriate or it shall first be indemnified to its satisfaction by the Lenders
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action except for its own gross
negligence or willful misconduct. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement and the
Notes in accordance with a request of the Required Lenders (or, when expressly
required hereby, all the Lenders), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Notes.
SECTION 12.5 Notice of Default. The Agent shall not be deemed to have
-----------------
knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless it has received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a "notice of default". In the event that the Agent receives such
a notice, it shall promptly give notice thereof to the Lenders. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders; provided, that unless and until the
--------
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Default or Event of Default as it shall deem advisable in the best
interests of the Lenders.
SECTION 12.6 Non-Reliance on the Agent and Other Lenders. Each Lender
-------------------------------------------
expressly acknowledges that neither the Agent nor any
65
of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Agent hereinafter taken, including any review of the affairs
of the Borrower or any of its Subsidiaries, shall be deemed to constitute any
representation or warranty by the Agent to any Lender. Each Lender represents to
the Agent that it has, independently and without reliance upon the Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Loans and
issue or participate in Letters of Credit hereunder and enter into this
Agreement. Each Lender also represents that it will, independently and without
reliance upon the Agent or any other Lender, and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit analysis, appraisals and decisions in taking or not taking action under
this Agreement and the other Loan Documents, and to make such investigation as
it deems necessary to inform itself as to the business, operations, property,
financial and other condition and creditworthiness of the Borrower and its
Subsidiaries. Except for notices, reports and other documents expressly required
to be furnished to the Lenders by the Agent hereunder or by the other Loan
Documents, the Agent shall not have any duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Borrower or
any of its Subsidiaries which may come into the possession of the Agent or any
of its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates.
SECTION 12.7 Indemnification. The Lenders agree to indemnify the Agent
---------------
in its capacity as such and (to the extent not reimbursed by the Borrower and
without limiting the obligation of the Borrower to do so), ratably according to
the respective amounts of their Commitment Percentages, from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment of the
Notes or any Reimbursement Obligation) be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement or the
other Loan Documents, or any documents contemplated by or referred to herein or
therein or the transactions contemplated hereby or thereby or any action taken
or omitted by the Agent under or in connection with any of the foregoing;
provided, that no Lender shall be liable for the payment of any portion of such
--------
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting solely from the Agent's bad faith,
gross negligence or willful misconduct. The agreements in this Section 12.7
shall survive the payment of
66
the Notes, any Reimbursement Obligation and all other amounts payable hereunder
and the termination of this Agreement.
SECTION 12.8 The Agent in Its Individual Capacity. The Agent and its
------------------------------------
respective Subsidiaries and Affiliates may make loans to, accept deposits from
and generally engage in any kind of business with the Borrower as though the
Agent were not an Agent hereunder. With respect to any Loans made or renewed by
it and any Note issued to it and with respect to any Letter of Credit issued by
it or participated in by it, the Agent shall have the same rights and powers
under this Agreement and the other Loan Documents as any Lender and may exercise
the same as though it were not an Agent, and the terms "Lender" and "Lenders"
shall include the Agent in its individual capacity.
SECTION 12.9 Resignation of the Agent; Successor Agent. Subject to the
-----------------------------------------
appointment and acceptance of a successor as provided below, the Agent may
resign at any time by giving notice thereof to the Lenders and the Borrower.
Upon any such resignation, the Required Lenders shall have the right, with the
consent of the Borrower (which consent shall not unreasonably be withheld or
delayed), to appoint a successor Agent, which successor shall have minimum
capital and surplus of at least $500,000,000. If no successor Agent shall have
been so appointed by the Required Lenders and shall have accepted such
appointment within thirty (30) days after the Agent's giving of notice of
resignation, then the Agent may, on behalf of the Lenders, with the consent of
the Borrower (which consent shall not unreasonably be withheld or delayed),
appoint a successor Agent, which successor shall have minimum capital and
surplus of at least $500,000,000. Upon the acceptance of any appointment as
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all rights, powers, privileges and duties of
the retiring Agent, and the retiring Agent shall be discharged from its duties
and obligations hereunder. After any retiring Agent's resignation hereunder as
Agent, the provisions of this Section 12.9 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Agent.
ARTICLE XIII
MISCELLANEOUS
-------------
SECTION 13.1 Notices.
-------
(a) Method of Communication. Except as otherwise provided in this
Agreement, all notices and communications hereunder shall be in writing, or by
telephone subsequently confirmed in writing. Any notice shall be effective if
delivered by hand delivery or sent via telecopy, recognized overnight courier
service or certified mail, return receipt requested, and shall be
67
presumed to be received by a party hereto (i) on the date of delivery if
delivered by hand or sent by telecopy, (ii) on the next Business Day if sent by
recognized overnight courier service and (iii) on the third Business Day
following the date sent by certified mail, return receipt requested. A
telephonic notice to the Agent as understood by the Agent will be deemed to be
the controlling and proper notice in the event of a discrepancy with or failure
to receive a confirming written notice.
(b) Addresses for Notices. Notices to any party shall be sent to it
---------------------
at the following addresses, or any other address as to which all the other
parties are notified in writing.
If to the Borrower: American Business Information, Inc.
0000 Xx. 00xx Xxxxxx
X.X. Xxx 00000
Xxxxx, Xxxxxxxx 00000-0000
Attention: Xx. Xxx X. Xxxxxxx
Xx. Xxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
With copies to: Xxxxxx Xxxxxxx Xxxxxxxx & Xxxxxx
000 Xxxx Xxxx Xxxx
Xxxx Xxxx, XX 00000-0000
Attention: Xxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
If to First Union as
Agent: First Union National Bank of
North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000-0000
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
68
With copies to: First Union National Bank of
North Carolina
One First Xxxxx Xxxxxx, XX-0
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
If to any Lender: To the Address set forth on
Schedule 1 hereto
----------
(c) Agent's Office. The Agent hereby designates its office located at
--------------
the address set forth above, or any subsequent office which shall have been
specified for such purpose by written notice to the Borrower and Lenders, as the
Agent's Office referred to herein, to which payments due are to be made and at
which Loans will be disbursed and Letters of Credit issued.
SECTION 13.2 Expenses; Indemnity. The Borrower will, within thirty (30)
-------------------
days after demand, (a) pay all reasonable out-of-pocket expenses of the Agent in
connection with: (i) the preparation, execution and delivery of this Agreement
and each other Loan Document, whenever the same shall be executed and delivered,
including without limitation all reasonable out-of-pocket syndication and due
diligence expenses and reasonable fees and disbursements of counsel for the
Agent and (ii) the preparation, execution and delivery of any waiver, amendment
or consent by the Agent or the Lenders relating to this Agreement or any other
Loan Document, including without limitation reasonable fees and disbursements of
counsel for the Agent, (b) pay all out-of-pocket expenses of the Agent and each
Lender in connection with the administration and enforcement of any rights and
remedies of the Agent and Lenders under the Credit Facility, including
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the Agent or any
Lender hereunder or under any other Loan Document or any factual matters in
connection therewith, which expenses shall include without limitation the
reasonable fees and disbursements of such Persons, and (c) defend, indemnify and
hold harmless the Agent and the Lenders, and their respective parents,
Subsidiaries, Affiliates, employees, agents, officers and directors, from and
against any losses, penalties, fines, liabilities, settlements, damages, costs
and expenses, suffered by any such Person in connection with any claim,
investigation, litigation or other proceeding (whether or not the Agent or any
Lender is a party thereto) and the prosecution and defense thereof, arising out
of or in any way connected with the Agreement, any other Loan Document or the
Loans, including without limitation reasonable attorney's and
69
consultant's fees, except to the extent that any of the foregoing directly
result from the gross negligence or willful misconduct of the party seeking
indemnification therefor.
SECTION 13.3 Set-off. In addition to any rights now or hereafter granted
-------
under Applicable Law and not by way of limitation of any such rights, upon and
after the occurrence of any Event of Default and during the continuance thereof,
the Lenders and any assignee or participant of a Lender in accordance with
Section 13.10 are hereby authorized by the Borrower at any time or from time to
time, without notice to the Borrower or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and to apply any
and all deposits (general or special, time or demand, including, but not limited
to, indebtedness evidenced by certificates of deposit, whether matured or
unmatured) and any other indebtedness at any time held or owing by the Lenders,
or any such assignee or participant to or for the credit or the account of the
Borrower against and on account of the Obligations irrespective of whether or
not (a) the Lenders shall have made any demand under this Agreement or any of
the other Loan Documents or (b) the Agent shall have declared any or all of the
Obligations to be due and payable as permitted by Section 11.2 and although such
Obligations shall be contingent or unmatured.
SECTION 13.4 Governing Law. This Agreement, the Notes and the other Loan
-------------
Documents, unless otherwise expressly set forth therein, shall be governed by,
construed and enforced in accordance with the laws of the State of North
Carolina, without reference to the conflicts or choice of law principles
thereof.
SECTION 13.5 Consent to Jurisdiction. The Borrower hereby irrevocably
-----------------------
consents to the personal jurisdiction of the state and federal courts located in
Mecklenburg County, North Carolina, in any action, claim or other proceeding
arising out of any dispute in connection with this Agreement, the Notes and the
other Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations. The Borrower hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Agent or any Lender in connection
with this Agreement, the Notes or the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations, on behalf of itself or its property, in the manner specified in
Section 13.1. Nothing in this Section 13.5 shall affect the right of the Agent
or any Lender to serve legal process in any other manner permitted by Applicable
Law or affect the right of the Agent or any Lender to bring any action or
proceeding against the Borrower or its properties in the courts of any other
jurisdictions.
70
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.
-----------------------------------------
(a) Binding Arbitration. Upon demand of any party, whether made
-------------------
before or after institution of any judicial proceeding, any dispute, claim or
controversy arising out of, connected with or relating to the Notes or any other
Loan Documents ("Disputes"), between or among parties to the Notes or any other
Loan Document shall be resolved by binding arbitration as provided herein.
Institution of a judicial proceeding by a party does not waive the right of that
party to demand arbitration hereunder. Disputes may include, without limitation,
tort claims, counterclaims, claims brought as class actions, claims arising from
Loan Documents executed in the future, or claims concerning any aspect of the
past, present or future relationships arising out of or connected with the Loan
Documents. Arbitration shall be conducted under and governed by the Commercial
Financial Disputes Arbitration Rules (the "Arbitration Rules") of the American
Arbitration Association and Title 9 of the U.S. Code. All arbitration hearings
shall be conducted in Charlotte, North Carolina. The expedited procedures set
forth in Rule 51, et seq. of the Arbitration Rules shall be applicable to claims
-- ---
of less than $1,000,000. All applicable statutes of limitation shall apply to
any Dispute. A judgment upon the award may be entered in any court having
jurisdiction. The panel from which all arbitrators are selected shall be
comprised of licensed attorneys. The single arbitrator selected for expedited
procedure shall be a retired judge from the highest court of general
jurisdiction, state or federal, of the state where the hearing will be
conducted. Notwithstanding the foregoing, this paragraph shall not apply to any
Hedging Agreement that is a Loan Document.
(b) Jury Trial. TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE AGENT,
----------
EACH LENDER AND THE BORROWER HEREBY IRREVOCABLY WAIVE THEIR RESPECTIVE RIGHTS TO
A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE OTHER LOAN
DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE PERFORMANCE
OF SUCH RIGHTS AND OBLIGATIONS.
(c) Preservation of Certain Remedies. Notwithstanding the preceding
--------------------------------
binding arbitration provisions, the parties hereto and to the other Loan
Documents preserve, without diminution, certain remedies that such Persons may
employ or exercise freely, either alone, in conjunction with or during a
Dispute. Each such Person shall have and hereby reserves the right to proceed
in any court of proper jurisdiction or by self help to exercise or prosecute the
following remedies: (i) all rights to foreclose against any real or personal
property or other security by exercising a power of sale granted in the Loan
Documents or under applicable law or by judicial foreclosure and sale, (ii) all
rights
71
of self help including peaceful occupation of property and collection of rents,
set off, and peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a Dispute.
SECTION 13.7 Reversal of Payments. To the extent the Borrower makes a
--------------------
payment or payments to the Agent, for the benefit of itself or the Lenders, or
the Agent receives any payment or proceeds of the collateral which payments or
proceeds or any part thereof are subsequently invalidated, declared to be
fraudulent or preferential, set aside and/or required to be repaid to a trustee,
receiver or any other party under any bankruptcy law, state or federal law,
common law or equitable cause, then, to the extent of such payment or proceeds
repaid, the Obligations or part thereof intended to be satisfied shall be
revived and continued in full force and effect as if such payment or proceeds
had not been received by the Agent.
SECTION 13.8 Punitive Damages. The Agent, Lenders and Borrower (on
----------------
behalf of itself and its Subsidiaries) hereby agree that no such Person shall
have a remedy of punitive or exemplary damages against any other party to a Loan
Document and each such Person hereby waives any right or claim to punitive or
exemplary damages that they may now have or may arise in the future in
connection with any Dispute, whether such Dispute is resolved through
arbitration or judicially.
SECTION 13.9 Accounting Matters. All financial and accounting
------------------
calculations, measurements and computations made for any purpose relating to
this Agreement, including, without limitation, all computations utilized by the
Borrower or any Subsidiary thereof to determine compliance with any covenant
contained herein, shall, except as otherwise expressly contemplated hereby or
unless there is an express written direction by the Agent to the contrary agreed
to by the Borrower, be performed in accordance with GAAP as in effect on the
Closing Date. In the event that changes in GAAP shall be mandated by the
Financial Accounting Standards Board, or any similar accounting body of
comparable standing, or shall be recommended by the Borrower's certified public
accountants, to the extent that such changes would modify such accounting terms
or the interpretation or computation thereof, such changes shall be followed in
defining such accounting terms only from and after the date the Borrower and the
Lenders shall have amended this Agreement to the extent necessary to reflect any
such changes in the financial covenants and other terms and conditions of this
Agreement.
72
SECTION 13.10 Successors and Assigns; Participations.
--------------------------------------
(a) Benefit of Agreement. This Agreement shall be binding upon and
--------------------
inure to the benefit of the Borrower, the Agent and the Lenders, all future
holders of the Notes, and their respective successors and assigns, except that
the Borrower shall not assign or transfer any of its rights or obligations under
this Agreement without the prior written consent of each Lender.
(b) Assignment by Lenders. Each Lender may, with the consent of the
---------------------
Agent and the Borrower, which consents shall not be unreasonably withheld or
delayed, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including, without
limitation, all or a portion of the Extensions of Credit at the time owing to it
and the Notes held by it); provided, that:
--------
(i) each such assignment shall be of a constant, and not a varying,
percentage of all the assigning Lender's rights and obligations under this
Agreement;
(ii) if less than all of the assigning Lender's Commitment is to
be assigned, the Commitment so assigned shall not be less than $5,000,000 and
the Commitment so retained shall not be less than $5,000,000;
(iii) the parties to each such assignment shall execute and deliver
to the Agent, for its acceptance and recording in the Register, an Assignment
and Acceptance in the form of Exhibit G attached hereto (an "Assignment and
---------
Acceptance") , together with any Note or Notes subject to such assignment;
(iv) such assignment shall not, without the consent of the Borrower,
require the Borrower to file a registration statement with the Securities and
Exchange Commission or apply to or qualify the Loans or the Notes under the blue
sky laws of any state; and
(v) the assigning Lender shall pay to the Agent an assignment fee
of $3,000 upon the execution by such Lender of the Assignment and Acceptance;
provided, that no such fee shall be payable upon any assignment by a Lender to
--------
an Affiliate thereof.
Upon such execution, delivery, acceptance and recording, from and after the
effective date specified in each Assignment and Acceptance, which effective
date shall be at least five (5) Business Days after the execution thereof, (A)
the assignee thereunder shall be a party hereto and, to the extent provided in
such Assignment and Acceptance, have the rights and obligations of a Lender
hereby and (B) the Lender thereunder shall, to the extent provided in such
assignment, be released from its obligations under this Agreement.
73
(c) Rights and Duties Upon Assignment. By executing and delivering an
---------------------------------
Assignment and Acceptance, the assigning Lender thereunder and the assignee
thereunder confirm to and agree with each other and the other parties hereto as
set forth in such Assignment and Acceptance.
(d) Register. The Agent shall maintain a copy of each Assignment and
--------
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders and the amount of the Extensions of Credit with respect
to each Lender from time to time (the "Register"). The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Agent and the Lenders may treat each person whose name is recorded in the
Register as a Lender hereunder for all purposes of this Agreement. The Register
shall be available for inspection by the Borrower or Lender at any reasonable
time and from time to time upon reasonable prior notice.
(e) Issuance of New Notes. Upon its receipt of an Assignment and
---------------------
Acceptance executed by an assigning Lender and an Eligible Assignee together
with any Note or Notes subject to such assignment and the written consent to
such assignment, the Agent shall, if such Assignment and Acceptance has been
completed and is substantially in the form of Exhibit G:
---------
(i) accept such Assignment and Acceptance;
(ii) record the information contained therein in the Register;
(iii) give prompt notice thereof to the Lenders and the Borrower; and
(iv) promptly deliver a copy of such Assignment and Acceptance to
the Borrower.
Within five (5) Business Days after receipt of notice, the Borrower shall
execute and deliver to the Agent, in exchange for the surrendered Note or Notes,
a new Note or Notes to the order of such Eligible Assignee in amounts equal to
the Commitment assumed by it pursuant to such Assignment and Acceptance and a
new Note or Notes to the order of the assigning Lender in an amount equal to the
Commitment retained by it hereunder. Such new Note or Notes shall be in an
aggregate principal amount equal to the aggregate principal amount of such
surrendered Note or Notes, shall be dated the effective date of such Assignment
and Acceptance and shall otherwise be in substantially the form of the assigned
Notes delivered to the assigning Lender. Each surrendered Note or Notes shall
be canceled and returned to the Borrower.
(f) Participations. Each Lender may sell participations to one or
--------------
more banks or other entities in all or a portion of its
74
rights and obligations under this Agreement (including, without limitation, all
or a portion of its Extensions of Credit and the Notes held by it); provided,
--------
that:
(i) each such participation shall be in an amount not less than
$3,000,000;
(ii) such Lender's obligations under this Agreement (including,
without limitation, its Commitment) shall remain unchanged;
(iii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(iv) such Lender shall remain the holder of the Notes held by it for
all purposes of this Agreement;
(v) the Borrower, the Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement;
(vi) such Lender shall not permit such participant the right to
approve any waivers, amendments or other modifications to this Agreement or any
other Loan Document other than waivers, amendments or modifications which would
reduce the principal of or the interest rate on any Loan or Reimbursement
Obligation, extend the term or increase the amount of the Commitment, reduce the
amount of any fees to which such participant is entitled, extend any scheduled
payment date for principal of any Loan or release any Subsidiary Guarantor; and
(vii) any such disposition shall not, without the consent of the
Borrower, require the Borrower to file a registration statement with the
Securities and Exchange Commission to apply to qualify the Loans or the Notes
under the blue sky law of any state.
(g) Disclosure of Information; Confidentiality. The Agent and the
------------------------------------------
Lenders shall hold all non-public information with respect to the Borrower
obtained pursuant to the Loan Documents in accordance with their customary
procedures for handling confidential information. Any Lender may, in connection
with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 13.10, disclose to the assignee,
participant, proposed assignee or proposed participant, any information relating
to the Borrower furnished to such Lender by or on behalf of the Borrower;
provided, that prior to any such disclosure, each such assignee, proposed
--------
assignee, participant or proposed participant shall agree with the Borrower or
such Lender to preserve the confidentiality of any confidential information
relating to the Borrower received from such Lender.
75
(h) Certain Pledges or Assignments. Nothing herein shall prohibit any
------------------------------
Lender from pledging or assigning any Note to any Federal Reserve Bank in
accordance with Applicable Law.
SECTION 13.11 Amendments, Waivers and Consents. Except as set forth
--------------------------------
below, any term, covenant, agreement or condition of this Agreement or any of
the other Loan Documents may be amended or waived by the Lenders, and any
consent given by the Lenders, if, but only if, such amendment, waiver or consent
is in writing signed by the Required Lenders (or by the Agent with the consent
of the Required Lenders) and delivered to the Agent and, in the case of an
amendment, signed by the Borrower; provided, that no amendment, waiver or
--------
consent shall (a) increase the amount or extend the time of the obligation of
the Lenders to make Loans or issue or participate in Letters of Credit
(including without limitation pursuant to Section 2.6), (b) extend the
originally scheduled time or times of payment of the principal of any Loan or
Reimbursement Obligation or the time or times of payment of interest on any Loan
or Reimbursement Obligation, (c) reduce the rate of interest or fees payable on
any Loan or Reimbursement Obligation, (d) permit any subordination of the
principal or interest on any Loan or Reimbursement Obligation, (e) release any
Subsidiary Guarantor or (f) amend the provisions of this Section 13.11 or the
definition of Required Lenders, without the prior written consent of each
Lender. In addition, no amendment, waiver or consent to the provisions of
Article XII shall be made without the written consent of the Agent.
SECTION 13.12 Performance of Duties. The Borrower's obligations under
---------------------
this Agreement and each of the Loan Documents shall be performed by the Borrower
at its sole cost and expense.
SECTION 13.13 All Powers Coupled with Interest. All powers of attorney
--------------------------------
and other authorizations granted to the Lenders, the Agent and any Persons
designated by the Agent or any Lender pursuant to any provisions of this
Agreement or any of the other Loan Documents shall be deemed coupled with an
interest and shall be irrevocable so long as any of the Obligations remain
unpaid or unsatisfied or the Credit Facility has not been terminated.
SECTION 13.14 Survival of Indemnities. Notwithstanding any termination of
-----------------------
this Agreement, the indemnities to which the Agent and the Lenders are entitled
under the provisions of this Article XIII and any other provision of this
Agreement and the Loan Documents shall continue in full force and effect and
shall protect the Agent and the Lenders against events arising after such
termination as well as before; provided, that those indemnities set forth in
--------
Sections 4.8 through 4.11 shall terminate ninety (90) days following the
termination of this Agreement.
SECTION 13.15 Titles and Captions. Titles and captions of Articles,
-------------------
Sections and subsections in this Agreement are for conve-
76
nience only, and neither limit nor amplify the provisions of this Agreement.
SECTION 13.16 Severability of Provisions. Any provision of this Agreement
--------------------------
or any other Loan Document which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
of such prohibition or unenforceability without invalidating the remainder of
such provision or the remaining provisions hereof or thereof or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 13.17 Counterparts. This Agreement may be executed in any number
------------
of counterparts and by different parties hereto in separate counterparts, each
of which when so executed shall be deemed to be an original and shall be binding
upon all parties, their successors and assigns, and all of which taken together
shall constitute one and the same agreement.
SECTION 13.18 Term of Agreement. This Agreement shall remain in effect
-----------------
from the Closing Date through and including the date upon which all Obligations
shall have been indefeasibly and irrevocably paid and satisfied in full. No
termination of this Agreement shall affect the rights and obligations of the
parties hereto arising prior to such termination.
77
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their duly authorized officers, all as of the day and year first
written above.
[CORPORATE SEAL] AMERICAN BUSINESS INFORMATION, INC.
By:________________________________
Name:______________________________
Title:_____________________________
FIRST UNION NATIONAL BANK OF NORTH
CAROLINA, as Agent and Lender
By:________________________________
Name:______________________________
Title:_____________________________
SCHEDULE 1: LENDERS AND COMMITMENTS
COMMITMENT
AND COMMITMENT
LENDER PERCENTAGE
------ ----------
First Union National Bank $65,000,000
of North Carolina 100%
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
First Union National Bank of
North Carolina
One First Xxxxx Xxxxxx, XX-0
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx
00000
Attention: Xxxx Xxxxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
================================================================================
CREDIT AGREEMENT
dated as of February 14, 1997,
by and among
AMERICAN BUSINESS INFORMATION, INC.,
as Borrower,
the Lenders referred to herein,
and
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Agent
================================================================================
TABLE OF CONTENTS PAGE
ARTICLE I.................................................................. 1
DEFINITIONS............................................ 1
-----------
SECTION 1.1 Definitions............................................ 1
-----------
SECTION 1.2 General................................................ 13
-------
SECTION 1.3 Other Definitions and Provisions....................... 13
--------------------------------
ARTICLE II................................................................. 14
REVOLVING CREDIT FACILITY.............................. 14
-------------------------
SECTION 2.1 Revolving Credit Loans................................. 14
----------------------
SECTION 2.2 Procedure for Advances of Loans........................ 14
-------------------------------
SECTION 2.3 Repayment of Loans..................................... 15
------------------
SECTION 2.4 Revolving Credit Notes................................. 15
----------------------
SECTION 2.5 Permanent Reduction of the Aggregate Commitment........ 16
-----------------------------------------------
SECTION 2.6 Termination of Credit Facility......................... 16
------------------------------
SECTION 2.7 Use of Proceeds........................................ 17
---------------
ARTICLE III................................................................ 17
LETTER OF CREDIT FACILITY.............................. 17
-------------------------
SECTION 3.1 L/C Commitment......................................... 17
--------------
SECTION 3.2 Procedure for Issuance of Letter of Credit............. 17
------------------------------------------
SECTION 3.3 Commissions and Other Charges.......................... 18
-----------------------------
SECTION 3.4 L/C Participations..................................... 18
------------------
SECTION 3.5 Reimbursement Obligation of the Borrower............... 20
----------------------------------------
SECTION 3.6 Obligations Absolute................................... 20
--------------------
SECTION 3.7 Effect of Application.................................. 21
---------------------
ARTICLE IV................................................................. 21
GENERAL LOAN PROVISIONS................................ 21
-----------------------
SECTION 4.1 Interest............................................... 21
--------
SECTION 4.2 Notice and Manner of Conversion or Continuation
-----------------------------------------------
of Loans............................................... 24
--------
SECTION 4.3 Fees................................................... 24
----
SECTION 4.4 Manner of Payment...................................... 25
-----------------
SECTION 4.5 Crediting of Payments and Proceeds..................... 26
----------------------------------
SECTION 4.6 Adjustments............................................ 26
-----------
SECTION 4.7 Nature of Obligations of Lenders Regarding
------------------------------------------
Extensions of Credit; Assumption by the Agent........ 27
-----------------------------------------------
SECTION 4.8 Changed Circumstances.................................. 27
---------------------
SECTION 4.9 Indemnity.............................................. 30
---------
SECTION 4.10 Capital Requirements................................... 30
--------------------
SECTION 4.11 Taxes.................................................. 31
-----
SECTION 4.12 Affected Lenders....................................... 33
----------------
SECTION 4.13 Similarly Situated Loans............................... 33
------------------------
ARTICLE V.................................................................. 33
CLOSING; CONDITIONS OF CLOSING AND BORROWING........... 33
--------------------------------------------
SECTION 5.1 Closing................................................ 33
-------
SECTION 5.2 Conditions to Closing and Initial
---------------------------------
Extensions of Credit................................... 33
--------------------
SECTION 5.3 Conditions to All Loans and Letters of Credit.......... 37
---------------------------------------------
ARTICLE VI................................................................. 37
REPRESENTATIONS AND WARRANTIES OF THE BORROWER......... 37
----------------------------------------------
SECTION 6.1 Representations and Warranties......................... 37
------------------------------
SECTION 6.2 Survival of Representations and Warranties, Etc........ 45
-----------------------------------------------
ARTICLE VII................................................................ 45
FINANCIAL INFORMATION AND NOTICES...................... 45
---------------------------------
SECTION 7.1 Financial Statements and Projections................... 45
------------------------------------
SECTION 7.2 Officer's Compliance Certificate....................... 47
--------------------------------
SECTION 7.3 Accountants' Certificate............................... 47
------------------------
SECTION 7.4 Other Reports.......................................... 47
-------------
SECTION 7.5 Notice of Litigation and Other Matters................. 48
--------------------------------------
SECTION 7.6 Accuracy of Information................................ 49
-----------------------
ARTICLE VIII............................................................... 49
AFFIRMATIVE COVENANTS.................................. 49
---------------------
SECTION 8.1 Preservation of Corporate Existence and Related Matters 49
-------------------------------------------------------
SECTION 8.2 Maintenance of Property................................ 49
-----------------------
SECTION 8.3 Insurance.............................................. 49
---------
SECTION 8.4 Accounting Methods and Financial Records............... 50
----------------------------------------
SECTION 8.5 Payment and Performance of Obligations................. 50
--------------------------------------
SECTION 8.6 Compliance With Laws and Approvals..................... 50
----------------------------------
SECTION 8.7 Environmental Laws..................................... 50
------------------
SECTION 8.8 Compliance with ERISA.................................. 51
---------------------
SECTION 8.9 Compliance With Agreements............................. 51
--------------------------
SECTION 8.10 Visits and Inspections................................. 51
----------------------
SECTION 8.11 Additional Subsidiary Guarantors....................... 51
--------------------------------
SECTION 8.12 Further Assurances..................................... 52
------------------
ARTICLE IX................................................................. 52
FINANCIAL COVENANTS.................................... 52
-------------------
SECTION 9.1 Leverage Ratio......................................... 52
--------------
SECTION 9.2 Interest Coverage Ratio................................ 52
-----------------------
SECTION 9.3 Minimum Tangible Net Worth............................. 52
--------------------------
ARTICLE X.................................................................. 53
NEGATIVE COVENANTS..................................... 53
------------------
SECTION 10.1 Limitations on Debt.................................... 53
-------------------
SECTION 10.2 Limitations on Contingent Obligations.................. 54
------------------------------------
SECTION 10.3 Limitations on Liens................................... 54
--------------------
SECTION 10.4 Limitations on Loans, Advances, Investments
-------------------------------------------
and Acquisitions....................................... 56
----------------
SECTION 10.5 Limitations on Mergers and Liquidation................... 58
--------------------------------------
SECTION 10.6 Limitations on Sale of Assets.......................... 58
-----------------------------
SECTION 10.7 Limitations on Dividends and Distributions............. 59
------------------------------------------
SECTION 10.8 Transactions with Affiliates........................... 59
----------------------------
SECTION 10.9 Certain Accounting Changes............................. 59
--------------------------
SECTION 10.10 Restrictive Agreements................................. 59
----------------------
SECTION 10.11 Conduct of Business.................................... 60
-------------------
ARTICLE XI................................................................. 60
DEFAULT AND REMEDIES................................... 60
--------------------
SECTION 11.1 Events of Default...................................... 60
-----------------
SECTION 11.2 Remedies............................................... 62
--------
SECTION 11.3 Rights and Remedies Cumulative; Non-Waiver; etc........ 63
------------------------------------------------
ARTICLE XII................................................................ 64
THE AGENT.............................................. 64
---------
SECTION 12.1 Appointment............................................ 64
-----------
SECTION 12.2 Delegation of Duties................................... 64
--------------------
SECTION 12.3 Exculpatory Provisions................................. 64
----------------------
SECTION 12.4 Reliance by the Agent.................................. 65
---------------------
SECTION 12.5 Notice of Default...................................... 65
-----------------
SECTION 12.6 Non-Reliance on the Agent and Other Lenders............ 65
-------------------------------------------
SECTION 12.7 Indemnification........................................ 66
---------------
SECTION 12.8 The Agent in Its Individual Capacity................... 67
------------------------------------
SECTION 12.9 Resignation of the Agent; Successor Agent.............. 67
-----------------------------------------
ARTICLE XIII............................................................... 67
MISCELLANEOUS.......................................... 67
-------------
SECTION 13.1 Notices................................................ 67
-------
SECTION 13.2 Expenses; Indemnity.................................... 69
-------------------
SECTION 13.3 Set-off................................................ 70
-------
SECTION 13.4 Governing Law.......................................... 70
-------------
SECTION 13.5 Consent to Jurisdiction................................ 70
-----------------------
SECTION 13.6 Binding Arbitration; Waiver of Jury Trial.............. 71
-----------------------------------------
SECTION 13.7 Reversal of Payments................................... 72
--------------------
SECTION 13.8 Punitive Damages....................................... 72
----------------
SECTION 13.9 Accounting Matters..................................... 72
------------------
SECTION 13.10 Successors and Assigns; Participations................. 73
------------------------------------
SECTION 13.11 Amendments, Waivers and Consents....................... 76
--------------------------------
SECTION 13.12 Performance of Duties.................................. 76
---------------------
SECTION 13.13 All Powers Coupled with Interest....................... 76
--------------------------------
SECTION 13.14 Survival of Indemnities................................ 76
-----------------------
SECTION 13.15 Titles and Captions.................................... 76
-------------------
SECTION 13.16 Severability of Provisions............................. 77
--------------------------
SECTION 13.17 Counterparts........................................... 77
------------
SECTION 13.18 Term of Agreement...................................... 77
-----------------
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Notice of Borrowing
Exhibit C - Form of Notice of Prepayment
Exhibit D - Form of Notice of Conversion/Continuation
Exhibit E - Form of Notice of Account Designation
Exhibit F - Form of Officer's Certificate
Exhibit G - Form of Assignment and Acceptance
Exhibit H - Form of Subsidiary Guaranty
Exhibit I - Investment Policy
Exhibit J - Subordination Terms
SCHEDULES TO THIS AGREEMENT
Schedule 1 - Lenders and Commitments
DISCLOSURE LETTER SCHEDULES
Schedule 6.1(a) - Jurisdictions of Organization and
- Qualification
Schedule 6.1(b) - Subsidiaries and Capitalization
Schedule 6.1(h) - Environmental Matters
Schedule 6.1(i) - ERISA Plans
Schedule 6.1(l) - Material Contracts
Schedule 6.1(m) - Labor and Collective Bargaining
Agreements
Schedule 6.1(t) - Debt and Contingent Obligations
Schedule 6.1(u) - Litigation
Schedule 10.3 - Existing Liens
Schedule 10.4 - Existing Loans, Advances and
Investments
EXHIBIT A
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
REVOLVING CREDIT NOTE
---------------------
$___________ __________, ____
FOR VALUE RECEIVED, the undersigned, AMERICAN BUSINESS INFORMATION, INC., a
corporation organized under the laws of Delaware (the "Borrower"), hereby
promises to pay to the order of _______________________________ (the "Bank"), at
the times, at the place and in the manner provided in the Credit Agreement
hereinafter referred to, the principal sum of up to ______________________
Dollars ($___________), or, if less, the aggregate unpaid principal amount of
all Loans disbursed by the Bank under the Credit Agreement referred to below,
together with interest at the rates as in effect from time to time with respect
to each portion of the principal amount hereof, determined and payable as
provided in Article IV of the Credit Agreement.
This Note is one of the Notes referred to in, and is entitled to the
benefits of, the Credit Agreement dated as of February 14, 1997 (as amended,
restated or otherwise modified, the "Credit Agreement") by and among the
Borrower, the lenders (including the Bank) party thereto (the "Lenders") and
First Union National Bank of North Carolina, as Agent. The Credit Agreement
contains, among other things, provisions for the time, place and manner of
payment of this Note, the determination of the interest rate borne by and fees
payable in respect of this Note, acceleration of the payment of this Note upon
the happening of certain stated events and the mandatory repayment of this Note
under certain circumstances.
The Borrower agrees to pay on demand all costs of collection, including
reasonable attorneys' fees, if any part of this Note, principal or interest, is
collected after maturity with the aid of an attorney.
Presentment for payment, notice of dishonor, protest and notice of protest
are hereby waived.
THIS NOTE IS MADE AND DELIVERED IN THE STATE OF NORTH CAROLINA AND SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NORTH
CAROLINA.
IN WITNESS WHEREOF, the Borrower has caused this Note to be executed under
seal by a duly authorized officer as of the day and year first above written.
AMERICAN BUSINESS INFORMATION, INC.
[CORPORATE SEAL]
By:_____________________________________
Name: _______________________________
Title: ______________________________
2
EXHIBIT B
---------
to
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
NOTICE OF BORROWING
-------------------
First Union National Bank
of North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Borrowing is delivered to you under Section 2.2
(a) of the Credit Agreement dated as of February 14, 1997 (as amended, restated
or otherwise modified, the "Credit Agreement"), by and among American Business
Information, Inc. ("the Borrower"), the lenders party thereto (the "Lenders"),
and First Union National Bank of North Carolina, as Agent.
1. The Borrower hereby requests that the Lenders make a Loan in the
aggregate principal amount of $___________ (the "Loan)./1/
2. The Borrower hereby requests that the Loan be made on the following
Business Day: _____________________./2/
3. The Borrower hereby requests that the Loan bear interest at the
following interest rate, plus the Applicable Margin, as set forth below:
----
_____________________
/1/ Complete with an amount in accordance with Section 2.2 of the Credit
Agreement.
/2/ Complete with a Business Day in accordance with Section 2.2 of the Credit
Agreement.
Termination
Date for
Interest
Principal Period
Component of Interest Interest Period (if
Loan Rate (if applicable) applicable)
------------ ------ --------------- -----------
4. The principal amount of all Loans outstanding as of the date hereof
(including the requested Loan) does not exceed the maximum amount permitted to
be outstanding pursuant to the terms of the Credit Agreement.
5. All of the conditions applicable to the Loan requested herein as set
forth in the Credit Agreement have been satisfied as of the date hereof and will
remain satisfied to the date of such Loan.
6. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of Borrowing
this ____ day of _______, ____.
AMERICAN BUSINESS INFORMATION, INC.
By:_____________________________________
Name: _______________________________
Title: ______________________________
2
EXHIBIT C
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
NOTICE OF PREPAYMENT
--------------------
First Union National Bank
of North Carolina, as Agent
One First Union Center
000 Xxxxx Xxxxxxx Xxxxxx, XX-00
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000-0000
Attention: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Prepayment is delivered to you by American
Business Information, Inc., a corporation organized under the laws of Delaware
(the "Borrower"), under Section 2.3(c) of the Credit Agreement dated as of
February 14, 1997, as amended, restated or otherwise modified (the "Credit
Agreement"), by and among the Borrower, the Lenders party thereto, and First
Union National Bank of North Carolina, as Agent.
1. The Borrower hereby provides notice to the Agent that the Borrower
shall repay the following [Base Rate Loans] and/or [LIBOR Rate Loans]:
____________________./1/
2. The Borrower shall repay the above referenced Loans on the following
Business Day: _______________./2/
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
____________________
/1/ Complete with an amount in accordance with Section 2.3 of the Credit
Agreement.
/2/ Complete with a Business Day in accordance with Section 2.3 of the Credit
Agreement.
IN WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment
this ____ day of _______, 19__.
AMERICAN BUSINESS INFORMATION, INC.
[CORPORATE SEAL]
By:______________________________
Name:_________________________
Title:________________________
2
EXHIBIT D
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
NOTICE OF CONVERSION/CONTINUATION
---------------------------------
First Union National Bank
of North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Ladies and Gentlemen:
This irrevocable Notice of Conversion/Continuation (the "Notice") is
delivered to you under Section 4.2 of the Credit Agreement dated as of February
14, 1997 (as amended, restated or otherwise modified, the "Credit Agreement"),
by and among American Business Information, Inc. ("the Borrower"), the lenders
party thereto (the "Lenders"), and First Union National Bank of North Carolina,
as Agent.
1. This Notice of Conversion/Continuation is submitted for the purpose
of: (Complete applicable information.)
(a) [Converting] [continuing] a _____________ Loan [into] [as] a
_____________ Loan./1/
(b) The aggregate outstanding principal balance of such Loan is
$_______________.
(c) The last day of the current Interest Period for such Loan is
______________./2/
(d) The principal amount of such Loan to be [converted] [continued] is
$_______________./3/
(e) The requested effective date of the [conversion] [continuation] of
such Loan is _______________./4/
(f) The requested Interest Period applicable to the [converted]
[continued] Loan is _______________./5/
2. No Default or Event of Default exists, and none will exist upon the
conversion or continuation of the Loan requested herein.
3. All capitalized undefined terms used herein have the meanings assigned
thereto in the Credit Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Notice of
Conversion/Continuation this ____ day of __________, 19__.
AMERICAN BUSINESS INFORMATION, INC.
By:_____________________________________
Name: _______________________________
Title: ______________________________
1. Delete the bracketed language and insert "Base Rate" or "LIBOR Rate", as
applicable, in each blank.
2. Insert applicable date for any LIBOR Rate Loan being converted or
continued.
3. Complete with an amount in compliance with Section 3.2 of the Credit
Agreement.
4. Complete with a Business Day at least three (3) Business Days after the
date of this Notice.
5. Complete for any LIBOR Rate Loan with an Interest Period in compliance with
Section 3.1(b) of the Credit Agreement.
2
EXHIBIT E
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
NOTICE OF ACCOUNT DESIGNATION
-----------------------------
Dated: ____________
First Union National Bank
of North Carolina
Xxx Xxxxx Xxxxx Xxxxxx, XX-00
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxx xxxxxxxx 00000-0000
Attn: Syndication Agency Services
Ladies and Gentlemen:
This Notice of Account Designation is delivered to you by American Business
Information, Inc. (the "Borrower"), a corporation organized under the laws of
Delaware, under Section 5.2(e)(ii) of the Credit Agreement dated as of February
14, 1997 (as amended, restated or otherwise modified, the "Credit Agreement") by
and among the Borrower, the Lenders party thereto, and First Union National Bank
of North Carolina, as Agent.
The Agent is hereby authorized to disburse all Loan proceeds into the
following account(s):
[Insert name of bank/
ABA Routing Number/
and Account Number]
IN WITNESS WHEREOF, the undersigned has executed this Notice of Account
Designation this ____ day of _______, 19__.
[CORPORATE SEAL] AMERICAN BUSINESS INFORMATION, INC.
By: ______________________________
Name: _______________________
Title: _______________________
2
EXHIBIT F
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
OFFICER'S COMPLIANCE CERTIFICATE
--------------------------------
The undersigned, on behalf of American Business Information, Inc., a
corporation organized under the laws of Delaware (the "Borrower"), hereby
certifies to First Union National Bank of North Carolina, as Agent ("First
Union"), as follows:
1. This Certificate is delivered to you pursuant to Section 7.2 of the
Credit Agreement dated as of February 14, 1997 (as amended, restated or
otherwise modified, the "Credit Agreement"), by and among the Borrower, the
lenders party thereto (the "Lenders"), and First Union. Capitalized terms used
herein and not defined herein shall have the meanings assigned thereto in the
Credit Agreement.
2. I have reviewed the financial statements of the Borrower and its
Subsidiaries dated as of _______________ and for the _______________ period[s]
then ended and such statements fairly present the financial condition of the
Borrower and its Subsidiaries as of the dates indicated and the results of its
operations and cash flows for the period[s] indicated.
3. I have reviewed the terms of the Credit Agreement, the Note and the
related Loan Documents and have made, or caused to be made under my supervision,
a review in reasonable detail of the transactions and the condition of the
Borrower and its Subsidiaries during the accounting period covered by the
financial statements referred to in Paragraph 2 above. Such review has not
disclosed the existence during or at the end of such accounting period of any
condition or event that constitutes a Default or an Event of Default, nor do I
have any knowledge of the existence of any such condition or event as at the
date of this Certificate [except, [if such condition or event existed or exists,
describe the nature and period of existence thereof and what action the Borrower
has taken, are taking and propose to take with respect thereto]].
4. The Applicable Margin and calculations determining such figure are set
forth on the attached Schedule 1 and the Borrower and its Subsidiaries are in
----------
compliance with the covenants contained in Article IX of the Credit Agreement as
shown on such Schedule 1
----------
and the Borrower and its Subsidiaries are in compliance with the other covenants
and restrictions contained in Articles VIII and X of the Credit Agreement.
WITNESS the following signatures as of the _____ day of _________, _____.
AMERICAN BUSINESS INFORMATION, INC.
By:_________________________________
Name: ___________________________
Title: __________________________
2
Schedule 1
----------
A. Leverage Ratio
--------------
1. Consolidated Debt of the Borrower
and its Subsidiaries as of the
immediately preceding fiscal
quarter end 1 __________
2. Consolidated EBITDA of the Borrower and
its Subsidiaries for the period
of four (4) consecutive fiscal
quarters ending on such fiscal
quarter end
(a) Net Income for such
period 2(a) __________
(b) Plus: The sum of the following
----
for such period to the extent
deducted in the determination
of such Net Income: (i) income
and franchise taxes, (ii)
Interest Expense,
(iii) amortization,
depreciation and other
non-cash charges (including
amortization of goodwill,
transaction expenses, covenants
not to compete and other
intangible assets) and (iv) the
after tax effect of any and all
charges related to the Employment
Termination Agreements referred to
in the Acquisition Agreement and the
"bonus pool" payments made in connection
with the Acquisition and Merger (which
payments shall be in an amount not to
exceed $21,500,000) 2(b) __________
(c) Less: any items of gain
----
which were included in
determining Net Income and
were not realized in the
ordinary course of business 2(c) __________
(d) Add lines 2(a) and 2(b) and
subtract line 2(c) 2(d) __________
3. Leverage Ratio: Divide line 1
by line 2(d) 3 __________
3
4. Maximum Leverage Ratio permit-
xxx by Section 9.1 as of the
date hereof 2.50 to 1.0
B. Interest Coverage Ratio
-----------------------
1. Consolidated EBITDA of the Borrower and
its Subsidiaries for the immediately
preceding fiscal quarter
(a) Net Income for such
period 1(a) __________
(b) Plus: The sum of the following
----
for such period to the extent
deducted in the determination
of such Net Income: (i) income
and franchise taxes, (ii)
Interest Expense,
(iii) amortization,
depreciation and other
non-cash charges (including
amortization of goodwill,
transaction expenses, covenants
not to compete and other
intangible assets) and (iv) the
after tax effect of any and all
charges related to the Employment
Termination Agreements referred to
in the Acquisition Agreement and the
"bonus pool" payments made in connection
with the Acquisition and Merger (which
payments shall be in an amount not to
exceed $21,500,000) 1(b) __________
(c) Less: any items of gain
----
which were included in
determining Net Income and
were not realized in the
ordinary course of business 1(c) __________
(d) Add lines 1(a) and 1(b) and
subtract line 1(c) 1(d) __________
2. Interest Expense for
such period 2 __________
3. Interest Coverage Ratio: Divide
line 1(d) by line 2 3 __________
4. Minimum Interest Coverage Ratio
4
required by Section 9.2 as of
such fiscal quarter end 4.0 to 1.0
C. Minimum Tangible Net Worth
--------------------------
1. Actual Consolidated Tangible
Net Worth
as of the immediately pre-
ceding fiscal quarter end 1 __________
2. Minimum Consolidated Net
Worth: The sum of the
following as of the such
fiscal quarter end
(a) $17,300,000 2(a) __________
(b) 50% of cumulative quarterly
Consolidated Net Income (prior
to the impact of non-cash
charges related to the write down
of intangible assets) of
the Borrower and its
Subsidiaries as of such
fiscal quarter end occur-
ring after January 1, 1997
2(b) __________
(c) 50% of the aggregate net
proceeds of any offer-
ing of equity capital of
the Borrower or any of its
Subsidiaries as of such fis-
cal quarter end received
after the Closing Date 2(c) __________
(d) Add lines 2(a), 2(b) and
2(c) 2(d) __________
5
D. Applicable Margin
-----------------
1. Leverage Ratio (from line
3 of Part A) 1 __________
2. Applicable Margin per Section
4.1(c) 2 __________
6
EXHIBIT G
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated _________
Reference is made to the Credit Agreement dated as of February 14, 1997 (as
amended, restated or otherwise modified, the "Credit Agreement"), by and among
American Business Information, Inc. ("the Borrower"), the lenders party thereto
(the "Lenders"), and First Union National Bank of North Carolina, as Agent.
Capitalized terms which are defined in the Credit Agreement and which are used
herein without definition shall have the same meanings herein as in the Credit
Agreement.
______________________________________ (the "Assignor") and
--------
____________________________________ (the "Assignee") agree as follows:
--------
1. The Assignor hereby sells and assigns to the Assignee, and the
Assignee hereby purchases and assumes from the Assignor, as of the Effective
Date (as defined below), a ____% interest (the "Assigned Interest") in and to
all of the Assignor's interests, rights and obligations under the Credit
Agreement and the Assignor thereby retains ____% of its interest therein (the
"Retained Interest"). This Assignment and Acceptance is entered pursuant to, and
authorized by, Section 13.10 of the Credit Agreement.
2. The Assignor (a) represents that, as of the date hereof, (i) its
Commitment Percentage (without giving effect to assignments thereof which have
not yet become effective) under the Credit Agreement and (ii) the outstanding
balance of its Loans (unreduced by any assignments thereof which have not yet
become effective) under the Credit Agreement are each set forth in Section 2 of
Schedule I hereto; (b) makes no representation or warranty and assumes no
responsibility with respect to any statements, warran ties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto, other than that the Assignor is the legal and beneficial owner
of the interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim; (c)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Borrower or its Subsidiaries or the
performance or observance by the Borrower or its Subsidiaries of any of their
obligations under the Credit Agreement or any other Loan Document; and (d)
attaches the Revolving Credit Note delivered to it under the Credit Agreement
and requests that the Borrower exchange such Note for new Notes payable to each
of the Assignor and the Assignee as follows:
Revolving Credit Note
Payable to the Order of: Principal Amount of Note:
------------------------ -------------------------
_____________________ $_________
_____________________ $_________
3. The Assignee (a) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (b) confirms that it has received
a copy of the Credit Agreement, together with copies of the most recent
financial statements delivered pursuant to Section 7.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (c) agrees
that it will, independently and without reliance upon the Assignor or any other
Lender or the Agent and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (d) confirms that it is an
Eligible Assignee; (e) appoints and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under the Credit Agreement and
the other Loan Documents as are delegated to the agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (f) agrees that
it will perform in accordance with their terms all the obligations which by the
terms of the Credit Agreement and the other Loan Documents are required to be
performed by it as a Lender; and (g) agrees that it will keep confidential all
non-public information with respect to the Borrower obtained pursuant to the
Loan Documents in accordance with Section 13.10(g) of the Credit Agreement.
4. The effective date for this Assignment and Acceptance shall be as set
forth in Section 1 of Schedule I hereto (the "Effective Date"). Following the
--------------
execution of this Assignment and Acceptance, it will be delivered to the Agent
for consent thereby and by the Borrower and acceptance and recording in the
Register.
5. Upon such consents, acceptance and recording, from and after the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and
the other Loan Documents to which Lenders are parties and, to the extent
provided in this Assignment and
3
Acceptance, have the rights and obligations of a Lender under each such
agreement, and (ii) the Assignor shall, to the extent provided in this
Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan Documents.
6. Upon such consents, acceptance and recording, from and after the
Effective Date, the Agent shall make all payments in respect of the interest
assigned hereby (including payments of principal, interest, fees and other
amounts) to the Assignee. The Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.
7. THIS ASSIGNMENT AND ACCEPTANCE SHALL BE DEEMED TO BE A CONTRACT UNDER
SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NORTH CAROLINA, WITHOUT REGARD TO CONFLICT OF LAW PRINCIPLES.
ASSIGNOR
_______________________________________
Commitment Percentage ____%
By:____________________________________
Title:_________________________________
ASSIGNEE
_______________________________________
Commitment Percentage ____%
By:____________________________________
Title:_________________________________
4
Acknowledged and Consented to:
AMERICAN BUSINESS INFORMATION, INC.
[CORPORATE SEAL]
By:____________________________________
Name: _____________________________
Title: _____________________________
Consented to and Accepted:
FIRST UNION NATIONAL BANK OF NORTH CAROLINA,
as Agent
By:____________________________________
Title:______________________________
5
Schedule I
to
Assignment and Acceptance
-------------------------
1. Effective Date ________________, ____
--------------
2. Assignor's Interest
Prior to Assignment
-------------------
(a) Commitment Percentage
of Assignor _______%
(b) Outstanding balance
of Assignor's Loans $____________
3. Assigned Interest
(from Section 1) _______%
-----------------
4. Assignee's Loans
After Effective Date
-------------------------------
(line 2(b) times line 3) $____________
-----
5. Retained Interest of Assignor after
Effective Date
-----------------------------------
6. Assignor's Loans
After Effective Date
-------------------------------
(line 2(b) times line 5) $____________
-----
7. Payment Amount $____________
--------------
8. Payment Instructions
--------------------
(a) If payable to Assignor,
to the account of Assignor to:
________________________________
________________________________
________________________________
Routing No.:____________________
Account No.:____________________
Attn:___________________________
Reference:______________________
(b) If payable to Assignee, to the account
of Assignee to:
________________________________
________________________________
________________________________
Routing No.:____________________
Account No.:____________________
Attn:___________________________
Reference:______________________
6
EXHIBIT H
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
Form of Subsidiary Guaranty
---------------------------
EXHIBIT I
---------
to
Credit Agreement dated as of February 14, 1997,
by and among
American Business Information, Inc.,
the Lenders party thereto,
and
First Union National Bank of North Carolina,
as Agent
Investment Policy
-----------------
EXHIBIT J
---------
to
Credit Agreement
dated as of February 14, 1996
by and among
American Business Information, Inc.,
the Lenders referred to therein,
and
First Union National Bank of North Carolina,
as Agent
Terms of
--------
Subordinated Seller Notes
-------------------------
1. Definitions.
-----------
(a) "Senior Debt" shall be defined as all Obligations (including post-
petition interest) under the Credit Agreement, and any extension,
renewal, refinancing or other modification thereof.
(b) Other capitalized terms used herein have the meanings assigned thereto
in the Credit Agreement.
2. Term. Such Debt shall mature no later than one year from the date
----
thereof.
3. Unsecured. Such Debt shall be unsecured.
---------
4. Limitations on Payment.
----------------------
(a)
Upon the occurrence of any Event of Default under the Senior Debt, no payments
(by setoff or otherwise) with respect to such Debt until such Event of Default
is waived or cured.
(b) Upon insolvency or bankruptcy of maker, all Senior Debt shall first be
paid in full in cash or in a manner satisfactory to the holders
thereof before any payment (by setoff or otherwise) with respect to
such Debt.
5. Limitation on Remedies. Upon the occurrence of any Event of Default under
----------------------
the Senior Debt, the payee may not take any action to demand or collect, or
exercise any other remedies with respect to, such Debt until the prior
payment in full in cash of the Senior Debt or in a manner satisfactory to
the holders thereof.
6. Proofs of Claim, etc. The Agent shall have the right to file proofs of
--------------------
claim (upon refusal of payee to do so within 30 days of written notice) on
payee's behalf and to vote the claims of payee in a bankruptcy of the maker
or, in lieu of such voting provision, the payee shall agree not to vote
such claims in a manner inconsistent with the terms of the subordination.
7. Improper Payments; Reinstatement . Any payment delivered to payee in
---------------------------------
violation of the subordination provisions shall be held in trust for and
promptly paid over to the Agent. If any amounts received by the Agent are
rescinded or returned for any reason, the subordination provisions shall be
reinstated with respect thereto.
8. Financial Covenants; Security. No financial covenants and no collateral or
-----------------------------
other security except as permitted under the Credit Agreement or as
approved by the Required Lenders.
9. Additional Covenants of Payee.
-----------------------------
(a) no further subordination of such Debt.
(b) no transfers, assignments or pledges of such Debt not subject to the
subordination provisions.
(c) holders of Senior Debt may specifically enforce the subordination
provisions.
(d) payee will take such action as is requested by holders of Senior Debt
to effect subordination provisions, including execution and delivery
of powers of attorney upon the refusal of payee to take any action
reasonably requested by the Agent.
(e) payee will not release, modify, compromise or discharge any part of
such Debt.
10. Waivers, Releases, Amendments, etc.
----------------------------------
(a) Waiver of all notices, demands and protests in connection with payments of
Senior Debt which might release maker or payee from the subordination
provisions.
(b) The subordination provisions shall be given full effect regardless of
any circumstance which might otherwise constitute a defense or
discharge with respect thereto.
(c) The Lenders may amend or otherwise modify the Senior Debt and take any
other action thereunder without impairing the subordination.
11. Legend. The agreement evidencing such Debt shall contain a legend noting
------
the subordination and the financial records of the payee and maker shall be
marked to reflect the subordination.
