--------------------------------------------------------------------------------
CREDIT AGREEMENT
Dated as of September 8, 1998
Among
RES HOLDING CORPORATION,
THE LENDERS NAMED HEREIN,
THE CHASE MANHATTAN BANK,
as Administrative Agent and
Collateral Agent,
and
DLJ CAPITAL FUNDING, INC.,
as Documentation Agent
--------------------------------------------------------------------------------
[CS&M Ref. No. 6700-696]
TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms..................................................3
SECTION 1.02. Terms Generally...............................................18
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments...................................................18
SECTION 2.02. Loans.........................................................19
SECTION 2.03. Borrowing Procedure...........................................20
SECTION 2.04. Evidence of Debt; Repayment of Loans..........................20
SECTION 2.05. Fees..........................................................21
SECTION 2.06. Interest on Loans.............................................21
SECTION 2.07. Default Interest..............................................22
SECTION 2.08. Alternate Rate of Interest....................................22
SECTION 2.09. Termination and Reduction of Commitments......................22
SECTION 2.10. Conversion and Continuation of Borrowings.....................23
SECTION 2.11. Repayment of Borrowings.......................................24
SECTION 2.12. Prepayment....................................................24
SECTION 2.13. Reserve Requirements; Change in Circumstances.................24
SECTION 2.14. Change in Legality............................................26
SECTION 2.15. Indemnity.....................................................26
SECTION 2.16. Pro Rata Treatment............................................27
SECTION 2.17. Sharing of Setoffs............................................27
SECTION 2.18. Payments......................................................28
SECTION 2.19. Taxes.........................................................28
SECTION 2.20. Replacement of Lenders........................................31
ARTICLE III. REPRESENTATIONS AND WARRANTIES
SECTION 3.01. Organization; Powers..........................................31
SECTION 3.02. Authorization.................................................32
SECTION 3.03. Enforceability................................................32
SECTION 3.04. Governmental Approvals........................................32
SECTION 3.05. Financial Statements..........................................32
SECTION 3.06. No Material Adverse Change....................................33
SECTION 3.07. Title to Properties; Possession Under Leases..................33
SECTION 3.08. Subsidiaries..................................................33
SECTION 3.09. Litigation; Compliance with Laws..............................33
SECTION 3.10. Agreements....................................................34
SECTION 3.11. Federal Reserve Regulations...................................34
SECTION 3.12. Investment Company Act; Public Utility Holding Company Act....34
SECTION 3.13. Use of Proceeds...............................................34
SECTION 3.14. Tax Returns...................................................34
SECTION 3.15. No Material Misstatements.....................................35
SECTION 3.16. Employee Benefit Plans........................................35
SECTION 3.17. Environmental Matters.........................................36
SECTION 3.18. Capitalization of the Borrower................................37
SECTION 3.19. Security Documents............................................37
SECTION 3.20. Location of Real Property and Leased Premises.................37
SECTION 3.21. Solvency......................................................37
Contents, p.2
Page
SECTION 3.22. Labor Matters.................................................38
SECTION 3.23. Insurance.....................................................38
ARTICLE IV. CONDITIONS OF LENDING
SECTION 4.01. Initial Borrowing. ..........................................38
SECTION 4.02. Second Borrowing. ...........................................41
SECTION 4.03. Interim Borrowing.............................................42
SECTION 4.04. Release of Amounts from the Collateral Account................43
SECTION 4.05. All Borrowings and Collateral Releases........................44
ARTICLE V. AFFIRMATIVE COVENANTS
SECTION 5.01. Existence; Businesses and Properties..........................44
SECTION 5.02. Insurance.....................................................44
SECTION 5.03. Taxes.........................................................45
SECTION 5.04. Financial Statements, Reports, etc............................46
SECTION 5.05. Litigation and Other Notices..................................47
SECTION 5.06. Employee Benefits.............................................48
SECTION 5.07. Maintaining Records; Access to Properties and Inspections.....48
SECTION 5.08. Use of Proceeds...............................................48
SECTION 5.09. Compliance with Environmental Laws............................48
SECTION 5.10. Preparation of Environmental Reports..........................49
SECTION 5.11. Further Assurances............................................49
SECTION 5.12. Fiscal Year; Accounting.......................................49
SECTION 5.13. Dividends.....................................................49
SECTION 5.14. Delivery of Stock Certificates................................49
ARTICLE VI. NEGATIVE COVENANTS
SECTION 6.01. Indebtedness..................................................50
SECTION 6.02. Liens.........................................................52
SECTION 6.03. Sale and Lease-Back Transactions..............................55
SECTION 6.04. Investments, Loans and Advances...............................55
SECTION 6.05. Mergers, Consolidations, Sales of Assets and Acquisitions.....56
SECTION 6.06. Dividends and Distributions...................................57
SECTION 6.07. Transactions with Affiliates..................................58
SECTION 6.08. Business of the Borrower and the Subsidiaries.................59
SECTION 6.09. Material Agreements...........................................59
SECTION 6.10. Capital Expenditures..........................................60
ARTICLE VII. EVENTS OF DEFAULT
ARTICLE VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices.......................................................65
SECTION 9.02. Survival of Agreement.........................................66
SECTION 9.03. Binding Effect................................................66
SECTION 9.04. Successors and Assigns........................................66
Contents, p. 3
Page
SECTION 9.05. Expenses; Indemnity...........................................69
SECTION 9.06. Right of Setoff...............................................71
SECTION 9.07. Applicable Law................................................71
SECTION 9.08. Waivers; Amendment............................................71
SECTION 9.09. Interest Rate Limitation......................................72
SECTION 9.10. Entire Agreement..............................................72
SECTION 9.11. WAIVER OF JURY TRIAL..........................................72
SECTION 9.12. Severability..................................................73
SECTION 9.13. Counterparts..................................................73
SECTION 9.14. Headings......................................................73
SECTION 9.15. Jurisdiction; Consent to Service of Process...................73
SECTION 9.16. Confidentiality...............................................74
SECTION 9.17. Release of Liens..............................................74
Exhibits and Schedules
Exhibit A Form of Administrative Questionnaire
Exhibit B Form of Assignment and Acceptance
Exhibit C Form of Borrowing Request
Exhibit D Form of Pledge Agreement
Exhibit E Form of Security Agreement
Exhibit F Form of Opinion of Xxxxxxx Xxxxxxx & Xxxxxxxx
Schedule 2.01 Commitments
Schedule 3.08 Subsidiaries
Schedule 3.09 Litigation
Schedule 3.14 Taxes
Schedule 3.17 Environmental Matters
Schedule 3.18 Capitalization
Schedule 3.20 Real Property and Leased Premises
Schedule 3.22 Labor Matters
Schedule 3.23 Insurance
Schedule 6.01 Indebtedness
Schedule 6.02 Liens
Schedule 6.04 Investments
Schedule 6.07 Transactions with Affiliates
CREDIT AGREEMENT dated as of September 8,
1998, among RES HOLDING CORPORATION, a Delaware
corporation (the "Borrower"), the financial
institutions listed on Schedule 2.01 (the "Lenders"),
THE CHASE MANHATTAN BANK, a New York banking
corporation, as administrative agent (in such
capacity, the "Administrative Agent") and as
collateral agent (in such capacity, the "Collateral
Agent") for the Lenders, and DLJ CAPITAL FUNDING,
INC., as documentation agent (in such capacity, the
"Documentation Agent") for the Lenders.
Pursuant to or in connection with the transactions
contemplated by the Merger Agreement (such term and each other capitalized term
used but not defined herein having the meaning given to it in Article I), (a)
the Funds and certain other investors (such investors, together with the Funds,
the "Investors") consisting principally of affiliates of the Funds, together
with Veritas and HVR, have formed the Borrower, (b) the Borrower has formed RES
Acquisition Corporation, a newly formed Delaware corporation and a direct wholly
owned subsidiary of the Borrower ("AcquisitionCo"), (c) AcquisitionCo has made a
tender offer (the "Equity Tender Offer") to acquire all of the outstanding
shares of common stock, par value $0.01 per share (the "Shares"), of Republic
Engineered Steels, Inc., a Delaware corporation ("RES"), and (d) as promptly as
practicable following the acceptance of Shares pursuant to the Equity Tender
Offer, (i) AcquisitionCo will merge (the "Merger") with and into RES, with RES
as the surviving corporation of the Merger and, as a result of the Merger, RES
will become a wholly owned subsidiary of the Borrower, (ii) subject to
stockholders' appraisal rights, each outstanding Share not acquired in the
Equity Tender Offer (the "Untendered Shares") will be converted into the right
to receive an amount in cash equal to the per-Share price paid in connection
with the Equity Tender Offer and (iii) each outstanding option to acquire Shares
will be converted into the right to receive an amount in cash equal to the
positive difference, if any, between the Cash Merger Consideration and the
exercise price of such option (the aggregate amount paid pursuant to clauses
(ii) and (iii), the "Cash Merger Consideration").
The consummation of the Equity Tender Offer is conditioned
upon, among other things, the purchase by AcquisitionCo of (a) not less than a
majority (or such other higher portion as shall be necessary under the governing
documents of RES and applicable law to approve the Merger without the vote of
any other stockholder) of the Shares, determined on a fully diluted basis
assuming the exercise of all options, warrants, rights, conversion privileges or
similar rights with respect to Shares, and (b) a sufficient number of the Shares
held by RES's employee stock ownership plan or other employee benefit plans to
ensure that the holder of the outstanding share of special preferred stock (the
"Special Preferred Stock") issued by RES will not be entitled to vote with
respect to the Merger (the minimum number of Shares referred to in clauses (a)
and (b) being referred to herein as the "Minimum Shares"). In addition, prior to
the consummation of the Equity Tender Offer, either (a) the lenders under the
Second Amended and Restated Revolving Credit Agreement (the "Existing Credit
Agreement") dated as of April 25, 1997, among RES, BankBoston, N.A., as agent,
and such lenders will (i) waive any "Default" or "Event of Default" under and as
defined in the Existing Credit Agreement that may occur as a result of the
consummation of the Equity Tender Offer or the Merger and (ii) amend (together
with the waiver referred to in clause (a)(i) above, the "Waiver and Amendment")
the Existing Credit Agreement to permit the incurrence by RES of indebtedness
under the RES Facility (or any refinancing thereof), the proceeds of which are
used to finance the purchase by RES of any of its 9-7/8% First Mortgage Notes
due 2001 (the "Existing Notes") issued under the indenture dated as of December
15, 1993 (the "Indenture"), governing the Existing Notes that are tendered
pursuant to the Debt Tender Offer or (b) RES will replace the Existing Credit
Agreement with a replacement revolving credit facility (the "Replacement Credit
Facility") having terms reasonably satisfactory to the Administrative Agent.
2
In connection with the foregoing, (a) prior to or
substantially simultaneously with the purchase by AcquisitionCo of Shares
pursuant to the Equity Tender Offer, (i) the Investors will make common equity
contributions to the Borrower in cash in an aggregate amount of not less than
the product of (A) the amount of the Total Equity Contribution divided by the
amount of the Total Financing and (B) the sum of (1) the amount of the Closing
Date Purchase Price, (2) all interest and fees that will be payable prior to the
Merger Date in respect of loans made on the Closing Date hereunder and (3) any
other fees and expenses expected to be incurred by the Borrower or AcquisitionCo
on or after the Closing Date and prior to the Merger Date (the "Closing Date
Equity Contribution"); and (ii) the Borrower will make a common equity
contribution to AcquisitionCo in an aggregate amount sufficient to enable
AcquisitionCo to purchase the Shares pursuant to the Equity Tender Offer; (b) to
finance the purchase of any Existing Notes tendered pursuant to the tender offer
(the "Debt Tender Offer") for all the outstanding Existing Notes in accordance
with the change of control and other provisions of the Indenture, RES will
borrow up to $202,000,000 from one or more lenders under a new senior secured
facility, on terms previously agreed to by the Administrative Agent and
otherwise reasonably satisfactory to the Administrative Agent (the "RES
Facility"); (c) following the consummation of the Equity Tender Offer, either
(i) the Existing Credit Agreement will remain in effect (as waived and amended
as contemplated hereby) or (ii) the Replacement Credit Facility will become
effective, in either case with $115,000,000 of commitments (used and unused)
available thereunder; (d) prior to the Merger, (i) the Investors will make
common equity contributions to the Borrower in cash in an aggregate amount of
not less than the product of (A) the amount of the Total Equity Contribution
divided by the amount of the Total Financing and (B) the sum of (1) the amount
of the Cash Merger Consideration payable under the Merger Agreement to the
holders of Untendered Shares and options to acquire Shares, (2) all interest and
fees that will be payable (x) on or after the Merger Date in respect of loans
made on the Closing Date hereunder and (y) in respect of loans made on the
Merger Date hereunder and (3) any other fees and expenses expected to be
incurred by the Borrower on or after the Merger Date (the "Merger Date Equity
Contribution") and (ii) the Borrower will make a common equity contribution to
AcquisitionCo in an amount equal to the aggregate Cash Merger Consideration
payable under the Merger Agreement to the holders of Untendered Shares and
options to acquire Shares; (e) as soon as practicable following the consummation
of the Equity Tender Offer (and, in any event, prior to any meeting of RES's
stockholders to vote on the Merger), RES will redeem the Special Preferred
Stock; (f) at any time after the Closing Date and prior to the Interim
Borrowing, the Investors will make common equity contributions (the "Interim
Equity Contribution") to the Borrower in cash in an aggregate amount equal to
the product of (A) the amount of the Total Equity Contribution divided by the
amount of the Total Bank Financing and (B) the amount of the Interim Borrowing;
and (g) costs and expenses (the "Transaction Costs") incurred in connection with
the Transactions will be paid. Following the date of acceptance of Shares for
payment pursuant to the Equity Tender Offer, RES will make the Debt Tender
Offer. The Equity Tender Offer, the Debt Tender Offer, the Merger and the other
transactions described above are collectively referred to herein as the
"Transactions".
The Borrower has requested the Lenders to extend credit in the
form of Loans, in an aggregate principal amount not in excess of $65,045,454,
either in (a) a single drawing to be made on the Closing Date or (b) up to three
drawings, (i) the first (the "First Borrowing") of which will be made on the
Closing Date and will be in an amount equal to the product of (A) the Closing
Date Equity Contribution and (B) the amount of the Total Bank Financing divided
by the amount of the Total Equity Contribution, (ii) the second (the "Second
Borrowing") of which will be made on the date of consummation of the Merger (the
"Merger Date") , if different from the Closing Date, and will be in an amount
equal to the product of (A) the Merger Date Equity Contribution and (B) the
amount of the Total Bank Financing divided by the amount of the Total Equity
Contribution and (iii) the third (the "Interim Borrowing") of which will be made
on a single date after the Closing Date and will be in an amount not to exceed
the difference between (A) $65,045,454 and (B) the sum of the amount of the
First Borrowing and the amount of the Second Borrowing. If (a) on the Closing
Date, the Borrower receives cash proceeds from any
3
source, including any Loans made hereunder on the Closing Date, in an aggregate
amount that exceeds the aggregate amount required to finance (i) the purchase of
Shares in the Equity Tender Offer and (ii) the payment on the Closing Date of
Transaction Costs or (b) at any time after the Closing Date, the Borrower
receives cash proceeds from any source, including any Loans made hereunder on
the Merger Date, in an aggregate amount that exceeds the aggregate amount
required to finance (i) the purchase of Shares on the Merger Date and (ii) the
payment of interest on the Loans or other fees and expenses required or
permitted to be paid by the Borrower hereunder at such time, then the portion of
such proceeds equal in amount to such excess (any such portion, an "Excess
Amount"), will be deposited in a cash collateral account (the "Collateral
Account") maintained (pursuant to the Security Agreement) by, and in the sole
dominion and control of, the Collateral Agent for the benefit of the Secured
Parties.
The proceeds of the First Borrowing and the Second Borrowing
will be used, together with the proceeds of the Closing Date Equity Contribution
and the Merger Date Equity Contribution, solely (a) on the Closing Date, to
finance the cash purchase price (the "Closing Date Purchase Price") to be paid
by AcquisitionCo in respect of the Shares purchased in the Equity Tender Offer,
(b) on the Merger Date, to finance the aggregate Cash Merger Consideration to be
paid by AcquisitionCo to holders of the Untendered Shares, if any, and holders
of options to acquire Shares in connection with the Merger, including any
amounts to be paid on or after the Merger Date in connection with the exercise
by such holders of appraisal rights, and (c) from time to time on and after the
Closing Date, to pay (i) the Transaction Costs and (ii) interest on Loans made
hereunder. The proceeds of the Interim Borrowing will be used, together with the
proceeds of the Interim Equity Contribution, solely for general corporate
purposes of RES and the RES Subsidiaries.
The Lenders are willing to extend such credit to the Borrower
on the terms and subject to the conditions set forth herein. Accordingly, the
parties hereto agree as follows:
ARTICLE I. DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms shall have the meanings specified below:
"ABR Borrowing" shall mean a Borrowing comprised of ABR Loans.
"ABR Loan" shall mean any Loan bearing interest at a rate
determined by reference to the Alternate Base Rate in accordance with the
provisions of Article II.
"AcquisitionCo" shall have the meaning given such term in the
preamble to this Agreement.
"Adjusted LIBO Rate" shall mean, with respect to any
Eurodollar Borrowing for any Interest Period, an interest rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the product of
(a) the LIBO Rate in effect for such Interest Period and (b) Statutory Reserves,
if any.
"Administrative Agent" shall have the meaning given such term
in the introductory paragraph of this Agreement.
"Administrative Questionnaire" shall mean an Administrative
Questionnaire in the form of Exhibit A.
4
"Affiliate" shall mean, when used with respect to a specified
person, another person that directly, or indirectly through one or more
intermediaries, Controls or is Controlled by or is under common Control with the
person specified.
"Agents" shall mean the Administrative Agent, the Collateral
Agent and the Documentation Agent.
"Agents' Fees" shall have the meaning given such term in
Section 2.05(b).
"Alternate Base Rate" shall mean, for any day, a rate per
annum (rounded upwards, if necessary, to the next 1/16 of 1%) equal to the
greater of (a) the Prime Rate in effect on such day and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Administrative Agent shall have determined (which determination shall be
conclusive absent manifest error) that it is unable to ascertain the Federal
Funds Effective Rate, including the failure of the Federal Reserve Bank of New
York to publish rates or the inability of the Administrative Agent to obtain
quotations in accordance with the terms thereof, the Alternate Base Rate shall
be determined without regard to clause (b) of the preceding sentence until the
circumstances giving rise to such inability no longer exist. Any change in the
Alternate Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective on the effective date of such change in the
Prime Rate or the Federal Funds Effective Rate, respectively.
"Applicable Percentage" shall mean, with respect to any
Lender, the percentage of the total Commitments represented by such Lender's
Commitment.
"Approved Fund" shall mean, with respect to any Lender that is
a fund that invests in bank loans, any other fund that invests in bank loans and
is advised or managed by the same investment advisor as such Lender or by an
Affiliate of such investment advisor.
"Assignment and Acceptance" shall mean an assignment and
acceptance entered into by a Lender and an assignee, and accepted by the
Administrative Agent and the Borrower, in the form of Exhibit B or such other
form as shall be approved by the Administrative Agent.
"Board" shall mean the Board of Governors of the Federal
Reserve System of the United States.
"Borrower" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"Borrowing" shall mean a group of Loans of a single Type and
made on a single date and, in the case of Eurodollar Loans, as to which a single
Interest Period is in effect.
"Borrowing Request" shall mean a request by the Borrower in
accordance with the terms of Section 2.03 and substantially in the form of
Exhibit C.
"Business Day" shall mean any day other than a Saturday,
Sunday or day on which banks in New York City are authorized or required by law
to close; provided, however, that when used in connection with a Eurodollar
Loan, the term "Business Day" shall also exclude any day on which banks are not
open for dealings in dollar deposits in the London interbank market.
"Capital Expenditures" shall mean, for any person in respect
of any period, the aggregate of all expenditures incurred by such person during
such period that, in accordance with GAAP, are or should be included in
"additions to property, plant or equipment" or similar items reflected in the
statement of cash flows of such person (which shall be deemed to include
5
expenditures by such person to acquire stock or other evidence of beneficial
ownership of any other person for the purpose of acquiring the capital assets of
such person (as opposed to acquiring such person as a going concern)); provided,
however, that Capital Expenditures for the Borrower and the Subsidiaries shall
not include (a) expenditures to the extent they are made with the proceeds of
the issuance of Capital Stock of the Borrower after the Closing Date (to the
extent not previously used to prepay Indebtedness or make any investment or
capital expenditure or used for any other purpose), (b) expenditures of proceeds
of insurance settlements, condemnation awards and other settlements in respect
of lost, destroyed, damaged or condemned assets, equipment or other property to
the extent such expenditures are made to replace or repair such lost, destroyed,
damaged or condemned assets, equipment or other property or otherwise to acquire
assets or properties useful in the business of the Borrower and the Subsidiaries
within 12 months of receipt of such proceeds, (c) interest capitalized during
such period, (d) expenditures that are accounted for as capital expenditures of
such person and that actually are paid for by a third party (excluding any
Subsidiary) and for which neither the Borrower nor any subsidiary thereof has
provided or is required to provide or incur, directly or indirectly, any
consideration or obligation to such third party or any other person (whether
before, during or after such period) or (e) the book value of any asset owned by
such person prior to or during such period to the extent that such book value is
included as a capital expenditure during such period as a result of such person
reusing or beginning to reuse such asset during such period without a
corresponding expenditure actually having been made in such period, provided
that any expenditure necessary in order to permit such asset to be reused shall
be included as a Capital Expenditure during the period that such expenditure
actually is made and such book value shall have been included in Capital
Expenditures when such asset was originally acquired.
"Capital Lease Obligations" of any person shall mean the
obligations of such person to pay rent or other amounts under any lease of (or
other arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such person under GAAP
and, for purposes hereof, the amount of such obligations at any time shall be
the capitalized amount thereof at such time determined in accordance with GAAP.
"Capital Stock" of any person shall mean any and all shares,
interests, rights to purchase, warrants, options, participation or other
equivalents of or interests in (however designated) equity of such person,
including any preferred stock, any limited or general partnership interest and
any limited liability company membership interest, but excluding any debt
securities convertible into such equity.
"Cash Merger Consideration" shall have the meaning given such
term in the preamble to this Agreement.
"CERCLA" shall have the meaning given such term in the
definition of the term "Environmental Law".
A "Change in Control" shall be deemed to have occurred if, (a)
any person or group (within the meaning of Rule 13d-5 of the Securities Exchange
Act of 1934 as in effect on the date hereof), other than the Funds, Fund
Affiliates and members of management of the Borrower holding voting stock of the
Borrower or options to acquire such stock on the Closing Date (collectively, the
"Designated Persons") or any combination of Designated Persons, shall own
beneficially, directly or indirectly, in the aggregate shares representing more
than 25% of the aggregate ordinary voting power represented by the issued and
outstanding capital stock of the Borrower at a time when Designated Persons or
any combination of Designated Persons shall fail to own beneficially, directly
or indirectly, shares representing at least a majority of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Borrower; (b) the Designated Persons or any combination of Designated Persons
shall fail to own beneficially, directly or indirectly, in the aggregate shares
representing at least 51% of the
6
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower; (c) any person or group (within the meaning of
Rule 13d-5 of the Securities Exchange Act of 1934 as in effect on the date
hereof), other than management of the Borrower, shall own beneficially, directly
or indirectly, in the aggregate shares representing a greater percentage of the
aggregate ordinary voting power represented by the issued and outstanding
capital stock of the Borrower than the aggregate ordinary voting power at such
time represented by the issued and outstanding capital stock of the Borrower
owned beneficially, directly or indirectly, by the Funds and Fund Affiliates
(excluding, for this purpose, from the definition of Fund Affiliates management
of the Borrower), provided that, a Change of Control shall be deemed to have
occurred at any time when both (i) management of the Borrower shall own
beneficially, directly or indirectly, in the aggregate shares representing a
greater percentage of the aggregate ordinary voting power represented by the
issued and outstanding capital stock of the Borrower than the aggregate ordinary
voting power at such time represented by the issued and outstanding capital
stock of the Borrower owned beneficially, directly or indirectly, by the Funds
and Fund Affiliates (excluding, for this purpose, from the definition of Fund
Affiliates management of the Borrower), and (ii) the Funds and Fund Affiliates
shall fail to own beneficially, directly or indirectly, in the aggregate shares
representing at least one-half the percentage of the aggregate ordinary voting
power represented by the issued and outstanding capital stock of the Borrower
owned by the Funds and Fund Affiliates (excluding, for this purpose, from the
definition of Fund Affiliates management of the Borrower) on the Closing Date;
(e) a majority of the seats (excluding vacant seats) on the board of directors
of the Borrower shall at any time after the Closing Date have been occupied by
persons who were neither (i) nominated by any one or more Designated Persons or
by a majority of the board of directors of the Borrower, nor (ii) appointed by
directors so nominated; (f) a change in control with respect to the Borrower (or
similar event, however denominated) shall occur under any indenture or agreement
in respect of Indebtedness in an aggregate outstanding principal amount in
excess of $5,000,000 to which the Borrower or any Subsidiary is party, other
than as a result of the Transactions; (g) prior to the Merger, (i) the Borrower
shall cease to own, directly or indirectly, beneficially and of record, 100% of
the outstanding Capital Stock of AcquisitionCo, free and clear of all Liens or
(ii) AcquisitionCo shall cease to own, directly or indirectly, beneficially and
of record, at least the Minimum Shares, free and clear of all Liens; or (h)
after the Merger, the Borrower shall cease to own, directly or indirectly,
beneficially and of record, 100% of the outstanding Capital Stock of RES. For
purposes of clauses (a) and (b) of this definition, the term "Designated Person"
shall be deemed to include any other holder or holders of shares of the Borrower
having ordinary voting power if the Borrower or any Fund or any Fund Affiliate
shall have the power to vote (or cause to be voted at its discretion), pursuant
to contract, irrevocable proxy or otherwise, the shares held by such holder.
"Closing Date" shall mean a single date (which shall in no
event be later than December 15, 1998) on which the initial Borrowing occurs
hereunder.
"Closing Date Equity Contribution" shall have the meaning
given such term in the preamble to this Agreement.
"Closing Date Purchase Price" shall have the meaning given
such term in the preamble to this Agreement.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
"Collateral" shall mean all the "Collateral" as defined in any
Security Document.
"Collateral Account" shall have the meaning given such term in
the preamble to this Agreement.
7
"Collateral Agent" shall have the meaning given such term in
the introductory paragraph of this Agreement.
"Collective Bargaining Agreement" shall mean the Collective
Bargaining Agreement dated as of August 2, 1998, between RES and the members of
the United Steelworkers of America.
"Commitment" shall mean, with respect to any Lender, the
commitment of such Lender to make Loans, as such commitment may be (a) reduced
from time to time pursuant to Section 2.09 and (b) reduced or increased from
time to time pursuant to assignments by or to such Lender pursuant to Section
9.04. The initial amount of each Lender's Commitment is set forth on Schedule
2.01, or in the Assignment and Acceptance pursuant to which such Lender shall
have assumed its Commitment, as applicable. The initial aggregate amount of the
Lenders' Commitments is $65,000,000.
"Commitment Fee" shall have the meaning given such term in
Section 2.05(a).
"Control" shall mean the possession, directly or indirectly,
of the power to direct or cause the direction of the management or policies of a
person, whether through the ownership of voting securities, by contract or
otherwise, and "Controlling" and "Controlled" shall have meanings correlative
thereto.
"Debt Tender Offer" shall have the meaning given such term in
the preamble to this Agreement.
"Default" shall mean any event or condition that upon notice,
lapse of time or both would constitute an Event of Default.
"Documentation Agent" shall have the meaning given such term
in the introductory paragraph of this Agreement.
"Dollars" or "$" shall mean lawful money of the United States
of America.
"environment" shall mean ambient air, surface water and
groundwater (including potable water, navigable water and wetlands), the land
surface or subsurface strata, the workplace or as otherwise defined in any
Environmental Law.
"Environmental Claim" shall mean any written accusation,
allegation, notice of violation, claim, demand, order, directive, cost recovery
action or other cause of action by, or on behalf of, any Governmental Authority
or any person for damages, injunctive or equitable relief, personal injury
(including sickness, disease or death), Remedial Action costs, tangible or
intangible property damage, natural resource damages, nuisance, pollution, any
adverse effect on the environment caused by any Hazardous Material, or for
fines, penalties or restrictions, resulting from or based upon: (a) the threat,
the existence, or the continuation of the existence of a Release (including
sudden or non-sudden, accidental or non-accidental Releases); (b) exposure to
any Hazardous Material; (c) the presence, use, handling, transportation,
storage, treatment or disposal of any Hazardous Material; or (d) the violation
or alleged violation of any Environmental Law or Environmental Permit.
"Environmental Law" shall mean any and all applicable current
and future treaties, laws, rules, regulations, codes, ordinances, orders,
decrees, judgments, injunctions, notices or binding agreements issued,
promulgated or entered into by any Governmental Authority, relating in any way
to the protection of the environment, preservation or reclamation of natural
resources, the treatment, storage, disposal, Release or threatened Release of
any Hazardous Material or to human health or safety as relating to the
environment, including the
8
Hazardous Materials Transportation Act, 49 U.S.C. xx.xx. 1801 et seq., the
Comprehensive Environmental Response, Compensation, and Liability Act of 1980,
as amended, 42 U.S.C. xx.xx. 9601 et seq. ("CERCLA"), the Solid Waste Disposal
Act, as amended, 42 U.S.C. xx.xx. 6901 et seq., the Federal Water Pollution
Control Act, as amended, 33 U.S.C. xx.xx. 1251 et seq., the Clean Air Act of
1970, as amended, 42 U.S.C. xx.xx. 7401 et seq., the Toxic Substances Control
Act of 1976, 15 U.S.C. xx.xx. 2601 et seq., the Emergency Planning and Community
Right-to-Know Act of 1986, 42 U.S.C. xx.xx. 11001 et seq., the National
Environmental Policy Act of 1975, 42 U.S.C. xx.xx. 4321 et seq., the Safe
Drinking Water Act of 1974, as amended, 42 U.S.C. xx.xx. 300(f) et seq., and any
similar or implementing state, local or foreign law, and all amendments or
regulations promulgated under any of the foregoing.
"Environmental Permit" shall mean any permit, approval,
authorization, certificate, license, variance, filing or permission required by
or from any Governmental Authority pursuant to any Environmental Law.
"Equity Tender Offer" shall have the meaning given such term
in the preamble to this Agreement.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as the same may be amended from time to time.
"ERISA Affiliate" shall mean any trade or business (whether or
not incorporated) that, together with the Borrower, is treated as a single
employer under Section 414(b) or (c) of the Code, or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"Eurodollar Borrowing" shall mean a Borrowing comprised of
Eurodollar Loans.
"Eurodollar Loan" shall mean any Loan bearing interest at a
rate determined by reference to the Adjusted LIBO Rate in accordance with the
provisions of Article II.
"Event of Default" shall have the meaning given such term in
Article VII.
"Excess Amount" shall have the meaning given such term in the
preamble to this Agreement.
"Existing Notes" shall have the meaning given such term in the
preamble to this Agreement.
"Federal Funds Effective Rate" shall mean, for any day, the
weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers, as
published on the next succeeding Business Day by the Federal Reserve Bank of New
York, or, if such rate is not so published for any day which is a Business Day,
the average of the quotations for the day of such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.
"Fee Letters" shall have the meaning given such term in
Section 2.05(b).
"Fees" shall mean the Commitment Fees and the Agents' Fees.
"Financial Officer" of any corporation shall mean the chief
financial officer, principal accounting officer, Treasurer, Assistant Treasurer
or Controller of such corporation.
9
"First Borrowing" shall have the meaning given such term in
the preamble to this Agreement.
"Funds" shall mean Blackstone Capital Partners II Merchant
Banking Fund L.P., a Delaware limited partnership, Blackstone Offshore Capital
Partners II L.P., a Cayman Islands exempted limited partnership, and Blackstone
Family Investment Partnership II L.P., a Delaware limited partnership.
"Fund Affiliates" shall mean each Affiliate of any Fund that
is not an operating company or Controlled by an operating company and each
general partner of any Fund or any Fund Affiliate who is a partner or employee
of The Blackstone Group L.P.
"GAAP" shall mean generally accepted accounting principles in
effect from time to time in the United States, applied on a consistent basis.
"Governmental Authority" shall mean any Federal, state, local
or foreign court or governmental agency, authority, instrumentality or
regulatory body or, in the case of references to "Governmental Authority" in
Article II and Sections 9.04 and 9.16, the National Association of Insurance
Commissioners.
"Guarantee" of or by any person shall mean (a) any obligation,
contingent or otherwise, of such person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other person (the "primary
obligor") in any manner, whether directly or indirectly, and including any
obligation of such person, direct or indirect, (i) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness
(whether arising by virtue of partnership arrangements, by agreement to keep
well, to purchase assets, goods, securities or services, to take-or-pay or
otherwise) or to purchase (or to advance or supply funds for the purchase of)
any security for the payment of such Indebtedness, (ii) to purchase or lease
property, securities or services for the purpose of assuring the owner of such
Indebtedness of the payment of such Indebtedness, (iii) to maintain working
capital, equity capital or any other financial statement condition or liquidity
of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or (iv) entered into for the purpose of assuring in any other
manner the holders of such Indebtedness of the payment thereof or to protect
such holders against loss in respect thereof (in whole or in part), or (b) any
Lien on any assets of such person securing any Indebtedness of any other person,
whether or not such Indebtedness is assumed by such person; provided, however,
that the term "Guarantee" shall not include endorsements for collection or
deposit, in either case in the ordinary course of business, or customary and
reasonable indemnity obligations in effect on the Closing Date or entered into
in connection with any acquisition or disposition of assets permitted under this
Agreement.
"Hazardous Materials" shall mean any material meeting the
definition of a "hazardous substance" in CERCLA 42 U.S.C. ss. 9601(14) and all
explosive or radioactive substances or wastes; hazardous or toxic substances or
wastes; pollutants; solid, liquid or gaseous wastes, including petroleum,
petroleum distillates or fractions or residues, asbestos or asbestos containing
materials, polychlorinated biphenyls ("PCBs") or materials or equipment
containing PCBs , radon gas, infectious or medical wastes, and all other
substances or wastes of any nature regulated pursuant to any Environmental Law,
or that reasonably could form the basis of an Environmental Claim.
"HVR" shall mean HVR Holdings, LLC, a Delaware limited
liability company.
"Indebtedness" of any person shall mean, without duplication,
(a) all obligations of such person for borrowed money or with respect to
deposits or advances of any kind, (b) all obligations of such person evidenced
by bonds, debentures, notes or similar instruments, (c) all obligations of such
person upon which interest charges are customarily paid (other than trade
10
payables incurred in the ordinary course of business), (d) all obligations of
such person under conditional sale or other title retention agreements relating
to property or assets purchased by such person, (e) all obligations of such
person issued or assumed as the deferred purchase price of property or services
(other than current trade liabilities incurred in the ordinary course of
business), (f) all Indebtedness of others secured by (or for which the holder of
such Indebtedness has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such person, whether or not the
obligations secured thereby have been assumed, (g) all Guarantees by such person
of Indebtedness of others, (h) all Capital Lease Obligations of such person, (i)
all payments that such person would have to make in the event of an early
termination, on the date Indebtedness of such person is being determined, in
respect of outstanding interest rate protection agreements, foreign currency
exchange agreements or other interest or exchange rate hedging arrangements and
(j) all obligations of such person as an account party in respect of letters of
credit and bankers' acceptances. The Indebtedness of any person shall include
the Indebtedness of any partnership in which such person is a general partner,
other than to the extent that the instrument or agreement evidencing such
Indebtedness expressly limits the liability of such person in respect thereof,
provided that, if the sole asset of such person is its general partnership
interest in such partnership, the amount of such Indebtedness shall be deemed
equal to the value of such general partnership interest and the amount of any
Indebtedness in respect of any Guarantee of such partnership Indebtedness shall
be limited to the same extent as such Guarantee may be limited.
"Information Memorandum" shall have the meaning given such
term in Section 3.15.
"Interest Payment Date" shall mean, (a) with respect to any
Eurodollar Loan, the last day of the Interest Period applicable to the Borrowing
of which such Loan is a part and, in the case of a Eurodollar Borrowing with an
Interest Period of more than three months' duration, each day that would have
been an Interest Payment Date had successive Interest Periods of three months'
duration been applicable to such Borrowing, and, in addition, the date of any
refinancing or conversion of such Borrowing with or to a Borrowing of a
different Type and (b) with respect to any ABR Loan, the last day of each
calendar quarter.
"Interest Period" shall mean as to any Eurodollar Borrowing,
the period commencing on the date of such Borrowing or on the last day of the
immediately preceding Interest Period applicable to such Borrowing, as the case
may be, and ending on the numerically corresponding day (or, if there is no
numerically corresponding day, on the last day) in the calendar month that is 1,
2, 3 or 6 months thereafter (or 9 or 12 months if, at the time of the relevant
Borrowing, all Lenders make interest periods of such length available), as the
Borrower may elect, and the date any Eurodollar Borrowing is converted to an ABR
Borrowing in accordance with Section 2.10 or repaid or prepaid in accordance
with Section 2.11 or 2.12; provided, however, that if any Interest Period would
end on a day other than a Business Day, such Interest Period shall be extended
to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Interest Period shall
end on the next preceding Business Day. Interest shall accrue from and including
the first day of an Interest Period to but excluding the last day of such
Interest Period.
"Interest Rate Protection Agreement" shall mean any interest
rate hedging agreement or arrangement approved by the Administrative Agent (such
approval not to be unreasonably withheld) entered into by RES or any RES
Subsidiary and designed to protect against fluctuations in interest rates.
"Interim Borrowing" shall have the meaning given such term in
the preamble to this Agreement.
11
"Interim Equity Contribution" shall have the meaning given
such term in the preamble to this Agreement.
"Investors" shall have the meaning given such term in the
preamble to this Agreement.
"Lenders" shall have the meaning given such term in the
introductory paragraph of this Agreement.
"LIBO Rate" shall mean, with respect to any Eurodollar
Borrowing for any Interest Period, the rate (rounded upwards, if necessary, to
the next 1/16 of 1%) at which dollar deposits approximately equal in principal
amount to the Administrative Agent's portion of such Eurodollar Borrowing and
for a maturity comparable to such Interest Period are offered to the principal
London office of the Administrative Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" shall mean, with respect to any asset, (a) any
mortgage, deed of trust, lien, pledge, encumbrance, charge or security interest
in or on such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" shall mean this Agreement and the Security
Documents.
"Loan Parties" shall mean the Borrower and AcquisitionCo.
"Loans" shall mean the loans made by the Lenders to the
Borrower pursuant to this Agreement.
"Margin Stock" shall have the meaning given such term in
Regulation U.
"Material Adverse Effect" shall mean (a) a materially adverse
effect on the assets, business, operations, properties or financial condition of
the Borrower, AcquisitionCo, RES and its subsidiaries, taken as a whole, (b) a
material impairment of the ability of the Borrower or AcquisitionCo to perform
any of its material obligations under any Loan Document to which it is or will
be a party or to consummate the Transactions or (c) an impairment of the
validity or enforceability of, or a material impairment of the material rights,
remedies or benefits available to the Lenders, the Administrative Agent or the
Collateral Agent under, any Loan Document.
"Maturity Date" shall mean the date that is the earlier of (a)
the date that is nine months after the Closing Date and (b) July 23, 1999.
"Merger" shall have the meaning given such term in the
preamble to this Agreement.
"Merger Agreement" shall mean the Agreement and Plan of Merger
dated as of July 23, 1998, among the Borrower, AcquisitionCo and RES.
"Merger Date" shall have the meaning given such term in the
preamble to this Agreement.
"Merger Date Equity Contribution" shall have the meaning given
such term in the preamble to this Agreement.
12
"Minimum Shares" shall have the meaning given such term in the
preamble to this Agreement.
"Multiemployer Plan" shall mean a multiemployer plan as
defined in Section 4001(a)(3) of ERISA to which the Borrower or any ERISA
Affiliate (other than one considered an ERISA Affiliate only pursuant to
subsection (m) or (o) of Code Section 414) is making or accruing an obligation
to make contributions, or has within any of the preceding five plan years made
or accrued an obligation to make contributions.
"New Notes" shall mean any senior secured notes to be issued
by RES in a public offering or a Rule 144A private placement (on terms
reasonably satisfactory to the Administrative Agent), the proceeds of which
shall be used to prepay loans under the RES Facility and/or the Existing Notes.
"Notes" shall mean any promissory note of the Borrower issued
pursuant to this Agreement.
"Obligations" shall mean all obligations defined as
"Obligations" in the Security Documents.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
referred to and defined in ERISA.
"Permitted Investments" shall mean: (a) direct obligations of
the United States of America or any agency thereof or obligations guaranteed by
the United States of America or any agency thereof; (b) time deposit accounts,
certificates of deposit and money market deposits maturing within 180 days of
the date of acquisition thereof issued by a bank or trust company which is
organized under the laws of the United States of America, any state thereof or
any foreign country recognized by the United States of America having capital,
surplus and undivided profits aggregating in excess of $250,000,000 (or the
foreign currency equivalent thereof) and whose long-term debt, or whose parent
holding company's long-term debt, is rated A (or such similar equivalent rating
or higher by at least one nationally recognized statistical rating organization
(as defined in Rule 436 under the Securities Act of 1933, as amended)); (c)
repurchase obligations with a term of not more than 30 days for underlying
securities of the types described in clause (a) above entered into with a bank
meeting the qualifications described in clause (b) above; (d) commercial paper,
maturing not more than 180 days after the date of acquisition, issued by a
corporation (other than an Affiliate of the Borrower) organized and in existence
under the laws of the United States of America or any foreign country recognized
by the United States of America with a rating at the time as of which any
investment therein is made of P-1 (or higher) according to Xxxxx'x Investors
Service, Inc., or A-1 (or higher) according to Standard & Poor's Ratings
Service; (e) securities with maturities of six months or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States of America, or by any political subdivision or taxing
authority thereof, and rated at least A by Standard & Poor's Ratings Service or
A by Xxxxx'x Investors Service, Inc.; (f) in the case of any Subsidiary
organized in a jurisdiction outside the United States: (i) direct obligations of
the sovereign nation (or any agency thereof) in which such Subsidiary is
organized and is conducting business or in obligations fully and unconditionally
guaranteed by such sovereign nation (or any agency thereof), (ii) investments of
the type and maturity described in clauses (a) through (e) above of foreign
obligors, which investments or obligors (or the parents of such obligors) have
ratings described in such clauses or equivalent ratings from comparable foreign
rating agencies or (iii) investments of the type and maturity described in
clauses (a) through (e) above of foreign obligors (or the parents of such
obligors), which investments or obligors (or the parents of such obligors) are
not rated as provided in such clauses or in clause (ii) above but which are, in
the reasonable judgment of the Borrower, comparable in investment quality to
such investments and obligors (or the parents of such obligors); (g) shares of
mutual funds whose
13
investment guidelines restrict 95% of such funds' investments to those
satisfying the provisions of clauses (a) through (e) above; and (h) time deposit
accounts, certificates of deposit and money market deposits in an aggregate face
amount not in excess of 1/2 of 1% of total assets of the Borrower and the
Subsidiaries, on a consolidated basis, as of the end of the Borrower's most
recently completed fiscal year.
"person" shall mean any natural person, corporation, business
trust, joint venture, association, company, partnership, limited liability
company or government, or any agency or political subdivision thereof.
"Plan" shall mean any employee pension benefit plan (other
than a Multiemployer Plan) subject to the provisions of Title IV of ERISA or
Section 412 of the Code and in respect of which the Borrower or any ERISA
Affiliate is (or, if such plan were terminated, would under Section 4069 of
ERISA be deemed to be) an "employer" as defined in Section 3(5) of ERISA.
"Pledge Agreement" shall mean the Pledge Agreement,
substantially in the form of Exhibit D, among the Borrower, AcquisitionCo and
the Collateral Agent for the benefit of the Secured Parties.
"Prime Rate" shall mean the rate of interest per annum
publicly announced from time to time by the Administrative Agent as its prime
rate in effect at its principal office in New York City; each change in the
Prime Rate shall be effective on the date such change is publicly announced as
being effective.
"Properties" shall have the meaning given such term in Section
3.17(a).
"Register" shall have the meaning given such term in Section
9.04(d).
"Regulation U" shall mean Regulation U of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Regulation X" shall mean Regulation X of the Board as from
time to time in effect and all official rulings and interpretations thereunder
or thereof.
"Release" shall have the meaning given such term in CERCLA, 42
U.S.C. ss. 9601(22).
"Remedial Action" shall mean (a) "remedial action" as such
term is defined in CERCLA, 42 U.S.C. Section 9601(24), and (b) all other
actions, including studies and investigations, required by any Governmental
Authority or voluntarily undertaken to (i) clean up, remove, treat, xxxxx or in
any other way respond to any Hazardous Material in the environment or (ii)
prevent the Release or threatened Release, or minimize the further Release, of
any Hazardous Material.
"Replacement Credit Facility" shall have the meaning given
such term in the preamble to this Agreement.
"Reportable Event" shall mean any reportable event as defined
in Section 4043 of ERISA or the regulations issued thereunder (other than any
reportable event waived pursuant to such Section or regulations) with respect to
a Plan (other than a Plan maintained by an ERISA Affiliate that is considered an
ERISA Affiliate only pursuant to subsection (m) or (o) of Code Section 414).
14
"Required Lenders" shall mean, at any time, Lenders having
Loans and unused Commitments representing more than 50% of the sum of all Loans
outstanding at such time and unused Commitments at such time.
"RES" shall have the meaning given such term in the preamble
to this Agreement.
"RES Facility" shall have the meaning given such term in the
preamble to this Agreement.
"RES Subsidiary" shall mean each subsidiary of RES.
"Responsible Officer" of any corporation shall mean any
executive officer or Financial Officer of such corporation and any other officer
or similar official thereof responsible for the administration of the
obligations of such corporation in respect of this Agreement.
"Sale and Lease-Back Transaction" shall have the meaning given
such term in Section 6.03.
"Second Borrowing" shall have the meaning given such term in
the preamble to this Agreement.
"Secured Parties" shall have the meaning given such term in
the Security Agreement.
"Security Agreement" shall mean the Security Agreement,
substantially in the form of Exhibit E, among the Borrower, AcquisitionCo and
the Collateral Agent for the benefit of the Secured Parties.
"Security Documents" shall mean the Security Agreement and the
Pledge Agreement.
"Shares" shall have the meaning given such term in the
preamble to this Agreement.
"Special Preferred Stock" shall have the meaning given such
term in the preamble to this Agreement.
"Statutory Reserves" shall mean a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board and any other banking authority, domestic
or foreign, to which the Administrative Agent is subject with respect to
Eurocurrency Liabilities (as defined in Regulation D of the Board) or other
categories of liabilities or deposits by reference to which the LIBO Rate is
determined. Such reserve percentages shall include those imposed pursuant to
such Regulation D. Eurodollar Loans shall be deemed to constitute Eurocurrency
Liabilities and to be subject to such reserve requirements without benefit of or
credit for proration, exemptions or offsets that may be available from time to
time to any Lender under such Regulation D. Statutory Reserves shall be adjusted
automatically on and as of the effective date of any change in any reserve
percentage.
"Stockholders Agreement" shall mean any stockholders
agreement, subscription agreement or other similar agreement that may be entered
into by the Borrower upon terms reasonably satisfactory to the Administrative
Agent.
15
"subsidiary" shall mean, with respect to any person (herein
referred to as the "parent"), any corporation, partnership, association or other
business entity (a) of which securities or other ownership interests
representing more than 50% of the equity or more than 50% of the ordinary voting
power or more than 50% of the general partnership interests are, at the time any
determination is being made, directly or indirectly, owned, controlled or held,
or (b) that is, at the time any determination is made, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" shall mean each subsidiary of the Borrower. For
purposes of the representations and warranties made herein on the Closing Date,
the term "Subsidiary" includes each of RES and the RES Subsidiaries.
"Supermajority Lenders" shall mean, at any time, Lenders
having Loans and unused Commitments representing more than 75% of the sum of all
Loans outstanding at such time and unused Commitments at such time.
"Total Bank Financing" shall mean $65,045,454.
"Total Equity Contribution" shall mean $95,454,546.
"Total Financing" shall mean the sum of (a) the Total Equity
Contribution and (b) the Total Bank Financing.
"Transaction Costs" shall have the meaning given such term in
the preamble to this Agreement.
"Transactions" shall have the meaning given such term in the
preamble to this Agreement.
"Type", when used in respect of any Loan or Borrowing, shall
refer to the Rate by reference to which interest on such Loan or on the Loans
comprising such Borrowing is determined. For purposes hereof, the term "Rate"
shall include the Adjusted LIBO Rate and the Alternate Base Rate.
"Untendered Shares" shall have the meaning given such term in
the preamble to this Agreement.
"Veritas" shall mean The Veritas Capital Fund, a Delaware
corporation, and its affiliates.
"Waiver and Amendment" shall have the meaning given such term
in the preamble to this Agreement.
"Wholly Owned RES Subsidiary" shall mean a Subsidiary, at
least 99% of the Capital Stock of which (other than directors' qualifying
shares) is owned by RES or another Wholly Owned RES Subsidiary.
"Wholly Owned Subsidiary" shall mean a Subsidiary, at least
99% of the Capital Stock of which (other than directors' qualifying shares) is
owned by the Borrower or another Wholly Owned Subsidiary.
"Withdrawal Liability" shall mean liability to a Multiemployer
Plan as a result of a complete or partial withdrawal from such Multiemployer
Plan, as such terms are defined in Part I of Subtitle E of Title IV of ERISA.
16
SECTION 1.02. Terms Generally. The definitions in Section 1.01
shall apply equally to both the singular and plural forms of the terms defined.
Whenever the context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes" and
"including" shall be deemed to be followed by the phrase "without limitation".
All references herein to Articles, Sections, Exhibits and Schedules shall be
deemed references to Articles and Sections of, and Exhibits and Schedules to,
this Agreement unless the context shall otherwise require. Except as otherwise
expressly provided herein, (a) any reference in this Agreement to any Loan
Document shall mean such document as amended, restated, supplemented or
otherwise modified from time to time and (b) all terms of an accounting or
financial nature shall be construed in accordance with GAAP, as in effect from
time to time; provided, however, that for purposes of determining compliance
with the covenants contained in Article VI all accounting terms herein shall be
interpreted and all accounting determinations hereunder (in each case, unless
otherwise provided for or defined herein) shall be made in accordance with GAAP
as in effect on the date of this Agreement and applied on a basis consistent
with the application used in the financial statements referred to in Section
3.05; and provided further that if the Borrower notifies the Administrative
Agent that the Borrower wishes to amend any covenant in Article VI or any
related definition to eliminate the effect of any change in GAAP occurring after
the date of this Agreement on the operation of such covenant (or if the
Administrative Agent notifies the Borrower that the Required Lenders wish to
amend Article VI or any related definition for such purpose), then (i) the
Borrower and the Administrative Agent shall negotiate in good faith to agree
upon an appropriate amendment to such covenant and (ii) the Borrower's
compliance with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective until such
covenant is amended in a manner satisfactory to the Borrower and the Required
Lenders.
ARTICLE II. THE CREDITS
SECTION 2.01. Commitments. (a) Subject to the terms and
conditions and relying upon the representations and warranties of the Borrower
herein set forth, each Lender agrees, severally and not jointly, to make Loans
to the Borrower either in (a) a single drawing to be made on the Closing Date or
(b) up to three drawings, (i) the first of which will be made on the Closing
Date and will be in an amount equal to such Lender's Applicable Percentage of
the amount of the First Borrowing, (ii) the second of which will be made on the
Merger Date and will be in an amount equal to such Lender's Applicable
Percentage of the amount of the Second Borrowing and (iii) the third of which
will be made on a single date at any time after the Closing Date and will be in
an amount equal to such Lender's Applicable Percentage of the amount of the
Interim Borrowing, provided that the aggregate principal amount of such Lender's
Loans made hereunder shall not exceed the Commitment set forth opposite its name
on Schedule 2.01, as the same may be reduced from time to time pursuant to
Section 2.09. Amounts repaid in respect of Loans may not be reborrowed.
SECTION 2.02. Loans. (a) Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their Commitments; provided, however, that the failure of any Lender to make any
Loan shall not relieve any other Lender of its obligation to lend hereunder (it
being understood, however, that no Lender shall be responsible for the failure
of any other Lender to make any Loan required to be made by such other Lender).
The Loans comprising any Borrowing shall be in an aggregate principal amount
which is (i) an integral multiple of $1,000,000 and not less than $1,000,000 or
(ii) equal to the remaining available balance of the Commitments.
(b) Subject to Sections 2.08 and 2.14, each Borrowing shall be
comprised entirely of ABR Loans or Eurodollar Loans as the Borrower may request
pursuant to Section 2.03. Each Lender may at its option make any Eurodollar Loan
by causing any domestic or foreign branch or Affiliate of such Lender to make
such Loan, provided that any exercise of
17
such option shall not affect the obligation of the Borrower to repay such Loan
in accordance with the terms of this Agreement and such Lender shall not be
entitled to any amounts payable under Section 2.13 or Section 2.19 in respect of
increased costs arising as a result of such exercise. Borrowings of more than
one Type may be outstanding at the same time; provided, however, that the
Borrower shall not be entitled to request any Borrowing that, if made, would
result in more than 5 Eurodollar Borrowings outstanding hereunder at any time.
For purposes of the foregoing, Borrowings having different Interest Periods,
regardless of whether they commence on the same date, shall be considered
separate Borrowings.
(c) Each Lender shall make each Loan to be made by it
hereunder on the proposed date thereof by wire transfer to such account as the
Administrative Agent may designate in federal funds not later than 11:00 a.m.,
New York City time, and the Administrative Agent shall by 12:00 (noon), New York
City time, credit the amounts so received to an account designated by the
Borrower in the applicable Borrowing Request; provided, however, that (i) if a
Borrowing shall not occur on such date because any condition precedent herein
specified shall not have been met, then the Administrative Agent shall return
the amounts so received to the respective Lenders and (ii) all or any portion of
the proceeds of Loans made hereunder on the Closing Date or on the Merger Date
that constitutes an Excess Amount will be deposited in the Collateral Account.
(d) Unless the Administrative Agent shall have received notice
from a Lender prior to the date of any Borrowing that such Lender will not make
available to the Administrative Agent such Lender's portion of such Borrowing,
the Administrative Agent may assume that such Lender has made such portion
available to the Administrative Agent on the date of such Borrowing in
accordance with paragraph (c) above and may, in reliance upon such assumption,
make available to the Borrower on such date a corresponding amount. If the
Administrative Agent shall have so made funds available then, to the extent that
such Lender shall not have made such portion available to the Administrative
Agent, such Lender and the Borrower severally agree to repay to the
Administrative Agent forthwith on demand such corresponding amount together with
interest thereon, for each day from the date such amount is made available to
the Borrower until the date such amount is repaid to the Administrative Agent,
at (i) in the case of the Borrower, the interest rate applicable at the time to
the Loans comprising such Borrowing and (ii) in the case of such Lender, a rate
determined by the Administrative Agent to represent its cost of overnight or
short-term funds (which determination shall be conclusive absent manifest
error). If such Lender shall repay to the Administrative Agent such
corresponding amount, such amount shall constitute such Lender's Loan as part of
such Borrowing for purposes of this Agreement.
(e) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request any Borrowing if the Interest Period
requested with respect thereto would end after the Maturity Date.
SECTION 2.03. Borrowing Procedure. In order to request a
Borrowing, the Borrower shall hand deliver or telecopy to the Administrative
Agent a duly completed Borrowing Request substantially in the form of Exhibit C
(a) in the case of a Eurodollar Borrowing, not later than 12:00 (noon), New York
City time, three Business Days before a proposed Borrowing, (b) in the case of
the initial ABR Borrowing, not later than 9:00 a.m., New York City time, on the
day of the proposed Borrowing, and (c) in the case of any other ABR Borrowing,
not later than 12:00 (noon), New York City time, one Business Day before a
proposed Borrowing; provided, however, that Borrowing Requests with respect to
Borrowings to be made on the Closing Date may, at the discretion of the
Administrative Agent, be delivered later than the times specified above. Each
Borrowing Request shall be irrevocable, shall be signed by or on behalf of the
Borrower and shall specify the following information: (i) whether such Borrowing
is to be a Eurodollar Borrowing or an ABR Borrowing, (ii) the date of such
Borrowing (which shall be a Business Day); (iii) the number and location of the
account to which funds are to be disbursed
18
(which shall be an account that complies with the requirements of Section
2.02(c)); (iv) the amount of such Borrowing; and (v) if such Borrowing is to be
a Eurodollar Borrowing, the Interest Period with respect thereto; provided,
however, that, notwithstanding any contrary specification in any Borrowing
Request, each requested Borrowing shall comply with the requirements set forth
in Section 2.02. If no election as to the Type of Borrowing is specified in any
such notice, then the requested Borrowing shall be an ABR Borrowing. If no
Interest Period with respect to any Eurodollar Borrowing is specified in any
such notice, then the Borrower shall be deemed to have selected an Interest
Period of one month's duration. The Administrative Agent shall promptly (and in
any event on the same day that the Administrative Agent receives such notice, if
received by 1:00 p.m., New York City time, on such day) advise the applicable
Lenders of any notice given pursuant to this Section 2.03 and of each Lender's
portion of the requested Borrowing.
If the Borrower shall not have delivered a Borrowing Request
in accordance with this Section 2.03 prior to the end of the Interest Period
then in effect requesting that such Borrowing be refinanced, then the Borrower
shall (unless the Borrower has notified the Administrative Agent, not less than
three Business Days prior to the end of such Interest Period, that such
Borrowing is to be repaid at the end of such Interest Period) be deemed to have
delivered a Borrowing Request requesting that such Borrowing be refinanced with
a new Borrowing of equivalent amount, and such new Borrowing shall be an ABR
Borrowing.
SECTION 2.04. Evidence of Debt; Repayment of Loans. (a) The
outstanding principal balance of each Loan shall be payable as provided in
Section 2.11. Each Loan shall bear interest from the date of the initial
Borrowing hereunder on the outstanding principal balance thereof as set forth in
Section 2.06.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness to such Lender
resulting from each Loan made by such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain accounts in which
it will record (i) the amount of each Loan made hereunder, the Type of each Loan
made and the Interest Period applicable thereto, (ii) the amount of any
principal or interest due and payable or to become due and payable from the
Borrower to each Lender hereunder and (iii) the amount of any sum received by
the Administrative Agent hereunder from the Borrower and each Lender's share
thereof.
(d) The entries made in the accounts maintained pursuant to
paragraphs (b) and (c) of this Section 2.04 shall be prima facie evidence of the
existence and amounts of the obligations therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain such
accounts or any error therein shall not in any manner affect the obligations of
the Borrower to repay the Loans in accordance with their terms.
(e) Notwithstanding any other provision of this Agreement, in
the event any Lender shall request and receive a Note as provided in Section
9.04(h) or otherwise the interests represented by that Note shall at all times
(including after any assignment of all or part of such interests pursuant to
Section 9.04) be represented by one or more Notes payable to the payee named
therein or its registered assigns.
SECTION 2.05. Fees. (a) The Borrower agrees to pay to each
Lender, through the Administrative Agent, on the last day of March, June,
September and December in each year, and on the date on which the Commitments of
all the Lenders shall be terminated as provided herein, a commitment fee (a
"Commitment Fee") on the average daily unused amount of the Commitments of such
Lender during the preceding quarter (or other period ending with the date
19
on which the Commitment of such Lender shall be terminated) at a rate equal to
0.50% per annum. All Commitment Fees shall be computed on the basis of the
actual number of days elapsed in a year of 365 or 366 days, as applicable. The
Commitment Fee due to each Lender shall commence to accrue on the date hereof
and shall cease to accrue on the date on which the Commitment of such Lender
shall be terminated as provided herein.
(b) The Borrower agrees to pay to the Administrative Agent,
for the account of the Agents, the fees set forth in the Fee Letters (the "Fee
Letters") dated as of July 23, 1998, and August 4, 1998, at the times specified
therein (the "Agents' Fees").
(c) All Fees shall be paid on the dates due, in immediately
available funds, to the Administrative Agent for distribution, if and as
appropriate, among the Lenders. Once paid, none of the Fees shall be refundable
under any circumstances.
SECTION 2.06. Interest on Loans. (a) Subject to the provisions
of Section 2.07, the Loans comprising each ABR Borrowing shall bear interest
(computed on the basis of the actual number of days elapsed over a year of 365
or 366 days, as the case may be, when determined by reference to the Prime Rate
and over a year of 360 days at all other times) at a rate per annum equal to the
Alternate Base Rate plus 3.00%.
(b) Subject to the provisions of Section 2.07, the Loans
comprising each Eurodollar Borrowing shall bear interest (computed on the basis
of the actual number of days elapsed over a year of 360 days) at a rate per
annum equal to the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus 4.00%.
(c) Interest on each Loan shall be payable on the Interest
Payment Dates applicable to such Loan except as otherwise provided in this
Agreement. The applicable Alternate Base Rate or Adjusted LIBO Rate for each
Interest Period or day within an Interest Period, as the case may be, shall be
determined by the Administrative Agent, and such determination shall be
conclusive absent manifest error. The Administrative Agent shall give the
Borrower prompt notice of each such determination.
SECTION 2.07. Default Interest. If the Borrower shall default
in the payment of the principal of or interest on any Loan or any other amount
becoming due hereunder, by acceleration or otherwise, the Borrower shall on
demand from time to time pay interest, to the extent permitted by law, on such
defaulted amount for the period beginning on the date of such default up to (but
not including) the date of actual payment (after as well as before judgment) at
a rate per annum (computed on the basis of the actual number of days elapsed
over a year of 360 days) equal to the rate that would otherwise be applicable to
ABR Loans pursuant to Section 2.06 plus 2.00%.
SECTION 2.08. Alternate Rate of Interest. In the event, and on
each occasion, that on the day two Business Days prior to the commencement of
any Interest Period for a Eurodollar Borrowing the Administrative Agent shall
have determined that dollar deposits in the principal amounts of the Loans
comprising such Borrowing are not generally available in the London interbank
market, or that the rates at which such dollar deposits are being offered will
not adequately and fairly reflect the cost to any Lender of making or
maintaining its Eurodollar Loan during such Interest Period, or that reasonable
means do not exist for ascertaining the Adjusted LIBO Rate, the Administrative
Agent shall, as soon as practicable thereafter, give written or telecopy notice
of such determination to the Borrower and the Lenders. In the event of any such
determination, until the Administrative Agent shall have advised the Borrower
and the Lenders that the circumstances giving rise to such notice no longer
exist, any request by the Borrower for a Eurodollar Borrowing pursuant to
Section 2.03 or 2.10 shall be deemed to be a request for an ABR Borrowing. Each
determination by the Administrative Agent hereunder shall be conclusive absent
manifest error.
20
SECTION 2.09. Termination and Reduction of Commitments. (a)
Unless previously terminated, the Commitments shall be automatically and
permanently terminated at 5:00 p.m., New York City time, on the earlier to occur
of (i) the date on which each of the First Borrowing, the Second Borrowing and
the Interim Borrowing shall have occurred and (ii) the Maturity Date.
(b) Upon at least three Business Days' prior irrevocable
written or telecopy notice to the Administrative Agent, the Borrower may at any
time in whole permanently terminate, or from time to time in part permanently
reduce, the Commitments; provided, however, that each partial reduction of the
Commitments shall be in an integral multiple of $1,000,000 and in a minimum
principal amount of $1,000,000 (or, if less, the remaining amount of the
Commitments).
(c) Each reduction in the Commitments hereunder shall be made
ratably among the Lenders in accordance with their respective Commitments. The
Borrower shall pay to the Administrative Agent for the account of the Lenders,
on the date of each termination or reduction, the Commitment Fees on the amount
of the Commitments so terminated or reduced accrued to but excluding the date of
such termination or reduction.
SECTION 2.10. Conversion and Continuation of Borrowings. The
Borrower shall have the right at any time upon prior irrevocable notice to the
Administrative Agent (a) not later than 12:00 (noon), New York City time, one
Business Day prior to conversion, to convert any Eurodollar Borrowing into an
ABR Borrowing, (b) not later than 10:00 a.m., New York City time, three Business
Days prior to conversion or continuation, to convert any ABR Borrowing into a
Eurodollar Borrowing or to continue any Eurodollar Borrowing as a Eurodollar
Borrowing for an additional Interest Period, and (c) not later than 10:00 a.m.,
New York City time, three Business Days prior to conversion, to convert the
Interest Period with respect to any Eurodollar Borrowing to another permissible
Interest Period, subject in each case to the following:
(i) each conversion or continuation shall be made pro rata
among the Lenders in accordance with the respective principal amounts
of the Loans comprising the converted or continued Borrowing;
(ii) if less than all the outstanding principal amount of any
Borrowing shall be converted or continued, then each resulting
Borrowing shall satisfy the limitations specified in Sections 2.02(a)
and (b) regarding the principal amount and maximum number of Borrowings
of the relevant Type;
(iii) each conversion shall be effected by each Lender by
recording for the account of such Lender the new Loan of such Lender
resulting from such conversion and reducing the Loan (or portion
thereof) of such Lender being converted by an equivalent principal
amount; accrued interest on a Loan (or portion thereof) being converted
shall be paid by the Borrower at the time of conversion;
(iv) if any Eurodollar Borrowing is converted at a time other
than the end of the Interest Period applicable thereto, the Borrower
shall pay, upon demand, any amounts due to the Lenders pursuant to
Section 2.15;
(v) any portion of a Borrowing maturing or required to be
repaid in less than one month may not be converted into or continued as
a Eurodollar Borrowing; and
(vi) any portion of a Eurodollar Borrowing which cannot be
converted into or continued as a Eurodollar Borrowing by reason of the
immediately preceding clause shall be automatically converted at the
end of the Interest Period in effect for such Borrowing into an ABR
Borrowing.
21
Each notice pursuant to this Section 2.10 shall be irrevocable
and shall refer to this Agreement and specify (i) the identity and amount of the
Borrowing that the Borrower requests be converted or continued, (ii) whether
such Borrowing is to be converted to or continued as a Eurodollar Borrowing or
an ABR Borrowing, (iii) if such notice requests a conversion, the date of such
conversion (which shall be a Business Day) and (iv) if such Borrowing is to be
converted to or continued as a Eurodollar Borrowing, the Interest Period with
respect thereto. If no Interest Period is specified in any such notice with
respect to any conversion to or continuation as a Eurodollar Borrowing, the
Borrower shall be deemed to have selected an Interest Period of one month's
duration. The Administrative Agent shall advise the other Lenders of any notice
given pursuant to this Section 2.10 and of each Lender's portion of any
converted or continued Borrowing. If the Borrower shall not have given notice in
accordance with this Section 2.10 to continue any Borrowing into a subsequent
Interest Period (and shall not otherwise have given notice in accordance with
this Section 2.10 to convert such Borrowing), such Borrowing shall, at the end
of the Interest Period applicable thereto (unless repaid pursuant to the terms
hereof), automatically be converted into an ABR Borrowing.
SECTION 2.11. Repayment of Borrowings. The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
each Lender the then unpaid principal amount of each Loan of such Lender on the
Maturity Date. Such payment shall be accompanied by accrued interest on the
principal amount paid to but excluding the date of payment.
SECTION 2.12. Prepayment. (a) The Borrower shall have the
right at any time and from time to time to prepay any Borrowing, in whole or in
part, upon at least three Business Days' prior written or telecopy notice (or
telephone notice promptly confirmed by written or telecopy notice) to the
Administrative Agent, before 11:00 a.m., New York City time; provided, however,
that each partial prepayment shall be in an amount that is an integral multiple
of $1,000,000 and not less than $1,000,000 (or, if less, the aggregate
outstanding amount).
(b) Each notice of prepayment or reduction pursuant to this
Section 2.12 shall specify the prepayment date and the principal amount of each
Borrowing (or portion thereof) to be prepaid, shall be irrevocable and shall
commit the Borrower to prepay such Borrowing by the amount stated therein on the
date stated therein. All prepayments under this Section 2.12 shall be subject to
Section 2.15 but otherwise without premium or penalty. All prepayments under
this Section 2.12 shall be accompanied by accrued interest on the principal
amount being prepaid to but excluding the date of payment.
SECTION 2.13. Reserve Requirements; Change in Circumstances.
(a) Notwithstanding any other provision herein, if after the date of this
Agreement any change in applicable law or regulation or in the interpretation or
administration thereof by any Governmental Authority charged with the
interpretation or administration thereof (whether or not having the force of
law) shall change the basis of taxation of payments to any Lender of the
principal of or interest on any Eurodollar Loan made by such Lender or any Fees
or other amounts payable hereunder (other than changes in respect of (i) taxes
imposed on the overall net income of such Lender by the jurisdiction in which
such Lender has its principal office or by any political subdivision or taxing
authority therein and (ii) any Taxes described in Section 2.19), or shall
impose, modify or deem applicable any reserve, special deposit or similar
requirement against assets or deposits with or for the account of or credit
extended by such Lender (except any such reserve requirement which is reflected
in the Adjusted LIBO Rate) or shall impose on such Lender or the interbank
Eurodollar market any other condition affecting this Agreement any Eurodollar
Loans of such Lender, and the result of any of the foregoing shall be to
increase the cost to such Lender of making or maintaining any Eurodollar Loan or
to reduce the amount of any sum received or receivable by such Lender hereunder
(whether of principal, interest or otherwise) by an amount deemed by such Lender
to be material, then from time to time the
22
Borrower will pay to such Lender upon demand such additional amount or amounts
as will compensate such Lender for such additional costs incurred or reduction
suffered.
(b) If any Lender shall have determined that the adoption
after the date hereof of any law, rule, regulation or guideline regarding
capital adequacy, or any change after the date hereof in any of the foregoing or
in the interpretation or administration of any of the foregoing by any
Governmental Authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender (or any
lending office of such Lender) or any Lender's holding company with any request
or directive regarding capital adequacy (whether or not having the force of law)
made or issued after the date hereof by any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of return
on such Lender's capital or on the capital of such Lender's holding company, if
any, as a consequence of this Agreement or its obligations pursuant hereto to a
level below that which such Lender or such Lender's holding company would have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time the Borrower shall pay to such Lender upon demand such
additional amount or amounts as will compensate such Lender or such Lender's
holding company for any such reduction suffered.
(c) A certificate of each Lender setting forth such amount or
amounts as shall be necessary to compensate such Lender or its holding company
as specified in paragraph (a) or (b) above, as the case may be, shall be
delivered to the Borrower through the Administrative Agent and shall be
conclusive absent manifest error. The Borrower shall pay each Lender the amount
shown as due on any such certificate delivered by it within 10 days after its
receipt of the same.
(d) In the event any Lender delivers a notice pursuant to
paragraph (e) below, the Borrower may require, at the Borrower's expense and
subject to Section 2.15, such Lender to assign, at par plus accrued interest and
fees, without recourse (in accordance with Section 9.04) all its interests,
rights and obligations hereunder (including, in the case of a Lender, its
Commitment and the Loans at the time owing to it) to a financial institution
specified by the Borrower, provided that (i) such assignment shall not conflict
with or violate any law, rule or regulation or order of any court or other
Governmental Authority, (ii) the Borrower shall have received the written
consent of the Administrative Agent (which consent shall not be unreasonably
withheld) to such assignment and (iii) the Borrower shall have paid to the
assigning Lender all monies accrued and owing hereunder to it (including
pursuant to this Section 2.13).
(e) Promptly after any Lender has determined, in its sole
judgment, that it will make a request for increased compensation pursuant to
this Section 2.13, such Lender will notify the Borrower thereof. Failure on the
part of any Lender so to notify the Borrower or to demand compensation for any
increased costs or reduction in amounts received or receivable or reduction in
return on capital with respect to any period shall not constitute a waiver of
such Lender's right to demand compensation with respect to such period or any
other period, provided that the Borrower shall not be under any obligation to
compensate any Lender under paragraph (b) above with respect to increased costs
or reductions with respect to any period prior to the date that is six months
prior to such request if such Lender knew or could reasonably have been expected
to be aware of the circumstances giving rise to such increased costs or
reductions and of the fact that such circumstances would in fact result in a
claim for increased compensation by reason of such increased costs or reductions
and provided further that the foregoing limitation shall not apply to any
increased costs or reductions arising out of the retroactive application of any
law, regulation, rule, guideline or directive as aforesaid within such six month
period. The protection of this Section 2.13 shall be available to each Lender
regardless of any possible contention as to the invalidity or inapplicability of
the law, rule, regulation, guideline or other change or condition which shall
have occurred or been imposed.
23
SECTION 2.14. Change in Legality. (a) Notwithstanding any
other provision herein, if the adoption of or any change in any law or
regulation or in the interpretation thereof by any Governmental Authority
charged with the administration or interpretation thereof shall make it unlawful
for any Lender to make or maintain any Eurodollar Loan or to give effect to its
obligations as contemplated hereby with respect to any Eurodollar Loan, then, by
written notice to the Borrower and to the Administrative Agent, such Lender may:
(i) declare that Eurodollar Loans will not thereafter be made
by such Lender hereunder, whereupon any request by the Borrower for a
Eurodollar Borrowing shall, as to such Lender only, be deemed a request
for an ABR Loan unless such declaration shall be subsequently
withdrawn; and
(ii) require that all outstanding Eurodollar Loans made by it
be converted to ABR Loans, in which event all such Eurodollar Loans
shall be automatically converted to ABR Loans as of the effective date
of such notice as provided in paragraph (b) below.
In the event any Lender shall exercise its rights under subparagraphs (i) and
(ii) above, all payments and prepayments of principal that would otherwise have
been applied to repay the Eurodollar Loans that would have been made by such
Lender or the converted Eurodollar Loans of such Lender shall instead be applied
to repay the ABR Loans made by such Lender in lieu of, or resulting from the
conversion of, such Eurodollar Loans.
(b) For purposes of this Section 2.14, a notice to the
Borrower by any Lender shall be effective as to each Eurodollar Loan, if lawful,
on the last day of the Interest Period currently applicable to such Eurodollar
Loan; in all other cases such notice shall be effective on the date of receipt
by the Borrower.
SECTION 2.15. Indemnity. The Borrower shall indemnify each
Lender against any loss or expense (other than taxes) that such Lender may
sustain or incur as a consequence of (a) any failure by the Borrower to fulfill
on the date of any Borrowing or proposed Borrowing hereunder the applicable
conditions set forth in Article IV, (b) any failure by the Borrower to borrow or
to refinance, convert or continue any Loan hereunder after irrevocable notice of
such Borrowing, refinancing, conversion or continuation has been given pursuant
to Section 2.03 or 2.10, (c) any payment, prepayment or conversion of a
Eurodollar Loan required by any other provision of this Agreement or otherwise
made or deemed made on a date other than the last day of the Interest Period
applicable thereto, (d) any default in payment or prepayment of the principal
amount of any Loan or any part thereof or interest accrued thereon, as and when
due and payable (at the due date thereof, whether by scheduled maturity,
acceleration, irrevocable notice of prepayment or otherwise) or (e) the
occurrence of any Event of Default, including, in each such case, any loss or
reasonable expense sustained or incurred or to be sustained or incurred in
liquidating or employing deposits from third parties acquired to effect or
maintain such Loan or any part thereof as a Eurodollar Loan. Such loss or
reasonable expense shall exclude loss of margin hereunder but shall include an
amount equal to the excess, if any, as reasonably determined by such Lender, of
(i) its cost of obtaining the funds for the Loan being paid, prepaid, converted
or not borrowed, converted or continued (assumed to be the Adjusted LIBO Rate
applicable thereto) for the period from the date of such payment, prepayment,
conversion or failure to borrow, convert or continue to the last day of the
Interest Period for such Loan (or, in the case of a failure to borrow, convert
or continue, the Interest Period for such Loan which would have commenced on the
date of such failure) over (ii) the amount of interest (as reasonably determined
by such Lender) that would be realized by such Lender in reemploying the funds
so paid, prepaid, converted or not borrowed, converted or continued for such
period or Interest Period, as the case may be. A certificate of any Lender
setting forth any amount or amounts that such Lender is entitled to receive
pursuant to this Section 2.15 (and the reasons therefor) shall be delivered to
the Borrower through the Administrative Agent and shall be conclusive absent
manifest error.
24
SECTION 2.16. Pro Rata Treatment. Except as required under
Section 2.14, each Borrowing, each payment or prepayment of principal of any
Borrowing, each payment of interest on the Loans, each payment of the Commitment
Fees, each reduction of the Commitments and each refinancing of any Borrowing
with, conversion of any Borrowing to or continuation of any Borrowing as a
Borrowing of any Type shall be allocated pro rata among the Lenders in
accordance with their respective Commitments (or, if such Commitments shall have
expired or been terminated, in accordance with the respective principal amounts
of their outstanding Loans). Each Lender agrees that in computing such Lender's
portion of any Borrowing, the Administrative Agent may, in its discretion, round
each Lender's percentage of such Borrowing, computed in accordance with Section
2.01, to the next higher or lower whole dollar amount.
SECTION 2.17. Sharing of Setoffs. Each Lender agrees that if
it shall, through the exercise of a right of banker's lien, setoff or
counterclaim against the Borrower or pursuant to a secured claim under Section
506 of Title 11 of the United States Code or other security or interest arising
from, or in lieu of, such secured claim, received by such Lender under any
applicable bankruptcy, insolvency or other similar law or otherwise, or by any
other means, obtain payment (voluntary or involuntary) in respect of any Loan as
a result of which the unpaid principal portion of its Loans made pursuant to its
Commitment (or, after acceleration of the Loans pursuant to Article VII,
applicable to any Loan) shall be proportionately less than the unpaid principal
portion of the Loans of any other Lender made pursuant to such Commitments (or,
after acceleration of the Loans pursuant to Article VII, applicable to any
Loan), it shall be deemed simultaneously to have purchased from such other
Lender at face value, and shall promptly pay to such other Lender the purchase
price for, an interest in the Loans of such other Lender, so that the aggregate
unpaid principal amount of the Loans and interests in Loans held by each such
Lender shall be in the same proportion to the aggregate unpaid principal amount
of all Loans then outstanding under the Commitments as the principal amount of
its Loans under such Commitments prior to such exercise of banker's lien, setoff
or counterclaim or other event was to the principal amount of all such Loans
outstanding prior to such exercise of banker's lien, setoff or counterclaim or
other event; provided, however, that, if any such purchase or purchases or
adjustments shall be made pursuant to this Section 2.17 and the payment giving
rise thereto shall thereafter be recovered, such purchase or purchases or
adjustments shall be rescinded to the extent of such recovery and the purchase
price or prices or adjustment restored without interest. The Borrower expressly
consents to the foregoing arrangements and agrees that any Lender holding an
interest in a Loan deemed to have been so purchased may exercise any and all
rights of banker's lien, setoff or counterclaim with respect to any and all
moneys owing by the Borrower to such Lender by reason thereof as fully as if
such Lender had made a Loan directly to the Borrower in the amount of such
interest.
SECTION 2.18. Payments. (a) The Borrower shall make each
payment without setoff or counterclaim (including principal of or interest on
any Borrowing or any Fees or other amounts) required to be made by it hereunder
and under any other Loan Document not later than 12:00 noon, New York City time,
on the date when due in Dollars to the Administrative Agent at its offices at
000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx, Attention of Agent Bank Services, in
immediately available funds, for credit to The Chase Manhattan Bank, ABA Number
0210 00021, Account Number 000-000-000. The Administrative Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds as
received.
(b) Whenever any payment (including principal of or interest
on any Borrowing or any Fees or other amounts) hereunder or under any other Loan
Document shall become due, or otherwise would occur, on a day that is not a
Business Day, such payment may be made on the next succeeding Business Day
(except in the case of payment of principal of a Eurodollar Borrowing if the
effect of such extension would be to extend such payment into the next
succeeding month, in which event such payment shall be due on the immediately
preceding
25
Business Day), and such extension of time shall in such case be included in the
computation of interest or Fees, if applicable.
SECTION 2.19. Taxes. (a) Any and all payments by the Borrower
to the Administrative Agent or the Lenders hereunder or under the other Loan
Documents shall be made, in accordance with Section 2.18, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding (i) in the case of each Lender and the Administrative Agent, taxes,
levies, imposts, deductions, charges or withholdings that would not be imposed
but for a present or former connection between such Lender or the Administrative
Agent (as the case may be) and the jurisdiction imposing such tax, other than a
connection arising solely by virtue of the activities of such Lender or the
Administrative Agent (as the case may be) pursuant to or in respect of this
Agreement or under any other Loan Document, including entering into, lending
money or extending credit pursuant to, receiving payments under, or enforcing,
this Agreement or any other Loan Document, and (ii) in the case of each Lender
and the Administrative Agent, any United States withholding taxes payable with
respect to any payments made hereunder or under the other Loan Documents under
laws (including any statute, treaty, ruling, determination or regulation) in
effect on the Initial Date (as hereinafter defined) applicable to such Lender or
the Administrative Agent, as the case may be, but not excluding any United
States withholding taxes payable solely as a result of any change in such laws
occurring after the Initial Date (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as "Taxes"). For purposes of this Section 2.19, the term "Initial Date" shall
mean (i) in the case of the Administrative Agent or any Lender, the date on
which such person became a party to this Agreement and (ii) in the case of any
assignment, including any assignment by a Lender to a new lending office, the
date of such assignment. If any Taxes shall be required by law to be deducted
from or in respect of any sum payable hereunder or under any other Loan Document
to any Lender or the Administrative Agent, (i) the sum payable by the Borrower
shall be increased as may be necessary so that after making all required
deductions (including deductions applicable to additional sums payable under
this Section 2.19) such Lender or the Administrative Agent, as the case may be,
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) the Borrower shall make such deductions and (iii) the
Borrower shall pay the full amount deducted to the relevant taxation authority
or other authority in accordance with applicable law. The Borrower shall not,
however, be required to pay any amounts pursuant to clause (i) of the preceding
sentence to any Lender or the Administrative Agent not organized under the laws
of the United States of America or a state thereof if such Lender or the
Administrative Agent fails to comply with the requirements of paragraph (f) or
(g), as the case may be, of this Section 2.19.
(b) In addition, the Borrower agrees to pay any present or
future stamp or documentary taxes or any other excise or property taxes, charges
or similar levies which arise from the execution, delivery or registration of,
or otherwise with respect to, this Agreement or any other Loan Document
(hereinafter referred to as "Other Taxes").
(c) The Borrower will indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes (including any
Taxes or Other Taxes imposed by any jurisdiction on amounts payable under this
Section 2.19) paid by such Lender or the Administrative Agent, as the case may
be, and any liability (including penalties, interest and expenses including
reasonable attorney's fees and expenses) arising therefrom or with respect
thereto whether or not such Taxes or Other Taxes were correctly or legally
asserted. A certificate as to the amount of such payment or liability prepared
by a Lender (or Transferee) or the Administrative Agent, absent manifest error,
shall be final, conclusive and binding for all purposes, provided that if the
Borrower reasonably believes that such Taxes were not correctly or legally
asserted, such Lender or the Administrative Agent, as the case may be shall use
reasonable efforts to cooperate with the Borrower to obtain a refund of such
Taxes or Other Taxes. Such indemnification shall be made within 10 days after
the date any Lender or the
26
Administrative Agent, as the case may be, makes written demand therefor. If a
Lender or the Administrative Agent shall become aware that it is entitled to
receive a refund in respect of Taxes or Other Taxes, it shall promptly notify
the Borrower of the availability of such refund and shall, within 30 days after
receipt of a request by the Borrower, pursue or timely claim such refund at the
Borrower's expense. If any Lender or the Administrative Agent receives a refund
in respect of any Taxes or Other Taxes for which such Lender or the
Administrative Agent has received payment from the Borrower hereunder, it shall
promptly repay such refund (plus any interest received) to the Borrower (but
only to the extent of indemnity payments made, or additional amounts paid, by
the Borrower under this Section 2.19 with respect to the Taxes or Other Taxes
giving rise to such refund), provided that the Borrower, upon the request of
such Lender or the Administrative Agent, agrees to return such refund (plus any
penalties, interest or other charges required to be paid) to such Lender or the
Administrative Agent in the event such Lender or the Administrative Agent is
required to repay such refund to the relevant taxing authority.
(d) Within 30 days after the date of any payment of Taxes or
Other Taxes withheld by the Borrower in respect of any payment to any Lender or
the Administrative Agent, the Borrower will furnish to the Administrative Agent,
at its address referred to in Section 9.01, the original or a certified copy of
a receipt evidencing payment thereof.
(e) Without prejudice to the survival of any other agreement
contained herein, the agreements and obligations contained in this Section 2.19
shall survive the payment in full of principal and interest hereunder and the
termination of the Commitments.
(f) In the case of any Borrowing by the Borrower, this
paragraph (f) shall apply. Each Lender and the Administrative Agent that is not
a United States person (as defined in Section 7701(a)(30) of the Code) agrees
that at least 10 days prior to the first Interest Payment Date following the
Initial Date in respect of such Lender, it will deliver to the Borrower and the
Administrative Agent (if appropriate) two duly completed copies of either (i)
United States Internal Revenue Service Form 1001 or 4224 or successor applicable
form, as the case may be, certifying in each case that such Lender or the
Administrative Agent, as the case may be, is entitled to receive payments under
this Agreement and the other Loan Documents payable to it without deduction or
withholding of any United States federal income taxes and backup withholding
taxes or is entitled to receive such payments at a reduced rate pursuant to a
treaty provision or (ii) in the case of a Lender that is not a "bank" within the
meaning of Section 881(c)(3) of the Code, (A) deliver to the Borrower and the
Administrative Agent (I) a statement under penalties of perjury that such Lender
(w) is not a "bank" under Section 881(c)(3)(A) of the Code, is not subject to
regulatory or other legal requirements as a bank in any jurisdiction, and has
not been treated as a bank for purposes of any tax, securities law or other
filing or submission made to any Governmental Authority, any application made to
a rating agency or qualification for any exemption from tax, securities law or
other legal requirements, (x) is not a 10-percent shareholder within the meaning
of Section 881(c)(3)(B) of the Code, (y) is not a controlled foreign corporation
receiving interest from a related person within the meaning of Section
881(c)(3)(c) of the Code and (z) is not a "conduit entity" within the meaning of
U.S. Treasury Regulations Section 1.881-3 and (II) an Internal Revenue Service
Form W-8; (B) deliver to the Borrower and the Administrative Agent a further
copy of said Form W-8, or any successor applicable form or other manner of
certification on or before the date that any such Form W-8 expires or becomes
obsolete or after the occurrence of any event requiring a change in the most
recent form previously delivered by such Lender; and (C) obtain such extensions
of time for filing and complete such forms or certifications as may be
reasonably requested by the Borrower or the Administrative Agent; unless in any
such case an event (including any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders any such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender so advises the Borrower and the Administrative Agent. Such Lender
shall
27
certify (i) in the case of a Form 1001 or 4224, that it is entitled to
receive payments under this Agreement without deduction or withholding of any
United States Federal income taxes or is entitled to receive such payments at a
reduced rate pursuant to a treaty provision and (ii) in the case of a Form W-8
or W-9, that it is entitled to an exemption from United States backup
withholding tax. Each Person that shall become a participant pursuant to Section
9.04 shall, upon the effectiveness of the related transfer, be required to
provide all the forms and statements required pursuant to this paragraph (f) to
the Lender from which the related participation shall have been purchased.
Unless the Borrower and the Administrative Agent have received forms,
certificates and other documents required by this Section 2.19(f) indicating
that payments hereunder or under this Agreement or any other Loan Document to or
for the Lender not incorporated under the laws of the United States or a state
thereof are not subject to United States withholding tax or are subject to such
tax at a rate reduced by an applicable tax treaty, the Borrower or the
Administrative Agent shall withhold such taxes from such payments at the
applicable statutory rate.
(g) Any Lender claiming any additional amounts payable
pursuant to this Section 2.19 shall use reasonable efforts (consistent with
legal and regulatory restrictions) to file any certificate or document requested
in writing by the Borrower to change the jurisdiction of its applicable lending
office, if the making of such a filing or change would avoid the need for or
reduce the amount of any such additional amounts which would be payable or may
thereafter accrue and would not, in the sole determination of such Lender, be
otherwise disadvantageous to such Lender.
(h) Nothing contained in this Section 2.19 shall require any
Lender or the Administrative Agent to make available any of its tax returns (or
any other information that it deems to be confidential or proprietary).
SECTION 2.20. Replacement of Lenders. If any Lender is subject
to an order, judgment or decree of any Governmental Authority that purports to
enjoin or restrain such Lender from making Loans hereunder, then the Borrower
may, at its sole expense and effort and subject to Section 2.15, upon notice to
such Lender and the Administrative Agent, require such Lender to assign and
delegate, at par plus accrued interest and fees, without recourse (in accordance
with and subject to the restrictions contained in Section 9.04), all its
interests, rights and obligations under this Agreement (including its Commitment
and the Loans at the time owing to it) to a financial institution specified by
the Borrower (which may be another Lender, if a Lender accepts such assignment),
provided that (i) the Borrower shall have received the prior written consent of
the Administrative Agent, which consent shall not unreasonably be withheld or
delayed, (ii) such assignment shall not conflict with or violate any law, rule
or regulation or order of any court or other Governmental Authority and (iii)
the Borrower shall have paid to the assigning Lender all monies accrued and
owing hereunder to it (including pursuant to this Section 2.20).
ARTICLE III. REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to each of the Lenders
that:
SECTION 3.01. Organization; Powers. Each of the Borrower and
each of the Subsidiaries (a) is a corporation duly organized, validly existing
and in good standing (or, if applicable in a foreign jurisdiction, enjoys the
equivalent status under the laws of any jurisdiction of organization outside the
United States) under the laws of the jurisdiction of its organization, (b) has
all requisite power and authority to own its property and assets and to carry on
its business as now conducted, (c) is qualified to do business in every
jurisdiction where such qualification is required, except where the failure so
to qualify could not reasonably be expected to result in a Material Adverse
Effect, and (d) in the case of the Borrower and AcquisitionCo, has
28
the corporate power and authority to execute, deliver and perform its
obligations under each of the Loan Documents and each other agreement or
instrument contemplated thereby to which it is or will be a party and, in the
case of the Borrower, to borrow and otherwise obtain credit hereunder.
SECTION 3.02. Authorization. The execution, delivery and
performance by the Borrower and each of the Subsidiaries of the Merger Agreement
and each of the Loan Documents to which it is a party, the borrowings hereunder
and the Transactions (a) have been duly authorized by all corporate and
stockholder action required to be obtained by the Borrower and the Subsidiaries
and (b) will not (i) violate (A) any provision of law, statute, rule or
regulation, or of the certificate or articles of incorporation or other
constitutive documents or By-laws of the Borrower or any Subsidiary, (B) any
applicable order of any court or any rule, regulation or order of any
Governmental Authority or (C) any provision of any indenture, certificate of
designation for preferred stock, agreement or other instrument to which the
Borrower or any Subsidiary is a party or by which any of them or any of their
property is or may be bound, (ii) be in conflict with, result in a breach of or
constitute (alone or with notice or lapse of time or both) a default under any
such indenture, certificate of designation for preferred stock, agreement or
other instrument, where any such conflict, violation, breach or default referred
to in clause (i) or (ii) of this Section 3.02, individually or in the aggregate,
could reasonably be expected to have a Material Adverse Effect, or (iii) result
in the creation or imposition of any Lien upon or with respect to any property
or assets now owned or hereafter acquired by the Borrower or any Subsidiary
other than the Liens created by the Loan Documents.
SECTION 3.03. Enforceability. This Agreement has been duly
executed and delivered by the Borrower and constitutes, and each other Loan
Document when executed and delivered by the Borrower and each other Loan Party
that is party thereto will constitute, a legal, valid and binding obligation of
the Borrower and such Loan Party enforceable against the Borrower and such Loan
Party in accordance with its terms, except as enforceability may be limited by
bankruptcy, insolvency, moratorium, reorganization or other similar laws
affecting creditors' rights generally and except as enforceability may be
limited by general principles of equity (regardless of whether such
enforceability is considered in a proceeding in equity or at law).
SECTION 3.04. Governmental Approvals. No action, consent or
approval of, registration or filing with or any other action by any Governmental
Authority is or will be required in connection with the Transactions, except for
(a) the filing of Uniform Commercial Code financing statements, (b) such as have
been made or obtained and are in full force and effect and (c) such actions,
consents and approvals the failure to obtain or make which could not reasonably
be expected to result in a Material Adverse Effect.
SECTION 3.05. Financial Statements. The Borrower has
heretofore furnished to the Lenders with respect to RES and the RES
Subsidiaries, consolidated balance sheets and consolidated statements of
operations, cash flows and stockholders' equity (a) as of and for the fiscal
years ended June 30, 1995, June 30, 1996 and June 30, 1997, audited by and
accompanied by the opinion of KPMG Peat Marwick LLP, independent public
accountants, and (b) as of and for the fiscal year ended June 30, 1998 (in the
case of clause (b), without footnotes), and certified by its chief financial
officer. Such financial statements present fairly the financial condition and
results of operations of RES and the RES Subsidiaries as of such dates and for
such periods. None of the Borrower and its consolidated subsidiaries has or
shall have as of the Closing Date any material Guarantee, contingent liability
or liability for taxes, or any long-term lease or unusual forward or long-term
commitment, including any interest rate or foreign currency hedging transaction,
other than pursuant to the Loan Documents. Such financial statements were
prepared in accordance with GAAP.
29
SECTION 3.06. No Material Adverse Change. There has been no
material adverse change in the assets, business, operations, properties or
financial condition of the Borrower and the Subsidiaries, taken as a whole,
since June 30, 1997.
SECTION 3.07. Title to Properties; Possession Under Leases.
(a) The Borrower and each of the Subsidiaries has good and marketable title to,
or valid leasehold interests in, or easements or other limited property
interests in, all its material properties and assets, except for minor defects
in title that do not interfere with its ability to conduct its business as
currently conducted or to utilize such properties and assets for their intended
purposes. All such material properties and assets are free and clear of Liens,
other than Liens expressly permitted by Section 6.02.
(b) The Borrower and each of the Subsidiaries has complied
with all obligations under all material leases to which it is a party, except
where the failure to comply would not have a Material Adverse Effect, and all
such leases are in full force and effect, except leases in respect of which the
failure to be in full force and effect could not reasonably be expected to have
a Material Adverse Effect. The Borrower and each of the Subsidiaries enjoys
peaceful and undisturbed possession under all such material leases, other than
leases which, individually or in the aggregate, are not material to the Borrower
and the Subsidiaries, taken as a whole, and in respect of which the failure to
enjoy peaceful and undisturbed possession could not reasonably be expected to,
individually or in the aggregate, result in a Material Adverse Effect.
(c) The Borrower and each of the Subsidiaries owns or
possesses, or could obtain ownership or possession of, on terms not materially
adverse to it, all patents, trademarks, service marks, trade names, copyrights,
licenses and rights with respect thereto necessary for the present conduct of
its business, without any known conflict with the rights of others, and free
from any burdensome restrictions, except where such conflicts and restrictions
could not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
SECTION 3.08. Subsidiaries. (a) Schedule 3.08 sets forth as of
the Closing Date the name and jurisdiction of incorporation of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by the Borrower or by any Subsidiary.
(b) As of the Closing Date, there are no outstanding
subscriptions, options, warrants, calls, rights or other agreements or
commitments (other than stock options granted to past and current employees or
directors and directors' qualifying shares) of any nature relating to any
Capital Stock of the Borrower or any Subsidiary, except under the Loan Documents
and the Existing Credit Agreement, provided that, as of the Merger Date, there
will be no outstanding subscriptions, options, warrants, calls, rights (other
than dissenter's rights) or other agreements or commitments of any nature
relating to any Capital Stock of RES.
SECTION 3.09. Litigation; Compliance with Laws. (a) Except as
set forth in Schedule 3.09, there are not any material actions, suits or
proceedings at law or in equity or by or before any Governmental Authority now
pending or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any Subsidiary or any business, property or rights of any such
person (i) which involve any Loan Document or the Transactions or (ii) as to
which there is a reasonable possibility of an adverse determination and which,
if adversely determined, could, individually or in the aggregate, reasonably be
expected to result in a Material Adverse Effect or materially adversely affect
the Transactions.
(b) None of the Borrower, the Subsidiaries and their
respective material properties or assets is in violation of (nor will the
continued operation of their material properties and assets as currently
conducted violate) any law, rule or regulation (including any zoning, building,
Environmental Law, ordinance, code or approval or any building permit), or is in
30
default with respect to any judgment, writ, injunction or decree of any
Governmental Authority, where such violation or default could reasonably be
expected to result in a Material Adverse Effect.
SECTION 3.10. Agreements. (a) None of the Borrower and the
Subsidiaries is a party to any agreement or instrument or subject to any
corporate restriction that has resulted or could reasonably be expected to
result in a Material Adverse Effect.
(b) None of the Borrower and the Subsidiaries is in default in
any manner under any provision of any indenture or other agreement or instrument
evidencing Indebtedness, or any other material agreement or instrument to which
it is a party or by which it or any of its properties or assets are or may be
bound, in either case where such default could reasonably be expected to result
in a Material Adverse Effect. Immediately after giving effect to the
Transactions, no Default or Event of Default shall have occurred and be
continuing.
SECTION 3.11. Federal Reserve Regulations. (a) None of the
Borrower and the Subsidiaries is engaged principally, or as one of its important
activities, in the business of extending credit for the purpose of purchasing or
carrying Margin Stock.
(b) No part of the proceeds of any Loan will be used, whether
directly or indirectly, and whether immediately, incidentally or ultimately, for
any purpose which entails a violation of, or which is inconsistent with, the
provisions of the Regulations of the Board, including Regulation U or X.
SECTION 3.12. Investment Company Act; Public Utility Holding
Company Act. None of the Borrower and the Subsidiaries is (a) an "investment
company" as defined in, or subject to regulation under, the Investment Company
Act of 1940 or (b) a "holding company" as defined in, or subject to regulation
under, the Public Utility Holding Company Act of 1935.
SECTION 3.13. Use of Proceeds. The Borrower will use the
proceeds of the Loans only for the purposes specified in the preamble to this
Agreement.
SECTION 3.14. Tax Returns. Each of the Borrower and each of
the Subsidiaries has timely filed or caused to be timely filed all Federal, and
all material state and local, tax returns required to have been filed by it and
has paid or caused to be paid all taxes shown thereon to be due and payable by
it and all assessments in excess of $5,000,000 in the aggregate received by it,
except taxes or assessments that are being contested in good faith by
appropriate proceedings in accordance with Section 5.03 and for which the
Borrower has set aside on its books adequate reserves and taxes, assessments,
charges, levies or claims in respect of property taxes for property that the
Borrower or a Subsidiary has determined to abandon where the sole recourse for
such tax, assessment, charge, levy or claim is to such property. Each of the
Borrower and each of the Subsidiaries has paid in full or made adequate
provision (in accordance with GAAP) for the payment of all taxes due with
respect to all periods ending on or before the Closing Date, which taxes, if not
paid or adequately provided for, could reasonably be expected to have a Material
Adverse Effect. Except as set forth on Schedule 3.14, with respect to each of
the Borrower and each of the Subsidiaries, (a) no material claims are being
asserted in writing with respect to any taxes, (b) no presently effective
waivers or extensions of statutes of limitation with respect to taxes have been
given or requested, (c) no tax returns are being examined by, and no written
notification of intention to examine has been received from, the Internal
Revenue Service or, with respect to any material tax liability, any other taxing
authority and (d) no currently pending issues have been raised in writing by the
Internal Revenue Service or, with respect to any material tax liability, any
other taxing authority. For purposes hereof, "taxes" shall mean any tax, levy,
impost, duty, charge, assessment or fee of any nature (including interest,
penalties and additions thereto) that is imposed by any Governmental Authority.
31
SECTION 3.15. No Material Misstatements. (a) The written
information, reports, financial statements, exhibits and schedules furnished by
or on behalf of the Borrower or any of the Subsidiaries to the Administrative
Agent or any Lender in connection with the negotiation of any Loan Document or
included therein or delivered pursuant thereto (including any Confidential
Information Memorandum relating to the Borrower (the "Information Memorandum")
delivered to the Lenders but excluding the financial projections referred to in
Section 3.15(b)), when taken as a whole, did not contain, and as they may be
amended, supplemented or modified from time to time, will not contain, as of the
Closing Date (or, in the case of the Information Memorandum, as of the date
thereof) any material misstatement of fact and did not omit, and as they may be
amended, supplemented or modified from time to time, will not omit, to state as
of the Closing Date (or, in the case of the Information Memorandum, as of the
date thereof) any material fact necessary to make the statements therein, in the
light of the circumstances under which they were, are or will be made, not
materially misleading in their presentation of the Transactions or of the
Borrower and the Subsidiaries taken as a whole.
(b) All financial projections concerning the Borrower and the
Subsidiaries that are or have been made available to the Administrative Agent or
any Lender by the Borrower or any Subsidiary have been or will be prepared in
good faith based upon assumptions believed by the Borrower to be reasonable on
the Closing Date (or, in the case of the Information Memorandum, as of the date
thereof).
SECTION 3.16. Employee Benefit Plans. Each of the Borrower and
the ERISA Affiliates is in compliance with the applicable provisions of ERISA
and the provisions of the Code relating to ERISA and the regulations and
published interpretations thereunder and any similar applicable non-U.S. law
except for such noncompliance which could not reasonably be expected to result
in a Material Adverse Effect. No Reportable Event has occurred as to which the
Borrower or any ERISA Affiliate was required to file a report with the PBGC,
other than reports for which the 30 day notice requirement is waived, reports
that have been filed and reports the failure of which to file could not
reasonably be expected to result in a Material Adverse Effect. As of the date
hereof, the present value of all benefit liabilities under each Plan of the
Borrower and the ERISA Affiliates (on an accumulated benefits obligation basis
and based on those assumptions used to fund such Plan) did not, as of the last
annual valuation date applicable thereto for which a valuation is available,
exceed by more than $18,000,000 the value of the assets of such Plan, and the
present value of all benefit liabilities of all underfunded Plans (on an
accumulated benefits obligation basis and based on those assumptions used to
fund each such Plan) did not, as of the last annual valuation dates applicable
thereto for which valuations are available, exceed by more than $21,000,000 the
value of the assets of all such underfunded Plans. None of the Borrower and the
ERISA Affiliates has incurred or could reasonably be expected to incur any
Withdrawal Liability that could reasonably be expected to result in a Material
Adverse Effect. None of the Borrower and the ERISA Affiliates have received any
written notification that any Multiemployer Plan is in reorganization or has
been terminated within the meaning of Title IV of ERISA, and no Multiemployer
Plan is reasonably expected to be in reorganization or to be terminated, where
such reorganization or termination has resulted or could reasonably be expected
to result, through increases in the contributions required to be made to such
Plan or otherwise, in a Material Adverse Effect.
SECTION 3.17. Environmental Matters. Except as set forth on
Schedule 3.17:
(a) There has not been a Release or threatened Release of
Hazardous Materials at, on, under or around the properties currently or
formerly owned, operated or leased by the Borrower and the Subsidiaries
(the "Properties") in amounts or concentrations which (i) constitute or
constituted a violation of Environmental Laws, except as could not
reasonably be expected to have a Material Adverse Effect; (ii) would
reasonably be expected to give rise to an Environmental Claim that, in
any such case or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect; or
32
(iii) could reasonably be expected to give rise to an obligation to
conduct a Remedial Action that could reasonably be expected to result
in a Material Adverse Effect;
(b) The Properties and all operations of the Borrower and the
Subsidiaries are in compliance, and in all prior periods have been in
compliance, with all Environmental Laws, and all necessary
Environmental Permits have been obtained and are in effect, except to
the extent that such non-compliance or failure to obtain any necessary
Environmental Permits, in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect;
(c) None of the Borrower and the Subsidiaries has received any
Environmental Claim in connection with the Properties or the operations
of the Borrower or the Subsidiaries or with regard to any person whose
liabilities for environmental matters the Borrower or the Subsidiaries
has retained or assumed, in whole or in part, contractually, by
operation of law or otherwise, which, in either such case or in the
aggregate, could reasonably be expected to result in a Material Adverse
Effect;
(d) Hazardous Materials have not been transported from the
Properties, nor have Hazardous Materials been generated, treated,
stored or disposed of at, on, under or around any of the Properties in
a manner that could reasonably be expected to give rise to liability
under any Environmental Law, nor have any of the Borrower and the
Subsidiaries retained or assumed any liability, contractually, by
operation of law or otherwise, with respect to the generation,
treatment, storage or disposal of Hazardous Materials, which, in each
case, individually or in the aggregate, could reasonably be expected to
result in a Material Adverse Effect; and
(e) No Lien in favor of any Governmental Authority for (i) any
liability under any Environmental Law or (ii) damages arising from or
costs incurred by such Governmental Authority in response to a Release
or threatened Release of Hazardous Materials into the environment has
been recorded with respect to the Properties, except for Liens
permitted by Section 6.02.
SECTION 3.18. Capitalization of the Borrower. The authorized
Capital Stock, the par value thereof and the amount of such authorized Capital
Stock issued and outstanding for the Borrower is set forth on Schedule 3.18 as
of the Closing Date (after giving effect to the Transactions intended to occur
on the Closing Date).
SECTION 3.19. Security Documents. (a) The Pledge Agreement is
effective to create in favor of the Collateral Agent, for the ratable benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral (as defined in the Pledge Agreement) and, when the Pledged Stock is
delivered to the Collateral Agent in accordance with the terms of the Pledge
Agreement, the Pledge Agreement will constitute a fully perfected first priority
Lien on, and security interest in, all right, title and interest of the
applicable pledgor thereunder in such Pledged Stock, in each case prior and
superior in right to any other person.
(b) The Security Agreement is effective to create in favor of
the Collateral Agent, for the ratable benefit of the Secured Parties, a legal,
valid and enforceable security interest in the Collateral (as defined in the
Security Agreement) and the Security Agreement will constitute a fully perfected
Lien on, and security interest in, all right, title and interest of the grantors
thereunder in such Collateral, prior and superior in right to any other person.
SECTION 3.20. Location of Real Property and Leased Premises.
(a) Schedule 3.20 lists completely and correctly as of the Closing Date all real
property owned by the Borrower and the Subsidiaries and the addresses thereof,
other than individual properties
33
that have an original cost of less than $200,000. As of the Closing Date, the
Borrower and the Subsidiaries own in fee all the real property set forth as
being owned by them on Schedule 3.20.
(b) Schedule 3.20 lists completely and correctly as of the
Closing Date all real property leased by the Borrower and the Subsidiaries and
the addresses thereof. As of the Closing Date, the Borrower and the Subsidiaries
have valid leases in all the real property set forth as being leased by them on
Schedule 3.20.
SECTION 3.21. Solvency. (a) Immediately after the consummation
of the Transactions and the other transactions to occur on the Closing Date and
the Merger Date and immediately following the making of each Loan made on the
Closing Date and the Merger Date and after giving effect to the application of
the proceeds thereof, (i) the fair value of the assets of the Borrower and the
Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts
and liabilities, direct, subordinated, contingent or otherwise, of the Borrower
and the Subsidiaries on a consolidated basis; (ii) the present fair saleable
value of the property of the Borrower and the Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the probable
liability of the Borrower and the Subsidiaries on a consolidated basis on their
debts and other liabilities, direct, subordinated, contingent or otherwise, as
such debts and other liabilities become absolute and matured; (iii) the Borrower
and the Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, direct, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (iv) the Borrower and the
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted following the
Closing Date.
(b) The Borrower does not intend to, and does not believe that
it or any Subsidiary will, incur debts beyond its ability to pay such debts as
they mature, taking into account the timing and amounts of cash to be received
by it or any such Subsidiary and the timing and amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
SECTION 3.22. Labor Matters. Except as set forth on Schedule
3.22, there are no strikes pending or threatened against the Borrower or any
Subsidiary that, individually or in the aggregate, could reasonably be expected
to result in a Material Adverse Effect. The hours worked and payments made to
employees of the Borrower and the Subsidiaries have not been in violation in any
material respect of the Fair Labor Standards Act or any other applicable law
dealing with such matters. All material payments due from the Borrower or any
Subsidiary or for which any claim may be made against the Borrower or any
Subsidiary, on account of wages and employee health and welfare insurance and
other benefits, have been paid or accrued as a liability on the books of the
Borrower or such Subsidiary to the extent required by GAAP. Neither consummation
of the Equity Tender Offer nor the consummation of the Merger will give rise to
a right of termination or right of renegotiation on the part of any union under
any collective bargaining agreement to which the Borrower or any Subsidiary (or
any predecessor) is a party or by which the Borrower or any Subsidiary (or any
predecessor) is bound, other than collective bargaining agreements which,
individually or in the aggregate, are not material to the Borrower and the
Subsidiaries taken as a whole.
SECTION 3.23. Insurance. Schedule 3.23 sets forth a true,
complete and correct description of all insurance maintained by or on behalf of
the Borrower and the Subsidiaries as of the Closing Date. As of such date, such
insurance is in full force and effect and all premiums have been duly paid.
34
ARTICLE IV. CONDITIONS OF LENDING
The obligations of the Lenders to make Loans hereunder are
subject to the satisfaction of the following conditions:
SECTION 4.01. Initial Borrowing. On the Closing Date:
(a) The Administrative Agent shall have received, on behalf of
itself and the Lenders, a favorable written opinion of Xxxxxxx Xxxxxxx
& Xxxxxxxx, special counsel for the Borrower, substantially to the
effect set forth in Exhibit F (i) dated the Closing Date, (ii)
addressed to the Administrative Agent and the Lenders, and (iii)
covering such other matters relating to the Loan Documents and the
Transactions as the Administrative Agent shall reasonably request, and
the Borrower hereby instructs its counsel to deliver such opinion.
(b) All legal matters incident to this Agreement, the
borrowings and extensions of credit hereunder and the other Loan
Documents shall be reasonably satisfactory to the Administrative Agent
and to the Lenders.
(c) The Administrative Agent shall have received in the case
of each Loan Party each of the items referred to in clauses (i), (ii),
(iii) and (iv) below: (i) a copy of the certificate or articles of
incorporation, including all amendments thereto, of each Loan Party,
certified as of a recent date by the Secretary of State of the state of
its organization, and a certificate as to the good standing of each
Loan Party as of a recent date from such Secretary of State; (ii) a
certificate of the Secretary or Assistant Secretary of each Loan Party
dated the Closing Date and certifying (A) that attached thereto is a
true and complete copy of the by-laws of such Loan Party as in effect
on the Closing Date and at all times since a date prior to the date of
the resolutions described in clause (B) below, (B) that attached
thereto is a true and complete copy of resolutions duly adopted by the
Board of Directors of such Loan Party authorizing the execution,
delivery and performance of the Loan Documents to which such person is
a party and, in the case of the Borrower, the borrowings hereunder, and
that such resolutions have not been modified, rescinded or amended and
are in full force and effect, (C) that the certificate or articles of
incorporation of such Loan Party have not been amended since the date
of the last amendment thereto shown on the certificate of good standing
furnished pursuant to clause (i) above, and (D) as to the incumbency
and specimen signature of each officer executing any Loan Document or
any other document delivered in connection herewith on behalf of such
Loan Party; (iii) a certificate of another officer as to the incumbency
and specimen signature of the Secretary or Assistant Secretary
executing the certificate pursuant to clause (ii) above; and (iv) such
other documents as the Administrative Agent and the Lenders may
reasonably request.
(d) The representations and warranties set forth in Article
III hereof shall be true and correct in all material respects on and as
of the Closing Date with the same effect as though made on and as of
such date, except to the extent such representations and warranties
expressly relate to an earlier date.
(e) At the time of and immediately after the initial
Borrowing, no Event of Default or Default shall have occurred and be
continuing.
(f) The Administrative Agent shall have received a certificate
of the Borrower, dated the Closing Date and signed by a Financial
Officer of and on behalf of the Borrower, confirming compliance with
the conditions precedent set forth in paragraphs (d) and (e) of this
Section 4.01.
35
(g) The Administrative Agent shall have received a notice of
Borrowing as required by Section 2.03.
(h) (i) The Pledge Agreement shall have been duly executed by
the parties thereto and delivered to the Collateral Agent and shall be
in full force and effect, and all the outstanding Capital Stock of (A)
AcquisitionCo owned by the Borrower and (B) RES owned by AcquisitionCo
shall have been duly and validly pledged thereunder to the Collateral
Agent for the ratable benefit of the Secured Parties and certificates
representing all the outstanding Capital Stock of AcquisitionCo owned
by the Borrower, accompanied by stock powers endorsed in blank, shall
be in the actual possession of the Collateral Agent; and (ii) the
Security Agreement shall have been duly executed by the Loan Parties
and shall have been delivered to the Collateral Agent and shall be in
full force and effect on such date and each document required by law or
reasonably requested by the Administrative Agent to be filed,
registered or recorded in order to create in favor of the Collateral
Agent for the benefit of the Secured Parties a valid, legal and
perfected first- priority security interest in and lien on the
Collateral described in such agreement shall have been delivered to the
Collateral Agent.
(i) The Administrative Agent shall have received copies of, or
an insurance broker's or agent's certificate as to coverage under, the
insurance policies required by Section 5.02.
(j) The Administrative Agent shall be reasonably satisfied
with the scope of due diligence performed with respect to environmental
matters concerning the Borrower and the Subsidiaries, including with
respect to any environmental hazards, liabilities or Remedial Action to
which the Borrower or any Subsidiaries may be subject.
(k) The Equity Tender Offer, the Closing Date Equity
Contribution, the Waiver and Amendment (or the Replacement Credit
Facility, as applicable) and the other Transactions intended to occur
on the Closing Date shall have been consummated simultaneously with the
initial Borrowing in accordance in all material respects with
applicable law, the Merger Agreement and all related documentation, in
each case in the form previously approved by, and reasonably acceptable
to, the Administrative Agent and otherwise on terms reasonably
satisfactory to the Administrative Agent in all material respects; and
the conditions to the Borrower's obligations set forth in the Merger
Agreement shall have been satisfied (other than any conditions that, by
their terms, cannot be satisfied on the Closing Date ) without giving
effect to any waiver or amendment in any manner materially adverse to
the Lenders that was not approved by the Administrative Agent.
(l) The Lenders shall be reasonably satisfied that, after
giving effect to the Transactions to occur on the Closing Date, (i) RES
and the RES Subsidiaries shall have outstanding no preferred stock and
no Indebtedness other than Indebtedness permitted under Section 6.01
and, if it is not reasonably practicable for RES to redeem the Special
Preferred Stock on the Closing Date or if the Special Preferred Stock
is to be canceled in the Merger, the Special Preferred Stock, provided
that if the Special Preferred Stock is outstanding following the
Closing Date, the holder of the Special Preferred Stock will not be
entitled to vote with respect to the Merger, (ii) the Borrower shall
have outstanding no Indebtedness other than Loans hereunder and no
Capital Stock other than common stock owned by the Investors and (iii)
AcquisitionCo shall have outstanding no Indebtedness and no Capital
Stock other than common stock owned by the Borrower.
(m) The Agents shall be reasonably satisfied with the sources
and uses of funds delivered to the Agents prior to the date hereof and
with the information, projections and financial models (to the extent
available) delivered to the Agents prior to the date hereof.
36
In addition, the Borrower shall have provided such other financial
information as the Agents may reasonably have requested in connection
with the Transactions.
(n) The Borrower shall have caused RES to use its commercially
reasonable efforts to secure availability of at least $20,000,000 under
the Existing Credit Agreement to fund up to $20,000,000 of the
consideration payable by RES pursuant to the Debt Tender Offer in lieu
of any funds being drawn under the RES Facility for such purpose.
(o) All requisite material governmental authorities shall have
approved or consented to the Transactions and the other transactions
contemplated hereby to the extent required, all applicable appeal
periods shall have expired and there shall be no governmental or
judicial action, actual or threatened, that has or could have a
reasonable likelihood of restraining, preventing or imposing materially
burdensome conditions on the Transactions or the consummation of the
other transactions contemplated hereby.
(p) The Administrative Agent shall have received all Fees and
other amounts due and payable on or prior to the Closing Date,
including, to the extent invoiced, reimbursement or payment of all
out-of-pocket expenses required to be reimbursed or paid by the
Borrower hereunder or under any other Loan Document.
(q) The Administrative Agent shall have received a solvency
certificate, in form and substance satisfactory to the Administrative
Agent, from a Financial Officer of the Borrower as to the solvency of
the Borrower and the Subsidiaries on a consolidated basis after giving
effect to the Transactions and the consummation of the other
transactions contemplated hereby.
The initial Borrowing shall be deemed to constitute a
representation and warranty by the Borrower on the date of such Borrowing as to
the matters specified in paragraphs (d) and (e) of this Section 4.01.
SECTION 4.02. Second Borrowing. On the date of the Second
Borrowing, if any:
(a) The Investors shall have made the Merger Date Equity
Contribution, and the other Transactions to occur on the Merger Date
shall have occurred, on or before the date of the Second Borrowing.
(b) At the time of and immediately following the Second
Borrowing, there shall not have occurred and be continuing an Event of
Default or Default under clause (b), (c) (without regard to any
applicable grace period), (g) (without regard to any applicable grace
period), (h), (l) or (m) of Article VII.
(c) The Lenders shall not have accelerated any or all Loans
hereunder.
(d) There shall not have occurred and be continuing any
payment default or payment event of default with respect to the
Existing Notes, the Existing Credit Agreement (or the Replacement
Credit Facility, as applicable) or the RES Facility (or any
indebtedness refinancing the RES Facility).
(e) There shall not be in effect a temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing or rendering illegal the consummation of the Merger, and
there shall not be pending any proceeding by any Governmental Authority
seeking any of the foregoing.
37
(f) The representations set forth in Sections 3.01, 3.02,
3.03, 3.04 and 3.11(b) shall be true and correct in all material
respects on and as of the date of the Second Borrowing with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
(g) The Administrative Agent shall have received a notice of
Borrowing as required by Section 2.03.
(h) The Administrative Agent shall have received a certificate
of the Borrower dated the date of the Second Borrowing signed by a
Financial Officer and on behalf of the Borrower, confirming compliance
with the conditions precedent set forth in paragraphs (b), (d) and (f)
of this Section 4.02.
(i) The Merger shall be consummated simultaneously with the
Second Borrowing in accordance with applicable law, the Merger
Agreement and all related documentation, in each case in the form
previously approved by the Administrative Agent, and otherwise on terms
reasonably satisfactory to the Administrative Agent.
(j) After giving effect to the Merger, RES shall have
outstanding no Capital Stock other than common stock owned by the
Borrower.
The Second Borrowing shall be deemed to constitute a
representation and warranty by the Borrower on the date of such Borrowing as to
the matters specified in paragraphs (b), (d) and (f) of this Section 4.02.
SECTION 4.03. Interim Borrowing. On the date of the Interim
Borrowing, if any:
(a) The Investors shall have made the Interim Equity
Contribution, and the other Transactions to occur on the date of the
Interim Borrowing shall have occurred, on or before the date of the
Interim Borrowing.
(b) At the time of and immediately following the Interim
Borrowing, there shall not have occurred and be continuing an Event of
Default or Default under clause (b), (c) (without regard to any
applicable grace period), (g) (without regard to any applicable grace
period), (h), (l) or (m) of Article VII.
(c) The Lenders shall not have accelerated any or all Loans
hereunder.
(d) There shall not have occurred and be continuing any
payment default or payment event of default with respect to the
Existing Notes, the Existing Credit Agreement (or the Replacement
Credit Facility, as applicable) or the RES Facility (or any
indebtedness refinancing the RES Facility).
(e) There shall not be in effect a temporary restraining
order, preliminary or permanent injunction or other order issued by any
court of competent jurisdiction or other legal restraint or prohibition
preventing or rendering illegal the consummation of the Merger, and
there shall not be pending any proceeding by any Governmental Authority
seeking any of the foregoing.
(f) The representations set forth in Sections 3.01, 3.02,
3.03, 3.04 and 3.11(b) shall be true and correct in all material
respects on and as of the date of the Interim Borrowing with the same
effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date.
38
(g) The Administrative Agent shall have received a notice of
Borrowing as required by Section 2.03.
(h) The Administrative Agent shall have received a certificate
of the Borrower dated the date of the Interim Borrowing signed by a
Financial Officer and on behalf of the Borrower, confirming compliance
with the conditions precedent set forth in paragraphs (b), (d) and (f)
of this Section 4.03.
The Interim Borrowing shall be deemed to constitute a
representation and warranty by the Borrower on the date of such Borrowing as to
the matters specified in paragraphs (b), (d) and (f) of this Section 4.03.
SECTION 4.04. Release of Amounts from the Collateral Account.
On the date of release of any amount (other than any amount payable under any
Loan Document to the Administrative Agent or the Lenders) from the Collateral
Account:
(a) The Merger and the other Transactions to occur on the date
of such release shall have occurred on such date or shall be
consummated simultaneously with such release in accordance with
applicable law, the Merger Agreement and all related documentation, in
each case in the form previously approved by the Administrative Agent
and otherwise on terms reasonably satisfactory to the Administrative
Agent.
(b) The representations and warranties set forth in Sections
3.11(b) and 3.13 shall be true and correct in all material respects on
and as of the date of such release with the same effect as though made
on and as of such date.
The release of any such amount from the Collateral Account
shall be deemed to constitute a representation and warranty by the Borrower on
the date of such release as to the matters specified in paragraphs (a) and (b)
of this Section 4.04.
SECTION 4.05. All Borrowings and Collateral Releases. On the
date of each Borrowing or release of any Collateral from the Collateral Account,
after giving effect to such Borrowing or release and all Transactions to occur
on such date, the sum of (a) 50% of the value of the Shares that form part of
the Collateral on such date (determined based on the purchase price per Share to
be paid in the Equity Tender Offer and the Merger) and (b) the aggregate amount
of cash held by the Collateral Agent in the Collateral Account on such date
shall be not less than the aggregate principal amount of Loans outstanding
hereunder on such date.
ARTICLE V. AFFIRMATIVE COVENANTS
The Borrower covenants and agrees with each Lender that so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document shall have been paid
in full, unless the Required Lenders shall otherwise consent in writing, the
Borrower will, and will cause each of the Subsidiaries to:
SECTION 5.01. Existence; Businesses and Properties. (a) Do or
cause to be done all things necessary to preserve, renew and keep in full force
and effect its legal existence, except as otherwise expressly permitted under
Section 6.05, and except for the liquidation or dissolution of Subsidiaries if
the assets of such corporations to the extent they exceed estimated liabilities
are acquired by the Borrower or a Wholly Owned Subsidiary in such liquidation or
dissolution.
39
(b) Do or cause to be done all things necessary to obtain,
preserve, renew, extend and keep in full force and effect the rights, licenses,
permits, franchises, authorizations, patents, copyrights, trademarks and trade
names material to the conduct of its business; comply in all material respects
with all applicable laws, rules, regulations and orders of any Governmental
Authority, whether now in effect or hereafter enacted; and at all times maintain
and preserve all property material to the conduct of such business and keep such
property in good repair, working order and condition and from time to time make,
or cause to be made, all needful and proper repairs, renewals, additions,
improvements and replacements thereto necessary in order that the business
carried on in connection therewith, if any, may be properly conducted at all
times (in each case except as expressly permitted by this Agreement).
SECTION 5.02. Insurance. (a) Keep its insurable properties
insured at all times by financially sound and reputable insurers in such amounts
as shall be customary for similar businesses and maintain such other reasonable
insurance (including, to the extent consistent with past practices,
self-insurance), of such types, to such extent and against such risks, as is
customary with companies in the same or similar businesses, and maintain such
other insurance as may be required by law or any other Loan Document.
(b) Notify the Administrative Agent and the Collateral Agent
promptly whenever any separate insurance concurrent in form or contributing in
the event of loss with that required to be maintained under this Section 5.02 is
taken out by the Borrower or any Subsidiary; and promptly deliver to the
Administrative Agent and the Collateral Agent a duplicate original copy of such
policy or policies, or insurance certificate with respect thereto.
(c) In connection with the covenants set forth in this Section
5.02, it is understood and agreed that:
(i) none of the Administrative Agent, the Lenders and their
respective agents or employees shall be liable for any loss or damage
insured by the insurance policies required to be maintained under this
Section 5.02, it being understood that (A) the Borrower and the other
Loan Parties shall look solely to their insurance companies or any
other parties other than the aforesaid parties for the recovery of such
loss or damage and (B) such insurance companies shall have no rights of
subrogation against the Administrative Agent, the Collateral Agent, the
Lenders or their agents or employees. If, however, the insurance
policies do not provide waiver of subrogation rights against such
parties, as required above, then the Borrower hereby agrees to the
extent permitted by law, to waive, and to cause each Subsidiary to
waive, its right of recovery, if any, against the Administrative Agent,
the Collateral Agent, the Lenders and their agents and employees; and
(ii) the designation of any form, type or amount of insurance
coverage by the Administrative Agent, the Collateral Agent or the
Required Lenders under this Section 5.02 shall in no event be deemed a
representation, warranty or advice by the Administrative Agent, the
Collateral Agent or the Lenders that such insurance is adequate for the
purposes of the business of the Borrower and the Subsidiaries or the
protection of their properties.
SECTION 5.03. Taxes. Pay and discharge promptly when due all
taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits or in respect of its property, before the same shall
become delinquent or in default, as well as all lawful claims for labor,
materials and supplies or otherwise which, if unpaid, might give rise to a Lien
upon such properties or any part thereof; provided, however, that such payment
and discharge shall not be required with respect to any such tax, assessment,
charge, levy or claim so long as (a) the validity or amount thereof shall be
contested in good faith by appropriate proceedings and the Borrower or the
affected Subsidiary, as applicable, shall have set aside on its
40
books reserves in accordance with GAAP with respect thereto, (b) such tax,
assessment, charge, levy or claim is in respect of property taxes for property
that the Borrower or one of the Subsidiaries has determined to abandon and the
sole recourse for such tax, assessment, charge, levy or claim is to such
property or (c) the amount of such taxes, assessments, charges, levies and
claims and interest and penalties thereon does not exceed $5,000,000 in the
aggregate.
SECTION 5.04. Financial Statements, Reports, etc. In the case
of the Borrower, furnish to the Administrative Agent and each Lender:
(a) within 120 days after the end of fiscal 1998 and within 90
days after the end of each subsequent fiscal year, a consolidated
balance sheet and related statements of operations, cash flows and
stockholders' equity showing the financial condition of the Borrower
and the Subsidiaries as of the close of such fiscal year and the
consolidated results of their operations during such year, all audited
by independent public accountants of recognized national standing
reasonably acceptable to the Administrative Agent and accompanied by an
opinion of such accountants (which shall not be qualified in any
material respect) to the effect that such consolidated financial
statements fairly present the financial condition and results of
operations of the Borrower and the Subsidiaries on a consolidated basis
in accordance with GAAP;
(b) within 45 days after the end of each of the first three
fiscal quarters of each fiscal year, a consolidated balance sheet and
related statements of operations, cash flows and stockholders' equity
showing the financial condition of the Borrower and the Subsidiaries as
of the close of such fiscal quarter and the consolidated results of
their operations during such fiscal quarter and the then-elapsed
portion of the fiscal year, all certified by one of its Financial
Officers on behalf of the Borrower as fairly presenting the financial
condition and results of operations of the Borrower and the
Subsidiaries on a consolidated basis in accordance with GAAP (except
for the absence of footnotes), subject to normal year-end audit
adjustments;
(c) concurrently with any delivery of financial statements
under (a) or (b) above, a certificate of the accounting firm or
Financial Officer on behalf of the Borrower opining on or certifying
such statements (which certificate, when furnished by an accounting
firm, may be limited to accounting matters and disclaim responsibility
for legal interpretations) (i) certifying that no Event of Default or
Default has occurred or, if such an Event of Default or Default has
occurred, specifying the nature and extent thereof and any corrective
action taken or proposed to be taken with respect thereto and (ii)
setting forth computations in reasonable detail satisfactory to the
Administrative Agent demonstrating compliance with the covenant
contained in Section 6.10 (it being understood that the information
required by this clause (ii) may be provided in a certificate of a
Financial Officer on behalf of the Borrower instead of from such
accounting firm);
(d) promptly after the same become publicly available, copies
of all periodic and other publicly available reports, proxy statements
and, to the extent requested by the Administrative Agent, other
materials filed by the Borrower or any Subsidiary with the Securities
and Exchange Commission, or any governmental authority succeeding to
any of or all the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders generally, as
the case may be;
(e) if, as a result of any change in accounting principles and
policies from those as in effect on the date of this Agreement, the
consolidated financial statements of the Borrower and the Subsidiaries
delivered pursuant to paragraph (a) or (b) above will differ in any
material respect from the consolidated financial statements that would
have been delivered pursuant to such clauses had no such change in
accounting principles and
41
policies been made, then, together with the first delivery of financial
statements pursuant to paragraph (a) and (b) above following such
change, a schedule prepared by a Financial Officer on behalf of the
Borrower reconciling such changes to what the financial statements
would have been without such changes;
(f) prior to the end of each fiscal year, a copy of an
operating and capital expenditure budget for RES for the next
succeeding fiscal year;
(g) promptly following the creation or acquisition of any
Subsidiary, a certificate from a Responsible Officer, identifying such
new Subsidiary and the ownership interest of the Borrower and the
Subsidiaries therein;
(h) simultaneously with the delivery of any financial
statements pursuant to paragraph (a) or (b) above, a balance sheet and
related statements of operations, cash flows and stockholder's equity
for each unconsolidated Subsidiary for the applicable period;
(i) promptly, a copy of all reports submitted in connection
with any material interim or special audit made by independent
accountants of the books of the Borrower or any Subsidiary;
(j) promptly, after any borrowing base report shall have been
delivered to the lenders under the Existing Credit Agreement, a copy of
such report; and
(k) promptly, from time to time, such other information
regarding the operations, business affairs and financial condition of
the Borrower or any Subsidiary, or compliance with the terms of any
Loan Document, or such consolidating financial statements, as in each
case the Administrative Agent or any Lender, acting through the
Administrative Agent, may reasonably request.
SECTION 5.05. Litigation and Other Notices. Furnish to the
Administrative Agent written notice of the following promptly after any
Responsible Officer of the Borrower obtains actual knowledge thereof:
(a) any Event of Default or Default, specifying the nature and
extent thereof and the corrective action (if any) proposed to be taken
with respect thereto;
(b) the filing or commencement of, or any written threat or
notice of intention of any person to file or commence, any action, suit
or proceeding, whether at law or in equity or by or before any
Governmental Authority, against the Borrower or any Subsidiary in
respect of which there is a reasonable possibility of an adverse
determination and which, if adversely determined, could reasonably be
expected to result in a Material Adverse Effect; and
(c) any other development specific to the Borrower or any
Subsidiary that is not a matter of general public knowledge and that
has resulted in, or could reasonably be expected to result in, a
Material Adverse Effect.
SECTION 5.06. Employee Benefits. (a) Comply in all material
respects with the applicable provisions of ERISA and the provisions of the Code
relating to ERISA and any applicable similar non-U.S. law, except to the extent
that failure to comply therewith could not reasonably be expected to result in a
Material Adverse Effect, and (b) furnish to the Administrative Agent (i) as soon
as possible after, and in any event within 30 days after any Responsible Officer
of the Borrower or any ERISA Affiliate knows or has reason to know that, any
Reportable Event has occurred, a statement of a Financial Officer setting forth
details as to
42
such Reportable Event and the action proposed to be taken with respect thereto,
together with a copy of the notice, if any, of such Reportable Event given to
the PBGC, (ii) promptly after any Responsible Officer learns of receipt thereof,
a copy of any notice that the Borrower or any ERISA Affiliate may receive from
the PBGC relating to the intention of the PBGC to terminate any Plan or Plans
(other than a Plan maintained by an ERISA Affiliate that is considered an ERISA
Affiliate only pursuant to subsection (m) or (o) of Code Section 414) or to
appoint a trustee to administer any such Plan, (iii) within 30 days after the
due date for filing with the PBGC pursuant to Section 412(n) of the Code a
notice of failure to make a required installment or other payment with respect
to a Plan, a statement of a Financial Officer setting forth details as to such
failure and the action proposed to be taken with respect thereto, together with
a copy of any such notice given to the PBGC and (iv) promptly after any
Responsible Officer learns thereof and in any event within 30 days after receipt
thereof by the Borrower or any ERISA Affiliate from the sponsor of a
Multiemployer Plan, a copy of each notice received by the Borrower or any ERISA
Affiliate concerning (A) the imposition of Withdrawal Liability or (B) a
determination that a Multiemployer Plan is, or is expected to be, terminated or
in reorganization, in each case within the meaning of Title IV of ERISA,
provided that in the case of each of clauses (i) through (iv) above, notice to
the Administrative Agent shall only be required if such event or condition,
together with all other events or conditions referred to in clauses (i) through
(iv) above, could reasonably be expected to result in a Material Adverse Effect.
SECTION 5.07. Maintaining Records; Access to Properties and
Inspections. Maintain all financial records in accordance with GAAP and permit
any persons designated by the Administrative Agent or any Lender to visit and
inspect the financial records and the properties of the Borrower or any
Subsidiary at reasonable times, upon reasonable prior notice to the Borrower,
and as often as reasonably requested and to make extracts from and copies of
such financial records, and permit any persons designated by the Administrative
Agent or any Lender upon reasonable prior notice to the Borrower to discuss the
affairs, finances and condition of the Borrower or any Subsidiary with the
officers thereof and independent accountants therefor (subject to reasonable
requirements of confidentiality, including requirements imposed by law or by
contract).
SECTION 5.08. Use of Proceeds. Use the proceeds of the Loans
only for the purposes set forth in the preamble to this Agreement.
SECTION 5.09. Compliance with Environmental Laws. Comply, and
make reasonable efforts to cause all lessees and other persons occupying its
Properties to comply, with all Environmental Laws and Environmental Permits
applicable to its operations and Properties; obtain and renew all material
Environmental Permits necessary for its operations and Properties; and conduct
any Remedial Action required under Environmental Laws in accordance with
Environmental Laws, except, in each case with respect to this Section 5.09, to
the extent the failure to do so, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.
SECTION 5.10. Preparation of Environmental Reports. If a
default caused by reason of a breach of Section 3.17 or 5.09 shall have occurred
and be continuing, at the reasonable request of the Required Lenders through the
Administrative Agent, provide to the Lenders within 90 days after such request,
at the expense of the Borrower, an environmental site assessment report of
reasonable scope and content for the Properties which are the subject of such
default, prepared by an environmental consulting firm reasonably acceptable to
the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the estimated cost of any Remedial Action reasonably likely to be
required under any applicable Environmental Law in connection with such
Properties.
SECTION 5.11. Further Assurances. Execute any and all further
documents, financing statements, agreements and instruments, and take all
further action (including filing
43
Uniform Commercial Code and other financing statements) that may be required
under applicable law, or which the Collateral Agent may reasonably request, in
order to effectuate the transactions contemplated by the Loan Documents and in
order to grant, preserve, protect and perfect the validity and first priority
(subject to Liens permitted by Section 6.02) of the security interests created
or intended to be created by the Security Documents.
SECTION 5.12. Fiscal Year; Accounting. In the case of the
Borrower and each of the Subsidiaries, cause its respective fiscal year to end
on June 30.
SECTION 5.13. Dividends. In the case of the Borrower, permit
the Subsidiaries to pay dividends and cause such dividends to be paid to the
extent required to pay the monetary Obligations, subject to restrictions
permitted by Section 6.09(d) and to prohibitions imposed by applicable
requirements of law.
SECTION 5.14. Delivery of Stock Certificates. As soon as
practicable, but in any event not later than four Business Days after the
Closing Date, deliver or cause to be delivered to the Collateral Agent
certificates representing all the shares of Capital Stock acquired by
AcquisitionCo on the Closing Date pursuant to the Equity Tender Offer,
accompanied by stock powers endorsed in blank.
ARTICLE VI. NEGATIVE COVENANTS
The Borrower covenants and agrees with each Lender that, so
long as this Agreement shall remain in effect and until the Commitments have
been terminated and the principal of and interest on each Loan, all Fees and all
other expenses or amounts payable under any Loan Document have been paid in
full, unless the Required Lenders shall otherwise consent in writing, the
Borrower will not, and will not cause or permit any of the Subsidiaries to:
SECTION 6.01. Indebtedness. Incur, create, assume or permit to
exist any Indebtedness, except:
(a) Indebtedness of RES and the RES Subsidiaries existing on
the date hereof and set forth on Schedule 6.01, but not any extensions,
renewals or replacements of such Indebtedness except (i) renewals and
extensions expressly provided for in the agreements evidencing any such
Indebtedness (other than the Existing Notes and Indebtedness under the
Existing Credit Agreement or the Replacement Credit Facility) as the
same are in effect on the date of this Agreement and (ii) refinancings
and extensions of any such Indebtedness (other than the Existing Notes
and Indebtedness under the Existing Credit Agreement or the Replacement
Credit Facility) if the average life to maturity thereof is greater
than or equal to that of the Indebtedness being refinanced or extended,
provided that such extending, renewal or replacement Indebtedness shall
not be (A) Indebtedness of an obligor that was not an obligor with
respect to the Indebtedness being extended, renewed or refinanced, (B)
in a principal amount which exceeds the Indebtedness being renewed,
extended or refinanced (plus unpaid accrued interest and premium
thereon) or (C) incurred, created or assumed if any Default or Event of
Default has occurred and is continuing or would result therefrom;
(b) Indebtedness created hereunder and under the other Loan
Documents;
(c) Indebtedness of RES and the RES Subsidiaries pursuant to
Interest Rate Protection Agreements entered into in order to fix the
effective rate of interest on any Indebtedness, provided that such
transactions shall be entered into to hedge actual interest rate
exposures and not for the purpose of speculation;
44
(d) Indebtedness of RES or any RES Subsidiary owed to
(including obligations in respect of letters of credit for the benefit
of) any person providing worker's compensation, health, disability or
other employee benefits or property, casualty or liability insurance to
RES or any RES Subsidiary, pursuant to reimbursement or indemnification
obligations to such person;
(e) (i) Indebtedness of RES to any RES Subsidiary; and (ii)
Indebtedness of any RES Subsidiary to RES or any RES Subsidiary arising
from an investment made pursuant to Section 6.04;
(f) Indebtedness of RES or a RES Subsidiary which represents
the assumption by RES or such RES Subsidiary of Indebtedness of a RES
Subsidiary in connection with the permitted merger of such RES
Subsidiary with or into the assuming person or the purchase of all or
substantially all the assets of such RES Subsidiary;
(g) Indebtedness of RES or the RES Subsidiaries in respect of
performance bonds, bid bonds, appeal bonds, surety bonds and similar
obligations and trade-related letters of credit, in each case provided
in the ordinary course of business, including those incurred to secure
health, safety and environmental obligations in the ordinary course of
business, and any extension, renewal or refinancing thereof to the
extent not provided to secure the repayment of other Indebtedness and
to the extent that the amount of refinancing Indebtedness is not
greater than the amount of Indebtedness being refinanced;
(h) Indebtedness of RES or any RES Subsidiary arising from the
honoring by a bank or other financial institution of a check, draft or
similar instrument drawn against insufficient funds in the ordinary
course of business, provided that such Indebtedness is extinguished
within two Business Days of its incurrence;
(i) Indebtedness of a RES Subsidiary acquired after the date
hereof and Indebtedness of a corporation merged or consolidated with or
into RES or a RES Subsidiary after the date hereof, which Indebtedness
in each case exists at the time of such acquisition, merger,
consolidation or conversion into a RES Subsidiary and is not created in
contemplation of such event and where such acquisition, merger or
consolidation is permitted by this Agreement, provided that the
aggregate principal amount of Indebtedness under this paragraph (i)
shall not at any time exceed $10,000,000 for RES and all RES
Subsidiaries;
(j) Capital Lease Obligations, mortgage financings and
purchase money Indebtedness incurred by RES or any RES Subsidiary prior
to or within 270 days after a Capital Expenditure permitted under
Section 6.10 in order to finance such Capital Expenditure, and
extensions, renewals and refinancings thereof in an aggregate principal
amount outstanding at any time not in excess of $10,000,000, provided
that any such refinancing Indebtedness shall not be (i) Indebtedness of
an obligor that was not an obligor with respect to the Indebtedness
being extended, renewed or refinanced or (ii) in a principal amount
which exceeds the Indebtedness being renewed, extended or refinanced;
(k) Indebtedness incurred under the RES Facility;
(l) the New Notes in an aggregate principal amount not to
exceed $210,000,000;
(m) extensions, renewals or refinancings of Indebtedness under
paragraphs (k) and (l) so long as (i) such Indebtedness (the
"Refinancing Indebtedness") is in an aggregate principal amount not
greater than the aggregate principal amount of the
45
Indebtedness being extended, renewed or refinanced plus the amount of
any interest or premiums required to be paid thereon and fees and
expenses associated therewith, (ii) such Refinancing Indebtedness has a
later or equal final maturity and a longer or equal weighted average
life than the Indebtedness being extended, renewed or refinanced, (iii)
the interest rate applicable to such Refinancing Indebtedness shall be
a market interest rate (as determined in good faith by the Board of
Directors of RES or the Borrower) as of the time of such extension,
renewal or refinancing, (iv) the covenants, events of default and other
provisions thereof (including any Guarantees thereof), taken as a
whole, shall be no less favorable to the Lenders than those contained
in the Indebtedness being refinanced and (v) at the time of and after
giving effect to such extension, renewal or refinancing, no Default or
Event of Default shall have occurred and be continuing;
(n) Indebtedness incurred under the Existing Credit Agreement
or the Replacement Credit Facility in an aggregate principal amount not
to exceed $115,000,000;
(o) Indebtedness of RES and the RES Subsidiaries in respect of
surety bonds or other obligations in favor of the PBGC entered into
pursuant to the Merger Agreement or the Settlement Agreement referred
to in the Merger Agreement, and not in respect of obligations violating
any of the provisions of this Agreement or the Existing Credit
Agreement;
(p) other Indebtedness of RES and the RES Subsidiaries in an
aggregate principal amount at any time outstanding not in excess of
$10,000,000; and
(q) all premium (if any), interest (including post-petition
interest), fees, expenses, indemnities, charges and additional or
contingent interest on obligations described in clauses (a) through (p)
above.
SECTION 6.02. Liens. Create, incur, assume or permit to exist
any Lien on any property or assets (including stock or other securities of any
person, including any Subsidiary) at the time owned by it or on any income or
revenues or rights in respect of any thereof, or sell or transfer any account
receivable or any right in respect thereof, except:
(a) Liens on property or assets of RES and the RES
Subsidiaries existing on the date hereof and set forth in Schedule
6.02, provided that such Liens shall secure only those obligations
which they secure on the date hereof (and extensions, renewals and
refinancings of such obligations permitted by Section 6.01(a)) and
shall not subsequently apply to any other property or assets of the
Borrower or any Subsidiary (other than pursuant to existing after
acquired property clauses);
(b) any Lien created under the Loan Documents;
(c) any Lien created under the Existing Credit Agreement, the
Replacement Credit Facility, the Existing Notes, the RES Facility and
the New Notes;
(d) any Lien existing on any property or asset of RES or any
RES Subsidiary prior to the acquisition thereof by RES or any RES
Subsidiary, provided that (i) such Lien is not created in contemplation
of or in connection with such acquisition and (ii) such Lien does not
apply to any other property or asset of RES or any RES Subsidiary;
(e) any Lien on any property or asset of a RES Subsidiary
securing Indebtedness permitted by Section 6.01(i), provided that such
Lien does not apply to any other
46
property or assets of the Borrower or any Subsidiary not securing such
Indebtedness at the date of acquisition of such property or asset
(other than after acquired property of RES or a RES Subsidiary
subjected to a Lien securing Indebtedness and other obligations
incurred prior to such date and permitted hereunder which contains a
requirement for the pledging of after acquired property);
(f) Liens for taxes, assessments or other governmental charges
or levies not yet delinquent, or which are for less than $200,000 in
the aggregate, or which are being contested in compliance with Section
5.03 or for property taxes on property that RES or one of the RES
Subsidiaries has determined to abandon if the sole recourse for such
tax, assessment, charge, levy or claim is to such property;
(g) carriers', warehousemen's, mechanics', materialmen's,
repairmen's or other like Liens on property of RES or any RES
Subsidiary arising in the ordinary course of business and securing
obligations that are not due and payable or that are being contested in
good faith by appropriate proceedings and in respect of which, if
applicable, RES or the relevant RES Subsidiary shall have set aside on
its books reserves in accordance with GAAP;
(h) pledges and deposits made in the ordinary course of
business by RES or any RES Subsidiary in compliance with the Federal
Employers Liability Act or any other workmen's compensation,
unemployment insurance and other social security laws or regulations
and deposits securing liability to insurance carriers under insurance
or self-insurance arrangements in respect of such obligations;
(i) deposits by RES or any RES Subsidiary to secure the
performance of bids, trade contracts (other than for Indebtedness),
leases (other than Capital Lease Obligations), statutory obligations,
surety and appeal bonds, performance bonds and other obligations of a
like nature incurred in the ordinary course of business, including
those incurred to secure health, safety and environmental obligations
in the ordinary course of business;
(j) zoning restrictions, easements, trackage rights, leases
(other than Capital Lease Obligations), licenses, special assessments,
rights-of-way, restrictions on use of real property and other similar
encumbrances incurred by RES or any RES Subsidiary in the ordinary
course of business which, in the aggregate, are not substantial in
amount and do not materially detract from the value of the property
subject thereto or interfere with the ordinary conduct of the business
of the Borrower or any of the Subsidiaries;
(k) purchase money security interests in real property,
improvements thereto or equipment hereafter acquired (or, in the case
of improvements, constructed) by RES or any RES Subsidiary (including
the interests of vendors and lessors under conditional sale and title
retention agreements), provided that (i) such security interests secure
Indebtedness or Sale and Lease-Back Transactions permitted by Section
6.01, (ii) such security interests are incurred, and the Indebtedness
secured thereby is created, within 270 days after such acquisition (or
construction), (iii) the Indebtedness secured thereby does not exceed
100% of the cost of such real property, improvements or equipment at
the time of such acquisition (or construction), including transaction
costs incurred by RES or any RES Subsidiary in connection with such
acquisition (or construction), (iv) such expenditures are permitted by
this Agreement and (v) such security interests do not apply to any
other property or assets of the Borrower or any Subsidiary (other than
to accessions to such real property, improvements or equipment and
provided that individual financings of equipment provided by a single
lender may be cross-collateralized to other financings of equipment
provided solely by such lender);
47
(l) Liens consisting of interests of lessors under capital or
operating leases permitted by Section 6.01;
(m) Liens securing judgments against RES or any RES Subsidiary
for the payment of money in an aggregate amount not in excess of
$1,000,000 (except to the extent covered by insurance), unless such
judgments shall remain undischarged for a period of more than 30
consecutive days during which execution shall not be effectively
stayed;
(n) any leases or subleases to other persons of properties or
assets owned or leased by RES or a RES Subsidiary;
(o) any Lien arising by operation of law pursuant to Section
107(1) of the Comprehensive Environmental Response, Compensation and
Liability Act, 42 U.S.C. ss.9607(1), or pursuant to analogous state
law, for costs or damages which are not yet due (by virtue of a written
demand for payment by a Governmental Authority) or which are being
contested in compliance with the standard set forth in Section 5.03(a),
or on property that RES or a RES Subsidiary has determined to abandon
if the sole recourse for such costs or damages is to such property,
provided that the liability of RES and the RES Subsidiaries with
respect to the matter giving rise to all such Liens shall not, in the
reasonable estimate of the Borrower (in light of all attendant
circumstances, including the likelihood of contribution by third
parties), exceed $2,000,000;
(p) Liens that are contractual rights of setoff (i) relating
to the establishment by RES or any RES Subsidiary of depository
relations with banks not given in connection with the issuance of
Indebtedness or (ii) pertaining to pooled deposit and/or sweep accounts
of RES and/or any RES Subsidiary to permit satisfaction of overdraft or
similar obligations incurred in the ordinary course of business of RES
and the RES Subsidiaries;
(q) Liens securing obligations in respect of trade-related
letters of credit permitted under Section 6.01 and covering the goods
(or the documents of title in respect of such goods) financed by such
letters of credit;
(r) the sale of accounts receivable in connection with
collection in the ordinary course of business;
(s) construction liens arising in the ordinary course of
business, including liens for work performed for which payment has not
been made, securing obligations that are not due and payable or are
being contested in good faith by appropriate proceedings and in respect
of which, if applicable, RES or the relevant RES Subsidiary shall have
set aside on its books reserves in accordance with GAAP;
(t) Liens on assets of RES and the RES Subsidiaries not
constituting collateral under the Existing Credit Agreement securing
Indebtedness permitted under Section 6.01(o), provided that if any such
Liens cover property on which any such collateral is located, the
holders of such Liens shall have entered into an intercreditor
agreement pursuant to the terms of the Existing Credit Agreement;
(u) Liens on assets of RES and the RES Subsidiaries not
constituting collateral under the Existing Credit Agreement, securing
approximately $8,300,000 of severance payments required to be funded
into a "rabbi trust" upon a change in control of RES under the Existing
Credit Agreement; and
(v) the replacement, extension or renewal of any Lien
permitted by clause (c), (d), (j) or (s) above, provided that such
replacement, extension or renewal Lien shall not
48
cover any property other than the property that was subject to such
Lien prior to such replacement, extension or renewal; and provided
further that the Indebtedness and other obligations secured by such
replacement, extension or renewal Lien are permitted by this Agreement.
SECTION 6.03. Sale and Lease-Back Transactions. Enter into any
arrangement, directly or indirectly, with any person whereby it shall sell or
transfer any property, real or personal, used or useful in its business, whether
now owned or hereafter acquired, and thereafter rent or lease such property or
other property which it intends to use for substantially the same purpose or
purposes as the property being sold or transferred (a "Sale and Lease-Back
Transaction"), other than any Sale and Lease-Back Transaction that involves a
sale by RES or a RES Subsidiary solely for cash consideration on terms not less
favorable than would prevail in an arm's-length transaction and that results in
a Capital Lease Obligation and Liens associated therewith permitted under
Sections 6.01(j) and 6.02(j).
SECTION 6.04. Investments, Loans and Advances. Purchase, hold
or acquire any capital stock, evidences of indebtedness or other securities of,
make or permit to exist any loans or advances to, or make or permit to exist any
investment or any other interest in, any other person, except:
(a) investments of RES and the RES Subsidiaries (i) existing
on the date hereof in the capital stock of the RES Subsidiaries; (ii)
by RES or any RES Subsidiary in any Wholly Owned RES Subsidiary; (iii)
by any Wholly Owned RES Subsidiary in any Wholly Owned RES Subsidiary;
(iv) by any RES Subsidiary in any Wholly Owned RES Subsidiary (so long
as such RES Subsidiary shall remain a Wholly Owned RES Subsidiary after
giving effect to such investment);
(b) Permitted Investments and investments that were Permitted
Investments when made;
(c) investments arising out of the receipt by RES or any RES
Subsidiary of noncash consideration for the sale of assets permitted
under Section 6.05;
(d) intercompany loans permitted to be incurred as
Indebtedness under Section 6.01;
(e) (i) loans and advances to employees of RES or the RES
Subsidiaries not to exceed $600,000 in the aggregate at any time
outstanding and (ii) advances of payroll payments and expenses to such
employees in the ordinary course of business;
(f) (i) accounts receivable arising and trade credit granted
in the ordinary course of business and any securities received in
satisfaction or partial satisfaction thereof from financially troubled
account debtors to the extent reasonably necessary in order to prevent
or limit loss and (ii) prepayments and other credits to suppliers made
in the ordinary course of business;
(g) Interest Rate Protection Agreements permitted pursuant to
Section 6.01(c);
(h) investments of RES and the RES Subsidiaries, other than
investments listed in paragraphs (a) through (g) of this Section,
existing on the Closing Date and set forth on Schedule 6.04;
(i) investments resulting from pledges and deposits referred
to in Section 6.02(g) or (h);
49
(j) investments of RES and the RES Subsidiaries consisting of
repurchases of Existing Notes pursuant to the Debt Tender Offer; and
(k) investments, loans or advances of RES and the RES
Subsidiaries in addition to those permitted by paragraphs (a) through
(j) not exceeding in the aggregate $500,000 at any time outstanding.
SECTION 6.05. Mergers, Consolidations, Sales of Assets and
Acquisitions. Merge into or consolidate with any other person, or permit any
other person to merge into or consolidate with it, or sell, transfer, lease or
otherwise dispose of (in one transaction or in a series of transactions) all or
any substantial part of its assets (whether now owned or hereafter acquired),
or any Capital Stock of any Subsidiary (including the Shares), or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all
or any substantial part of the assets of any other person, except that this
Section shall not prohibit:
(a) the purchase and sale of inventory in the ordinary course
of business by RES or any RES Subsidiary or the acquisition by RES or
any RES Subsidiary of any asset of any person in the ordinary course of
business, in each case subject to Section 6.04;
(b) if at the time thereof and immediately after giving effect
thereto no Event of Default or Default shall have occurred and be
continuing, the merger or consolidation of any RES Subsidiary into or
with any other Wholly Owned RES Subsidiary in a transaction in which
the surviving entity is a Wholly Owned RES Subsidiary (which shall be a
domestic Subsidiary if the non-surviving person shall be a domestic
Subsidiary) and, in each case, no person other than RES or a Wholly
Owned RES Subsidiary receives any consideration;
(c) Sale and Lease-Back Transactions permitted by Section
6.03;
(d) investments permitted by Section 6.04;
(e) subject to Section 6.07, sales, leases or transfers (i)
from RES or any RES Subsidiary to RES or to a domestic Wholly Owned RES
Subsidiary or (ii) from any foreign RES Subsidiary to any foreign
Wholly Owned RES Subsidiary or to RES;
(f) sales, leases or other dispositions of equipment or real
property of RES or the RES Subsidiaries determined by the Board of
Directors or senior management of RES to be no longer useful or
necessary in the operation of the business of RES or the RES
Subsidiaries;
(g) sales, leases or other dispositions of inventory of RES
and the RES Subsidiaries not made in the ordinary course of business
determined by the Board of Directors or senior management of RES to be
no longer useful or necessary in the operation of the business of RES
and the RES Subsidiaries;
(h) sales, leases or other dispositions of property by RES and
the RES Subsidiaries having a net book value not in excess of
$1,000,000 in the aggregate during the term of this Agreement, provided
that no sale may be made of the Capital Stock of any RES Subsidiary
except the Capital Stock of a RES Subsidiary in connection with the
sale of all its outstanding Capital Stock that is held by RES and any
other RES Subsidiary;
(i) the sale or other disposition, in one transaction or
series of related transactions, by RES or any RES Subsidiary of the
business or assets of RES's stainless and specialty steel division for
fair value (as determined in good faith by the Board of
50
Directors of the Borrower) in cash, provided that (i) within a
reasonable period of time prior to any such sale or disposition, the
Borrower shall, or shall cause RES to, deliver to the Administrative
Agent a certificate of a Financial Officer setting forth details of the
proposed transaction and RES's intention to reinvest the proceeds
thereof in other steel- related assets within lines of business similar
to the lines of business conducted on the date hereof by RES and the
RES Subsidiaries, (ii) no Default or Event of Default shall have
occurred and shall be continuing at the time of such sale or
disposition or at the proposed time of application of such proceeds and
(iii) any such sale or disposition shall be upon terms not materially
adverse to the interests of the Lenders (it being understood and agreed
that the adequacy of the consideration for such sale or disposition
shall be deemed not to be adverse to the interests of the Lenders if
the Board of Directors of the Borrower has determined in good faith
that such sale or disposition shall have been made for fair value); and
(j) the Merger.
SECTION 6.06. Dividends and Distributions. Declare or pay,
directly or indirectly, any dividend or make any other distribution (by
reduction of capital or otherwise), whether in cash, property, securities or a
combination thereof, with respect to any shares of its Capital Stock (other than
dividends and distributions on the common stock of the Borrower payable solely
by the issuance of additional shares of common stock of the Borrower) or
directly or indirectly redeem, purchase, retire or otherwise acquire for value
(or permit any Subsidiary to purchase or acquire) any shares of any class of its
Capital Stock or set aside any amount for any such purpose; provided, however,
that:
(a) any Subsidiary may declare and pay dividends to,
repurchase its Capital Stock from or make other distributions to the
Borrower or to any Wholly Owned Subsidiary (or, in the case of
non-Wholly Owned Subsidiaries, to the Borrower or any Subsidiary and to
each other owner of Capital Stock of such Subsidiary on a pro rata
basis (or more favorable basis from the perspective of the Borrower or
such Subsidiary) based on their relative ownership interests);
(b) AcquisitionCo may make payments in an aggregate amount not
to exceed $150,100,000 in connection with (i) the acquisition of Shares
in the Equity Tender Offer and the Merger (including Shares with
respect to which appraisal rights shall be exercised) and (ii) the
acquisition or conversion of existing options at the time of the
Merger; and
(c) the Borrower may purchase or redeem shares of Capital
Stock of the Borrower (including related stock appreciation rights or
similar securities), and, prior to the Merger, RES may purchase or
redeem shares of Capital Stock of RES, in either case, held by present
or former officers or employees of the Borrower or any Subsidiary or by
any Plan upon such person's death, disability, retirement or
termination of employment or under the terms of any such Plan or any
other agreement under which such shares of stock or related rights were
issued, provided that the aggregate amount of such purchases or
redemptions that may be made under this paragraph (c) shall not exceed
$5,000,000 in the aggregate during the term of this Agreement.
SECTION 6.07. Transactions with Affiliates. (a) Sell or
transfer any property or assets to, or purchase or acquire any property or
assets from, or otherwise engage in any other transaction with, any of its
Affiliates or any known direct or indirect holder of 10% or more of any class of
capital stock of the Borrower or RES, unless such transaction forms a part of
the Transactions or is (i) otherwise permitted under this Agreement and (ii)
upon terms no less favorable to the Borrower or such Subsidiary, as the case may
be, than it would obtain in a comparable arm's-length transaction with a person
which was not an Affiliate, provided that the
51
foregoing restriction shall not apply to (A) the payment to any Fund or any of
its Affiliates or the Fund Affiliates of the monitoring and management fees
referred to in paragraph (c) below or fees payable on the Closing Date or (B)
the indemnification of directors of the Borrower and the Subsidiaries in
accordance with customary practice.
(b) The foregoing paragraph (a) shall not prohibit, to the
extent otherwise permitted under this Agreement, (i) any issuance of securities,
or other payments, awards or grants in cash, securities or otherwise pursuant
to, or the funding of, employment arrangements, stock options and stock
ownership plans approved by the Board of Directors of the Borrower, (ii) loans
or advances to employees of RES or any RES Subsidiary in accordance with Section
6.04(e), (iii) transactions among RES and Wholly Owned RES Subsidiaries and
transactions among Wholly Owned RES Subsidiaries otherwise permitted by this
Agreement, (iv) the payment of fees and indemnities to directors, officers and
employees of RES and the RES Subsidiaries in the ordinary course of business,
(v) transactions pursuant to permitted agreements in existence on the Closing
Date and set forth on Schedule 6.07, (vi) any employment agreements entered into
by any of RES or any of the RES Subsidiaries in the ordinary course of business,
(vii) dividends and repurchases permitted under Section 6.06, (viii) any
purchase by the Investors of Capital Stock of the Borrower and (ix) the payment
on or after the Merger Date by RES to any of the Funds of a financial advisory
fee in connection with financial advisory services provided by the Funds in
connection with the Equity Tender Offer in an aggregate amount not to exceed
$4,200,000, provided that such financial advisory fee shall be paid to the Funds
only if, on or prior to the date of payment of such financial advisory fee, the
Agents shall have received the entire amount of the advisory fee payable to them
pursuant to the terms of the Fee Letters.
(c) Make any payment of or on account of monitoring or
management fees payable to any Fund or its Affiliates if a Default or Event of
Default shall have occurred and be continuing or would result therefrom,
provided that the aggregate amount of monitoring and management fees paid or
payable to the Funds and their Affiliates in any fiscal year shall not exceed
$2,000,000 in the aggregate during the term of this Agreement.
SECTION 6.08. Business of the Borrower and the Subsidiaries.
Engage at any time in any business or business activity other than (a) in the
case of the Subsidiaries, any business or business activity conducted by it on
the date hereof and any business or business activities incidental or related
thereto, provided that in the case of AcquisitionCo, it shall conduct no
business or business activities prior to the consummation of the Merger other
than the Equity Tender Offer and activities reasonably incidental thereto and
actions required by law to maintain its status as a corporation and (b) in the
case of the Borrower, (i) the ownership of all the capital stock of, prior to
the Merger, AcquisitionCo and, after the Merger, RES, together with activities
directly related thereto, (ii) performance of its obligations under and in
connection with the Loan Documents and under the Merger Agreement, the
Stockholders Agreement executed in connection with the Merger Agreement and
other agreements contemplated thereby, (iii) actions incidental to the
consummation of the Merger and (iv) actions required by law to maintain its
status as a corporation.
SECTION 6.09. Material Agreements. (a)(i) Directly or
indirectly make any payment, retirement, repurchase or redemption on account of
the principal of the Existing Notes, the RES Facility, RES's 9% Solid Waste
Revenue Bonds, Series 1996, Due 2021, and RES's 8 1/4% Solid Waste Revenue
Bonds, Series 1994, Due 2014, or directly or indirectly prepay or defease any
such Indebtedness prior to the stated maturity date of such Indebtedness, (ii)
make any payment of any such Indebtedness that would violate the terms of this
Agreement or of such Indebtedness, any agreement or document evidencing, related
to or securing the payment or performance of such Indebtedness or any
subordination agreement or provision applicable to such Indebtedness or (iii)
pay in cash any amount in respect of such Indebtedness that may at the
Borrower's option be paid in kind thereunder; provided, however, that (A) the
Existing Notes
52
may be retired, repurchased or redeemed with the proceeds of the issuance of the
New Notes and/or borrowings under the RES Facility, the Existing Credit
Agreement or the Replacement Credit Facility and (B) Indebtedness under the RES
Facility may be repaid with the proceeds of the issuance of the New Notes or
pursuant to the mandatory prepayment provisions under the RES Facility or with
borrowings under the Existing Credit Agreement or the Replacement Credit
Facility.
(b) Amend or modify in any manner materially adverse to the
Lenders, or grant any waiver or release under or terminate in any manner (if
such action shall be materially adverse to the Lenders), (i) the certificate of
incorporation or By-laws in any material respect of the Borrower or any
Subsidiary, (ii) the Stockholders Agreement, (iii) the Merger Agreement or (iv)
the Collective Bargaining Agreement.
(c) Amend or modify in any manner materially adverse to the
Lenders, or grant any waiver or release under or terminate in any manner (if
such action shall be materially adverse to the Lenders) the terms of the
instruments governing the New Notes, the Existing Credit Agreement or the
Replacement Credit Facility or any Indebtedness existing on the date hereof and
set forth on Schedule 6.01.
(d) Permit any Subsidiary to enter into any agreement or
instrument that by its terms restricts the payment of dividends or the making of
cash advances by such Subsidiary to the Borrower or any Subsidiary that is a
direct or indirect parent of such Subsidiary other than those arising under any
Loan Document, the Existing Credit Agreement, the RES Facility, the indenture
governing the Existing Notes or the New Notes and the documents governing any
Refinancing Indebtedness permitted by Section 6.01(m) if the terms of such
Refinancing Indebtedness so restricting the payment of dividends or the making
of cash advances are not materially more restrictive than the corresponding
terms of Indebtedness refinanced thereby.
SECTION 6.10. Capital Expenditures. Permit the Borrower or,
prior to the Merger, AcquisitionCo to make any Capital Expenditure or permit the
aggregate amount of Capital Expenditures by RES and the RES Subsidiaries from
and including the Closing Date to exceed $35,000,000.
ARTICLE VII. EVENTS OF DEFAULT
In case of the happening of any of the following events
("Events of Default"):
(a) any representation or warranty made or deemed made by any
Loan Party in any Loan Document, or any representation, warranty,
statement or information contained in any report, certificate,
financial statement or other instrument furnished in connection with or
pursuant to any Loan Document, shall prove to have been false or
misleading in any material respect when so made, deemed made or
furnished by such Loan Party;
(b) default shall be made in the payment of any principal of
any Loan when and as the same shall become due and payable, whether at
the due date thereof or at a date fixed for prepayment thereof or by
acceleration thereof or otherwise;
(c) default shall be made in the payment of any interest on
any Loan or in the payment of any Fee or any other amount (other than
an amount referred to in paragraph (b) above) due under any Loan
Document, when and as the same shall become due and payable, and such
default shall continue unremedied for a period of five Business Days;
53
(d) default shall be made in the due observance or performance
by the Borrower or any Subsidiary of any covenant, condition or
agreement contained in Section 5.01(a) (with respect to the Borrower),
5.05(a) or 5.08 or in Article VI;
(e) default shall be made in the due observance or performance
by the Borrower or any Subsidiary of any covenant, condition or
agreement contained in any Loan Document (other than those specified in
paragraph (b), (c) or (d) above) and such default shall continue
unremedied for a period of 30 days after notice thereof from the
Administrative Agent or the Required Lenders to the Borrower;
(f) the Borrower or any Subsidiary shall fail to observe or
perform any term, covenant, condition or agreement contained in any
agreement or instrument evidencing or governing any Indebtedness (other
than any Indebtedness under any Loan Document) having an aggregate
principal or notional amount in excess of $5,000,000 if the effect of
any such failure is to cause, or to permit the holder or holders of
such Indebtedness or a trustee on its or their behalf to cause, such
Indebtedness to become due prior to its stated maturity, or the
Borrower or any Subsidiary shall fail to pay any principal in respect
of any such Indebtedness at the stated maturity thereof;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent
jurisdiction seeking (i) relief in respect of the Borrower or any
Subsidiary, or of a substantial part of the property or assets of the
Borrower or any Subsidiary, under Title 11 of the United States Code,
as now constituted or hereafter amended, or any other Federal, state or
foreign bankruptcy, insolvency, receivership or similar law, (ii) the
appointment of a receiver, trustee, custodian, seques trator,
conservator or similar official for the Borrower or any Subsidiary or
for a substantial part of the property or assets of the Borrower or any
Subsidiary or (iii) the winding-up or liquidation of the Borrower or
any Subsidiary; and such proceeding or petition shall continue
undismissed for 60 days or an order or decree approving or ordering any
of the foregoing shall be entered;
(h) the Borrower or any Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title
11 of the United States Code, as now constituted or hereafter amended,
or any other Federal, state or foreign bankruptcy, insolvency,
receivership or similar law, (ii) consent to the institution of, or
fail to contest in a timely and appropriate manner, any proceeding or
the filing of any petition described in paragraph (g) above, (iii)
apply for or consent to the appointment of a receiver, trustee,
custodian, sequestrator, conservator or similar official for the
Borrower or any Subsidiary or for a substantial part of the property or
assets of the Borrower or any Subsidiary, (iv) file an answer admitting
the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors,
(vi) become unable, admit in writing its inability or fail generally to
pay its debts as they become due or (vii) take any action for the
purpose of effecting any of the foregoing;
(i) one or more judgments for the payment of money in an
aggregate amount in excess of $100,000 (except to the extent covered by
insurance as to which the insurer has acknowledged in writing its
obligation to cover) shall be rendered against the Borrower or any
Subsidiary or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken
by a judgment creditor to levy upon assets or properties of the
Borrower or any Subsidiary to enforce any such judgment;
54
(j) (i) a Reportable Event or Reportable Events, or a failure
to make a required installment or other payment (within the meaning of
Section 412(n)(1) of the Code), shall have occurred with respect to any
Plan or Plans, (ii) a trustee shall be appointed by a United States
district court to administer any Plan or Plans, (iii) the PBGC shall
institute proceedings (including giving notice of intent thereof) to
terminate any Plan or Plans, (iv) the Borrower or any ERISA Affiliate
shall have been notified by the sponsor of a Multiemployer Plan that it
has incurred Withdrawal Liability to such Multiemployer Plan and the
Borrower or such ERISA Affiliate does not have reasonable grounds for
contesting such Withdrawal Liability or is not contesting such
Withdrawal Liability in a timely and appropriate manner, (v) the
Borrower or any ERISA Affiliate shall have been notified by the sponsor
of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV
of ERISA, (vi) the Borrower or any ERISA Affiliate shall engage in any
"prohibited transaction" (as defined in Section 406 of ERISA or Section
4975 of the Code) involving any Plan, (vii) any other similar event or
condition shall occur or exist with respect to a Plan; and in each case
in clauses (i) through (vii) above, such event or condition, together
with all other such events or conditions, if any, could reasonably be
expected to have a Material Adverse Effect;
(k) the Collective Bargaining Agreement shall cease to be in
effect;
(l) (i) any Loan Document shall not be, or shall for any
reason be asserted by the Borrower or any Subsidiary not to be, a
legal, valid and binding obligation of any party thereto, (ii) any
security interest purported to be created by any Security Document and
to extend to assets that are not immaterial to the Borrower and the
Subsidiaries on a consolidated basis shall cease to be, or shall be
asserted by any Loan Party not to be, a valid and perfected security
interest (having the priority required by this Agreement or the
relevant Security Document) in the securities or assets covered
thereby, except to the extent that any such loss of perfection or
priority results from the failure of the Collateral Agent to maintain
possession of certificates representing securities pledged under the
Pledge Agreement; or
(m) there shall have occurred a Change in Control;
then, and in every such event (other than an event with respect to the Borrower
described in paragraph (g) or (h) above), and at any time thereafter during the
continuance of such event, the Administrative Agent, at the request of the
Required Lenders, shall, by notice to the Borrower, take any or all of the
following actions, at the same or different times: (i) terminate forthwith the
Commitments and (ii) declare the Loans then outstanding to be forthwith due and
payable in whole or in part, whereupon the principal of the Loans so declared to
be due and payable, together with accrued interest thereon and any unpaid
accrued Fees and all other liabilities of the Borrower accrued hereunder and
under any other Loan Document, shall become forthwith due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are
hereby expressly waived by the Borrower, anything contained herein or in any
other Loan Document to the contrary notwithstanding; and in any event with
respect to the Borrower described in para graph (g) or (h) above, the
Commitments shall automatically terminate and the principal of the Loans then
outstanding, together with accrued interest thereon and any unpaid accrued Fees
and all other liabilities of the Borrower accrued hereunder and under any other
Loan Document, shall automatically become due and payable, without presentment,
demand, protest or any other notice of any kind, all of which are hereby
expressly waived by the Borrower, anything contained herein or in any other Loan
Document to the contrary notwithstanding.
55
ARTICLE VIII. THE ADMINISTRATIVE AGENT AND THE COLLATERAL AGENT
In order to expedite the transactions contemplated by this
Agreement, The Chase Manhattan Bank is hereby appointed to act as Administrative
Agent and Collateral Agent on behalf of the Lenders (for purposes of this
Article VIII, the Administrative Agent and the Collateral Agent are referred to
collectively as the "Article VIII Agents"). Each of the Lenders and each
assignee of any such Lender hereby irrevocably authorizes the Article VIII
Agents to take such actions on behalf of such Lender or assignee and to exercise
such powers as are specifically delegated to the Article VIII Agents by the
terms and provisions hereof and of the other Loan Documents, together with such
actions and powers as are reasonably incidental thereto. The Administrative
Agent is hereby expressly authorized by the Lenders, without hereby limiting any
implied authority, (a) to receive on behalf of the Lenders all payments of
principal of and interest on the Loans and all other amounts due to the Lenders
hereunder, and promptly to distribute to each Lender its proper share of each
payment so received; (b) to give notice on behalf of each of the Lenders to the
Borrower of any Event of Default specified in this Agreement of which the
Administrative Agent has actual knowledge acquired in connection with its agency
hereunder; and (c) to distribute to each Lender copies of all notices, financial
statements and other materials delivered by the Borrower pursuant to this
Agreement as received by the Administrative Agent. Without limiting the
generality of the foregoing, the Article VIII Agents are hereby expressly
authorized to execute any and all documents (including releases) with respect to
the Collateral and the rights of the Secured Parties with respect thereto, as
contemplated by and in accordance with the provisions of this Agreement and the
Security Documents. In the event that any party other than the Lenders and the
Article VIII Agents shall participate in all or any portion of the Collateral
pursuant to the Security Documents, all rights and remedies in respect of such
Collateral shall be controlled by the Collateral Agent.
Neither the Article VIII Agents nor any of their respective
directors, officers, employees or agents shall be liable as such for any action
taken or omitted by any of them except for its or his own gross negligence or
wilful misconduct, or be responsible for any statement, warranty or
representation herein or the contents of any document delivered in connection
herewith, or be required to ascertain or to make any inquiry concerning the
performance or observance by the Borrower or any other Loan Party of any of the
terms, conditions, covenants or agreements contained in any Loan Document. The
Article VIII Agents shall not be responsible to the Lenders for the due
execution, genuineness, validity, enforceability or effectiveness of this
Agreement or any other Loan Documents or other instruments or agreements. The
Article VIII Agents shall in all cases be fully protected in acting, or
refraining from acting, in accordance with written instructions signed by the
Required Lenders and, except as otherwise specifically provided herein, such
instructions and any action or inaction pursuant thereto shall be binding on all
the Lenders. Each Article VIII Agent shall, in the absence of knowledge to the
contrary, be entitled to rely on any instrument or document believed by it in
good faith to be genuine and correct and to have been signed or sent by the
proper person or persons. Neither the Article VIII Agents nor any of their
respective directors, officers, employees or agents shall have any
responsibility to the Borrower or any other Loan Party on account of the failure
of or delay in performance or breach by any Lender of any of its obligations
hereunder or to any Lender on account of the failure of or delay in performance
or breach by any other Lender or the Borrower or any other Loan Party of any of
their respective obligations hereunder or under any other Loan Document or in
connection herewith or therewith. Each of the Article VIII Agents may execute
any and all duties hereunder by or through agents or employees and shall be
entitled to rely upon the advice of legal counsel selected by it with respect to
all matters arising hereunder and shall not be liable for any action taken or
suffered in good faith by it in accordance with the advice of such counsel.
The Lenders hereby acknowledge that neither Article VIII Agent
shall be under any duty to take any discretionary action permitted to be taken
by it pursuant to the provisions of this Agreement unless it shall be requested
in writing to do so by the Required Lenders. The
56
Lenders further acknowledge and agree that so long as an Article VIII Agent
shall make any determination to be made by it hereunder or under any other Loan
Document in good faith, such Article VIII Agent shall have no liability in
respect of such determination to any person.
Subject to the appointment and acceptance of a successor
Article VIII Agent as provided below, either Article VIII Agent may resign at
any time by notifying the Lenders and the Borrower. Upon any such resignation,
the Required Lenders shall have the right to appoint a successor with the
consent of the Borrower (not to be unreasonably withheld or delayed). If no
successor shall have been so appointed by the Required Lenders and approved by
the Borrower and shall have accepted such appointment within 30 days after the
retiring Article VIII Agent gives notice of its resignation, then the retiring
Article VIII Agent may, on behalf of the Lenders with the consent of the
Borrower (not to be unreasonably withheld or delayed), appoint a successor
Article VIII Agent which shall be a bank with an office in New York, New York,
having a combined capital and surplus of at least $500,000,000 or an Affiliate
of any such bank. Upon the acceptance of any appointment as Article VIII Agent
hereunder by a successor bank, such successor shall succeed to and become vested
with all the rights, powers, privileges and duties of the retiring Article VIII
Agent and the retiring Article VIII Agent shall be discharged from its duties
and obligations hereunder. After the Article VIII Agent's resignation hereunder,
the provisions of this Article and Section 9.05 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 Article VIII Agent.
With respect to the Loans made by it hereunder, each Article
VIII Agent in its individual capacity and not as Article VIII Agent shall have
the same rights and powers as any other Lender and may exercise the same as
though it were not an Article VIII Agent, and the Article VIII Agents and their
Affiliates may accept deposits from, lend money to and generally engage in any
kind of business with the Borrower or any Subsidiary or other Affiliate thereof
as if it were not an Article VIII Agent.
Each Lender agrees (a) to reimburse the Article VIII Agents,
on demand, in the amount of its pro rata share (based on its Commitments
hereunder (or if such Commitments shall have expired or been terminated, in
accordance with the respective principal amounts of its applicable outstanding
Loans)) of any reasonable expenses incurred for the benefit of the Lenders by
the Article VIII Agents, including counsel fees and compensation of agents and
employees paid for services rendered on behalf of the Lenders, which shall not
have been reimbursed by the Borrower and (b) to indemnify and hold harmless each
Article VIII Agent and any of its directors, officers, employees or agents, on
demand, in the amount of such pro rata share, from and against any and all
liabilities, taxes, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against it in its capacity as Article
VIII Agent or any of them in any way relating to or arising out of this
Agreement or any other Loan Document or any action taken or omitted by it or any
of them under this Agreement or any other Loan Document, to the extent the same
shall not have been reimbursed by the Borrower, provided that no Lender shall be
liable to an Article VIII Agent for any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting from the gross negligence or wilful
misconduct of such Article VIII Agent or any of its directors, officers,
employees or agents.
Each Lender acknowledges that it has, independently and
without reliance upon the Article VIII Agents or any other Lender and based on
such documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the Article
VIII Agents or any other Lender and based on such documents and information as
it shall from time to time deem appropriate, continue to make its own decisions
in taking or not taking action under or based upon this Agreement or any other
Loan Document, any related agreement or any document furnished hereunder or
thereunder.
57
As soon as practicable after it becomes aware of a Default or
an Event of Default that has occurred and is continuing, the Administrative
Agent shall notify each Lender thereof.
ARTICLE IX. MISCELLANEOUS
SECTION 9.01. Notices. Notices and other communications
provided for herein shall be in writing and shall be delivered by hand or
overnight courier service, mailed by certified or registered mail or sent by
telecopy, as follows:
(a) if to the Borrower, to it at 000 Xxxxxxx Xxxx, X.X.,
Xxxxxxxxx, Xxxx 00000, Attention of Chief Executive Officer (Telecopy
No. (000) 000-0000), with a copy to The Blackstone Group, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Mr. Xxxxx Xxxxxxx
(Telecopy No. (000) 000-0000);
(b) if to the Administrative Agent or the Collateral Agent, to
The Chase Manhattan Bank, Loan and Agency Services Group, One Chase
Xxxxxxxxx Xxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of Ms.
Xxxxx Xxxxxxx (Telecopy No. (000) 000-0000), with a copy to The Chase
Manhattan Bank, 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention of
Xx. Xxxxx Xxxxxx (Telecopy No. (000) 000-0000);
(c) if to the Documentation Agent, to DLJ Capital Funding,
Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention
of Xx. Xxxxx Xxxxxxxx (Telecopy No. (000) 000-0000); and
(d) if to a Lender, to it at its address (or telecopy number)
set forth in the Administrative Questionnaire delivered to the
Administrative Agent by such Lender in connection with the execution of
this Agreement or in the Assignment and Acceptance pursuant to which
such Lender shall have become a party hereto.
All notices and other communications given to any party hereto in accordance
with the provisions of this Agreement shall be deemed to have been given on the
date of receipt if delivered by hand or overnight courier service or sent by
telecopy or on the date five Business Days after dispatch by certified or
registered mail if mailed, in each case delivered, sent or mailed (properly
addressed) to such party as provided in this Section 9.01 or in accordance with
the latest unrevoked direction from such party given in accordance with this
Section 9.01.
SECTION 9.02. Survival of Agreement. All covenants,
agreements, representations and warranties made by the Borrower herein, in the
other Loan Documents and in the certificates or other instruments prepared or
delivered in connection with or pursuant to this Agreement or any other Loan
Document shall be considered to have been relied upon by the Lenders and shall
survive the making by the Lenders of the Loans and the execution and delivery to
the Lenders of the Loan Documents, regardless of any investigation made by the
Lenders or on their behalf, and shall continue in full force and effect as long
as the principal of or any accrued interest on any Loan or any Fee or any other
amount payable under this Agreement or any other Loan Document is outstanding
and unpaid and so long as the Commitments have not been terminated. Without
prejudice to the survival of any other agreements contained herein,
indemnification and reimbursement obligations contained herein (including
pursuant to Sections 2.13, 2.15, 2.19 and 9.05) shall survive the payment in
full of the principal and interest hereunder and the termination of the
Commitments or this Agreement.
SECTION 9.03. Binding Effect. This Agreement shall become
effective when it shall have been executed by the Borrower and the
Administrative Agent and when the Administrative Agent shall have received
copies hereof which, when taken together, bear the
58
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the Borrower, the Administrative Agent and each
Lender and their respective permitted successors and assigns.
SECTION 9.04. Successors and Assigns. (a) Whenever in this
Agreement any of the parties hereto is referred to, such reference shall be
deemed to include the permitted successors and assigns of such party; and all
covenants, promises and agreements by or on behalf of the Borrower, the
Administrative Agent or the Lenders that are contained in this Agreement shall
bind and inure to the benefit of their respective successors and assigns.
(b) Each Lender may assign to one or more assignees all or a
portion of its interests, rights and obligations as a Lender under this
Agreement (including all or a portion of its Commitments, the Loans, it being
understood that Lenders shall not be required to assign pro rata amounts of
their Loans and Commitments); provided, however, that (i) except in the case of
an assignment to another Lender or an Affiliate of, or an Approved Fund with
respect to, such Lender, in each case, the Borrower and the Administrative Agent
must each give its prior written consent to such assignment (which consent shall
not in either case be unreasonably withheld or delayed), (ii) except in the case
of an assignment to another Lender or an Affiliate of, or an Approved Fund with
respect to, such Lender, the amount of the Loans or Commitments of the assigning
Lender subject to such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall be an amount not less than $5,000,000 and an integral multiple of
$1,000,000 unless the Borrower shall have given its prior written consent to an
assignment of a lesser amount, or shall be the entire remaining amount of such
Loans or Commitments, (iii) unless the assignor ceases to be a Lender, the
aggregate amount of the Loans owing to and unused Commitments of such Lender
after giving effect to such assignment shall be not less than $5,000,000, (iv)
the parties to each such assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a processing
and recordation fee of $3,500 and (v) the assignee, if it shall not be a Lender,
shall deliver to the Administrative Agent an Administrative Questionnaire. Upon
acceptance and recording pursuant to paragraph (e) of this Section 9.04, from
and after the effective date specified in each Assignment and Acceptance, which
effective date shall be at least five Business Days after the execution thereof
unless agreed otherwise by the Administrative Agent, (i) the assignee thereunder
shall be a party hereto and, to the extent of the interest assigned by such
Assignment and Acceptance, have the rights and obligations of a Lender under
this Agreement and (ii) the assigning Lender thereunder shall, to the extent of
the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all or the remaining portion of an assigning Lender's rights
and obligations under this Agreement, such Lender shall cease to be a party
hereto but shall continue to be entitled to the benefits of Sections 2.13, 2.15,
2.19 and 9.05, as well as to any Fees accrued for its account and not yet paid).
(c) By executing and delivering an Assignment and Acceptance,
the assigning Lender thereunder and the assignee thereunder shall be deemed to
confirm to and agree with each other and the other parties hereto as follows:
(i) such assigning Lender warrants that it is the legal and beneficial owner of
the interest being assigned thereby free and clear of any adverse claim and that
its Commitments and the outstanding balances of its Loans, in each case without
giving effect to assignments thereof that have not become effective, are as set
forth in such Assignment and Acceptance; (ii) except as set forth in clause (i)
above, such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with this Agreement, or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto, or the financial condition of the Borrower or the performance
or observance by the Borrower of any of its obligations under this Agreement,
any other Loan Document or any other instrument or document furnished pursuant
hereto or thereto; (iii) such assignee represents and
59
warrants that it is legally authorized to enter into such Assignment and
Acceptance; (iv) such assignee confirms that it has received copies of this
Agreement and the other Loan Documents, together with copies of the most recent
financial statements delivered pursuant to this Agreement and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance; (v) such
assignee will independently and without reliance upon the Administrative Agent,
such assigning Lender 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 decisions in taking or not taking action under this Agreement; (vi) such
assignee appoints and authorizes the Administrative Agent and the Collateral
Agent to take such action as agent on its behalf and to exercise such powers
under this Agreement and the other Loan Documents as are delegated to the
Administrative Agent and the Collateral Agent by the terms hereof or thereof,
together with such powers as are reasonably incidental thereto; and (vii) such
assignee agrees that it will perform in accordance with their terms all the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(d) The Administrative Agent, acting for this purpose as an
agent of the Borrower, shall maintain at its address referred to in Section 9.01
a copy of each Assignment and Acceptance delivered to it and a register (the
"Register") for the recordation of the names and addresses of the Lenders and
the Commitments of, and principal amount of the Loans (whether or not evidenced
by a Note) owing to, each Lender from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each person whose name is
recorded in the Register as the owner of Commitments and the Loans recorded
therein for all purposes of this Agreement. Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "canceled". The Register shall be
available for inspection by the Borrower, any Lender and their representatives
(including counsel and accountants), at any reasonable time and from time to
time upon reasonable prior notice.
(e) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, an Administrative
Questionnaire completed in respect of the assignee (unless the assignee shall
already be a Lender hereunder), the processing and recordation fee referred to
in paragraph (b) above and, if required, the written consent of the Borrower and
the Administrative Agent to such assignment, the Administrative Agent shall (i)
accept such Assignment and Acceptance, (ii) record the information contained
therein in the Register and (iii) give prompt notice thereof to the Lenders.
Notwithstanding anything to the contrary contained herein, no assignment under
Section 9.04(b) of any rights or obligations shall be effective unless and until
the Administrative Agent shall have recorded such assignment in the Register.
The Administrative Agent shall record the name of the transferor, the name of
the transferee, and the amount of the transfer in the Register after receipt of
all documents required pursuant to this Section 9.04 and such other documents as
the Administrative Agent may reasonably request.
(f) Each Lender may without the consent of the Borrower or the
Administrative Agent sell participations to one or more banks or other entities
in all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitments and the Loans owing to it);
provided, however, that (i) such Lender's obligations under this Agreement shall
remain unchanged, (ii) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) the participating
banks or other entities shall be entitled to the benefit of the cost protection
provisions contained in Sections 2.13, 2.15, 2.19 and 9.06 to the same extent as
if they were Lenders, provided that no such participating bank or entity shall
60
be entitled to receive any greater amount pursuant to such Sections than a
Lender would have been entitled to receive in respect of the amount of the
participation sold by such Lender to such participating bank or entity had no
sale occurred, and (iv) the Borrower, the Administrative Agent and the other
Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement, and
such Lender shall retain the sole right to enforce the obligations of the
Borrower or any other Loan Party, as the case may be, relating to its Loans and
Fees and to approve any amendment, modification or waiver of any provision of
this Agreement or any other Loan Document (other than amendments, modifications
or waivers decreasing any Fee payable hereunder or the amount of principal of or
the rate at which interest is payable on the Loans, extending any final maturity
date to a date that is later than the date that is twelve months after the
Maturity Date or increasing any Commitment, in each case in respect of an
Obligation in which the relevant participating bank or entity is participating).
Each Lender will disclose the identity of its participants to the Borrower and
Administrative Agent if requested by the Borrower or the Administrative Agent.
(g) Any Lender or participant may, in connection with any
assignment or participation or proposed assignment or participation pursuant to
this Section 9.04, disclose to the assignee or participant or proposed assignee
or 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 or participant or proposed assignee or participant shall
execute an agreement whereby such assignee or participant shall agree to be
bound by Section 9.16.
(h) Any Lender may at any time assign all or any portion of
its rights under this Agreement to a Federal Reserve Bank, provided that no such
assignment shall release a Lender from any of its obligations hereunder. In
order to facilitate such an assignment to a Federal Reserve Bank, the Borrower
shall, at the request of the assigning Lender, duly execute and deliver to the
assigning Lender a promissory note or notes evidencing the Loans made to the
Borrower by the assigning Lender hereunder.
(i) The Borrower shall not assign or delegate any of its
rights or duties hereunder and any attempted assignment shall be null and void.
SECTION 9.05. Expenses; Indemnity. (a) The Borrower agrees to
pay all reasonable out-of-pocket expenses incurred by the Administrative Agent
and the Collateral Agent in connection with the preparation of this Agreement
and the other Loan Documents, or by the Administrative Agent or the Collateral
Agent in connection with the syndication of the Commitments or the
administration of this Agreement (including expenses incurred in connection with
due diligence and initial and ongoing Collateral examination to the extent
incurred with the reasonable prior approval of the Borrower) or in connection
with any amendments, modifications or waivers of the provisions hereof or
thereof (whether or not the transactions hereby contemplated shall be
consummated) or incurred by the Administrative Agent, the Collateral Agent or
any Lender in connection with the enforcement or protection of their rights in
connection with this Agreement and the other Loan Documents or in connection
with the Loans made, including the reasonable fees, charges and disbursements of
Cravath, Swaine & Xxxxx, counsel for the Administrative Agent and the Collateral
Agent, and, in connection with any such enforcement or protection, the
reasonable fees, charges and disbursements of any other counsel (including the
reasonable allocated costs of internal counsel if a Lender elects to use
internal counsel in lieu of outside counsel) for the Administrative Agent or any
Lender (but no more than one such counsel for any Lender).
(b) The Borrower agrees to indemnify the Administrative Agent,
the Collateral Agent, each Lender and each of their respective directors,
trustees, officers, employees and agents (each such person being called an
"Indemnitee") against, and to hold each Indemnitee harmless from, any and all
losses, claims, damages, liabilities and related expenses, including
61
reasonable counsel fees, charges and disbursements, incurred by or asserted
against any Indemnitee arising out of, in any way connected with, or as a result
of (i) the execution or delivery of this Agreement or any other Loan Document or
any agreement or instrument contemplated hereby or thereby, the performance by
the parties hereto and thereto of their respective obligations thereunder or the
consummation of the Merger and the other transactions contemplated hereby and
thereby, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether or not any Indemnitee is a party thereto, provided that such indemnity
shall not, as to any Indemnitee, be available to the extent that such losses,
claims, damages, liabilities or related expenses result from the gross
negligence or wilful misconduct of such Indemnitee (treating, for this purpose
only, the Administrative Agent or any Lender and its directors, trustees,
officers and employees as a single Indemnitee). Subject to and without limiting
the generality of the foregoing sentence, the Borrower agrees to indemnify each
Indemnitee against, and hold each Indemnitee harmless from, any and all losses,
claims, damages, liabilities and related expenses, including reasonable counsel
or consultant fees, charges and disbursements, incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a result of (A)
any Environmental Claim related in any way to the Borrower or any Subsidiary, or
(B) any actual or alleged presence, Release or threatened Release of Hazardous
Materials on any of the Properties or on any property owned, leased or operated
by any predecessor of the Borrower or any Subsidiary, provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses are, determined by a
court of competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or wilful misconduct of such Indemnitee or
any of its directors, trustees, officers or employees. The provisions of this
Section 9.05 shall remain operative and in full force and effect regardless of
the expiration of the term of this Agreement, the consummation of the
transactions contemplated hereby, the repayment of any of the Obligations, the
invalidity or unenforceability of any term or provision of this Agreement or any
other Loan Document, or any investigation made by or on behalf of the
Administrative Agent or any Lender. All amounts due under this Section 9.05
shall be payable on written demand therefor.
(c) Unless an Event of Default shall have occurred and be
continuing, the Borrower shall be entitled to assume the defense of any action
for which indemnification is sought hereunder with counsel of its choice at its
expense (in which case the Borrower shall not thereafter be responsible for the
fees and expenses of any separate counsel retained by an Indemnitee except as
set forth below); provided, however, that such counsel shall be reasonably
satisfactory to each such Indemnitee. Notwithstanding the Borrower's election to
assume the defense of such action, each Indemnitee shall have the right to
employ separate counsel and to participate in the defense of such action, and
the Borrower shall bear the reasonable fees, costs and expenses of such separate
counsel, if (i) the use of counsel chosen by the Borrower to represent such
Indemnitee would present such counsel with a conflict of interest; (ii) the
actual or potential defendants in, or targets of, any such action include both
the Borrower and such Indemnitee and such Indemnitee shall have reasonably
concluded that there may be legal defenses available to it that are different
from or additional to those available to the Borrower (in which case the
Borrower shall not have the right to assume the defense or such action on behalf
of such Indemnitee); (iii) the Borrower shall not have employed counsel
reasonably satisfactory to such Indemnitee to represent it within a reasonable
time after notice of the institution of such action; or (iv) the Borrower shall
authorize such Indemnitee to employ separate counsel at the Borrower's expense.
The Borrower will not be liable under this Agreement for any amount paid by an
Indemnitee to settle any claims or actions if the settlement is entered into
without the Borrower's consent, which consent may not be withheld or delayed
unless such settlement is unreasonable in light of such claims or actions
against, and defenses available to, such Indemnitee.
62
(d) Notwithstanding anything to the contrary in this Section
9.05, this Section 9.05 shall not apply to taxes, it being understood that the
Borrower's only obligations with respect to taxes shall arise under Sections
2.13 and 2.19.
(e) The Borrower further agrees to pay the expenses of and
indemnify BankBoston, N.A. as provided for in the last sentence of the second
paragraph of the fee letter dated as of August 4, 1998, among BankBoston, N.A.,
BancBoston Securities Inc. and the Borrower.
SECTION 9.06. Right of Setoff. If an Event of Default shall
have occurred and be continuing, each Lender is hereby authorized at any time
and from time to time, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand, provisional or
final) at any time held and other indebtedness at any time owing by such Lender
to or for the credit or the account of the Borrower against any of and all the
obligations of the Borrower now or hereafter existing under this Agreement or
any other Loan Document held by such Lender, irrespective of whether or not such
Lender shall have made any demand under this Agreement or such other Loan
Document and although such obligations may be unmatured. The rights of each
Lender under this Section 9.06 are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.07. Applicable Law. THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS (OTHER THAN AS EXPRESSLY SET FORTH IN OTHER LOAN DOCUMENTS) SHALL
BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW
YORK.
SECTION 9.08. Waivers; Amendment. (a) No failure or delay of
the Administrative Agent or any Lender in exercising any right or power
hereunder or under any Loan Document shall operate as a waiver thereof, nor
shall any single or partial exercise of any such right or power, or any
abandonment or discontinuance of steps to enforce such a right or power,
preclude any other or further exercise thereof or the exercise of any other
right or power. The rights and remedies of the Administrative Agent and the
Lenders hereunder and under the other Loan Documents are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or any other Loan Document or consent to any
departure by the Borrower therefrom shall in any event be effective unless the
same shall be permitted by paragraph (b) below, and then such waiver or consent
shall be effective only in the specific instance and for the purpose for which
given. No notice or demand on the Borrower in any case shall entitle the
Borrower to any other or further notice or demand in similar or other
circumstances.
(b) Neither this Agreement nor any other Loan Document nor any
provision hereof or thereof may be waived, amended or modified except, in the
case of this Agreement, pursuant to an agreement or agreements in writing
entered into by the Borrower and the Required Lenders or, in the case of any
other Loan Document, pursuant to an agreement or agreements in writing entered
into by each party thereto and the Collateral Agent and consented to by the
Required Lenders; provided, however, that no such agreement shall (i)(A) waive,
amend or modify any provision of this Agreement or any other Loan Document
required to be made in connection with the merger or consolidation of Bar
Technologies Inc., a Delaware corporation (or any of its affiliates), or the
Borrower, with the Borrower or Bar Technologies Inc. (or any of its affiliates),
as the case may be; or (B) extend the Maturity Date to a date that is up to
twelve months after the earlier of (I) the date that is nine months after the
Closing Date and (II) July 23, 1999, without the prior written consent of the
Supermajority Lenders; and (ii) (A) extend the Maturity Date to a date that is
later than the date that is twelve months after the earlier of (I) the date that
is nine months after the Closing Date and (II) July 23, 1999, (B) decrease the
principal amount of or decrease the rate of interest on, any Loan, (C) increase
the Commitment of any Lender or decrease the Commitment Fees or (D) amend or
modify the provisions of Section 2.16,
63
the provisions of this Section or the definition of the term "Required Lenders",
without the prior written consent of each Lender adversely affected thereby,
provided further that no such agreement shall amend, modify or otherwise affect
the rights or duties of the Administrative Agent hereunder without the prior
written consent of the Administrative Agent acting as such at the effective date
of such agreement, as the case may be. Each Lender shall be bound by any waiver,
amendment or modification authorized by this Section 9.08 and any consent by any
Lender pursuant to this Section 9.08 shall bind any assignee of such Lender.
SECTION 9.09. Interest Rate Limitation. Notwithstanding
anything herein to the contrary, if at any time the applicable interest rate,
together with all fees and charges that are treated as interest under applicable
law (collectively, the "Charges"), as provided for herein or in any other
document executed in connection herewith, or otherwise contracted for, charged,
received, taken or reserved by any Lender, shall exceed the maximum lawful rate
(the "Maximum Rate") that may be contracted for, charged, taken, received or
reserved by such Lender in accordance with applicable law, the rate of interest
payable hereunder, together with all Charges payable to such Lender, shall be
limited to the Maximum Rate, provided that such excess amount shall be paid to
such Lender on subsequent payment dates to the extent not exceeding the legal
limitation.
SECTION 9.10. Entire Agreement. This Agreement, the other Loan
Documents and the agreements regarding certain Fees referred to herein
constitute the entire contract between the parties relative to the subject
matter hereof. Any previous agreement among or representations from the parties
with respect to the subject matter hereof is superseded by this Agreement and
the other Loan Documents. Nothing in this Agreement or in the other Loan
Documents, expressed or implied, is intended to confer upon any party other than
the parties hereto and thereto any rights, remedies, obligations or liabilities
under or by reason of this Agreement or the other Loan Documents.
SECTION 9.11. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING
OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH
OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING
WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN
INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS
APPLICABLE, BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN
THIS SECTION 9.11.
SECTION 9.12. Severability. In the event any one or more of
the provisions contained in this Agreement or in any other Loan Document should
be held invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein and therein
shall not in any way be affected or impaired thereby. The parties shall endeavor
in good-faith negotiations to replace the invalid, illegal or unenforceable
provisions with valid provisions the economic effect of which comes as close as
possible to that of the invalid, illegal or unenforceable provisions.
SECTION 9.13. Counterparts. This Agreement may be executed in
two or more counterparts, each of which shall constitute an original but all of
which when taken together shall constitute but one contract, and shall become
effective as provided in Section 9.03.
64
SECTION 9.14. Headings. Article and Section headings and the
Table of Contents used herein are for convenience of reference only, are not
part of this Agreement and are not to affect the construction of, or to be taken
into consideration in interpreting, this Agreement.
SECTION 9.15. Jurisdiction; Consent to Service of Process. (a)
The Borrower hereby irrevocably and unconditionally submits, for itself and its
property, to the nonexclusive jurisdiction of any New York State court or
Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or the other Loan Documents, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that any
Lender may otherwise have to bring any action or proceeding relating to this
Agreement or the other Loan Documents against the Borrower or its properties in
the courts of any jurisdiction.
(b) The Borrower hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or the other
Loan Documents in any New York State or Federal court. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(c) Each party to this Agreement irrevocably consents to
service of process in the manner provided for notices in Section 9.01. Nothing
in this Agreement will affect the right of any party to this Agreement to serve
process in any other manner permitted by law.
SECTION 9.16. Confidentiality. Each of the Lenders and the
Administrative Agent agrees that it shall maintain in confidence any information
relating to the Loan Parties furnished to it by or on behalf of the Loan Parties
(other than information that (a) has become generally available to the public
other than as a result of a disclosure by such party, (b) has been independently
developed by such Lender or the Administrative Agent without violating this
Section 9.16 or (c) was available to such Lender or the Administrative Agent
from a third party having, to such person's knowledge, no obligations of
confidentiality to any Loan Party) and shall not reveal the same other than (i)
to its directors, trustees, officers, employees and advisors with a need to know
or to any person that approves or administers the Loans on behalf of such Lender
(so long as each such person shall have been instructed to keep the same
confidential in accordance with this Section 9.16) and (ii) as contemplated by
Section 9.04(g), except: (A) to the extent necessary to comply with law or any
legal process or the requirements of any Governmental Authority or of any
securities exchange on which securities of the disclosing party or any Affiliate
of the disclosing party are listed or traded, (B) as part of normal reporting or
review procedures to Governmental Authorities, (C) to its parent companies,
Affiliates or auditors (so long as each such person shall have been instructed
to keep the same confidential in accordance with this Section 9.16) and (D) in
order to enforce its rights under any Loan Document in a legal proceeding.
SECTION 9.17. Release of Liens. In the event that the Borrower
or any Subsidiary conveys, sells, leases, assigns, transfers or otherwise
disposes of all or any portion of any of the Capital Stock, assets or property
of the Borrower or any of the Subsidiaries in a transaction not prohibited by
Section 6.05, the Administrative Agent and the Collateral Agent shall promptly
(and the Lenders hereby authorize the Administrative Agent and the Collateral
Agent to) take such action and execute any such documents as may be reasonably
requested by
65
the Borrower and at the Borrower's expense to release any Liens created by any
Loan Document in respect of such Capital Stock, assets or property. In addition,
the Administrative Agent and the Collateral Agent agree to take such actions as
are reasonably requested by the Borrower and at the Borrower's expense to
terminate the Liens and security interests created by the Loan Documents when
all the Obligations are paid in full and all Commitments are terminated. Any
representation, warranty or covenant contained in any Loan Document relating to
any such Capital Stock, assets, property or Subsidiary shall no longer be deemed
to be made once such Capital Stock, assets or property is conveyed, sold,
leased, assigned, transferred or disposed of.
66
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed by their respective authorized officers as of the
day and year first above written.
RES HOLDING CORPORATION,
by /s/ Xxxxx Xxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxx
Title: Vice President
THE CHASE MANHATTAN BANK,
by /s/ Xxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
DLJ CAPITAL FUNDING, INC.,
by /s/ Xxxxxxx X. Xxxxxx
-------------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Managing Director
BANKBOSTON, N.A.,
by /s/ Xxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxx
Title: Director
