EXHIBIT 10.3
CREDIT AGREEMENT
among
ACQUISITION HOLDINGS, INC.,
ACQUISITION CORP.,
VARIOUS BANKS
and
BANKERS TRUST COMPANY,
as AGENT
----------------------------------
Dated as of January 29, 1998
----------------------------------
TABLE OF CONTENTS
Page
SECTION 1. Amount and Terms of Credit..................................... 1
1.01 The Commitments............................................. 1
1.02 Minimum Amount of Each Borrowing............................ 4
1.03 Notice of Borrowing......................................... 4
1.04 Disbursement of Funds....................................... 5
1.05 Notes....................................................... 6
1.06 Conversions................................................. 7
1.07 Pro Rata Borrowings......................................... 8
1.08 Interest.................................................... 8
1.09 Interest Periods............................................ 9
1.10 Increased Costs, Illegality, etc............................ 11
1.11 Compensation................................................ 13
1.12 Change of Lending Office.................................... 13
1.13 Replacement of Banks........................................ 14
SECTION 2. Letters of Credit.............................................. 15
2.01 Letters of Credit........................................... 15
2.02 Maximum Letter of Credit Outstandings; Final Maturities..... 16
2.03 Letter of Credit Requests; Minimum Stated Amount............ 16
2.04 Letter of Credit Participations............................. 17
2.05 Agreement to Repay Letter of Credit Drawings................ 19
2.06 Increased Costs............................................. 20
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.......... 21
3.01 Fees........................................................ 21
3.02 Voluntary Termination of Unutilized Revolving Loan
Commitments.............................................. 22
3.03 Mandatory Reduction of Commitments.......................... 23
SECTION 4. Prepayments; Payments; Taxes................................... 24
4.01 Voluntary Prepayments....................................... 24
4.02 Mandatory Repayments and Commitment Reductions.............. 25
(i)
Page
4.03 Method and Place of Payment................................. 29
4.04 Net Payments................................................ 29
SECTION 5. Conditions Precedent to Credit Events on the Initial
Borrowing Date................................................. 31
5.01 Execution of Agreement; Notes............................... 31
5.02 Officer's Certificate....................................... 31
5.03 Opinions of Counsel......................................... 32
5.04 Corporate Documents; Proceedings; etc....................... 32
5.05 Plans; Shareholders' Agreements; Management Agreements;
Employment Agreements; Non-Compete Agreements;
Collective Bargaining Agreements; Tax Sharing
Agreements; Existing Indebtedness Agreements.............. 32
5.06 Financings; etc............................................. 34
5.07 Tender Offer; Merger; etc................................... 34
5.08 Refinancing................................................. 35
5.09 ATEC Subordination Agreement................................ 36
5.10 Adverse Change, etc......................................... 36
5.11 Litigation.................................................. 37
5.12 Pledge Agreement............................................ 37
5.13 Security Agreement.......................................... 37
5.14 Subsidiaries Guaranty....................................... 38
5.15 Acknowledgment and Joinder Agreement........................ 38
5.16 Financial Statements; Pro Forma Financial Statements,
Projections.............................................. 38
5.17 Solvency Opinion; Insurance Certificates.................... 39
5.18 Fees, etc................................................... 39
SECTION 6. Conditions Precedent to All Credit Events...................... 39
6.01 No Default; Representations and Warranties.................. 39
6.02 Notice of Borrowing; Letter of Credit Request............... 40
SECTION 7. Representations, Warranties and Agreements..................... 40
7.01 Corporate Status............................................ 40
7.02 Corporate and Other Power and Authority..................... 41
7.03 No Violation................................................ 41
7.04 Approvals................................................... 41
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc............................ 42
7.06 Litigation.................................................. 43
7.07 True and Complete Disclosure................................ 44
(ii)
Page
7.08 Use of Proceeds; Margin Regulations......................... 44
7.09 Tax Returns and Payments.................................... 44
7.10 Compliance with ERISA....................................... 45
7.11 The Security Documents...................................... 46
7.12 Representations and Warranties in the Documents............. 47
7.13 Properties.................................................. 47
7.14 Capitalization.............................................. 47
7.15 Subsidiaries................................................ 48
7.16 Compliance with Statutes, etc............................... 48
7.17 Investment Company Act...................................... 49
7.18 Public Utility Holding Company Act.......................... 49
7.19 Environmental Matters....................................... 49
7.20 Labor Relations............................................. 50
7.21 Patents, Licenses, Franchises and Formulas.................. 50
7.22 Indebtedness................................................ 50
7.23 Tender Offer................................................ 51
7.24 Merger...................................................... 51
7.25 Issuance of the Senior Subordinated Notes................... 51
7.26 Special Purpose Corporations................................ 52
7.27 Insurance................................................... 52
7.28 Senior Subordinated Notes................................... 52
SECTION 8. Affirmative Covenants.......................................... 52
8.01 Information Covenants....................................... 53
(a) Monthly Reports..................................... 53
(b) Quarterly Financial Statements...................... 53
(c) Annual Financial Statements......................... 53
(d) Management Letters.................................. 54
(e) Budgets and Projections............................. 54
(f) Officer's Certificates.............................. 54
(g) Notice of Default or Litigation..................... 54
(h) Other Reports and Filings........................... 54
(i) Environmental Matters............................... 55
(j) Other Information................................... 56
8.02 Books, Records, Inspections and Annual Meetings............. 56
8.03 Maintenance of Property; Insurance.......................... 56
8.04 Corporate Franchises........................................ 57
8.05 Compliance with Statutes, etc............................... 57
8.06 Compliance with Environmental Laws.......................... 58
8.07 ERISA....................................................... 59
8.08 End of Fiscal Years; Fiscal Quarters........................ 60
(iii)
Page
8.09 Performance of Obligations.................................. 60
8.10 Payment of Taxes............................................ 60
8.11 Additional Security; Further Assurances..................... 60
8.12 Contributions............................................... 61
SECTION 9. Negative Covenants............................................. 62
9.01 Liens....................................................... 62
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc...... 65
9.03 Dividends................................................... 68
9.04 Indebtedness................................................ 69
9.05 Advances, Investments and Loans............................. 71
9.06 Transactions with Affiliates................................ 72
9.07 Capital Expenditures........................................ 73
9.08 Consolidated Interest Coverage Ratio........................ 74
9.09 Maximum Leverage Ratio...................................... 75
9.10 Limitation on Payments of Certain Indebtedness,;
Modifications of Certain Indebtedness; Modifications
of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc.................................... 76
9.11 Limitation on Certain Restrictions on Subsidiaries.......... 77
9.12 Limitation on Issuance of Capital Stock..................... 77
9.13 Business.................................................... 77
9.14 Limitation on Creation of Subsidiaries...................... 78
9.15 Senior Subordinated Notes................................... 79
SECTION 10. Events of Default............................................. 79
10.01 Payments................................................... 79
10.02 Representations, etc....................................... 79
10.03 Covenants.................................................. 79
10.04 Default Under Other Agreements............................. 79
10.05 Bankruptcy, etc............................................ 80
10.06 ERISA...................................................... 80
10.07 Security Documents......................................... 81
10.08 Guaranties................................................. 81
10.09 Judgments.................................................. 81
10.10 Change of Control.......................................... 81
10.11 ATEC Subordination Agreement............................... 81
SECTION 11. Definitions and Accounting Terms.............................. 82
11.01 Defined Terms.............................................. 82
(iv)
Page
SECTION 12. The Agent.................................................... 109
12.01 Appointment............................................... 109
12.02 Nature of Duties.......................................... 109
12.03 Lack of Reliance on the Agent............................. 110
12.04 Certain Rights of the Agent............................... 110
12.05 Reliance.................................................. 110
12.06 Indemnification........................................... 110
12.07 The Agent in its Individual Capacity...................... 111
12.08 Holders................................................... 111
12.09 Resignation by the Agent.................................. 111
SECTION 13. Miscellaneous................................................ 112
13.01 Payment of Expenses, etc.................................. 112
13.02 Right of Setoff........................................... 113
13.03 Notices................................................... 114
13.04 Benefit of Agreement; Assignments; Participations......... 114
13.05 No Waiver; Remedies Cumulative............................ 116
13.06 Payments Pro Rata......................................... 117
13.07 Calculations; Computations; Accounting Terms.............. 118
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION;
VENUE; WAIVER OF JURY TRIAL............................ 118
13.09 Counterparts.............................................. 119
13.10 Effectiveness............................................. 119
13.11 Headings Descriptive...................................... 120
13.12 Amendment or Waiver; etc.................................. 120
13.13 Survival.................................................. 121
13.14 Domicile of Loans......................................... 121
13.15 Register.................................................. 122
13.16 Confidentiality........................................... 122
SECTION 14. Parent Guaranty.............................................. 123
14.01 Guaranty.................................................. 123
14.02 Bankruptcy................................................ 124
14.03 Nature of Liability....................................... 124
14.04 Independent Obligation.................................... 124
14.05 Authorization............................................. 124
14.06 Reliance.................................................. 126
14.07 Subordination............................................. 126
14.08 Waiver.................................................... 126
14.09 Nature of Liability....................................... 128
(v)
SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Properties
SCHEDULE IV Plans
SCHEDULE V Subsidiaries
SCHEDULE VI Existing Indebtedness
SCHEDULE VII Insurance
SCHEDULE VIII Existing Liens
SCHEDULE IX Existing Investments
SCHEDULE X Indebtedness to be Refinanced
SCHEDULE XI Litigation
SCHEDULE XII Certain Contingent Liabilities
SCHEDULE XIII Certain Matters
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Term Note
EXHIBIT B-2 Form of Revolving Note
EXHIBIT B-3 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E-1 Form of Opinion of Xxxxxxxxxx & Xxxxx LLP,
Special Counsel to the Credit Parties
EXHIBIT E-2 Form of Opinion of Xxxx X. Xxxxx, Esq., General Counsel
to the Borrower
EXHIBIT F Form of Officers' Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Form of Subsidiaries Guaranty
EXHIBIT J Form of Acknowledgment and Joinder Agreement
EXHIBIT K Form of Assignment and Assumption Agreement
EXHIBIT L Form of Intercompany Note
(vi)
CREDIT AGREEMENT, dated as of January 29, 1998, among
ACQUISITION HOLDINGS, INC., a Delaware corporation ("Holdings"), ACQUISITION
CORP., a Delaware corporation ("Acquisition Corp."), the Banks party hereto from
time to time, and BANKERS TRUST COMPANY, as Agent (all capitalized terms used
herein and defined in Section 11 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks are willing to make available to the Borrower the
respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit
1.01 The Commitments. (a) Subject to and upon the terms and conditions set
forth herein, each Bank with a Term Loan Commitment severally agrees to make a
term loan or term loans (each a "Term Loan" and, collectively, the "Term Loans")
to the Borrower, which Term Loans (i) only may be incurred by the Borrower on
the Initial Borrowing Date, (ii) shall, at the option of the Borrower, be
incurred and maintained as, and/or converted into, Base Rate Loans or Eurodollar
Loans, provided that (A) except as otherwise specifically provided in Section
1.10(b), all Term Loans comprising the same Borrowing shall at all times be of
the same Type and (B) unless the Agent has determined (and has notified the
Borrower) that the Syndication Date has occurred (at which time this clause (B)
shall no longer be applicable), no more than three Borrowings of Term Loans to
be maintained as Eurodollar Loans may be incurred prior to the 90th day after
the Effective Date (each of which Borrowings of Eurodollar Loans may only have
an Interest Period of one month, and the first of which Borrowings may only be
made on the Initial Borrowing Date or on or prior to the sixth Business Day
after the Initial Borrowing Date, the second of which Borrowings may only be
made on the last day of the Interest Period of the first such Borrowing and the
third of which Borrowings may only be made on the last day of the Interest
Period of the second such Borrowing) and (iii) shall be made by each such Bank
in that aggregate principal amount which does not exceed the Term Loan
Commitment of such Bank on the Initial Borrowing Date (before giving effect to
the termination thereof on such date pursuant to Section 3.03(b)(ii)).
Once repaid, Term Loans incurred hereunder may not be reborrowed.
(b) (A) Subject to and upon the terms and conditions set forth
herein, each Bank with a Revolving Loan Commitment severally agrees to make, at
any time and from time to time on and after the Initial Borrowing Date and prior
to the Revolving Loan Maturity Date, a revolving loan or revolving loans (each a
"Revolving Loan" and, collectively, the "Revolving Loans") to the Borrower,
which Revolving Loans (i) shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans,
provided that (A) except as otherwise specifically provided in Section 1.10(b),
all Revolving Loans comprising the same Borrowing shall at all times be of the
same Type and (B) unless the Agent has determined (and has notified the
Borrower) that the Syndication Date has occurred (at which time this clause (B)
shall no longer be applicable), no more than three Borrowings of Revolving Loans
to be maintained as Eurodollar Loans may be incurred prior to the 90th day after
the Effective Date (each of which Borrowings of Eurodollar Loans may only have
an Interest Period of one month, and the first of which Borrowings may only be
made on the same day as the first day of the first Interest Period of the Term
Loans that are maintained as Eurodollar Loans, the second of which Borrowings
may only be made on the last day of the Interest Period of the first such
Borrowing and the third of which Borrowings may only be made on the last day of
the Interest Period of the second such Borrowing), (ii) may be repaid and
reborrowed in accordance with the provisions hereof, (iii) shall not exceed for
any such Bank at any time outstanding that aggregate principal amount which,
when added to the product of (x) such Bank's RL Percentage and (y) the sum of
(I) the aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) at such time
and (II) the aggregate principal amount of all Swingline Loans (exclusive of
Swingline Loans which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Revolving Loans) then
outstanding, equals the Revolving Loan Commitment of such Bank at such time and
(iv) shall not exceed for all such Banks at any time outstanding that aggregate
principal amount which, when added to the sum of (I) the aggregate amount of all
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Total Revolving Loan
Commitment at such time. Notwithstanding anything to the contrary contained in
this Agreement, no more than $9,000,000 of Revolving Loans in the aggregate may
be incurred on the Initial Borrowing Date.
(B) Revolving Loans may not be incurred as Acquisition Loans
if after giving effect thereto the aggregate outstanding principal amount of
Acquisition Loans would exceed the Acquisition Sub-Limit then in effect. Except
to the extent made pursuant to a Mandatory Borrowing, Revolving Loans may not be
incurred as Working Capital Loans if after giving effect thereto the aggregate
outstanding principal amount of Working Capital Loans
-2-
would exceed the Working Capital Sub-Limit then in effect.
(c) Subject to and upon the terms and conditions set forth
herein, the Swingline Bank agrees to make, at any time and from time to time
after the Initial Borrowing Date and prior to the Swingline Expiry Date, a
revolving loan or revolving loans (each a "Swingline Loan" and, collectively,
the "Swingline Loans") to the Borrower, which Swingline Loans (i) shall be made
and maintained as Base Rate Loans, (ii) may be repaid and reborrowed in
accordance with the provisions hereof, (iii) shall not exceed in aggregate
principal amount at any time outstanding, when combined with the aggregate
principal amount of all Revolving Loans then outstanding and the aggregate
amount of all Letter of Credit Outstandings at such time, an amount equal to the
Total Revolving Loan Commitment at such time, and (iv) shall not exceed in
aggregate principal amount at any time outstanding the Maximum Swingline Amount.
Notwithstanding anything to the contrary contained in this Section 1.01(c), (x)
the Swingline Bank shall not be obligated to make any Swingline Loans at a time
when a Bank Default exists unless the Swingline Bank has entered into
arrangements satisfactory to it and the Borrower to eliminate the Swingline
Bank's risk with respect to the Defaulting Bank's or Banks' participation in
such Swingline Loans, including by cash collateralizing such Defaulting Bank's
or Banks' RL Percentage of the outstanding Swingline Loans and (y) the Swingline
Bank shall not make any Swingline Loan after it has received written notice from
the Borrower, any other Credit Party or the Required Banks stating that a
Default or an Event of Default exists and is continuing until such time as the
Swingline Bank shall have received written notice (I) of rescission of all such
notices from the party or parties originally delivering such notice or (II) of
the waiver of such Default or Event of Default by the Required Banks.
(d) On any Business Day, the Swingline Bank may, in its sole
discretion, give notice to the Banks with Revolving Loan Commitments that the
Swingline Bank's outstanding Swingline Loans shall be funded with one or more
Borrowings of Revolving Loans (provided that such notice shall be deemed to have
been automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case one or more Borrowings of Revolving
Loans constituting Base Rate Loans (each such Borrowing, a "Mandatory
Borrowing") shall be made on the immediately succeeding Business Day by all
Banks with a Revolving Loan Commitment (without giving effect to any termination
thereto pursuant to the last paragraph of Section 10) pro rata based on each
such Bank's RL Percentage (determined before giving effect to any termination of
the Revolving Loan Commitments pursuant to the last paragraph of Section 10) and
the proceeds thereof shall be applied directly by the Swingline Bank to repay
the Swingline Bank for such outstanding Swingline Loans. Each such Bank hereby
irrevocably agrees to make Revolving Loans upon one Business Day's notice
pursuant to each Mandatory Borrowing in the amount and in the manner specified
in the preceding sentence and on the date specified in writing by
-3-
the Swingline Bank notwithstanding (i) the amount of the Mandatory Borrowing
may not comply with the Minimum Borrowing Amount otherwise required hereunder,
(ii) whether any conditions specified in Section 6 are then satisfied, (iii)
whether a Default or an Event of Default then exists, (iv) the date of such
Mandatory Borrowing and (v) the amount of the Total Revolving Loan Commitment
at such time. In the event that any Mandatory Borrowing cannot for any reason
be made on the date otherwise required above (including, without limitation, as
a result of the commencement of a proceeding under the Bankruptcy Code with
respect to the Borrower), then each such Bank hereby agrees that it shall
forthwith purchase (as of the date the Mandatory Borrowing would otherwise have
occurred, but adjusted for any payments received from the Borrower on or after
such date and prior to such purchase) from the Swingline Bank such
participations in the outstanding Swingline Loans as shall be necessary to
cause such Banks to share in such Swingline Loans ratably based upon their
respective RL Percentages (determined before giving effect to any termination
of the Revolving Loan Commitments pursuant to the last paragraph of Section
10), provided that (x) all interest payable on the Swingline Loans shall be for
the account of the Swingline Bank until the date as of which the respective
participation is required to be purchased and, to the extent attributable to
the purchased participation, shall be payable to the participant from and after
such date and (y) at the time any purchase of participations pursuant to this
sentence is actually made, the purchasing Bank shall be required to pay the
Swingline Bank interest on the principal amount of participation purchased for
each day from and including the day upon which the Mandatory Borrowing would
otherwise have occurred to but excluding the date of payment for such
participation, at the overnight Federal Funds Rate for the first three days and
at the rate otherwise applicable to Revolving Loans maintained as Base Rate
Loans hereunder for each day thereafter.
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount of
each Borrowing of Loans under a respective Tranche shall not be less than the
Minimum Borrowing Amount for such Tranche. More than one Borrowing may occur on
the same date, but at no time shall there be outstanding more than eight
Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to incur (x)
Eurodollar Loans hereunder, the Borrower shall give the Agent at the Notice
Office at least three Business Days' prior notice of each Eurodollar Loan to be
incurred hereunder and (y) Base Rate Loans hereunder (excluding Swingline Loans
and Revolving Loans made pursuant to a Mandatory Borrowing), the Borrower shall
give the Agent at the Notice Office at least one Business Day's prior notice of
each Base Rate Loan to be incurred hereunder, provided that (in each case) any
such notice shall be deemed to have been given on a certain day only if given
before 11:00 A.M. (New York time) on such day. Each such notice (each a "Notice
of Borrowing"), except as otherwise expressly provided in Section 1.10, shall be
irrevocable and shall be given by the Borrower in writing, or by telephone
promptly confirmed in writing, in the form of Exhibit A, appropriately completed
-4-
to specify (i) the aggregate principal amount of the Loans to be incurred
pursuant to such Borrowing, (ii) the date of such Borrowing (which shall be a
Business Day), (iii) whether the Loans being incurred pursuant to such Borrowing
shall constitute Term Loans or Revolving Loans, (iv) whether the Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base Rate
Loans or, to the extent permitted hereunder, Eurodollar Loans and, if Eurodollar
Loans, the initial Interest Period to be applicable thereto and (v) the
respective portion of any Borrowing of Revolving Loans to constitute Acquisition
Loans and/or Working Capital Loans, as the case may be. The Agent shall promptly
give each Bank which is required to make Loans of the Tranche specified in the
respective Notice of Borrowing, notice of such proposed Borrowing, of such
Bank's proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.
(b)(i) Whenever the Borrower desires to incur Swingline Loans
hereunder, the Borrower shall give the Swingline Bank no later than 1:00 P.M.
(New York time) on the date that a Swingline Loan is to be incurred, written
notice or telephonic notice promptly confirmed in writing of each Swingline Loan
to be incurred hereunder. Each such notice shall be irrevocable and specify in
each case (A) the date of Borrowing (which shall be a Business Day) and (B) the
aggregate principal amount of the Swingline Loans to be incurred pursuant to
such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice
specified in Section 1.01(d), with the Borrower irrevocably agreeing, by its
incurrence of any Swingline Loan, to the making of the Mandatory Borrowings as
set forth in Section 1.01(d).
(c) Without in any way limiting the obligation of the Borrower
to confirm in writing any telephonic notice of any Borrowing or prepayment of
Loans, the Agent or the Swingline Bank, as the case may be, may act without
liability upon the basis of telephonic notice of such Borrowing or prepayment,
as the case may be, believed by the Agent or the Swingline Bank, as the case may
be, in good faith to be from the Chairman of the Board, the President, the Chief
Financial Officer, the Treasurer or any Assistant Treasurer of the Borrower, or
from any other authorized officer of the Borrower designated in writing by the
Borrower to the Agent as being authorized to give such notices, prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the right
to dispute the Agent's or Swingline Bank's record of the terms of such
telephonic notice of such Borrowing or prepayment of Loans, as the case may be,
absent manifest error.
1.04 Disbursement of Funds. No later than 12:00 Noon (New York time) on the
date specified in each Notice of Borrowing (or (x) in the case of Swingline
Loans, no later than 3:00 P.M. (New York time) on the date specified pursuant to
Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, no later than
1:00 P.M. (New York time) on the date specified in Section 1.01(d)), each Bank
with a Commitment of the
-5-
respective Tranche will make available its pro rata portion (determined in
accordance with Section 1.07) of each such Borrowing requested to be made on
such date (or in the case of Swingline Loans, the Swingline Bank will make
available the full amount thereof). All such amounts will be made available in
Dollars and in immediately available funds at the Payment Office, and, except
for Revolving Loans made pursuant to a Mandatory Borrowing, the Agent will
promptly thereafter make available to the Borrower at the Payment Office the
aggregate of the amounts so made available by the Banks. Unless the Agent shall
have been notified by any Bank prior to the date of Borrowing that such Bank
does not intend to make available to the Agent such Bank's portion of any
Borrowing to be made on such date, the Agent may assume that such Bank has made
such amount available to the Agent on such date of Borrowing and the Agent may
(but shall not be obligated to), in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Agent by such Bank, the Agent shall be
entitled to recover such corresponding amount on demand from such Bank. If such
Bank does not pay such corresponding amount forthwith upon the Agent's demand
therefor, the Agent shall promptly notify the Borrower and the Borrower shall
immediately pay such corresponding amount to the Agent. The Agent also shall be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was made available by the Agent to the Borrower until
the date such corresponding amount is recovered by the Agent, at a rate per
annum equal to (i) if recovered from such Bank, at the overnight Federal Funds
Rate and (ii) if recovered from the Borrower, the rate of interest applicable to
the respective Borrowing, as determined pursuant to Section 1.08. Nothing in
this Section 1.04 shall be deemed to relieve any Bank from its obligation to
make Loans hereunder or to prejudice any rights which the Borrower may have
against any Bank as a result of any failure by such Bank to make Loans
hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Bank shall be evidenced (i) if Term Loans,
by a promissory note duly executed and delivered by the Borrower substantially
in the form of Exhibit B-1, with blanks appropriately completed in conformity
herewith (each a "Term Note" and, collectively, the "Term Notes"), (ii) if
Revolving Loans, by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-2, with blanks appropriately
completed in conformity herewith (each a "Revolving Note" and, collectively, the
"Revolving Notes") and (iii) if Swingline Loans, by a promissory note duly
executed and delivered by the Borrower substantially in the form Exhibit B-3,
with blanks appropriately completed in conformity herewith (the "Swingline
Note").
(b) The Term Note issued to each Bank that has a Term Loan
Commitment or outstanding Term Loans shall (i) be executed by the Borrower, (ii)
be payable to such Bank or its registered assigns and be dated the Initial
Borrowing Date (or, if issued after the Initial Borrowing Date, be dated the
date of the issuance thereof), (iii) be in a stated
-6-
principal amount equal to the Term Loans made by such Bank on the Initial
Borrowing Date (or, if issued after the Initial Borrowing Date, be in a stated
principal amount equal to the outstanding principal amount of Term Loans of such
Bank at such time) and be payable in the outstanding principal amount of Term
Loans evidenced thereby, (iv) mature on the Term Loan Maturity Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans and Eurodollar Loans, as the case may be, evidenced thereby,
(vi) be subject to voluntary prepayment as provided in Section 4.01, and
mandatory repayment as provided in Section 4.02, and (vii) be entitled to the
benefits of this Agreement and the other Credit Documents.
(c) The Revolving Note issued to each Bank that has a
Revolving Loan Commitment or outstanding Revolving Loans shall (i) be executed
by the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the Initial Borrowing Date (or, if issued after the Initial Borrowing
Date, be dated the date of the issuance thereof), (iii) be in a stated principal
amount equal to the Revolving Loan Commitment of such Bank (or, if issued after
the termination thereof, be in a stated principal amount equal to the
outstanding Revolving Loans of such Bank at such time) and be payable in the
outstanding principal amount of the Revolving Loans evidenced thereby, (iv)
mature on the Revolving Loan Maturity Date, (v) bear interest as provided in the
appropriate clause of Section 1.08 in respect of the Base Rate Loans and
Eurodollar Loans, as the case may be, evidenced thereby, (vi) be subject to
voluntary prepayment as provided in Section 4.01, and mandatory repayment as
provided in Section 4.02, and (vii) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) The Swingline Note issued to the Swingline Bank shall (i)
be executed by the Borrower, (ii) be payable to the Swingline Bank or its
registered assigns and be dated the Initial Borrowing Date, (iii) be in a stated
principal amount equal to the Maximum Swingline Amount and be payable in the
outstanding principal amount of the Swingline Loans evidenced thereby from time
to time, (iv) mature on the Swingline Expiry Date, (v) bear interest as provided
in the appropriate clause of Section 1.08 in respect of the Base Rate Loans
evidenced thereby, (vi) be subject to voluntary prepayment as provided in
Section 4.01, and mandatory repayment as provided in Section 4.02, and (vii) be
entitled to the benefits of this Agreement and the other Credit Documents.
(e) Each Bank will note on its internal records the amount of
each Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
or any error in such notation shall not affect the Borrower's obligations in
respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on any
Business Day occurring after the Initial Borrowing Date, all or a portion equal
to at least
-7-
the Minimum Borrowing Amount of the outstanding principal amount of
Loans (other than Swingline Loans which may not be converted pursuant to this
Section 1.06) made pursuant to one or more Borrowings (so long as of the same
Tranche) of one or more Types of Loans into a Borrowing (of the same Tranche) of
another Type of Loan, provided that, (i) except as otherwise provided in Section
1.10(b), Eurodollar Loans may be converted into Base Rate Loans only on the last
day of an Interest Period applicable to the Loans being converted and no such
partial conversion of Eurodollar Loans shall reduce the outstanding principal
amount of such Eurodollar Loans made pursuant to a single Borrowing to less than
the Minimum Borrowing Amount applicable thereto, (ii) Base Rate Loans may only
be converted into Eurodollar Loans if no Default under Section 10.01 or 10.05 is
in existence or no Event of Default is in existence (in either case) on the date
of the conversion, (iii) unless the Agent has determined (and has notified the
Borrower) that the Syndication Date has occurred (at which time this clause
(iii) shall no longer be applicable), prior to the 90th day after the Effective
Date, conversions of Base Rate Loans into Eurodollar Loans may only be made if
any such conversion is effective on the first day of the first, second or third
Interest Period referred to in clause (B) of each of Sections 1.01(a)(ii) and
1.01(b)(i) and so long as such conversion does not result in a greater number of
Borrowings of Eurodollar Loans prior to the 90th day after the Effective Date as
are permitted under such Sections and (iv) no conversion pursuant to this
Section 1.06 shall result in a greater number of Borrowings of Eurodollar Loans
than is permitted under Section 1.02. Each such conversion shall be effected by
the Borrower by giving the Agent at the Notice Office prior to 11:00 A.M. (New
York time) at least three Business Days' prior notice (each a "Notice of
Conversion") specifying the Loans to be so converted, the Borrowing or
Borrowings pursuant to which such Loans were made and, if to be converted into
Eurodollar Loans, the Interest Period to be initially applicable thereto. The
Agent shall give each Bank prompt notice of any such proposed conversion
affecting any of its Loans. Upon any such conversion the proceeds thereof will
be deemed to be applied directly on the day of such conversion to prepay the
outstanding principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Term Loans and Revolving Loans
under this Agreement shall be incurred from the Banks pro rata on the basis of
their Term Loan Commitments or Revolving Loan Commitments, as the case may be.
It is understood that no Bank shall be responsible for any default by any other
Bank of its obligation to make Loans hereunder and that each Bank shall be
obligated to make the Loans provided to be made by it hereunder, regardless of
the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Base Rate Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Base Rate Loan to a Eurodollar
Loan pursuant to Section 1.06, at a rate
-8-
per annum which shall be equal to the sum of the Applicable Base Rate Margin
plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date of Borrowing
thereof until the earlier of (i) the maturity thereof (whether by acceleration
or otherwise) and (ii) the conversion of such Eurodollar Loan to a Base Rate
Loan pursuant to Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum
which shall, during each Interest Period applicable thereto, be equal to the sum
of the Applicable Eurodollar Rate Margin plus the Eurodollar Rate for such
Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder shall, in each case, bear interest at a rate per annum equal to the
greater of (x) the rate which is 2% in excess of the rate then borne by such
Loans and (y) the rate which is 2% in excess of the rate otherwise applicable to
Base Rate Loans of such Tranche from time to time. Interest which accrues under
this Section 1.08(c) shall be payable on demand.
(d) Accrued (and theretofore unpaid) interest shall be payable
(i) in respect of each Base Rate Loan, quarterly in arrears on each Quarterly
Payment Date, (ii) in respect of each Eurodollar Loan, on the last day of each
Interest Period applicable thereto and, in the case of an Interest Period in
excess of three months, on each date occurring at three month intervals after
the first day of such Interest Period and (iii) in respect of each Loan, on any
repayment or prepayment (on the amount repaid or prepaid), at maturity (whether
by acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Agent shall
determine the Eurodollar Rate for each Interest Period applicable to Eurodollar
Loans and shall promptly notify the Borrower and the Banks thereof. Each such
determination shall, absent manifest error, be final and conclusive and binding
on all parties hereto.
1.09 Interest Periods. At the time the Borrower gives any Notice of
Borrowing or Notice of Conversion in respect of the making of, or conversion
into, any Eurodollar Loan (in the case of the initial Interest Period applicable
thereto) or on the third Business Day prior to the expiration of an Interest
Period applicable to such Eurodollar Loan (in the case of any subsequent
Interest Period), the Borrower shall have the right to elect, by giving the
Agent notice thereof, the interest period (each an "Interest Period") applicable
to such Eurodollar Loan, which Interest Period shall, at the option of the
Borrower (but otherwise subject to the limitation set forth in clause (B) of the
proviso in each of Sections 1.01(a)(ii) and 1.01(b)(i)), be a one, two, three or
six-month period, provided that:
-9-
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including
the date of any conversion thereto from a Base Rate Loan) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
(iii) if any Interest Period for a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall
end on the last Business Day of such calendar month;
(iv) if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day, such Interest
Period shall expire on the next succeeding Business Day, provided,
however, that if any Interest Period for a Eurodollar Loan would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day;
(v) no Interest Period may be selected at any time when a
Default under Section 10.01 or 10.05 is then in existence or an Event
of Default is then in existence;
(vi) no Interest Period in respect of any Borrowing of any
Tranche of Loans shall be selected which extends beyond the respective
Maturity Date for such Tranche of Loans; and
(vii) no Interest Period in respect of any Borrowing of Term
Loans shall be selected which extends beyond any date upon which a
mandatory repayment of Term Loans will be required to be made under
Section 4.02(b), if the aggregate principal amount of Term Loans which
have Interest Periods which will expire after such date will be in
excess of the aggregate principal amount of Term Loans then outstanding
less the aggregate amount of such required repayment.
If upon the expiration of any Interest Period applicable to a
Borrowing of Eurodollar Loans, the Borrower has failed to elect, or is not
permitted to elect, a new Interest Period to be applicable to such Eurodollar
Loans as provided above, the Borrower shall be deemed to have elected to convert
such Eurodollar Loans into Base Rate Loans effective as of the expiration date
of such current Interest Period.
-10-
1.10 Increased Costs, Illegality, etc. (a) In the event that any Bank shall
have determined (which determination shall, absent manifest error, be final and
conclusive and binding upon all parties hereto but, with respect to clause (i)
below, may be made only by the Agent):
(i) on any Interest Determination Date that, by reason of any
changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect
to any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or
in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, order,
guideline or request, such as, for example, but not limited to: (A) a
change in the basis of taxation of payment to any Bank of the principal
of or interest on the Notes or any other amounts payable hereunder
(except for changes in the rate of tax on, or determined by reference
to, the net income or profits of such Bank pursuant to the laws of the
jurisdiction in which such Bank is organized or in which such Bank's
principal office or applicable lending office is located or any
subdivision thereof or therein), but without duplication of any amounts
payable to such Bank pursuant to Section 4.04, or (B) a change in
official reserve requirements, but, in all events, excluding reserves
required under Regulation D to the extent included in the computation
of the Eurodollar Rate and/or (y) other circumstances since the date of
this Agreement affecting the interbank Eurodollar market; or
(iii) at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having force
of law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely affects
the interbank Eurodollar market;
then, and in any such event, such Bank (or the Agent, in the case of clause (i)
above) shall promptly give notice (by telephone promptly confirmed in writing)
to the Borrower and, except in the case of clause (i) above, to the Agent of
such determination (which notice the Agent shall promptly transmit to each of
the other Banks). Thereafter (x) in the case of clause (i) above, Eurodollar
Loans shall no longer be available until such time as the Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by the
Agent no longer exist, and any Notice of Borrowing or Notice of Conversion given
-11-
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to such
Bank, upon such Bank's written request therefor, such additional amounts (in the
form of an increased rate of, or a different method of calculating, interest or
otherwise as such Bank in its sole discretion shall determine) as shall be
required to compensate such Bank for such increased costs or reductions in
amounts received or receivable hereunder (a written notice as to the additional
amounts owed to such Bank, showing in reasonable detail the basis for the
calculation thereof, submitted to the Borrower by such Bank shall, absent
manifest error, be final and conclusive and binding on all the parties hereto)
and (z) in the case of clause (iii) above, the Borrower shall take one of the
actions specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, cancel such Borrowing by
giving the Agent telephonic notice (confirmed in writing) on the same date that
the Borrower was notified by the affected Bank or the Agent pursuant to Section
1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan is then outstanding,
upon at least three Business Days' written notice to the Agent, require the
affected Bank to convert such Eurodollar Loan into a Base Rate Loan, provided
that, (A) to the extent permitted by applicable law or any governmental request
(whether or not having the force of law), any such outstanding Eurodollar Loan
may be continued as such until the end of the then current Interest Period for
such Eurodollar Loan and (B) if more than one Bank is affected at any time, then
all affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If any Bank determines that after the date of this
Agreement the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority, central
bank or comparable agency, will have the effect of increasing the amount of
capital required or expected to be maintained by such Bank or any corporation
controlling such Bank based on the existence of such Bank's Commitments
hereunder or its obligations hereunder, then the Borrower shall pay to such
Bank, upon its written demand therefor, such additional amounts as shall be
required to compensate such Bank or such other corporation for the increased
cost to such Bank or such other corporation or the reduction in the rate of
return to such Bank or such other corporation as a result of such increase of
capital. In determining such additional amounts, each Bank will act reasonably
and in good faith and will use averaging and attribution methods which are
reasonable, provided that such Bank's determination of compensation owing under
this Section 1.10(c) shall, absent
-12-
manifest error, be final and conclusive and binding on all the parties hereto.
Each Bank, upon determining that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrower, which notice shall show in reasonable detail the basis for calculation
of such additional amounts.
(d) Notwithstanding anything to the contrary contained in this
Section 1.10, unless a Bank gives notice to the Borrower that the Borrower is
obligated to pay any amount under this Section 1.10 within 180 days after the
later of (x) the date such Bank incurs the respective increased costs or
reduction in return the rate of return or (y) the date such Bank has actual
knowledge of its incurrence of the respective increased costs or reduction in
the rate of return, then such Bank shall only be entitled to be compensated for
such amount by the Borrower pursuant to this Section 1.10 to the extent the
respective increased costs or reduction in the rate of return are incurred or
suffered on or after the date which occurs 180 days prior to such Bank giving
notice to the Borrower that it is obligated to pay the respective amounts
pursuant to this Section 1.10.
1.11 Compensation. The Borrower shall compensate each Bank, upon its
written request (which request shall set forth in reasonable detail the basis
for requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Bank to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Bank may sustain: (i) if for any reason (other
than a default by such Bank or the Agent) a Borrowing of, or conversion from or
into, Eurodollar Loans does not occur on a date specified therefor in a Notice
of Borrowing or Notice of Conversion (whether or not withdrawn by the Borrower
or deemed withdrawn pursuant to Section 1.10(a)); (ii) if any repayment
(including any repayment made pursuant to Section 4.01, Section 4.02 or as a
result of an acceleration of the Loans pursuant to Section 10) or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Loans when required by the terms of this Agreement or any
Note held by such Bank or (y) any election made pursuant to Section 1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the occurrence of
any event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to such Bank, it will, if
requested by the Borrower, use reasonable efforts (subject to overall policy
considerations of such Bank) to designate another lending office for any Loans
or Letters of Credit affected by such event, provided that such designation is
made on such terms that such Bank and its lending office suffer no economic,
legal or regulatory disadvantage, with the object of avoiding the consequence of
the event giving rise to the operation of such Section. Nothing in this Section
1.12 shall
-13-
affect or postpone any of the obligations of the Borrower or the right of any
Bank provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Banks. (x) If any Bank becomes a Defaulting Bank or
otherwise defaults in its obligations to make Loans, (y) upon the occurrence of
an event giving rise to the operation of Section 1.10(a)(ii) or (iii), Section
1.10(c), Section 2.06 or Section 4.04 with respect to any Bank which results in
such Bank charging to the Borrower increased costs in excess of those being
generally charged by the other Banks or (z) in the case of a refusal by a Bank
to consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Banks as (and
to the extent) provided in Section 13.12(b), the Borrower shall have the right,
if no Event of Default then exists (or, in the case of preceding clause (z), no
Event of Default will exist immediately after giving effect to such
replacement), to replace such Bank (the "Replaced Bank") with one or more other
Eligible Transferees, none of whom shall constitute a Defaulting Bank at the
time of such replacement (collectively, the "Replacement Bank") and each of whom
shall be required to be reasonably acceptable to the Agent, provided that (i) at
the time of any replacement pursuant to this Section 1.13, the Replacement Bank
shall enter into one or more Assignment and Assumption Agreements pursuant to
Section 13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to
be paid by the Replacement Bank) pursuant to which the Replacement Bank shall
acquire all of the Commitments and outstanding Loans of, and in each case
participations in Letters of Credit by, the Replaced Bank and, in connection
therewith, shall pay to (x) the Replaced Bank in respect thereof an amount equal
to the sum of (I) an amount equal to the principal of, and all accrued interest
on, all outstanding Loans of the Replaced Bank, (II) an amount equal to all
Unpaid Drawings that have been funded by (and not reimbursed to) such Replaced
Bank, together with all then unpaid interest with respect thereto at such time
and (III) an amount equal to all accrued, but theretofore unpaid, Fees owing to
the Replaced Bank pursuant to Section 3.01, (y) the Issuing Bank an amount equal
to such Replaced Bank's RL Percentage of any Unpaid Drawing (which at such time
remains an Unpaid Drawing) to the extent such amount was not theretofore funded
by such Replaced Bank to such Issuing Bank and (z) the Swingline Bank an amount
equal to such Replaced Bank's RL Percentage of any Mandatory Borrowing to the
extent such amount was not theretofore funded by such Replaced Bank to the
Swingline Bank and (ii) all obligations of the Borrower due and owing to the
Replaced Bank at such time (other than those specifically described in clause
(i) above in respect of which the assignment purchase price has been, or is
concurrently being, paid) shall be paid in full to such Replaced Bank
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreement, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Bank,
delivery to the Replacement Bank of the appropriate Note or Notes executed by
the Borrower, the Replacement Bank shall become a Bank hereunder and the
Replaced Bank shall cease to constitute a Bank hereunder, except with respect to
indemnification provisions under this Agreement (including, without limitation,
-14-
Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall survive as to
such Replaced Bank with respect to any liabilities incurred by such Replaced
Bank relating to periods prior to the date such Replaced Bank ceased to be a
Bank hereunder.
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and conditions
set forth herein, the Borrower may request that the Issuing Bank issue, at any
time and from time to time on and after the Initial Borrowing Date and prior to
the 30th day prior to the Revolving Loan Maturity Date, for the account of the
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
the Borrower or any of its Subsidiaries, an irrevocable standby letter of
credit, in a form customarily used by the Issuing Bank or in such other form as
has been approved by the Issuing Bank (each such standby letter of credit, a
"Letter of Credit") in support of such L/C Supportable Obligations. All Letters
of Credit shall be denominated in Dollars and shall be issued on a sight basis
only.
(b) Subject to and upon the terms and conditions set forth
herein, the Issuing Bank agrees that it will, at any time and from time to time
on and after the Initial Borrowing Date and prior to the 30th day prior to the
Revolving Loan Maturity Date, following its receipt of the respective Letter of
Credit Request, issue for the account of the Borrower, one or more Letters of
Credit in support of such L/C Supportable Obligations of the Borrower or any of
its Subsidiaries as are permitted to remain outstanding without giving rise to a
Default or an Event of Default, provided that the Issuing Bank shall be under no
obligation to issue any Letter of Credit of the types described above if at the
time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit or any
requirement of law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which the
Issuing Bank is not otherwise compensated) not in effect on the date
hereof, or any unreimbursed loss, cost or expense which was not
applicable or in effect with respect to the Issuing Bank as of the date
hereof and which the Issuing Bank reasonably and in good xxxxx xxxxx
material to it; or
-15-
(ii) the Issuing Bank shall have received notice from the
Borrower, any other Credit Party or the Required Banks prior to the
issuance of such Letter of Credit of the type described in the second
sentence of Section 2.03(b).
2.02 Maximum Letter of Credit Outstandings; Final Maturities.
Notwithstanding anything to the contrary contained in this Agreement, (i) no
Letter of Credit shall be issued the Stated Amount of which, when added to the
Letter of Credit Outstandings (exclusive of Unpaid Drawings which are repaid on
the date of, and prior to the issuance of, the respective Letter of Credit) at
such time would exceed either (x) $2,000,000 or (y) when added to the aggregate
principal amount of all Revolving Loans then outstanding and the aggregate
principal amount of all Swingline Loans then outstanding, an amount equal to the
Total Revolving Loan Commitment at such time and (ii) each Letter of Credit
shall by its terms terminate on or before the earlier of (x) the date which
occurs 12 months after the date of the issuance thereof (although any such
Letter of Credit may be extendable for successive periods of up to 12 months,
but not beyond the third Business Day prior to the Revolving Loan Maturity Date,
on terms acceptable to the Issuing Bank) and (y) three Business Days prior to
the Revolving Loan Maturity Date.
2.03 Letter of Credit Requests; Minimum Stated Amount. (a) Whenever the
Borrower desires that a Letter of Credit be issued for its account, the Borrower
shall give the Agent and the Issuing Bank at least five Business Days' (or such
shorter period as is acceptable to the Issuing Bank) written notice thereof.
Each notice shall be in the form of Exhibit C appropriately completed (each a
"Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 2.02. Unless the Issuing Bank has received notice from the Borrower,
any other Credit Party or the Required Banks before it issues a Letter of Credit
that one or more of the conditions specified in Section 5 or 6 are not then
satisfied, or that the issuance of such Letter of Credit would violate Section
2.02, then the Issuing Bank shall, subject to the terms and conditions of this
Agreement, issue the requested Letter of Credit for the account of the Borrower
in accordance with the Issuing Bank's usual and customary practices. Upon its
issuance of or amendment or modification to any Letter of Credit, the Issuing
Bank shall promptly notify the Borrower and the Agent of such issuance,
amendment or modification and such notification shall be accompanied by a copy
of the issued Letter of Credit or amendment or modification. Notwithstanding
anything to the contrary contained in this Agreement, in the event that a Bank
Default exists, the Issuing Bank shall not be required to issue any Letter of
Credit unless the Issuing Bank has entered into an arrangement satisfactory to
it and the Borrower to eliminate the Issuing Bank's risk with respect to the
participation in Letters of Credit by the Defaulting Bank or Banks, including by
cash collateralizing such Defaulting Bank's or Banks' RL Percentage of the
Letter of Credit Outstandings.
-16-
(c) The initial Stated Amount of each Letter of Credit shall
not be less than $100,000 or such lesser amount as is acceptable to the Issuing
Bank.
2.04 Letter of Credit Participations. (a) Immediately upon the issuance by
the Issuing Bank of any Letter of Credit, the Issuing Bank shall be deemed to
have sold and transferred to each Bank with a Revolving Loan Commitment, other
than the Issuing Bank (each such Bank, in its capacity under this Section 2.04,
a "Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent of
such Participant's RL Percentage, in such Letter of Credit, each drawing or
payment made thereunder and the obligations of the Borrower under this Agreement
with respect thereto, and any security therefor or guaranty pertaining thereto.
Upon any change in the Revolving Loan Commitments or RL Percentages of the Banks
pursuant to Section 1.13 or 13.04, it is hereby agreed that, with respect to all
outstanding Letters of Credit and Unpaid Drawings, there shall be an automatic
adjustment to the participations pursuant to this Section 2.04 to reflect the
new RL Percentages of the assignor and assignee Bank, as the case may be.
(b) In determining whether to pay under any Letter of Credit,
the Issuing Bank shall not have an obligation relative to the other Banks other
than to confirm that any documents required to be delivered under such Letter of
Credit appear to have been delivered and that they appear to substantially
comply on their face with the requirements of such Letter of Credit. Any action
taken or omitted to be taken by the Issuing Bank under or in connection with any
Letter of Credit if taken or omitted in the absence of gross negligence or
willful misconduct (as finally determined by a court of competent jurisdiction),
shall not create for the Issuing Bank any resulting liability to the Borrower,
any other Credit Party, any Bank or any other Person.
(c) In the event that the Issuing Bank makes any payment under
any Letter of Credit and the Borrower shall not have reimbursed such amount in
full to the Issuing Bank pursuant to Section 2.05(a), the Issuing Bank shall
promptly notify the Agent, which shall promptly notify each Participant of such
failure, and each Participant shall promptly and unconditionally pay to the
Issuing Bank the amount of such Participant's RL Percentage of such unreimbursed
payment in Dollars and in same day funds. If the Agent so notifies, prior to
11:00 A.M. (New York time) on any Business Day, any Participant required to fund
a payment under a Letter of Credit, such Participant shall make available to the
Issuing Bank in Dollars such Participant's RL Percentage of the amount of such
payment on such Business Day in same day funds. If and to the extent such
Participant shall not have so made its RL Percentage of the amount of such
payment available to the Issuing Bank, such Participant agrees to pay to the
Issuing Bank, forthwith on demand such amount, together with interest thereon,
for each day from such date until the date such amount is paid to the Issuing
Bank at the overnight Federal Funds Rate for the first three
-17-
days and at the interest rate applicable to Revolving Loans maintained as Base
Rate Loans for each day thereafter. The failure of any Participant to make
available to the Issuing Bank its RL Percentage of any payment under any Letter
of Credit shall not relieve any other Participant of its obligation hereunder to
make available to the Issuing Bank its RL Percentage of any Letter of Credit on
the date required, as specified above, but no Participant shall be responsible
for the failure of any other Participant to make available to the Issuing Bank
such other Participant's RL Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, the Issuing Bank shall pay to each
Participant which has paid its RL Percentage thereof, in Dollars and in same day
funds, an amount equal to such Participant's share (based upon the proportionate
aggregate amount originally funded by such Participant to the aggregate amount
funded by all Participants) of the principal amount of such reimbursement
obligation and interest thereon accruing after the purchase of the respective
participations.
(e) Upon the request of any Participant, the Issuing Bank
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such Participant.
(f) The obligations of the Participants to make payments to
the Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any transferee
of any Letter of Credit (or any Person for whom any such transferee may
be acting), the Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any
underlying transaction between the Borrower or any Subsidiary of the
Borrower and the beneficiary named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect;
-18-
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower agrees
to reimburse the Issuing Bank, by making payment to the Agent in immediately
available funds at the Payment Office, for any payment or disbursement made by
the Issuing Bank under any Letter of Credit (each such amount, so paid until
reimbursed, an "Unpaid Drawing"), not later than one Business Day following
receipt by the Borrower of notice of such payment or disbursement (provided that
no such notice shall be required to be given if a Default or an Event of Default
under Section 10.05 shall have occurred and be continuing, in which case the
Unpaid Drawing shall be due and payable immediately without presentment, demand,
protest or notice of any kind (all of which are hereby waived by the Borrower)),
with interest on the amount so paid or disbursed by the Issuing Bank, to the
extent not reimbursed prior to 12:00 Noon (New York time) on the date of such
payment or disbursement, from and including the date paid or disbursed to but
excluding the date the Issuing Bank was reimbursed by the Borrower therefor at a
rate per annum which shall be the Base Rate in effect from time to time plus the
Applicable Base Rate Margin for Revolving Loans; provided, however, to the
extent such amounts are not reimbursed prior to 12:00 Noon (New York time) on
the third Business Day following the receipt by the Borrower of notice of such
payment or disbursement or following the occurrence of a Default or an Event of
Default under Section 10.05, interest shall thereafter accrue on the amounts so
paid or disbursed by the Issuing Bank (and until reimbursed by the Borrower) at
a rate per annum which shall be the Base Rate in effect from time to time plus
the Applicable Base Rate Margin for Revolving Loans plus 2%, in each such case,
with interest to be payable on demand. The Issuing Bank shall give the Borrower
prompt written notice of each Drawing under any Letter of Credit, provided that
the failure to give any such notice shall in no way affect, impair or diminish
the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse the Issuing Bank with respect to Unpaid Drawings (including, in each
case, interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Bank (including in its
capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to conform to the terms of the Letter of
Credit or any nonapplication or misapplication by the beneficiary of the
proceeds of such Drawing; provided, however, that the Borrower shall not be
obligated to reimburse the Issuing Bank for any wrongful payment made by the
Issuing Bank under a Letter of Credit as a result of acts or omissions
constituting willful misconduct or gross negligence on the part of the Issuing
Bank (as finally determined by a court of competent jurisdiction).
-19-
2.06 Increased Costs. (a) If at any time after the date of this Agreement,
the introduction of or any change in any applicable law, rule, regulation,
order, guideline or request or in the interpretation or administration thereof
by any governmental authority charged with the interpretation or administration
thereof, or compliance by the Issuing Bank or any Participant with any request
or directive by any such authority (whether or not having the force of law),
shall either (i) impose, modify or make applicable any reserve, deposit, capital
adequacy or similar requirement against letters of credit issued by the Issuing
Bank or participated in by any Participant, or (ii) impose on the Issuing Bank
or any Participant any other conditions relating, directly or indirectly, to
this Agreement; and the result of any of the foregoing is to increase the cost
to the Issuing Bank or any Participant of issuing, maintaining or participating
in any Letter of Credit, or reduce the amount of any sum received or receivable
by the Issuing Bank or any Participant hereunder or reduce the rate of return on
its capital with respect to Letters of Credit (except for changes in the rate of
tax on, or determined by reference to, the net income or profits of the Issuing
Bank or such Participant pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein), then, upon the delivery of the
certificate referred to below to the Borrower by the Issuing Bank or any
Participant (a copy of which certificate shall be sent by the Issuing Bank or
such Participant to the Agent), the Borrower shall pay to the Issuing Bank or
such Participant such additional amount or amounts as will compensate such Bank
for such increased cost or reduction in the amount receivable or reduction on
the rate of return on its capital. The Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this Section
2.06, will give prompt written notice thereof to the Borrower, which notice
shall include a certificate submitted to the Borrower by the Issuing Bank or
such Participant (a copy of which certificate shall be sent by the Issuing Bank
or such Participant to the Agent), setting forth in reasonable detail the basis
for the calculation of such additional amount or amounts necessary to compensate
the Issuing Bank or such Participant. The certificate required to be delivered
pursuant to this Section 2.06 shall, absent manifest error, be final and
conclusive and binding on the Borrower.
(b) Notwithstanding anything to the contrary contained in this
Section 2.06, unless the Issuing Bank or a Participant gives notice to the
Borrower that the Borrower is obligated to pay any amount under this Section
2.06 within 180 days after the later of (x) the date the Issuing Bank or such
Participant incurs the respective increased costs or reduction in return the
rate of return or (y) the date the Issuing Bank or such Participant has
acknowledge of its incurrence of the respective increased costs or reduction in
the rate of return, then the Issuing Bank or such Participant shall only be
entitled to be compensated for such amount by the Borrower pursuant to this
Section 2.06 to the extent the respective increased costs or reduction in the
rate of return are incurred or suffered on or after the date which occurs 180
days prior to the Issuing Bank or such Participant giving notice to the Borrower
that it is obligated to pay the respective amounts pursuant to this Section
2.06.
-20-
SECTION 3. Commitment Commission; Fees; Reductions of
Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Agent for distribution to
each Non-Defaulting Bank with a Term Loan Commitment, a commitment commission
(the "Term Loan Commitment Commission") for the period from and including the
Effective Date to but excluding the date on which the Total Term Loan Commitment
shall have been terminated, computed at a rate for each day equal to the
Applicable Commitment Commission Percentage on the daily Term Loan Commitment of
such Non-Defaulting Bank. Accrued Term Loan Commitment Commission shall be due
and payable quarterly in arrears on each Quarterly Payment Date and on the date
on which the Total Term Loan Commitment shall have been terminated.
(b) The Borrower agrees to pay to the Agent for distribution
to each Non-Defaulting Bank with a Revolving Loan Commitment, a commitment
commission (the "Revolving Loan Commitment Commission") for the period from and
including the Effective Date to but excluding the Revolving Loan Maturity Date
(or such earlier date on which the Total Revolving Loan Commitment shall have
been terminated), computed at a rate for each day equal to the Applicable
Commitment Commission Percentage on the daily average Unutilized Revolving Loan
Commitment of such Non-Defaulting Bank. Accrued Revolving Loan Commitment
Commission shall be due and payable quarterly in arrears on each Quarterly
Payment Date and on the Revolving Loan Maturity Date (or such earlier date on
which the Total Revolving Loan Commitment shall have been terminated).
(c) The Borrower agrees to pay to the Agent for distribution
to each Bank with a Revolving Loan Commitment (based on each such Bank's
respective RL Percentage) a fee in respect of each Letter of Credit issued
hereunder (the "Letter of Credit Fee") for the period from and including the
date of issuance of such Letter of Credit to and including the date of
termination or expiration of such Letter of Credit, computed at a rate per annum
equal to the Applicable Eurodollar Rate Margin then in effect with respect to
Revolving Loans on the daily Stated Amount of such Letter of Credit. Accrued
Letter of Credit Fees shall be due and payable quarterly in arrears on each
Quarterly Payment Date and on the first day after the termination of the Total
Revolving Loan Commitment upon which no Letters of Credit remain outstanding.
(d) The Borrower agrees to pay to the Issuing Bank, for its
own account, a facing fee in respect of each Letter of Credit issued hereunder
(the "Facing Fee") for the period from and including the date of issuance of
such Letter of Credit to and including the date of the termination of such
Letter of Credit, computed at a rate equal to 1/4 of 1% per annum on the daily
Stated Amount of such Letter of Credit, provided that in any event the minimum
amount of the Facing Fee payable in any 12 month period for each Letter of
Credit shall be $500; it being agreed that, on the date of issuance of any
Letter of Credit
-21-
and on each anniversary thereof prior to the termination of such Letter of
Credit, if $500 will exceed the amount of Facing Fees that will accrue with
respect to such Letter of Credit for the immediately succeeding 12 month period,
the full $500 shall be payable on the date of issuance of such Letter of Credit
and on each such anniversary thereof. Except as otherwise provided in the
proviso to the immediately preceding sentence, accrued Facing Fees shall be due
and payable quarterly in arrears on each Quarterly Payment Date and upon the
first day after the termination of the Total Revolving Loan Commitment upon
which no Letters of Credit remain outstanding.
(e) The Borrower agrees to pay to the Issuing Bank, for its
own account, upon each payment under, issuance of, or amendment to, any Letter
of Credit, such amount as shall at the time of such event be the administrative
charge and the reasonable expenses which the Issuing Bank is generally imposing
in connection with such occurrence with respect to letters of credit issued by
it.
(f) The Borrower agrees to pay to the Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower and
the Agent.
3.02 Voluntary Termination of Unutilized Revolving Loan Commitments. (a)
Upon at least one Business Day's prior written notice to the Agent at the Notice
Office (which notice the Agent shall promptly transmit to each of the Banks),
the Borrower shall have the right, at any time or from time to time, without
premium or penalty, to terminate the Total Unutilized Revolving Loan Commitment,
in whole or in part, pursuant to this Section 3.02(a), in an integral multiple
of $500,000, in the case of partial reductions to the Total Unutilized Revolving
Loan Commitment, which notice shall specify the portion of the specified
reduction which shall apply to the Unutilized Acquisition Sub-Limit and the
Unutilized Working Capital Sub-Limit, respectively, provided that each such
reduction shall apply proportionately to permanently reduce the Revolving Loan
Commitment of each Bank with such a Commitment.
(b) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b), the Borrower may, subject to its compliance with
the requirements of Section 13.12(b), upon five Business Days' prior written
notice to the Agent at the Notice Office (which notice the Agent shall promptly
transmit to each of the Banks) terminate all of the Commitments of such Bank, so
long as all Loans, together with accrued and unpaid interest, Fees and all other
amounts, owing to such Bank are repaid concurrently with the effectiveness of
such termination pursuant to Section 4.01(b) (at which time Schedule I shall be
deemed modified to reflect such changed amounts), and at such time, such Bank
shall no longer constitute a "Bank" for purposes of this Agreement, except with
respect to
-22-
indemnifications under this Agreement (including, without limitation, Sections
1.10, 1.11, 2.06, 4.04, 12.06 and 13.01), which shall survive as to such repaid
Bank.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
each of the Commitments of each Bank) shall terminate in its entirety on March
31, 1998 unless the Initial Borrowing Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Term Loan Commitment (and the Term Loan
Commitment of each Bank) shall terminate in its entirety on the earlier of (i)
the date on which a Change of Control occurs and (ii) the Initial Borrowing Date
(after giving effect to the incurrence of the Term Loans on the Initial
Borrowing Date).
(c) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Revolving Loan Commitment (and the
Revolving Loan Commitment of each Bank) shall terminate in its entirety on the
earlier of (i) the date on which a Change of Control occurs and (ii) the
Revolving Loan Maturity Date.
(d) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, the Total Term Loan Commitment shall be
permanently reduced on the dates, and in the amounts, required by Sections
4.02(c), (d), (e) and (g). Each reduction to the Total Term Loan Commitment
pursuant to this Section 3.03(d) shall be applied proportionately to permanently
reduce the Term Loan Commitment of each Bank with such a Commitment.
(e) In addition to any other mandatory commitment reductions
pursuant to this Section 3.03, on each date after the Effective Date upon which
a mandatory repayment of Term Loans (or a mandatory reduction to the Total Term
Loan Commitment, as the case may be) pursuant to any of Sections 4.02(c) through
(g), inclusive, is required (and exceeds in amount the aggregate principal
amount of Term Loans then outstanding (or the Total Term Loan Commitment was
then in effect, as the case may be)) or would be required if Term Loans were
then outstanding (or the Total Term Commitment as then in effect, as the case
may be), the Total Revolving Loan Commitment shall be permanently reduced by the
amount, if any, by which the amount required to be applied pursuant to said
Sections (determined as if an unlimited amount of Term Loans were actually
outstanding (or the Total Term Loan Commitment was then in effect, as the case
may be)) exceeds the aggregate principal amount of Term Loans then outstanding
(or the Total Term Loan Commitment as then in effect, as the case may be).
Each reduction to the Total Revolving Loan Commitment pursuant to this Section
3.03(e) shall be applied proportionately to permanently reduce the Revolving
Loan Commitment of each Bank with such a Commitment.
-23-
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. (a) The Borrower shall have the right to prepay
the Loans, without premium or penalty, in whole or in part at any time and from
time to time on the following terms and conditions: (i) the Borrower shall give
the Agent prior to 12:00 Noon (New York time) at the Notice Office (x) at least
one Business Day's prior written notice (or telephonic notice promptly confirmed
in writing) of its intent to prepay Base Rate Loans (or same day notice in the
case of a prepayment of Swingline Loans) and (y) at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of its
intent to prepay Eurodollar Loans, whether Term Loans, Revolving Loans or
Swingline Loans shall be prepaid, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing
or Borrowings pursuant to which made, which notice the Agent shall, except in
the case of Swingline Loans, promptly transmit to each of the Banks; (ii) (x)
each partial prepayment of Term Loans pursuant to this Section 4.01(a) shall be
in an aggregate principal amount of at least $500,000 and in integral multiples
of $100,000 in excess thereof, (y) each partial prepayment of Revolving Loans
pursuant to this Section 4.01(a) shall be in an aggregate principal amount of at
least $250,000 and in integral multiples of $100,000 in excess thereof, and (z)
each partial prepayment of Swingline Loans pursuant to this Section 4.01(a)
shall be in an aggregate principal amount of at least $50,000 and in integral
multiples of $50,000 in excess thereof, provided that if any partial prepayment
of Eurodollar Loans made pursuant to any Borrowing shall reduce the outstanding
principal amount of Eurodollar Loans made pursuant to such Borrowing to an
amount less than the Minimum Borrowing Amount applicable thereto, then such
Borrowing may not be continued as a Borrowing of Eurodollar Loans and any
election of an Interest Period with respect thereto given by the Borrower shall
have no force or effect; (iii) each prepayment pursuant to this Section 4.01(a)
in respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans, provided that at the Borrower's election in connection with
any prepayment of Revolving Loans pursuant to this Section 4.01(a), such
prepayment shall not, so long as no Default or Event of Default then exists, be
applied to any Revolving Loan of a Defaulting Bank; (iv) each voluntary
prepayment of Term Loans pursuant to this Section 4.01(a) shall be applied to
reduce the then remaining Scheduled Repayments of Term Loans on a pro rata basis
(based upon the then remaining unpaid principal amounts of such Scheduled
Repayments after giving effect to all prior reductions thereto); and (v) with
respect to each prepayment of any Revolving Loans made pursuant to this Section
4.01(a), such prepayment shall, unless otherwise directed by the Borrower at the
time of prepayment, first be deemed applied to any outstanding Working Capital
Loans and then to any outstanding Acquisition Loans.
(b) In the event of a refusal by a Bank to consent to certain
proposed changes, waivers, discharges or terminations with respect to this
Agreement which have been approved by the Required Banks as (and to the extent)
provided in Section 13.12(b),
-24-
the Borrower may, upon five Business Days' prior written notice to the Agent at
the Notice Office (which notice the Agent shall promptly transmit to each of the
Banks) repay all Loans of, together with accrued and unpaid interest, Fees and
other amounts owing to, such Bank in accordance with, and subject to the
requirements of, said Section 13.12(b) so long as (A) in the case of the
repayment of Revolving Loans of any Bank pursuant to this Section 4.01(b) the
Revolving Loan Commitment of such Bank is terminated concurrently with such
repayment pursuant to Section 3.02(b) (at which time Schedule I shall be deemed
modified to reflect the changed Revolving Loan Commitments) and (B) the
consents, if any, required under Section 13.12(b) in connection with the
repayment pursuant to this clause (b) have been obtained.
4.02 Mandatory Repayments and Commitment Reductions. (a) (i) On any day on
which the sum of the aggregate outstanding principal amount of the Revolving
Loans, Swingline Loans and the Letter of Credit Outstandings exceeds the Total
Revolving Loan Commitment as then in effect, the Borrower shall prepay on such
day the principal of Swingline Loans and, after all Swingline Loans have been
repaid in full (or if no Swingline Loans are outstanding), Revolving Loans in an
amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Revolving Loan Commitment as
then in effect, the Borrower shall pay to the Agent at the Payment Office on
such day an amount of cash and/or Cash Equivalents equal to the amount of such
excess (up to a maximum amount equal to the Letter of Credit Outstandings at
such time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Bank and the Banks hereunder in a
cash collateral account to be established by the Agent. All repayments of
Revolving Loans pursuant to this Section 4.02(a)(i) shall be applied to repay
outstanding Acquisition Loans and Working Capital Loans in proportion to their
respective outstanding amounts except to the extent that such repayment would
result in the outstanding principal amount of (x) Acquisition Loans exceeding
the Acquisition Sub-Limit as then in effect or (y) Working Capital Loans
exceeding the Working Capital Sub-Limit as then in effect, in which case such
repayment will be applied to Acquisition Loans and/or Working Capital Loans in
such allocation as will best result in the respective Sub-Limit not being
exceeded.
(ii) If, after giving effect to any prepayment then being made
pursuant to Section 4.02(a)(i), on any day on which the aggregate outstanding
principal amount of Working Capital Loans exceeds the Working Capital Sub-Limit
as then in effect, the Borrower shall prepay on such day the principal of
Working Capital Loans in an amount equal to such excess.
(iii) If, after giving effect to any prepayment then being
made pursuant to Section 4.02(a)(i), on any day on which the aggregate
-25-
outstanding principal amount of Acquisition Loans exceeds the Acquisition
Sub-Limit as then in effect, the Borrower shall prepay on such day the principal
of Acquisition Loans in an amount equal to such excess.
(b) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each date set forth below, the Borrower shall be required
to repay that principal amount of Term Loans, to the extent then outstanding, as
is set forth opposite such date below (each such repayment, as the same may be
reduced as provided in Sections 4.01(a) and 4.02(h), a "Scheduled Repayment"):
Scheduled Repayment Date Amount
------------------------ --------
February 28, 1999 $750,000
May 31, 1999 $750,000
August 31, 1999 $750,000
November 30, 1999 $750,000
February 29, 2000 $1,000,000
May 31, 2000 $1,000,000
August 31, 2000 $1,000,000
November 30, 2000 $1,000,000
February 28, 2001 $1,500,000
May 31, 2001 $1,500,000
August 31, 2001 $1,500,000
November 30, 2001 $1,500,000
February 28, 2002 $1,750,000
May 31, 2002 $1,750,000
November 30, 2002 $1,750,000
Term Loan Maturity Date $1,750,000
(c) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date after the
Effective Date upon which Holdings or any of its Subsidiaries receives any cash
proceeds from any capital contribution or any sale or issuance of its equity
(other than cash proceeds received (i) as part of the Equity Financing, (ii)
from the issuance by Holdings of shares of its common stock (including as a
result of the exercise of any options with regard thereto), or options to
purchase to shares of its common stock, to officers, directors and employees of
Holdings and its Subsidiaries in an aggregate amount not to exceed $500,000 in
any fiscal year of Holdings or (iii) from equity contributions to any Subsidiary
of Holdings to the extent made by Holdings or another Subsidiary of Holdings),
an amount equal to 50% of the Net Equity
-26-
Proceeds of such capital contribution or sale or issuance of equity shall be
applied as a mandatory repayment of principal of outstanding Term (or, if the
Initial Borrowing Date has not yet occurred, as a mandatory reduction to the
Total Term Loan Commitment) Loans in accordance with the requirements of
Sections 4.02(h) and (i).
(d) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Effective Date upon which Holdings or any of its Subsidiaries receives any
cash proceeds from any incurrence by Holdings or any of its Subsidiaries of
Indebtedness for borrowed money (other than Indebtedness for borrowed money
permitted to be incurred pursuant to Section 9.04 as such Section is in effect
on the Effective Date), an amount equal to 100% of the Net Debt Proceeds of the
respective incurrence of Indebtedness shall be applied as a mandatory repayment
of principal of outstanding Term Loans (or, if the Initial Borrowing Date has
not yet occurred, as a mandatory reduction to the Total Term Loan Commitment) in
accordance with the requirements of Sections 4.02(h) and (i).
(e) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, on each date on or after
the Effective Date upon which Holdings or any of its Subsidiaries receives any
cash proceeds from any Asset Sale, an amount equal to 100% of the Net Sale
Proceeds from such Asset Sale shall be applied as a mandatory repayment of
principal of outstanding Term Loans (or, if the Initial Borrowing Date has not
yet occurred, as a mandatory reduction to the Total Term Loan Commitment) in
accordance with the requirements of Sections 4.02(h) and (i); provided that with
respect to no more than $1,500,000 in the aggregate of cash proceeds from Asset
Sales in any fiscal year of Holdings, such Net Sale Proceeds therefrom shall not
be required to be so applied on such date so long as no Default under Section
10.01 or 10.05 then exists or no Event of Default then exists and Holdings has
delivered a certificate to the Agent on or prior to such date stating that such
Net Sale Proceeds shall be used to purchase replacement assets within 300 days
following the date of such Asset Sale (which certificate shall set forth the
estimates of the proceeds to be so expended), and provided further, that if all
or any portion of such Net Sale Proceeds not required to be applied to the
repayment of outstanding Term Loans (or to reduce the Total Term Loan
Commitment, as the case may be) are not so reinvested in replacement assets
within such 300 day period, such remaining portion shall be applied on the last
day of such period as a mandatory repayment of principal of outstanding Term
Loans as provided above in this Section 4.02(e) without regard to the
immediately preceding proviso.
(f) In addition to any other mandatory repayments pursuant to
this Section 4.02, on each Excess Cash Payment Date, an amount equal to the
Applicable Excess Cash Flow Percentage of the Excess Cash Flow for the relevant
Excess Cash Payment Period shall be applied as a mandatory repayment of
principal of outstanding Term Loans in accordance with the requirements of
Sections 4.02(h) and (i).
-27-
(g) In addition to any other mandatory repayments or
commitment reductions pursuant to this Section 4.02, within 10 days following
each date on or after the Effective Date upon which Holdings or any of its
Subsidiaries receives any cash proceeds from any Recovery Event, an amount equal
to 100% of the Net Insurance Proceeds from such Recovery Event shall be applied
as a mandatory repayment of principal of outstanding Term Loans (or, if the
Initial Borrowing Date has not yet occurred, as a mandatory reduction to the
Total Term Loan Commitment) in accordance with the requirements of Sections
4.02(h) and (i), provided that so long as no Default under Section 10.01 or
10.05 then exists or no Event of Default then exists and such Net Insurance
Proceeds do not exceed $2,500,000, such Net Insurance Proceeds shall not be
required to be so applied on such date to the extent that Holdings has delivered
a certificate to the Agent on or prior to such date stating that such Net
Insurance Proceeds shall be used to replace or restore any properties or assets
in respect of which such Net Insurance Proceeds were paid within 300 days
following the date of the receipt of such Net Insurance Proceeds (which
certificate shall set forth the estimates of the proceeds to be so expended),
and provided further, that (i) if the amount of such Net Insurance Proceeds
exceeds $2,500,000, then the entire amount of such Net Insurance Proceeds, and
not just the portion of such Net Insurance Proceeds in excess of $2,500,000,
shall be applied as a mandatory repayment of Term Loans (or, if the Initial
Borrowing Date has not yet occurred, as a mandatory reduction to the Total Term
Loan Commitment) as provided above in this Section 4.02(g) without regard to the
immediately preceding proviso and (ii) if all or any portion of such Net
Insurance Proceeds not required to be applied to the repayment of outstanding
Term Loans (or to reduce the Total Term Loan Commitment, as the case may) be
pursuant to the immediately preceding proviso are not so used within 300 days
after the date of the receipt of such Net Insurance Proceeds, such remaining
portion shall be applied on the last day of such period as a mandatory repayment
of principal of outstanding Term Loans as provided above in this Section 4.02(g)
without regard to the immediately preceding proviso.
(h) Each amount required to be applied to repay outstanding
Term Loans (or, if the Initial Borrowing Date has not yet occurred, to reduce
the Total Term Loan Commitment, as the case may be) pursuant to Sections
4.02(c), (d), (e), (f) and (g) shall be applied to reduce the then remaining
Scheduled Repayments on a pro rata basis (based upon the then remaining unpaid
principal amounts of such Scheduled Repayments after giving effect to all prior
reductions thereto).
(i) With respect to each repayment of Loans required by this
Section 4.02, the Borrower may designate the Types of Loans of the respective
Tranche which are to be repaid and, in the case of Eurodollar Loans, the
specific Borrowing or Borrowings of the respective Tranche pursuant to which
made, provided that: (i) repayments of Eurodollar Loans pursuant to this Section
4.02 may only be made on the last day of an Interest Period applicable thereto
unless all Eurodollar Loans of the respective Tranche with Interest Periods
ending on such date of required repayment and all Base Rate Loans of the respec-
-28-
tive Tranche have been paid in full; (ii) if any repayment of Eurodollar Loans
made pursuant to a single Borrowing shall reduce the outstanding Eurodollar
Loans made pursuant to such Borrowing to an amount less than the Minimum
Borrowing Amount applicable thereto, such Borrowing shall be converted at the
end of the then current Interest Period into a Borrowing of Base Rate Loans; and
(iii) each repayment of any Loans made pursuant to a Borrowing shall be applied
pro rata among such Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Agent shall, subject to the above, make
such designation in its sole discretion.
(j) Notwithstanding anything to the contrary contained in this
Agreement or in any other Credit Document, (i) all then outstanding Loans of any
Tranche shall be repaid in full on the respective Maturity Date for such Tranche
of Loans and (ii) all then outstanding Loans shall be repaid in full on the date
on which a Change of Control occurs.
4.03 Method and Place of Payment. Except as otherwise specifically provided
herein, all payments under this Agreement or under any Note shall be made to the
Agent for the account of the Bank or Banks entitled thereto not later than 12:00
Noon (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office. Whenever any payment to be
made hereunder or under any Note shall be stated to be due on a day which is not
a Business Day, the due date thereof shall be extended to the next succeeding
Business Day and, with respect to payments of principal, interest shall be
payable at the applicable rate during such extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or under
any Note will be made without setoff, counterclaim or other defense. Except as
provided in Section 4.04(b), all such payments will be made free and clear of,
and without deduction or withholding for, any present or future taxes, levies,
imposts, duties, fees, assessments or other charges of whatever nature now or
hereafter imposed by any jurisdiction or by any political subdivision or taxing
authority thereof or therein with respect to such payments (but excluding,
except as provided in the second succeeding sentence, any tax imposed on or
measured by the net income or profits of a Bank, or any franchise tax based on
the net income or profits of a Bank, in either case pursuant to the laws of the
jurisdiction in which it is organized or the jurisdiction in which the principal
office or applicable lending office of such Bank is located or any subdivision
thereof or therein) and all interest, penalties or similar liabilities with
respect to such non-excluded taxes, levies, imposts, duties, fees, assessments
or other charges (all such non-excluded taxes, levies, imposts, duties, fees,
assessments or other charges being referred to collectively as "Taxes"). If any
Taxes are so levied or imposed, the Borrower agrees to pay the full amount of
such Taxes, and such additional amounts as may be necessary so that every
payment of all amounts due under this Agreement or under any Note, after
withholding or deduction for or on account of any Taxes, will not be less than
the amount provided for herein or in such Note. If any amounts are payable in
respect of Taxes pursuant to the pre-
-29-
ceding sentence, the Borrower agrees to reimburse each Bank, upon the written
request of such Bank, for taxes imposed on or measured by the net income or
profits of such Bank pursuant to the laws of the jurisdiction in which such Bank
is organized or in which the principal office or applicable lending office of
such Bank is located or under the laws of any political subdivision or taxing
authority of any such jurisdiction in which such Bank is organized or in which
the principal office or applicable lending office of such Bank is located and
for any withholding of taxes as such Bank shall determine are payable by, or
withheld from, such Bank, in respect of such amounts so paid to or on behalf of
such Bank pursuant to the preceding sentence and in respect of any amounts paid
to or on behalf of such Bank pursuant to this sentence. The Borrower will
furnish to the Agent within 45 days after the date the payment of any Taxes is
due pursuant to applicable law certified copies of tax receipts evidencing such
payment by the Borrower. The Borrower agrees to indemnify and hold harmless each
Bank, and reimburse such Bank within 15 days of its written request, for the
amount of any Taxes so levied or imposed and paid by such Bank.
(b) Each Bank that is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax
purposes agrees to deliver to the Borrower and the Agent on or prior to the
Effective Date, or in the case of a Bank that is an assignee or transferee of an
interest under this Agreement pursuant to Section 1.13 or 13.04 (unless the
respective Bank was already a Bank hereunder immediately prior to such
assignment or transfer), on the date of such assignment or transfer to such
Bank, (i) two accurate and complete original signed copies of Internal Revenue
Service Form 4224 or 1001 (or successor forms) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments to be made under this Agreement and under any Note, or (ii)
if the Bank is not a "bank" within the meaning of Section 881(c)(3)(A) of the
Code and cannot deliver either Internal Revenue Service Form 1001 or 4224 (or
successor forms) pursuant to clause (i) above, (x) a certificate substantially
in the form of Exhibit D (any such certificate, a "Section 4.04(b)(ii)
Certificate") and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8 (or successor form) certifying to such Bank's
entitlement to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Bank agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, such Bank will
deliver to the Borrower and the Agent two new accurate and complete original
signed copies of Internal Revenue Service Form 4224 or 1001 (or successor
forms), or Form W-8 (or successor form) and a Section 4.04(b)(ii) Certificate,
as the case may be, and such other forms as may be required in order to confirm
or establish the entitlement of such Bank to a continued exemption from or
reduction in United States withholding tax with respect to payments under this
Agreement and any Note, or such Bank shall immediately notify the Borrower and
the Agent of its inability to deliver any such Form or Certificate, in which
case such Bank shall not be required to deliver any such Form or Certificate
pursuant to this Section
-30-
4.04(b). Notwithstanding anything to the contrary contained in Section 4.04(a),
but subject to Section 13.04(b) and the immediately succeeding sentence, (x) the
Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
Fees or other amounts payable hereunder for the account of any Bank which is not
a United States person (as such term is defined in Section 7701(a)(30) of the
Code) for U.S. Federal income tax purposes to the extent that such Bank has not
provided to the Borrower U.S. Internal Revenue Service Forms that establish a
complete exemption from such deduction or withholding and (y) the Borrower shall
not be obligated pursuant to Section 4.04(a) hereof to gross-up payments to be
made to a Bank in respect of income or similar taxes imposed by the United
States if (I) such Bank has not provided to the Borrower the Internal Revenue
Service Forms required to be provided to the Borrower pursuant to this Section
4.04(b) or (II) in the case of a payment, other than interest, to a Bank
described in clause (ii) above, to the extent that such Forms do not establish a
complete exemption from withholding of such taxes. Notwithstanding anything to
the contrary contained in the preceding sentence or elsewhere in this Section
4.04 and except as set forth in Section 13.04(b), the Borrower agrees to pay any
additional amounts and to indemnify each Bank in the manner set forth in Section
4.04(a) (without regard to the identity of the jurisdiction requiring the
deduction or withholding) in respect of any Taxes deducted or withheld by it as
described in the immediately preceding sentence as a result of any changes after
the Effective Date in any applicable law, treaty, governmental rule, regulation,
guideline or order, or in the interpretation thereof, relating to the deducting
or withholding of such Taxes.
SECTION 5. Conditions Precedent to Credit Events on the
Initial Borrowing Date. The obligation of each Bank to make Loans, and the
obligation of the Issuing Bank to issue Letters of Credit, on the Initial
Borrowing Date, is subject at the time of the making of such Loans or the
issuance of such Letters of Credit to the satisfaction of the following
conditions:
5.01 Execution of Agreement; Notes. On or prior to the Initial Borrowing
Date, (i) the Effective Date shall have occurred and (ii) there shall have been
delivered to the Agent for the account of each of the Banks the appropriate Term
Note and/or Revolving Note executed by the Borrower and to the Swingline Bank,
the Swingline Note executed by the Borrower, in each case, in the amount,
maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Initial Borrowing Date, the Agent shall
have received a certificate, dated the Initial Borrowing Date and signed on
behalf of the Borrower by the Chairman of the Board, the President or any Vice
President of the Borrower, stating on behalf of the Borrower that all of the
conditions in Sections 5.06, 5.07, 5.08, 5.10, 5.11 and 6.01 have been satisfied
on such date.
-31-
5.03 Opinions of Counsel. On the Initial Borrowing Date, the Agent shall
have received from (i) Xxxxxxxxxx & Xxxxx LLP, special counsel to the Credit
Parties, an opinion addressed to the Agent, the Collateral Agent and each of the
Banks and dated the Initial Borrowing Date covering the matters set forth in
Exhibit E-1 and such other matters incident to the transaction contemplated
herein as the Agent may reasonably request, and (ii) Xxxx X. Xxxxx, Esq.,
general counsel to the Borrower, an opinion addressed to the Agent, the
Collateral Agent and each of the Banks and dated the Initial Borrowing Date,
covering the matters set forth in Exhibit E-2 and such other matters incident to
the transaction contemplated herein as the Agent may reasonably request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Initial Borrowing
Date, the Agent shall have received a certificate from each Credit Party, dated
the Initial Borrowing Date, signed by the Chairman of the Board, the President
or any Vice President of such Credit Party, and attested to by the Secretary or
any Assistant Secretary of such Credit Party, in the form of Exhibit F with
appropriate insertions, together with copies of the certificate of incorporation
(or equivalent organizational document) and by-laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be in form and substance reasonably acceptable to the Agent.
(b) All corporate and legal proceedings and all instruments
and agreements in connection with the transactions contemplated by this
Agreement and the other Documents shall be reasonably satisfactory in form and
substance to the Agent and the Required Banks, and the Agent shall have received
all information and copies of all documents and papers, including records of
corporate proceedings, governmental approvals, good standing certificates and
bring-down telegrams or facsimiles, if any, which the Agent reasonably may have
requested in connection therewith, such documents and papers where appropriate
to be certified by proper corporate or governmental authorities.
(c) On the Initial Borrowing Date, the corporate, ownership
and capital structure (including, without limitation, the terms of any capital
stock, options, warrants or other securities issued by Holdings or any of its
Subsidiaries) of Holdings and its Subsidiaries shall be in form and substance
reasonably satisfactory to the Agent and the Required Banks.
5.05 Plans; Shareholders' Agreements; Management Agreements; Employment
Agreements; Non-Compete Agreements; Collective Bargaining Agreements; Tax
Sharing Agreements; Existing Indebtedness Agreements. On or prior to the Initial
Borrowing Date, there shall have been delivered to the Agent true and correct
copies of the following documents (if any):
(i) all Plans (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of
the most recent such
-32-
report (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information), and for each Plan that is
a "single-employer plan," as defined in Section 4001(a)(15) of ERISA,
the most recently prepared actuarial valuation therefor) and any other
"employee benefit plans," as defined in Section 3(3) of ERISA, and any
other material agreements with or for the benefit of current or former
employees of Holdings or any of its Subsidiaries or any ERISA Affiliate
(provided that the foregoing shall apply in the case of any
multiemployer plan, as defined in 4001(a)(3) of ERISA, only to the
extent that any document described therein is in the possession of
Holdings or any Subsidiary of Holdings or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such
plan);
(ii) all collective bargaining agreements applying or
relating to any employee of Holdings or any of its Subsidiaries
(collectively, the "Collective Bargaining Agreements");
(iii) all agreements entered into by Holdings or any of its
Subsidiaries governing the terms and relative rights of its capital
stock and any agreements entered into by shareholders relating to any
such entity with respect to its capital stock (collectively, the
"Shareholders' Agreements");
(iv) all material agreements with members of, or with respect
to, the management of Holdings or any of its Subsidiaries to which
Holdings or any of its Subsidiaries are parties (collectively, the
"Management Agreements");
(v) all material employment agreements entered into by
Holdings or any of its Subsidiaries (collectively, the "Employment
Agreements");
(vi) any non-compete agreement entered into by Holdings or any
of its Subsidiaries which restrict or limit the ability of Holdings or
any of its Subsidiaries to engage in any line of business in any
geographic area (collectively, the "Non-Compete Agreements");
(vii) all tax sharing, tax allocation and other similar
agreements entered into by Holdings or any of its Subsidiaries
(collectively, the "Tax Sharing Agreements"); and
(viii) all agreements evidencing or relating to Indebtedness of
(including all existing Seller Notes issued by) Holdings or any of its
Subsidiaries which is to remain outstanding after giving effect to the
incurrence of Loans on the Initial Borrowing Date (collectively, the
"Existing Indebtedness Agreements");
-33-
all of which Plans, Collective Bargaining Agreements, Shareholders' Agreements,
Management Agreements, Employment Agreements, Non-Compete Agreements, Tax
Sharing Agreement and Existing Indebtedness Agreements shall be in form and
substance reasonably satisfactory to the Agent and the Required Banks and shall
be in full force and effect on the Initial Borrowing Date.
5.06 Financings; etc. (a) On or prior to the Initial Borrowing Date, (i)
Holdings shall have received gross cash proceeds of at least $32,500,000 from
the Equity Financing (of which no more than (x) $10,000,000 may be received from
the issuance to JNL and Old Hickory of Qualified Preferred Stock of Holdings and
warrants to purchase common stock of Holdings and (y) $2,500,000 may be in the
form of rollover equity by existing management of ATC), (ii) Holdings shall have
contributed the full amount of the gross cash proceeds received by it from the
Equity Financing to the capital of the Borrower as a common equity contribution
in exchange for 100% of the issued and outstanding shares of common stock of the
Borrower and (iii) the Borrower shall have utilized the full amount of such cash
contribution to make payments owing in connection with the Transaction.
(b) On or prior to the Initial Borrowing Date, the Borrower
shall have received gross cash proceeds of $100,000,000 from the issuance by it
of a like principal amount of the Senior Subordinated Notes and (ii) the
Borrower shall have utilized the full amount of the net cash proceeds received
from the issuance of the Senior Subordinated Notes to make payments owing in
connection with the Transaction.
(c) On or prior to the Initial Borrowing Date, there shall
have been delivered to the Agent true and correct copies of the Equity Financing
Documents and the Senior Subordinated Note Documents (including (x) the
supplemental indenture to the Senior Subordinated Note Indenture evidencing
ATC's assumption of the obligations of Acquisition Corp. in respect of the
Senior Subordinated Notes and (y) the guarantees executed by the Subsidiary
Guarantors in respect of the Senior Subordinated Notes), and all of the terms
and conditions of the Equity Financing Documents and the Senior Subordinated
Note Documents shall be reasonably satisfactory in form and substance to the
Agent and the Required Banks. The Equity Financing and the issuance of the
Senior Subordinated Notes shall have been consummated, in each case in all
material respects in accordance with the terms and conditions of the applicable
Documents therefor and all applicable laws.
(d) On the Initial Borrowing Date (but before giving effect to
the Merger and the incurrence of any Loans on such date) ATC and its
Subsidiaries shall have cash on hand of at least $4,500,000.
5.07 Tender Offer; Merger; etc. (a) On or prior to the Initial Borrowing
Date, there shall have been delivered to the Agent true and correct copies of
the Tender
-34-
Offer Documents, which Tender Offer Documents shall be in form and substance
reasonably satisfactory to the Agent and the Required Banks.
(b) On or prior to the Initial Borrowing Date, the Tender
Offer shall have been consummated in all material respects in accordance with
the Tender Offer Documents and all applicable laws. At the time of the
consummation of the Tender Offer, neither the fair price provisions under
applicable law nor the fair price provisions of ATC's articles of incorporation
shall require a higher price be paid for Shares in the Merger than that paid in
the Tender Offer, which price, in any event, shall not exceed that amount set
forth in the Offer to Purchase and the Merger Agreement as in effect on the
Effective Date.
(c) On or prior to the Initial Borrowing Date, there shall
have been delivered to the Agent true and correct copies of the Merger Agreement
and the other Merger Documents, all of which Merger Documents shall be in form
and substance reasonably satisfactory to the Agent and the Required Banks and in
full force and effect. All material conditions precedent to the consummation of
the Merger as contained in the Merger Agreement shall have been satisfied (and
not waived without the consent of the Agent and the Required Banks (which
consent shall not be unreasonably withheld or delayed)), and any amendment to
the Merger Documents shall be required to be reasonably satisfactory in form and
substance to the Agent and the Required Banks.
(d) On or prior to the Initial Borrowing Date, the Merger
shall have been consummated in all material respects in accordance with the
Merger Documents and all applicable laws. After giving effect to the
consummation of the Merger, Holdings shall own 100% of the issued and
outstanding shares of capital stock of ATC.
(e) On or prior to the Initial Borrowing Date, there shall
have been delivered to the Agent true and correct copies of all Proxy Materials,
if any, and all such Proxy Materials shall be required to be in form and
substance reasonably satisfactory to the Agent and the Required Banks.
5.08 Refinancing. (a) On the Initial Borrowing Date, the total commitments
in respect of the Indebtedness to be Refinanced shall have been terminated, and
all loans and notes with respect thereto shall have been repaid in full,
together with interest thereon, all letters of credit issued thereunder shall
have been terminated and all other amounts (including premiums) owing pursuant
to the Indebtedness to be Refinanced shall have been repaid in full and all
documents in respect of the Indebtedness to be Refinanced and all guarantees
with respect thereto shall have been terminated (except as to indemnification
provisions, which may survive to the extent provided therein) and be of no
further force and effect.
-35-
(b) On the Initial Borrowing Date, the creditors in respect of
the Indebtedness to be Refinanced shall have terminated and released any and all
security interests and Liens on the assets owned by ATC and its Subsidiaries.
The Agent shall have received such releases of security interests in and Liens
on the assets owned by ATC and its Subsidiaries as may have been requested by
the Agent, which releases shall be in form and substance reasonably satisfactory
to the Agent. Without limiting the foregoing, there shall have been delivered
(i) proper termination statements (Form UCC-3 or the appropriate equivalent) for
filing under the UCC of each jurisdiction where a financing statement (Form
UCC-1 or the appropriate equivalent) was filed with respect to ATC or any of its
Subsidiaries in connection with the security interests created with respect to
the Indebtedness to be Refinanced and the documentation related thereto, (ii)
termination or reassignment of any security interest in, or Lien on, any
patents, trademarks, copyrights, or similar interests of ATC or any of its
Subsidiaries on which filings have been made, (iii) terminations of all
mortgages, leasehold mortgages, deeds of trust and leasehold deeds of trust
created with respect to property of ATC or any of its Subsidiaries, in each
case, to secure the obligations in respect of the Indebtedness to be Refinanced,
all of which shall be in form and substance reasonably satisfactory to the
Agent, and (iv) all collateral owned by ATC and its Subsidiaries in the
possession of any of the creditors in respect of the Indebtedness to be
Refinanced or any collateral agent or trustee under any related security
document shall have been returned to ATC or its respective Subsidiary, as the
case may be.
(c) The Agent shall have received evidence, in form and
substance reasonably satisfactory to it, that the matters set forth in this
Section 5.08 have been satisfied as of the Initial Borrowing Date.
5.09 ATEC Subordination Agreement. On or prior to the Initial Borrowing
Date, the Agent shall have received a duly executed Subordination Agreement
among ATC, ATEC and Xxxxxx X. Xxxx (as amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof, the "ATEC
Subordination Agreement"), which ATEC Subordination Agreement shall be in form
and substance reasonably satisfactory to the Agent and shall be in full force
and effect on the Initial Borrowing Date.
5.10 Adverse Change, etc. (a) Since February 28, 1997, nothing shall have
occurred (and neither the Agent nor the Banks shall have become aware of any
facts or conditions not previously known, whether as a result of their due
diligence investigations or otherwise) which the Agent or the Required Banks
shall reasonably determine (a) has had, or could reasonably be expected to have,
a material adverse effect on the rights or remedies of the Banks or the Agent,
or on the ability of any Credit Party to perform its obligations to them
hereunder or under any other Credit Document or (b) has had, or could reasonably
be expected to have, a material adverse effect on the Transaction or on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
-36-
(b) On or prior to the Initial Borrowing Date, all necessary
governmental (domestic and foreign) and third party approvals and/or consents in
connection with the Transaction and the other transactions contemplated by the
Documents and otherwise referred to herein or therein shall have been obtained
and remain in effect (other than certain third party approvals and consents with
respect to the Acquisition the failure to obtain could not, individually or in
the aggregate, reasonably be expected to have a material adverse effect on the
Acquisition or on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole) and all applicable waiting periods with respect thereto shall
have expired without any action being taken by any competent authority which
restrains, prevents or imposes materially adverse conditions upon, the
consummation of the Transaction or the other transactions contemplated by the
Documents or otherwise referred to herein or therein. Additionally, there shall
not exist any judgment, order, injunction or other restraint issued or filed or
a hearing seeking injunctive relief or other restraint pending or notified
prohibiting or imposing materially adverse conditions upon, or materially
delaying, or making economically unfeasible, the consummation of the Transaction
or the other transactions contemplated by the Documents or otherwise required to
be consummated herein or therein.
5.11 Litigation. On the Initial Borrowing Date, there shall be no actions,
suits or proceedings pending or threatened (i) with respect to the Transaction,
this Agreement or any other Document except as disclosed on Schedule XI or (ii)
which the Agent or the Required Banks shall reasonably determine could
reasonably be expected to have a material adverse effect on (a) the Transaction
or on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole, (b) the rights or remedies of the Banks or the Agent hereunder or under
any other Credit Document or (c) the ability of any Credit Party to perform its
respective obligations to the Banks or the Agent hereunder or under any other
Credit Document.
5.12 Pledge Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Pledge Agreement in the
form of Exhibit G (as amended, modified or supplemented from time to time, the
"Pledge Agreement") and shall have delivered to the Collateral Agent, as pledgee
thereunder, all of the Pledged Securities, if any, referred to therein and owned
by such Credit Party, (x) endorsed in blank in the case of promissory notes
constituting Pledged Securities and (y) together with executed and undated stock
powers in the case of capital stock constituting Pledged Securities.
5.13 Security Agreement. On the Initial Borrowing Date, each Credit Party
shall have duly authorized, executed and delivered the Security Agreement in the
form of Exhibit H (as modified, supplemented or amended from time to time, the
"Security
-37-
Agreement") covering all of such Credit Party's present and future
Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the
equivalent) fully executed for filing under the UCC or other
appropriate filing offices of each jurisdiction as may be necessary or,
in the reasonable opinion of the Collateral Agent, desirable to perfect
the security interests purported to be created by the Security
Agreement;
(ii) certified copies of Requests for Information or Copies
(Form UCC-11), or equivalent reports, listing all effective financing
statements that name any Credit Party or any of its Subsidiaries as
debtor and that are filed in the jurisdictions referred to in clause
(i) above, together with copies of such other financing statements that
name any Credit Party or any of its Subsidiaries as debtor (none of
which shall cover the Collateral except to the extent evidencing
Permitted Liens or in respect of which the Collateral Agent shall have
received termination statements (Form UCC-3 or the equivalent) as shall
be required by local law fully executed for filing);
(iii) evidence of the completion of all other recordings and
filings of, or with respect to, the Security Agreement as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests intended to be created by
the Security Agreement; and
(iv) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Security
Agreement have been taken.
5.14 Subsidiaries Guaranty. On the Initial Borrowing Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered the Subsidiaries
Guaranty in the form of Exhibit I (as amended, modified or supplemented from
time to time, the "Subsidiaries Guaranty").
5.15 Acknowledgment and Joinder Agreement. On the Initial Borrowing Date,
ATC, as the surviving corporation of the Merger, shall have duly authorized,
executed and delivered to the Agent the Acknowledgment and Joinder Agreement in
the form of Exhibit J (the "Acknowledgment and Joinder Agreement").
5.16 Financial Statements; Pro Forma Financial Statements, Projections.
On or prior to the Initial Borrowing Date, the Agent shall have received true
and correct copies of the historical financial statements, the pro forma
financial statements and the Projections referred to in Sections 7.05(a) and
(d), which historical financial statements, pro
-38-
forma financial statements and Projections shall be in form and substance
reasonably satisfactory to the Agent and the Required Banks. On or prior to the
Initial Borrowing Date, the Agent shall have received evidence, in form and
substance reasonably satisfactory to the Agent and the Required Banks, that
ATC's pro forma EBITDA for the twelve month period ended February 28, 1997 was
at least $22,491,000 (with such pro forma EBITDA to give pro forma effect to any
acquisitions consummated by ATC on and after March 1, 1996 and prior to the
Initial Borrowing Date, including the Bing Yen Acquisition and the EWI
Acquisition).
5.17 Solvency Opinion; Insurance Certificates. On or prior to the Initial
Borrowing Date, the Agent shall have received:
(i) a solvency opinion from Houlihan, Lokey, Xxxxxx & Xxxxx
Financial Advisors, Inc., which solvency opinion shall be in form and
substance reasonably satisfactory to the Agent; and
(ii) certificates of insurance complying with the requirements
of Section 8.03 for the business and properties of Holdings and its
Subsidiaries, in form and substance reasonably satisfactory to the
Agent and naming the Collateral Agent as an additional insured and as
loss payee, and stating that such insurance shall not be cancelled
without at least 30 days prior written notice by the insurer to the
Collateral Agent (or such shorter period of time as a particular
insurance company generally provides).
5.18 Fees, etc. On the Initial Borrowing Date, the Borrower shall have
paid to the Agent and each Bank all costs, fees and expenses (including, without
limitation, legal fees and expenses) payable to the Agent and such Bank to the
extent then due.
SECTION 6. Conditions Precedent to All Credit Events. The
obligation of each Bank to make Loans (including Loans made on the Initial
Borrowing Date), and the obligation of the Issuing Bank to issue Letters of
Credit, is subject, at the time of each such Credit Event (except as
hereinafter indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each such
Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein and in the other Credit Documents shall be true and correct in
all material respects with the same effect as though such representations and
warranties had been made on the date of such Credit Event (it being understood
and agreed that any representation or warranty which by its terms is made
-39-
as of a specified date shall be required to be true and correct in all material
respects only as of such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (other than a Swingline Loan and a Revolving Loan made
pursuant to a Mandatory Borrowing), the Agent shall have received a Notice of
Borrowing meeting the requirements of Section 1.03(a). Prior to the making of
each Swingline Loan, the Swingline Bank shall have received the notice referred
to in Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Agent
and the Issuing Bank shall have received a Letter of Credit Request meeting the
requirements of Section 2.03.
The acceptance of the benefits of each Credit Event shall
constitute a representation and warranty by Holdings and the Borrower to the
Agent and each of the Banks that all the conditions specified in Section 5 (with
respect to Credit Events on the Initial Borrowing Date) and in this Section 6
(with respect to Credit Events on or after the Initial Borrowing Date) and
applicable to such Credit Event exist as of that time. All of the Notes,
certificates, legal opinions and other documents and papers referred to in
Section 5 and in this Section 6, unless otherwise specified, shall be delivered
to the Agent at the Notice Office for the account of each of the Banks and,
except for the Notes, in sufficient counterparts or copies for each of the Banks
and shall be in form and substance reasonably satisfactory to the Agent and the
Required Banks.
SECTION 7 Representations, Warranties and Agreements. In
order to induce the Banks to enter into this Agreement and to make the Loans,
and issue (or participate in) the Letters of Credit as provided herein, each of
Holdings and the Borrower makes the following representations, warranties and
agreements, in each case after giving effect to the Transaction, all of which
shall survive the execution and delivery of this Agreement and the Notes and the
making of the Loans and issuance of the Letters of Credit, and with the
occurrence of each Credit Event on or after the Initial Borrowing Date being
deemed to constitute a representation and warranty that the matters specified in
this Section 7 are true and correct in all material respects on and as of the
Initial Borrowing Date and on the date of each such Credit Event (it being
understood and agreed that any representation or warranty which by its terms is
made as of a specified date shall be required to be true and correct in all
material respects only as of such specified date).
7.01 Corporate Status. Each Credit Party and each of its Subsidiaries (i)
is a duly organized and validly existing corporation in good standing under the
laws of the jurisdiction of its organization, (ii) has the corporate power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes
-40-
to engage and (iii) is duly qualified and is authorized to do business and is in
good standing in each jurisdiction where the ownership, leasing or operation of
its property or the conduct of its business requires such qualifications except
for failures to be so qualified which, individually or in the aggregate, could
not reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each Credit Party has duly executed and
delivered each of the Documents to which it is party, and each of such Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by any
Credit Party of the Documents to which it is a party, nor compliance by it with
the terms and provisions thereof, (i) will contravene any provision of any law,
statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions or provisions of, or
constitute a default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the Security
Documents) upon any of the property or assets of Holdings or any of its
Subsidiaries pursuant to the terms of any indenture, mortgage, deed of trust,
credit agreement or loan agreement, or any other material agreement, contract or
instrument, to which Holdings or any of its Subsidiaries is a party or by which
it or any of its property or assets is bound or to which it may be subject
(including, without limitation, any Seller Note), except for the violation of
certain lease and other agreements as a result of Acquisition, which violations
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the Acquisition or on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole, or (iii) will violate any
provision of the certificate of incorporation or by-laws (or equivalent
organizational documents) of Holdings or any of its Subsidiaries.
7.04 Approvals. No order, consent, approval, license, authorization or
validation of, or filing, recording or registration with (except for (x) those
that have otherwise been obtained or made on or prior to the Initial Borrowing
Date and which remain in full force and effect on the Initial Borrowing Date,
(y) those required to register the Senior Subordinated Notes with the SEC and
(z) the filing of continuation statements
-41-
in connection with the Liens granted pursuant to the Security Agreement), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
execution, delivery and performance of any Document or (ii) the legality,
validity, binding effect or enforceability of any such Document.
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities;
Projections; etc. (a) The consolidated balance sheets of ATC for the fiscal year
and nine month period ended on February 28, 1997 and November 30, 1997,
respectively, and the related consolidated statements of income, cash flows and
shareholders' equity of ATC for the fiscal year or nine month period, as the
case may be, ended on such dates, copies of which have been furnished to the
Banks prior to the Initial Borrowing Date, present fairly in all material
respects the consolidated financial position of ATC at the dates of such balance
sheets and the consolidated results of the operations of ATC for the periods
covered thereby. The consolidated balance sheet of each of Bing Yen and EWI for
the fiscal years ended on December 31, 1996 and June 30, 1997, respectively, and
the related consolidated statements of income, cash flows and shareholders'
equity of each of Bing Yen and EWI for the respective fiscal years ended on such
dates, copies of which have been furnished to the Banks prior to the Initial
Borrowing Date, present fairly in all material respects the consolidated
financial position of each of Bing Yen and EWI at the dates of such balance
sheets and the consolidated results of operations of each of Bing Yen and EWI
for the periods covered thereby. All of the foregoing historical financial
statements have been prepared in accordance with generally accepted accounting
principles consistently applied. The pro forma consolidated financial statements
of Holdings and its Subsidiaries as of November 30, 1997, in each case after
giving effect to the Transaction and the financing therefor, copies of which
have been furnished to the Banks prior to the Initial Borrowing Date, present
fairly in all material respects the pro forma consolidated financial position of
Holdings and its Subsidiaries as of November 30, 1997 and the pro forma
consolidated results of operations of Holdings and its Subsidiaries for the
twelve month and nine month periods covered thereby, as the case may be. After
giving effect to the Transaction (but for this purpose assuming that the
Transaction, the Bing Yen Acquisition, the EWI Acquisition and the related
financing had occurred prior to February 28, 1997), since February 28, 1997,
there has been no material adverse change in the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of Holdings
and its Subsidiaries taken as a whole.
(b) On and as of the Initial Borrowing Date and after giving
effect to the Transaction and to all Indebtedness (including the Loans) being
incurred or assumed and Liens created by the Credit Parties in connection
therewith (a) the sum of the assets, at a fair valuation, of each of the
Borrower on a stand-alone basis and of Holdings and its Subsidiaries taken as a
whole will exceed its debts; (b) each of the Borrower on a stand-alone basis and
Holdings and its Subsidiaries taken as a whole has not incurred and does
-42-
not intend to incur, and does not believe that it will incur, debts beyond its
ability to pay such debts as such debts mature; and (c) each of the Borrower on
a stand alone basis and Holdings and its Subsidiaries taken as a whole will have
sufficient capital with which to conduct its business. For purposes of this
Section 7.05(b), "debt" means any liability on a claim, and "claim" means (i)
right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured, or unsecured or (ii) right to an
equitable remedy for breach of performance if such breach gives rise to a
payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except as disclosed in the financial statements delivered
pursuant to Section 7.05(a) (including in the notes thereto) or as set forth on
Schedule XII, there were as of the Initial Borrowing Date no liabilities or
obligations with respect to Holdings or any of its Subsidiaries of any nature
whatsoever (whether absolute, accrued, contingent or otherwise and whether or
not due) which, either individually or in aggregate, could reasonably be
expected to be material to Holdings and its Subsidiaries taken as a whole. As of
the Initial Borrowing Date, neither Holdings nor the Borrower knows of any basis
for the assertion against it or any of its Subsidiaries of any liability or
obligation of any nature whatsoever that is not disclosed in the financial
statements delivered pursuant to Section 7.05(a) or on Schedule XII which,
either individually or in the aggregate, could reasonably be expected to be
material to Holdings and its Subsidiaries taken as a whole.
(d) On and as of the Initial Borrowing Date, the Projections
delivered to the Agent and the Banks prior to the Initial Borrowing Date have
been prepared in good faith and are based on reasonable assumptions, and there
are no statements or conclusions in the Projections which are based upon or
include information known to Holdings or the Borrower to be misleading in any
material respect or which fail to take into account material information known
to Holdings or the Borrower regarding the matters reported therein. On the
Initial Borrowing Date, Holdings and the Borrower believe that the Projections
are reasonable and attainable, it being recognized by the Banks, however, that
projections as to future events are not to be viewed as facts and are subject to
various contingencies (many of which may be outside the Borrower's control) and
that the actual results during the period or periods covered by the Projections
may differ from the projected results and that the differences may be material.
7.06 Litigation. There are no actions, suits or proceedings pending or, to
the best knowledge of Holdings and the Borrower, threatened (i) with respect to
the Transaction or any Document except as disclosed on Schedule XI, (ii) with
respect to any
-43-
material Indebtedness of Holdings or any of its Subsidiaries or (iii) that are
reasonably likely to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by or on behalf of any Credit Party in writing to the Agent or
any Bank (including, without limitation, all information contained in the
Documents) for purposes of or in connection with this Agreement, the other
Credit Documents or any transaction contemplated herein or therein is, and all
other such factual information (taken as a whole) hereafter furnished by or on
behalf of any Credit Party in writing to the Agent or any Bank will be, true and
accurate in all material respects on the date as of which such information was
or is dated or certified and not incomplete by omitting to state any fact
necessary to make such information (taken as a whole) not misleading in any
material respect at such time in light of the circumstances under which such
information was provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the
Term Loans will be used by the Borrower (i) to effect the Refinancing and (ii)
to pay fees and expenses related to this Agreement.
(b) All proceeds of the Working Capital Loans and the
Swingline Loans shall be used for the working capital and general corporate
purposes of the Borrower and its Subsidiaries (it being understood and agreed
that such purposes shall include payments to effect the repayment of working
capital indebtedness of entities that become Subsidiaries of the Borrower that
is outstanding at the time of the acquisition thereof pursuant to a Permitted
Acquisition), provided that up to $9,000,000 of Working Capital Loans in the
aggregate may be incurred on the Initial Borrowing Date to effect the
Refinancing and to pay fees and expenses in connection with this Agreement. The
proceeds of all Acquisition Loans shall be utilized to make Permitted
Acquisitions.
(c) No part of any Credit Event (or the proceeds thereof) will
be used to purchase or carry any Margin Stock (including any Shares tendered
pursuant to the Tender Offer or to pay the merger consideration pursuant to the
Merger) or to extend credit for the purpose of purchasing or carrying any Margin
Stock. Neither the making of any Loan nor the use of the proceeds thereof nor
the occurrence of any other Credit Event will violate or be inconsistent with
the provisions of Regulation G, T, U or X of the Board of Governors of the
Federal Reserve System.
7.09 Tax Returns and Payments. Except as set forth on Schedule XIII, each
of Holdings and each of its Subsidiaries has filed all federal and state income
tax returns and all other material tax returns, domestic and foreign, required
to be filed by it and has paid all taxes and assessments payable by it which
have become due, except for
-44-
those contested in good faith and adequately disclosed and fully provided for on
the financial statements of Holdings and its Subsidiaries in accordance with
generally accepted accounting principles. Holdings and each of its Subsidiaries
have at all times paid, or have provided adequate reserves (in the good faith
judgment of the management of Holdings) for the payment of, all federal, state
and other material income taxes applicable for all prior fiscal years and for
the current fiscal year to date. There is no material action, suit, proceeding,
investigation, audit or claim now pending or, to the best knowledge of Holdings
and the Borrower threatened, by any authority regarding any taxes relating to
Holdings or any of its Subsidiaries. As of the Initial Borrowing Date, neither
Holdings nor any of its Subsidiaries has entered into an agreement or waiver or
been requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Holdings or any of
its Subsidiaries, or is aware of any circumstances that would cause the taxable
years or other taxable periods of Holdings or any of its Subsidiaries not to be
subject to the normally applicable statute of limitations.
7.10 Compliance with ERISA. (a) Schedule IV sets forth, as of the Initial
Borrowing Date, each Plan; except as set forth on Schedule IV, each Plan (and
each related trust, insurance contract or fund) is in substantial compliance
with its terms and with all applicable laws, including, without limitation,
ERISA and the Code; each Plan (and each related trust, if any) which is intended
to be qualified under Section 401(a) of the Code has received a determination
letter from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has
occurred; no Plan which is a multiemployer plan (as defined in Section
4001(a)(3) of ERISA) is insolvent or in reorganization; no Plan has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA;
all contributions required to be made with respect to a Plan have been timely
made; neither Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate
has incurred any material liability (including any indirect, contingent or
secondary liability) to or on account of a Plan pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971 or 4975 of the Code or expects to incur any such material
liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to Holdings or any Subsidiary of
Holdings or any ERISA Affiliate of incurring a material liability to or on
account of a Plan pursuant to the foregoing provisions of ERISA and the Code; no
proceedings have been instituted to terminate or appoint a trustee to administer
any Plan which is subject to Title IV of ERISA; no action, suit, proceeding,
hearing, audit or investigation with respect to the administration, operation or
the investment of assets of any Plan (other than routine claims for benefits) is
pending, expected or threatened; using actuarial assumptions and computation
methods consistent with Part 1 of subtitle E of Title
-45-
IV of ERISA, the aggregate liabilities of Holdings and its Subsidiaries and its
ERISA Affiliates to all Plans which are multiemployer plans (as defined in
Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom, as
of the close of the most recent fiscal year of each such Plan ended prior to the
date of the most recent Credit Event, would not exceed $500,000; each group
health plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the
Code) which covers or has covered employees or former employees of Holdings, any
Subsidiary of Holdings or any ERISA Affiliate has at all times been operated in
material compliance with the provisions of Part 6 of subtitle B of Title I of
ERISA and Section 4980B of the Code; no lien imposed under the Code or ERISA on
the assets of Holdings or any Subsidiary of Holdings or any ERISA Affiliate
exists or is likely to arise on account of any Plan; and Holdings and its
Subsidiaries may cease contributions to or terminate any employee benefit plan
maintained by any of them without incurring any material liability.
(b) Each Foreign Pension Plan has been maintained in material
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Holdings nor any of its Subsidiaries has incurred any
material obligation in connection with the termination of or withdrawal from any
Foreign Pension Plan. The present value of the accrued benefit liabilities
(whether or not vested) under each Foreign Pension Plan, determined as of the
end of Holdings most recently ended fiscal year on the basis of actuarial
assumptions, each of which is reasonable, did not exceed the current value of
the assets of such Foreign Pension Plan allocable to such benefit liabilities.
7.11 The Security Documents. (a) The provisions of the Security Agreement
are effective to create in favor of the Collateral Agent for the benefit of the
Secured Creditors a legal, valid and enforceable security interest in all right,
title and interest of the Credit Parties in the Security Agreement Collateral
described therein, and the Collateral Agent, for the benefit of the Secured
Creditors, has a fully perfected first lien on, and security interest in, all
right, title and interest of the Credit Parties in all of the Security Agreement
Collateral described therein, in each case subject to no other Liens other than
Permitted Liens. The recordation of the Grant of Security Interest in U.S.
Patents and Trademarks in the form attached to the Security Agreement in the
United States Patent and Trademark Office, together with filings on Form UCC-1
made pursuant to the Security Agreement, will create, as may be perfected by
such filing and recordation, a perfected security interest in the United States
trademarks and patents covered by the Security Agreement. The recordation of
the Grant of Security Interest in U.S. Copyrights in the form attached to the
Security Agreement with the United States Copyright Office, together with
filings on Form UCC-1 made pursuant to the Security Agreement, will create,
-46-
as may be perfected by such filing and recordation, a perfected security
interest in the United States copyrights covered by the Security Agreement.
(b) The security interests created in favor of the Collateral
Agent, as pledgee, for the benefit of the Secured Creditors, under the Pledge
Agreement constitute first priority perfected security interests in the Pledged
Securities described in the Pledge Agreement, subject to no security interests
of any other Person. So long as the Collateral Agent has control (as defined in
Section 9-115 of the New York UCC) of the Pledged Securities, no filings or
recordings are required to perfect (or maintain the perfection or priority of)
the security interests created in the Pledged Securities under the Pledge
Agreement.
(c) After the execution and deliver thereof pursuant to
Section 811, the Mortgages create, for the obligations purported to be secured
thereby, a valid and enforceable perfected security interest in and mortgage
lien on all of the Mortgaged Properties in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors, superior to and prior to the rights of all
third persons (except that the security interest and mortgage lien created in
the Mortgaged Properties may be subject to the Permitted Encumbrances related
thereto) and subject to no other Liens (other than Liens permitted under Section
9.01). Schedule III contains a true and complete list of each parcel of Real
Property owned or leased by Holdings and its Subsidiaries on the Initial
Borrowing Date, and the type of interest therein held by Holdings or such
Subsidiary. Holdings and each of its Subsidiaries have good and marketable title
to all fee-owned Real Property and valid leasehold title to all Leaseholds, in
each case free and clear of all Liens except those described in the first
sentence of this subsection (c).
7.12 Representations and Warranties in the Documents. All representations
and warranties set forth in the other Documents were true and correct in all
material respects at the time as of which such representations and warranties
were made (or deemed made) and shall be true and correct in all material
respects as of the Initial Borrowing Date as if such representations and
warranties were made on and as of such date, unless stated to relate to a
specific earlier date, in which case such representations and warranties shall
be true and correct in all material respects as of such earlier date.
7.13 Properties. Holdings and each of its Subsidiaries have good title to
all material properties owned by them, including all property reflected in the
balance sheets referred to in Section 7.05(a) (except as sold or otherwise
disposed of since the date of such balance sheet in the ordinary course of
business or as permitted by the terms of this Agreement), free and clear of all
Liens, other than Permitted Liens.
7.14 Capitalization. (a) On the Initial Borrowing Date and after giving
effect to the Transaction and the other transactions contemplated hereby, the
authorized
-47-
capital stock of Holdings shall consist of (i) 15,000,000 shares of common
stock, $.01 par value per share, and (ii) 2,000,000 shares of preferred stock,
$.01 par value per share, of which 100,000 shares of series A Preferred Stock
shall be issued and outstanding. All outstanding shares of capital stock of
Holdings have been duly and validly issued and are fully paid and
non-assessable. Holdings does not have outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock, except
(i) for options to purchase shares of Holdings' common stock which may be issued
from time to time to directors, officers and employees of Holdings or any of its
Subsidiaries, (ii) warrants to purchase shares of Holdings' common stock issued
to JNL and Old Hickory as part of the Equity Financing, (iii) Qualified
Preferred Stock of Holdings which may be convertible into shares of common stock
of Holdings, and (iv) as may be set forth in the Shareholders' Agreements
delivered pursuant to Section 5.05(iii).
(b) On the Initial Borrowing Date and after giving effect to
the Transaction and the other transactions contemplated hereby, the authorized
capital stock of the Borrower shall consist of one share of common stock, $0.01
par value per share, which shall be owned by Holdings. All outstanding shares of
capital stock of the Borrower have been duly and validly issued, are fully paid
and nonassessable. The Borrower does not have outstanding any securities
convertible into or exchangeable for its capital stock or outstanding any rights
to subscribe for or to purchase, or any options for the purchase of, or any
agreement providing for the issuance (contingent or otherwise) of, or any calls,
commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. As of the Initial Borrowing Date, Holdings has no
Subsidiaries other than the Borrower and its Subsidiaries and the Borrower has
no Subsidiaries other than those Subsidiaries listed on Schedule V. Schedule V
correctly sets forth, as of the Initial Borrowing Date, the percentage ownership
(direct or indirect) of Holdings in each class of capital stock or other equity
of each of its Subsidiaries and also identifies the direct owner thereof.
7.16 Compliance with Statutes, etc. Each of Holdings and each of its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
-48-
7.17 Investment Company Act. Neither Holdings nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of 1940,
as amended.
7.18 Public Utility Holding Company Act. Neither Holdings nor any of its
Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.19 Environmental Matters. (a) Holdings and each of its Subsidiaries have
complied with, and on the date of each Credit Event are in compliance with, all
applicable Environmental Laws and the requirements of any permits issued under
such Environmental Laws. There are no pending or, to the best knowledge of
Holdings and the Borrower, threatened Environmental Claims against Holdings or
any of its Subsidiaries (including any such claim arising out of the ownership,
lease or operation by Holdings or any of its Subsidiaries of any Real Property
no longer owned, leased or operated by Holdings or any of its Subsidiaries) or
any Real Property owned, leased or operated by Holdings or any of its
Subsidiaries. There are no facts, circumstances, conditions or occurrences with
respect to the business or operations of Holdings or any of its Subsidiaries, or
any Real Property owned, leased or operated by Holdings or any of its
Subsidiaries (including any Real Property formerly owned, leased or operated by
Holdings or any of its Subsidiaries but no longer owned, leased or operated by
Holdings or any of its Subsidiaries) or, to the knowledge of Holdings or the
Borrower, any property adjoining or adjacent to any such Real Property, that
could reasonably be expected (i) to form the basis of an Environmental Claim
against Holdings or any of its Subsidiaries or any Real Property owned, leased
or operated by Holdings or any of its Subsidiaries or (ii) to cause any Real
Property owned, leased or operated by Holdings or any of its Subsidiaries to be
subject to any restrictions on the ownership, occupancy or transferability of
such Real Property by Holdings or any of its Subsidiaries under any applicable
Environmental Law.
(b) Hazardous Materials have not at any time been generated,
used, treated or stored on, or transported to or from, any Real Property owned,
leased or operated by Holdings or any of its Subsidiaries where such generation,
use, treatment or storage has violated or has given rise to an Environmental
Claim under, or could reasonably be expected to violate or give rise to an
Environmental Claim under, any applicable Environmental Law. Hazardous Materials
have not at any time been Released or disposed of on or from any Real Property
owned, leased or operated by Holdings or any of its Subsidiaries where such
Release or disposal has violated or given rise to an Environmental Claim under,
or could reasonably be expected to violate or give rise to an Environmental
Claim under, any applicable Environmental Law.
-49-
(c) Notwithstanding anything to the contrary in this Section
7.19, the representations and warranties made in this Section 7.19 shall not be
untrue unless the effect of any or all violations, claims, restrictions,
failures and noncompliances of the types described above in this Section 7.19
could reasonably be expected to, either individually or in the aggregate, have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.20 Labor Relations. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
material adverse effect on Holdings and its Subsidiaries taken as a whole. There
is (i) no unfair labor practice complaint pending against Holdings or any of its
Subsidiaries or, to the best knowledge of Holdings or the Borrower, threatened
against any of them, before the National Labor Relations Board, and no grievance
or arbitration proceeding arising out of or under any collective bargaining
agreement is so pending against Holdings or any of its Subsidiaries or, to the
best knowledge of Holdings and the Borrower, threatened against any of them,
(ii) no strike, labor dispute, slowdown or stoppage pending against Holdings or
any of its Subsidiaries or, to the best knowledge of Holdings and the Borrower,
threatened against Holdings or any of its Subsidiaries and (iii) no union
representation question exists with respect to the employees of Holdings or any
of its Subsidiaries, except (with respect to any matter specified in clause (i),
(ii) or (iii) above, either individually or in the aggregate) such as could not
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of Holdings and each
of its Subsidiaries owns or has the right to use all the patents, trademarks,
permits, service marks, trade names, copyrights, licenses, franchises,
proprietary information (including but not limited to rights in computer
programs and databases) and formulas, or rights with respect to the foregoing,
and has obtained assignments of all leases and other rights of whatever nature,
necessary for the present conduct of its business, without any known conflict
with the rights of others which, or the failure to obtain which, as the case may
be, could reasonably be expected to result in a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule VI sets forth a true and complete list of all
Indebtedness (including Contingent Obligations and Seller Notes) of Holdings and
its Subsidiaries as of the Initial Borrowing Date and which is to remain
outstanding after giving effect to the Transaction (excluding the Loans, the
Letters of Credit and the Senior Subordinated Notes, the "Existing
Indebtedness"), in each case showing the aggregate
-50-
principal amount thereof and the name of the respective borrower and any Credit
Party or any of its Subsidiaries which directly or indirectly guarantees such
debt.
7.23 Tender Offer. At the time of consummation thereof, the Tender Offer
shall have been consummated in all material respects in accordance with the
terms of the Tender Offer Documents and all applicable laws. At the time of
consummation of the Tender Offer, all third party approvals and all consents and
approvals of, and filings and registrations with, and all other actions in
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Tender Offer (or otherwise referred to in the
Offer to Purchase) will have been obtained, given, filed or taken and are or
will be in full force and effect (or effective judicial relief with respect
thereto has been obtained). All actions taken by Holdings or any of its
Subsidiaries pursuant to or in furtherance of the Tender Offer have been taken
in all material respects in compliance with the Tender Offer Documents and all
applicable laws.
7.24 Merger. At the time of consummation thereof, the Merger shall have
been consummated in all material respects in accordance with the terms of the
Merger Documents and all applicable laws. At the time of consummation of the
Merger, all third party approvals and all consents (other than certain third
party approvals and consents with respect to the Acquisition the failure to
obtain could not, individually or in the aggregate, reasonably be expected to
have a material adverse effect on the Acquisition or on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole) and approvals of,
and filings and registrations with, and all other actions in respect of, all
governmental agencies, authorities or instrumentalities required in order to
make or consummate the Merger will have been obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the Merger.
Additionally, there does not exist any judgment, order or injunction prohibiting
the Merger or the performance by Holdings or any of its Subsidiaries of their
respective obligations under the Merger Documents. As of the Initial Borrowing
Date, all actions taken by Holdings or any of its Subsidiaries pursuant to or in
furtherance of the Merger have been taken in all material respects in compliance
with the Merger Documents and all applicable laws.
7.25 Issuance of the Senior Subordinated Notes. At the time of the issuance
thereof, the Senior Subordinated Notes shall have been issued in all material
respects in accordance with the terms of the Senior Subordinated Note Documents
and all applicable laws. At the time of the issuance thereof, all consents,
approvals of and permits for, and filings and registrations with, and all other
actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to issue the Senior Subordinated
-51-
Notes have been (or will, within the time frame required, be) obtained, given,
filed or taken and are or will be in full force and effect (or effective
judicial relief with respect thereto has been obtained). Additionally, there
does not exist any judgment, order or injunction prohibiting or imposing
material adverse conditions upon the issuance of the Senior Subordinated Notes
or the performance by Acquisition Corp. or any of its Subsidiaries of their
obligations under the Senior Subordinated Note Documents. All actions taken by
the Borrower or any of its Subsidiaries pursuant to or in furtherance of the
issuance of Senior Subordinated Notes have been taken in all material respects
in compliance with the Senior Subordinated Note Documents and all applicable
laws.
7.26 Special Purpose Corporations. (a) Holdings and Acquisition Corp. were
formed to effect the Transaction. Prior to the consummation of the Tender
Offer, (i) Holdings had no significant assets (other than the capital stock of
Acquisition Corp.) or liabilities (other than those liabilities under the
Documents) and (ii) Acquisition Corp. had no significant assets or liabilities
(other than those liabilities under the Documents).
(b) After the consummation of the Transaction, Holdings has no
significant assets (other than the capital stock of the Borrower)) or material
liabilities (other than those liabilities under this Agreement and the other
Documents to which it is a party).
(c) Prior to the consummation of the Merger, Acquisition Corp.
has no significant assets (other than the Shares of ATC tendered to it pursuant
to the Tender Offer) or material liabilities (other than those liabilities under
this Agreement and the other Documents to which it is party).
7.27 Insurance. Schedule VII sets forth a true and complete listing of all
insurance maintained by Holdings and its Subsidiaries as of the Initial
Borrowing Date, and with the amounts insured (and any deductibles) set forth
therein.
7.28 Senior Subordinated Notes. The subordination provisions contained in
the Senior Subordinated Notes and in the other Senior Subordinated Note
Documents are enforceable against the respective Credit Parties party thereto
and the holders of the Senior Subordinated Notes, and all Obligations and
Guaranteed Obligations (as defined in the Subsidiaries Guaranty) are within the
definition of "Senior Indebtedness" or "Guarantor Senior Indebtedness", as the
case may be, included in such subordination provisions.
SECTION 8. Affirmative Covenants. Each of Holdings and the
Borrower hereby covenants and agrees that on and after the Effective Date and
until the Total Commitment and all Letters of Credit have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than indemnities
-52-
described in Section 13.13 which are not then due and payable) incurred
hereunder and thereunder, are paid in full:
8.01 Information Covenants. Holdings will furnish to each Bank:
(a) Monthly Reports. Within 50 days after the end of each fiscal
month of Holdings (commencing with its fiscal month ending on March 31,
1998), the consolidated balance sheet of Holdings and its Subsidiaries
as at the end of such fiscal month and the related consolidated
statements of income and retained earnings and statement of cash flows
for such fiscal month and for the elapsed portion of the fiscal year
ended with the last day of such fiscal month, in each case setting
forth comparative figures for the corresponding fiscal month in the
prior fiscal year and comparable budgeted figures for such fiscal
month.
(b) QuarterlyFinancial Statements. Within 50 days after the close
of the first three quarterly accounting periods in each fiscal year of
Holdings (commencing with its quarterly accounting period ending on May
31, 1998), the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and
statement of cash flows for such quarterly accounting period and for
the elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, in each case setting forth comparative
figures for the related periods in the prior fiscal year, all of which
shall be certified by the Chief Financial Officer of Holdings, subject
to normal year-end audit adjustments and the absence of footnotes.
(c) Annual Financial Statements. Within 95 days after the
close of each fiscal year of Holdings, (i) the consolidated balance
sheet of Holdings and its Subsidiaries as at the end of such fiscal
year and the related consolidated statements of income and retained
earnings and statement of cash flows for such fiscal year setting
forth comparative figures for the preceding fiscal year and certified
by Deloitte & Touche LLP or such other independent certified public
accountants of recognized national standing reasonably acceptable to
the Agent, together with a report of such accounting firm stating that
in the course of its regular audit of the financial statements of
Holdings and its Subsidiaries, which audit was conducted in accordance
with generally accepted auditing standards, such accounting firm
obtained no knowledge of any Default or an Event of Default relating
to accounting matters which has occurred and is continuing or, if in
the opinion of such accounting firm such a Default or Event of Default
has occurred and is continuing, a statement as to the nature thereof
and (ii) management's discussion and analysis of the material
operational and financial developments during such fiscal year.
-53-
(d) Management Letters. Promptly after Holdings' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter"
received from its certified public accountants and management's
response thereto.
(e) Budgets and Projections. No later than 30 days following the
first day of each fiscal year of Holdings (commencing with its fiscal
year ending February 28, 1999), a budget in form reasonably
satisfactory to the Agent (including budgeted statements of income and
sources and uses of cash and balance sheets) prepared by Holdings (i)
for each of the twelve months of such fiscal year prepared in detail
and (ii) for each of the immediately three succeeding fiscal years
prepared in summary form, in each case setting forth, with appropriate
discussion, the principal assumptions upon which such budgets are
based.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(b) and (c), a
certificate of the Chief Financial Officer of Holdings to the effect
that, to the best of such officer's knowledge, no Default or Event of
Default has occurred and is continuing or, if any Default or Event of
Default has occurred and is continuing, specifying the nature and
extent thereof, which certificate shall (x) set forth in reasonable
detail the calculations required to establish (A) whether Holdings and
its Subsidiaries were in compliance with the provisions of Sections
4.02(e), 4.02(g), 9.04 and 9.07 through 9.09, inclusive, at the end of
such fiscal quarter or year, as the case may be, and (B) the Applicable
Eurodollar Rate Margin and the Applicable Base Rate Margin for the
Applicable Margin Period commencing with the date of the delivery of
such financial statements, and (y) if delivered with the financial
statements required by Section 8.01(c), set forth in reasonable detail
the amount of (and the calculations required to establish the amount
of) Excess Cash Flow for the respective Excess Cash Payment Period.
(g) Notice of Default or Litigation. Promptly upon, and in any
event within three Business Days after, any officer of any Credit Party
obtains knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Default or an Event of Default and (ii) any
litigation or governmental investigation or proceeding pending (x)
against Holdings or any of its Subsidiaries which could reasonably be
expected to materially and adversely affect the business, operations,
property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole, (y) with
respect to any material Indebtedness of Holdings or any of its
Subsidiaries or (z) with respect to the Transaction or any Document.
(h) Other Reports and Filings. Promptly after the filing or
delivery thereof, copies of all financial information, proxy materials
and reports, if any, which
-54-
Holdings or any of its Subsidiaries shall publicly file with the
Securities and Exchange Commission or any successor thereto (the "SEC")
or deliver to holders of its material Indebtedness pursuant to the
terms of the documentation governing such Indebtedness (or any trustee,
agent or other representative therefor).
(i) Environmental Matters. Promptly after any officer of any
Credit Party obtains knowledge thereof, notice of one or more of the
following environmental matters, unless such environmental matters
could not, individually or when aggregated with all other such
environmental matters, be reasonably expected to materially and
adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of
Holdings and its Subsidiaries taken as a whole:
(i) any pending or threatened Environmental Claim
against Holdings or any of its Subsidiaries or any Real
Property owned, leased or operated by Holdings or any of its
Subsidiaries;
(ii) any condition or occurrence on or arising from
any Real Property owned, leased or operated by Holdings or
any of its Subsidiaries that (a) results in noncompliance by
Holdings or any of its Subsidiaries with any applicable
Environmental Law or (b) could be expected to form the basis
of an Environmental Claim against Holdings or any of its
Subsidiaries or any such Real Property;
(iii) any condition or occurrence on any Real Property
owned, leased or operated by Holdings or any of its
Subsidiaries that could be expected to cause such Real
Property to be subject to any restrictions on the ownership,
occupancy, use or transferability by Holdings or any of its
Subsidiaries of such Real Property under any Environmental
Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries as required by any
Environmental Law or any governmental or other administrative
agency; provided, that in any event Holdings shall deliver to
each Bank all notices received by Holdings or any of its
Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify Holdings or any
of its Subsidiaries as potentially responsible parties for
remediation costs or which otherwise notify Holdings or any
of its Subsidiaries of potential liability under CERCLA.
-55-
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings'
or such Subsidiary's response thereto.
(j) Other Information. From time to time, such other information
or documents (financial or otherwise) with respect to Holdings or any of its
Subsidiaries as the Agent or any Bank may reasonably request.
8.02 Books, Records, Inspections and Annual Meetings. (a) Holdings will,
and will cause each of its Subsidiaries to, keep proper books of record and
accounts in which full, true and correct entries in conformity with generally
accepted accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. Holdings
will, and will cause each of its Subsidiaries to, permit officers and designated
representatives of the Agent or any Bank to visit and inspect, under guidance of
officers of Holdings or such Subsidiary, any of the properties of Holdings or
such Subsidiary, and to examine the books of account of Holdings or such
Subsidiary and discuss the affairs, finances and accounts of Holdings or such
Subsidiary with, and be advised as to the same by, its and their officers and
independent accountants, all upon reasonable prior notice and at such reasonable
times and intervals and to such reasonable extent as the Agent or such Bank may
reasonably request.
(b) At a date to be mutually agreed upon between the Agent and
Holdings occurring on or prior to the 120th day after the close of each fiscal
year of Holdings, Holdings shall, at the request of the Agent, hold a meeting
with all of the Banks at which meeting shall be reviewed the financial results
of Holdings and its Subsidiaries for the previous fiscal year and the budgets
presented for the current fiscal year of Holdings.
8.03 Maintenance of Property; Insurance. (a) Holdings will, and will cause
each of its Subsidiaries to, (i) keep all property necessary to the business of
Holdings and its Subsidiaries in reasonably good working order and condition,
ordinary wear and tear excepted, (ii) maintain insurance on all such property in
at least such amounts and against at least such risks as is consistent and in
accordance with industry practice for companies similarly situated owning
similar properties in the same general areas in which Holdings or any of its
Subsidiaries operates, and (iii) furnish to the Agent, upon written request,
full information as to the insurance carried. At any time that insurance at or
above the levels described on Schedule VII is not being maintained by Holdings
or any Subsidiary of Holdings, Holdings will, or will cause one of its
Subsidiaries to, promptly notify the Agent in writing and, if thereafter
reasonably requested by the Agent or the Required Banks to do so, Holdings or
any such Subsidiary, as the case may be, shall obtain such insurance at such
levels and coverage which are at least as great as to the extent such insurance
is reasonably available at a reasonable expense.
-56-
(b) Holdings will, and will cause each of its Subsidiaries to,
at all times keep its property insured in favor of the Collateral Agent, and all
policies (including Mortgage Policies) or certificates (or certified copies
thereof) with respect to such insurance (and any other insurance maintained by
Holdings and/or such Subsidiaries) (i) shall be endorsed to the Collateral
Agent's satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as loss payee and/or additional
insured), (ii) shall state that such insurance policies shall not be cancelled
without at least 30 days' prior written notice thereof by the respective insurer
to the Collateral Agent (or such shorter period of time as a particular
insurance company policy generally provides), (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall contain
the standard non-contributing mortgage clause endorsement in favor of the
Collateral Agent with respect to hazard liability insurance, (v) shall, except
in the case of public liability insurance, provide that any losses shall be
payable notwithstanding (A) any act or neglect of Holdings or any of its
Subsidiaries, (B) the occupation or use of the properties for purposes more
hazardous than those permitted by the terms of the respective policy if such
coverage is obtainable at commercially reasonable rates and is of the kind from
time to time customarily insured against by Persons owning or using similar
property and in such amounts as are customary, (C) any foreclosure or other
proceeding relating to the insured properties or (D) any change in the title to
or ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent.
(c) If Holdings or any of its Subsidiaries shall fail to
insure its property in accordance with this Section 8.03, or if Holdings or any
of its Subsidiaries shall fail to so endorse and deposit all policies or
certificates with respect thereto, the Collateral Agent shall have the right
(but shall be under no obligation) to procure such insurance and Holdings and
the Borrower agree to reimburse the Collateral Agent for all reasonable costs
and expenses of procuring such insurance.
8.04 Corporate Franchises. Holdings will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this Section 8.04 shall
prevent (i) sales of assets and other transactions by Holdings or any of its
Subsidiaries in accordance with Section 9.02 or (ii) the withdrawal by Holdings
or any of its Subsidiaries of its qualification as a foreign corporation in any
jurisdiction where such withdrawal could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. Holdings will, and will cause each of
its Subsidiaries to, comply with all applicable statutes, regulations and orders
of, and all
-57-
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property (including applicable statutes, regulations, orders and restrictions
relating to environmental standards and controls), except such noncompliances as
could not, individually or in the aggregate, reasonably be expected to have a
material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Holdings will comply, and will
cause each of its Subsidiaries to comply, in all material respects with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned, leased or operated by Holdings or any of its Subsidiaries,
will promptly pay or cause to be paid all costs and expenses incurred in
connection with such compliance, and will keep or cause to be kept all such Real
Property free and clear of any Liens imposed pursuant to such Environmental
Laws. Neither Holdings nor any of its Subsidiaries will generate, use, treat,
store, Release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property now or hereafter
owned, leased or operated by Holdings or any of its Subsidiaries, or transport
or permit the transportation of Hazardous Materials to or from any such Real
Property, except for Hazardous Materials generated, used, treated, stored,
Released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and reasonably required
in connection with the operation, use and maintenance of the business or
operations of Holdings or any of its Subsidiaries.
(b) At the reasonable written request of the Agent or the
Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, Holdings and the Borrower will
provide, at the sole expense of Holdings and the Borrower, an environmental site
assessment report concerning any Real Property owned, leased or operated by
Holdings or any of its Subsidiaries, prepared by an environmental consulting
firm reasonably approved by the Agent, indicating the presence or absence of
Hazardous Materials and the potential cost of any removal or remedial action in
connection with such Hazardous Materials on such Real Property, provided that
(i) unless the Banks or the Agent has received any notice of the type described
in Section 8.01(i) or (ii) the Banks have exercised any of the remedies pursuant
to the last paragraph of Section 10, such request may not be made more than once
every two years in respect of any parcel of Real Property. If Holdings or the
Borrower fails to provide the same within 90 days after such request was made,
the Agent may order the same, the cost of which shall be borne by Holdings and
the Borrower, and Holdings and the Borrower shall grant and hereby grant to the
Agent and the Banks and their agents access to such Real Property and
specifically grants the Agent and the Banks an irrevocable non-exclusive
license, subject to the rights of tenants, to undertake such an assessment at
any reasonable time upon rea-
-58-
sonable notice to Holdings, all at the sole and reasonable expense of Holdings
and the Borrower.
8.07 ERISA. As soon as possible and, in any event, within ten (10) days
after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, Holdings will deliver
to each of the Banks a certificate of the Chief Financial Officer of Holdings
setting forth the full details as to such occurrence and the action, if any,
that Holdings, such Subsidiary or such ERISA Affiliate is required or proposes
to take, together with any notices required or proposed to be given to or filed
with or by Holdings, any Subsidiary, any ERISA Affiliate, the PBGC, a Plan
participant or the Plan administrator with respect thereto: that a Reportable
Event has occurred (except to the extent that Holdings has previously delivered
to the Banks a certificate and notices (if any) concerning such event pursuant
to the next clause hereof); that a contributing sponsor (as defined in Section
4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is subject to the
advance reporting requirement of PBGC Regulation Section 4043.61 (without regard
to subparagraph (b)(1) thereof), and an event described in subsection .62, .63,
.64, .65, .66, .67 or .68 of PBGC Regulation Section 4043 is reasonably expected
to occur with respect to such Plan within the following 30 days; that an
accumulated funding deficiency, within the meaning of Section 412 of the Code or
Section 302 of ERISA, has been incurred or an application is reasonably likely
to be or has been made for a waiver or modification of the minimum funding
standard (including any required installment payments) or an extension of any
amortization period under Section 412 of the Code or Section 303 or 304 of ERISA
with respect to a Plan; that any contribution required to be made with respect
to a Plan or Foreign Pension Plan has not been timely made; that a Plan has been
or may be terminated, reorganized, partitioned or declared insolvent under Title
IV of ERISA; that a Plan has an Unfunded Current Liability in excess of $150,000
or all Plans in the aggregate have an Unfunded Current Liability in excess of
$500,000; that proceedings are reasonably likely to be or have been instituted
to terminate or appoint a trustee to administer a Plan which is subject to Title
IV of ERISA; that a proceeding has been instituted pursuant to Section 515 of
ERISA to collect a delinquent contribution to a Plan; that Holdings, any
Subsidiary of Holdings or any ERISA Affiliate will or may incur any material
liability (including any indirect, contingent, or secondary liability) to or on
account of the termination of or withdrawal from a Plan under Section 4062,
4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or
502(l) of ERISA or with respect to a group health plan (as defined in Section
607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the
Code; or that Holdings or any Subsidiary of Holdings may incur any material
liability pursuant to any employee welfare benefit plan (as defined in Section
3(1) of ERISA) that provides benefits to retired employees or other former
employees (other than as required by Section 601 of ERISA) or any Plan or any
Foreign Pension Plan. Holdings will deliver to each of the Banks (i) a complete
copy of the annual report (on Internal Revenue Service Form 5500-series) of each
-59-
Plan (including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications,
schedules and information) required to be filed with the Internal Revenue
Service and (ii) copies of any records, documents or other information that must
be furnished to the PBGC with respect to any Plan pursuant to Section 4010 of
ERISA. In addition to any certificates or notices delivered to the Banks
pursuant to the first sentence hereof, copies of annual reports and any records,
documents or other information required to be furnished to the PBGC, and any
material notices received by Holdings, any Subsidiary of Holdings or any ERISA
Affiliate with respect to any Plan or Foreign Pension Plan shall be delivered to
the Banks no later than ten (10) days after the date such annual report has been
filed with the Internal Revenue Service or such records, documents and/or
information has been furnished to the PBGC or such notice has been received by
Holdings, any Subsidiary or any ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings will cause (i) each of
its, and each of its Subsidiaries', fiscal years to end on February 28 or
February 29, as the case may be, and (ii) each of its, and each of its
Subsidiaries', fiscal quarters to end on February 28 (or February 29, as the
case may be), May 31, August 31 and November 30.
8.09 Performance of Obligations. Holdings will, and will cause each of its
Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement, loan agreement or credit agreement and
each other material agreement, contract or instrument by which it is bound,
except such non-performances as could not, individually or in the aggregate,
reasonably be expected to have a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. Holdings will pay and discharge, and will cause
each of its Subsidiaries to pay and discharge, all taxes, assessments and
governmental charges or levies imposed upon it or upon its income or profits, or
upon any properties belonging to it, prior to the date on which penalties attach
thereto, and all lawful claims for sums that have become due and payable which,
if unpaid, might become a Lien not otherwise permitted under Section 9.01(i);
provided, that neither Holdings nor any of its Subsidiaries shall be required to
pay any such tax, assessment, charge, levy or claim which is being contested in
good faith and by proper proceedings if it has maintained adequate reserves with
respect thereto in accordance with generally accepted accounting principles.
8.11 Additional Security; Further Assurances. (a) Holdings will, and will
cause each of its Subsidiaries to, grant to the Collateral Agent security
interests and Mortgages in such assets and properties of Holdings and its
Subsidiaries as are not covered by the original Security Documents, and as may
be reasonably requested from time to time by the Agent or the Required Banks
(collectively, the "Additional Security Documents"). All such security interests
and Mortgages shall be granted pursuant to documentation reasonably
-60-
satisfactory in form and substance to the Agent and shall constitute valid and
enforceable perfected security interests and Mortgages superior to and prior to
the rights of all third Persons and subject to no other Liens except for
Permitted Liens. The Additional Security Documents or instruments related
thereto shall have been duly recorded or filed in such manner and in such places
as are required by law to establish, perfect, preserve and protect the Liens in
favor of the Collateral Agent required to be granted pursuant to the Additional
Security Documents and all taxes, fees and other charges payable in connection
therewith shall have been paid in full.
(b) Holdings will, and will cause each of its Subsidiaries to,
at the expense of Holdings and the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys on new Mortgaged Properties, reports and other assurances or
instruments and take such further steps relating to the Collateral covered by
any of the Security Documents as the Collateral Agent may reasonably require.
Furthermore, Holdings and the Borrower will cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Agent to assure itself that this
Section 8.11 has been complied with.
(c) If the Agent or the Required Banks reasonably determine
that they are required by law or regulation to have appraisals prepared in
respect of the Mortgaged Properties, the Borrower will provide, at its own
expense, to the Agent appraisals which satisfy the applicable requirements of
the Real Estate Appraisal Reform Amendments of the Financial Institution Reform,
Recovery and Enforcement Act of 1989, as amended, and which otherwise shall be
in form and substance reasonably satisfactory to the Agent.
(d) Holdings and the Borrower agree that each action required
above by this Section 8.11 shall be completed as soon as possible, but in no
event later than 90 days after such action is either requested to be taken by
the Agent or the Required Banks or required to be taken by Holdings and/or its
Subsidiaries pursuant to the terms of this Section 8.11; provided that, in no
event will Holdings or any of its Subsidiaries be required to take any action,
other than using its reasonable efforts, to obtain consents from third parties
with respect to its compliance with this Section 8.11.
8.12 Contributions. Holdings will contribute as a common equity
contribution to the capital of the Borrower upon its receipt thereof, any cash
proceeds received by Holdings after the Effective Date from any asset sale, any
incurrence of Indebtedness, any Recovery Event, any sale or issuance of its
equity or any cash capital contributions received by Holdings.
-61-
SECTION 9. Negative Covenants. Each of Holdings and the
Borrower hereby covenants and agrees that on and after the Effective Date and
until the Total Commitment and all Letters of Credit have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations (other than any indemnities described in Section 13.13 which are not
then due and payable) incurred hereunder and thereunder, are paid in full:
9.01 Liens. Holdings will not, and will not permit any of its Subsidiaries
to, create, incur, assume or suffer to exist any Lien upon or with respect to
any property or assets (real or personal, tangible or intangible) of Holdings or
any of its Subsidiaries, whether now owned or hereafter acquired, or sell any
such property or assets subject to an understanding or agreement, contingent or
otherwise, to repurchase such property or assets (including sales of accounts
receivable with recourse to Holdings or any of its Subsidiaries), or assign any
right to receive income or permit the filing of any financing statement under
the UCC or any other similar notice of Lien under any similar recording or
notice statute; provided that the provisions of this Section 9.01 shall not
prevent the creation, incurrence, assumption or existence of the following
(Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental
charges or levies not yet due or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the Borrower
or any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for borrowed
money, such as carriers', warehousemen's, materialmen's and mechanics'
liens and other similar Liens (including any right of set-off by a bank
in connection with any deposit accounts maintained with such bank)
arising in the ordinary course of business, and (x) which do not in the
aggregate materially detract from the value of the Borrower's or such
Subsidiary's property or assets or materially impair the use thereof in
the operation of the business of the Borrower or such Subsidiary or (y)
which are being contested in good faith by appropriate proceedings,
which proceedings have the effect of removing such Lien or preventing
the forfeiture or sale of the property or assets subject to any such
Lien;
(iii) Liens in existence on the Initial Borrowing Date which
are listed, and the property subject thereto described, in Schedule
VIII, but only to the respective date, if any, set forth in such
Schedule VIII for the removal, replacement and termination of any such
Liens, plus renewals, replacements and extensions of such
-62-
Liens to the extent set forth on Schedule VIII, provided that (x) the
aggregate principal amount of the Indebtedness, if any, secured by
such Liens does not increase from that amount outstanding at the time
of any such renewal, replacement or extension and (y) any such
renewal, replacement or extension does not encumber any additional
assets or properties of Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not
materially interfering with the conduct of the business of Holdings or
any of its Subsidiaries;
(vii) Liens upon assets of the Borrower or any of its
Subsidiaries subject to Capitalized Lease Obligations to the extent
such Capitalized Lease Obligations are permitted by Section 9.04(iv),
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y)
the Lien encumbering the asset giving rise to the Capitalized Lease
Obligation does not encumber any other asset of the Borrower or any
Subsidiary of the Borrower;
(viii) Liens placed upon Real Property, fixtures, equipment or
machinery acquired after the Effective Date and used in the ordinary
course of business of the Borrower or any of its Subsidiaries at the
time of the acquisition thereof by the Borrower or any such Subsidiary
or within 90 days thereafter to secure Indebtedness incurred to pay all
or a portion of the purchase price thereof or to secure Indebtedness
incurred solely for the purpose of financing the acquisition of any
such Real Property, fixtures, equipment or machinery or extensions,
renewals or replacements of any of the foregoing for the same or a
lesser amount, provided that (x) the aggregate outstanding principal
amount of all Indebtedness secured by Liens permitted by this clause
(viii) shall not at any time exceed $1,000,000 and (y) in all events,
the Lien encumbering the Real Property, fixtures, equipment or
machinery so acquired does not encumber any other asset of the Borrower
or such Subsidiary;
(ix) easements, rights-of-way, restrictions, encroachments
and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not materially
interfering with the conduct of the business of Holdings or any of its
Subsidiaries;
(x) Liens arising from precautionary UCC financing
statement filings regarding operating leases;
-63-
(xi) Liens arising out of the existence of judgments or
awards in respect of which Holdings or any of its Subsidiaries shall in
good faith be prosecuting an appeal or proceedings for review in
respect of which there shall have been secured a subsisting stay of
execution pending such appeal or proceedings, provided that the
aggregate amount of any cash and the fair market value of any property
subject to such Liens do not exceed $1,000,000 at any time outstanding;
(xii) statutory and common law landlords' liens under leases
to which Holdings or any of its Subsidiaries is a party;
(xiii) Liens (other than Liens imposed under ERISA) incurred in
the ordinary course of business in connection with workers compensation
claims, unemployment insurance and social security benefits and Liens
securing the performance of bids, tenders, leases and contracts in the
ordinary course of business, statutory obligations, surety bonds,
performance bonds and other obligations of a like nature incurred in
the ordinary course of business (exclusive of obligations in respect of
the payment for borrowed money);
(xiv) Liens on property or assets acquired pursuant to a
Permitted Acquisition, or on property or assets of a Subsidiary of the
Borrower in existence at the time such Subsidiary is acquired pursuant
to a Permitted Acquisition, provided that (x) any Indebtedness that is
secured by such Liens is permitted to exist under Section 9.04(viii),
and (y) such Liens are not incurred in connection with, or in
contemplation or anticipation of, such Permitted Acquisition and do not
attach to any other asset of the Borrower or any of its Subsidiaries;
(xv) Liens securing the Indebtedness to be Refinanced,
provided that such Liens shall only be permitted to remain outstanding
until the consummation of the Merger; and
(xvi) Liens on the proceeds (plus investment earnings thereon)
from the issuance of the Senior Subordinated Notes (to the extent such
proceeds were not used to pay for the Shares tendered pursuant to the
Tender Offer) in favor of the holders thereof to be held by the trustee
for such holders to pay the merger consideration pursuant to the
Merger, provided that such Liens only shall be permitted to remain
outstanding through the consummation of the Merger.
In connection with the granting of Liens of the type described in clauses (vii)
and (viii) of this Section 9.01 by the Borrower or any of its Subsidiaries, the
Agent and the Collateral Agent shall be authorized to take any actions deemed
appropriate by it in connection therewith (including, without limitation, by
executing appropriate lien releases or lien subordination agreements in favor of
the holder or holders of such Liens, in either case solely with
-64-
respect to the item or items of equipment or other assets (including Real
Property) subject to such Liens).
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings will
not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of all or any part of its property
or assets, or enter into any sale-leaseback transactions, or purchase or
otherwise acquire (in one or a series of related transactions) any part of the
property or assets (other than purchases or other acquisitions of inventory,
materials and equipment in the ordinary course of business) of any Person (or
agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures by the Borrower and its
Subsidiaries shall be permitted to the extent not in violation of
Section 9.08;
(ii) each of the Borrower and its Subsidiaries may make sales
of inventory in the ordinary course of business;
(iii) each of the Borrower and its Subsidiaries may sell
obsolete, uneconomic or worn-out equipment or materials in the ordinary
course of business or other equipment or materials in the ordinary
course of business which are no longer useful in the business of the
Borrower or such Subsidiary, provided that the aggregate amount of the
proceeds received from all assets sold pursuant to this clause (iii)
shall not exceed $250,000 in any fiscal year of the Borrower;
(iv) each of the Borrower and its Subsidiaries may sell assets
(other than the capital stock of any Subsidiary Guarantor), so long as
(u) no Default or Event of Default then exists or would result
therefrom, (w) each such sale is in an arm's-length transaction and the
Borrower or the respective Subsidiary receives at least fair market
value (as determined in good faith by the Borrower or such Subsidiary,
as the case may be), (x) the total consideration received by the
Borrower or such Subsidiary is at least 90% cash and is paid at the
time of the closing of such sale, (y) the Net Sale Proceeds therefrom
are applied and/or reinvested as (and to the extent) required by
Section 4.02(e) and (z) the aggregate amount of the proceeds received
from all assets sold pursuant to this clause (iv) shall not exceed
$1,500,000 in any fiscal year of the Borrower;
(v) Investments may be made to the extent permitted by
Section 9.05;
(vi) each of the Borrower and its Subsidiaries may lease (as
lessee) real or personal property (so long as any such lease does not
create a Capitalized Lease Obligation except to the extent permitted by
Section 9.04(iv));
-65-
(vii) each of the Borrower and its Subsidiaries may sell or
discount, in each case without recourse and in the ordinary course of
business, accounts receivable arising in the ordinary course of
business, but only in connection with the compromise or collection
thereof;
(viii) the Acquisition shall be permitted;
(ix) each of the Borrower and its Subsidiaries may grant
leases or subleases to other Persons not materially interfering with
the conduct of the business of the Borrower or any of its Subsidiaries;
(x) any Subsidiary of the Borrower (x) may be merged,
consolidated or liquidated with or into the Borrower so long as the
Borrower is the surviving corporation of such merger, consolidation or
liquidation and (y) may transfer all or any portion of its assets to
the Borrower;
(xi) any Subsidiary of the Borrower (x) may be merged,
consolidated or liquidated with or into any other Subsidiary of the
Borrower so long as (i) in the case of any such merger, consolidation
or liquidation involving a Subsidiary Guarantor, the Subsidiary
Guarantor is the surviving corporation of such merger, consolidation or
liquidation and (ii) in addition to the requirements or preceding
clause (i), in the case of any such merger, consolidation or
liquidation involving a Wholly-Owned Subsidiary of the Borrower, the
Wholly-Owned Subsidiary is the surviving corporation of such merger,
consolidation or liquidation, (y) may transfer all or any portion of
its assets to any Subsidiary Guarantor and (z) may, so long as such
Subsidiary is not a Subsidiary Guarantor, (i) be merged, consolidated
or liquidated with or into any other Subsidiary of the Borrower that is
not a Subsidiary Guarantor and (ii) transfer all or any portion of its
assets to any other Subsidiary of the Borrower that is not a Subsidiary
Guarantor; and
(xii) after the consummation of the Merger, each of the
Borrower and the Subsidiary Guarantors may acquire all or substantially
all of the assets of any Person (or all or substantially all of the
assets of a product line or division of any Person) or 100% (or, to the
extent permitted below, at least 90%) of the capital stock of any
Person (including by the merger or consolidation of such Person with
and into the Borrower or such Subsidiary Guarantor so long as the
Borrower or such Subsidiary Guarantor is the surviving corporation of
such merger or consolidation) (any such acquisition, merger or
consolidation permitted by this clause (xii), a "Permitted
Acquisition"), so long as (i) no Default or Event of Default then
exists or would result therefrom, (ii) each of the representations and
warranties contained in Section 7 shall be true and correct in all
material respects both before and after giving effect to such Permitted
Acquisition (provided that any
-66-
representation or warranty which is made as of specified shall solely
be required to be true and correct in all material respects as of such
date), (iii) any Liens or Indebtedness assumed or issued (including
any Seller Notes) in connection with such acquisition are otherwise
permitted under Section 9.01 or 9.04, as the case may be, (iv) the
only consideration paid by the Borrower or any Subsidiary Guarantor in
connection with any Permitted Acquisition consists solely of cash,
Seller Notes, common stock of Holdings and/or Qualified Preferred
Stock of Holdings, (v) at least 10 Business Days prior to the
consummation of any Permitted Acquisition, the Borrower shall have
delivered to the Agent and each of the Banks a certificate of
Holdings' Chief Financial Officer certifying (and showing the
calculations therefor in reasonable detail) that (x) the assets or
Person acquired pursuant to such Permitted Acquisition will have pro
forma positive earnings (before interest expense and taxes and adding
back any amortization of intangibles and depreciation) and (y)
Holding's and its Subsidiaries would have been in compliance with the
financial covenants set forth in Sections 9.08 and 9.09 for the Test
Period then most recently ended prior to the date of the consummation
of such Permitted Acquisition, in each case with such earnings and
financial covenants to be determined on a pro forma basis as if such
Permitted Acquisition had been consummated on the first day of such
Test Period (and assuming that any Indebtedness incurred, issued or
assumed in connection therewith had been incurred, issued or assumed
on the first day of, and had remained outstanding throughout, such
Test Period), it being understood, however, (A) that with respect to
any Permitted Acquisition consummated prior to May 31, 1998, the
Borrower shall be in pro forma compliance with the financial ratios
set forth in Sections 9.08 and 9.09 in respect of the Test Period
ending May 31, 1998 but utilizing the Borrower's Consolidated EBITDA
for its fourth quarter ended February 28, 1998 (and annualized in
connection with determining compliance with Section 9.09), and (B)
that with respect to any Permitted Acquisition consummated on or prior
to January 29, 2000, the Borrower's pro forma Leverage Ratio for the
respective Test period shall be at least .25 below the maximum
permitted Leverage Ratio for such Test Period as set forth in Section
9.09 (provided that this clause (B) shall not apply to any Permitted
Acquisition in which the aggregate consideration (determined as
provided below in this Section 9.02(xii)) is $1,000,000 or less so
long as no more than one such $1,000,000 or less Permitted Acquisition
is consummated in any six month period), (vi) the aggregate
consideration paid in connection with any Permitted Acquisition or
group of related Permitted Acquisitions (including, without
limitation, any earn-out, non-compete or deferred compensation
arrangements, the aggregate principal amount of any Indebtedness
issued and/or assumed in connection therewith and the fair market
value of any capital stock of Holdings issued in connection therewith
(as determined in good faith by the Board of Directors of Holdings))
does not exceed $10,000,000, (vii) the aggregate cash consideration
paid in connection with all Permitted Acquisitions in which less than
100% of the capital stock of the acquired Person is
-67-
purchased (including, without limitation, any earn-out, non-compete or
deferred compensation arrangements, the aggregate principal amount of
any Indebtedness issued and/or assumed in connection therewith and the
fair market value of any capital stock of Holdings issued in
connection therewith) does not exceed $5,000,000 and (viii) the assets
acquired pursuant to each such Permitted Acquisition are engaged in a
business permitted by Section 9.13 and are employed principally in the
United States and Canada.
To the extent the Required Banks waive the provisions of this Section 9.02 with
respect to the sale of any Collateral, or any Collateral is sold as permitted by
this Section 9.02 (other than to Holdings or a Subsidiary thereof), such
Collateral shall be sold free and clear of the Liens created by the Security
Documents, and the Agent and the Collateral Agent shall be authorized to take
any actions deemed appropriate in order to effect the foregoing.
9.03 Dividends. Holdings will not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) (x) any Subsidiary of the Borrower may pay cash
Dividends to the Borrower or to any Wholly-Owned Subsidiary of the
Borrower, provided that, prior to the consummation of the Merger, ATC
may not pay cash Dividends and (y) so long as no Default under Section
10.01 or 10.05 then exists or would result therefrom or no Event of
Default then exists or would result therefrom, any non-Wholly-Owned
Subsidiary of the Borrower may pay cash Dividends to its shareholders
generally so long as the Borrower or its respective Subsidiary which
owns the equity interest or interests in the Subsidiary paying such
Dividends receives at least its proportionate share thereof (based upon
its relative holdings of equity interests in the Subsidiary paying such
Dividends and taking into account the relative preferences, if any, of
the various classes of equity interests in such Subsidiary);
(ii) so long as no Default or Event of Default then exists or
would result therefrom, after the consummation of the Merger, Holdings
may repurchase outstanding shares of its common stock (or options to
purchase such common stock) following the death, disability, hardship
or termination of employment of officers or employees of Holdings or
any of its Subsidiaries, provided that the aggregate amount of
Dividends paid by Holdings pursuant to this clause (ii) shall not
exceed $500,000 in any fiscal year of Holdings;
(iii) so long as no Default or Event of Default then exists or
would result therefrom, after the consummation of the Merger, the
Borrower may pay cash
-68-
Dividends to Holdings so long as Holdings promptly uses such proceeds
for the purposes described in clause (ii) of this Section 9.03;
(iv) after the consummation of the Merger, the Borrower may
pay cash Dividends to Holdings so long as the proceeds thereof are
promptly used by Holdings to pay operating expenses in the ordinary
course of business (including, without limitation, director fees,
professional fees and expenses) and other similar corporate overhead
costs and expenses, provided that the aggregate amount of cash
Dividends paid pursuant to this clause (iv) during any fiscal year of
the Borrower shall not exceed $250,000;
(v) after the consummation of the Merger, the Borrower may
pay cash Dividends to Holdings in the amounts and at the times of any
payment by Holdings in respect of taxes, provided that (x) the amount
of cash Dividends paid pursuant to this clause (v) to enable Holdings
to pay federal and state income taxes at any time shall not exceed the
amount of such federal and state income taxes actually owing by
Holdings at such time for the respective period and (y) any refunds
received by Holdings shall promptly be returned by Holdings to the
Borrower;
(vi) Holdings may pay Dividends on its Qualified Preferred
Stock solely through the issuance of additional shares of Qualified
Preferred Stock of Holdings; and
(vii) the merger consideration may be paid in connection with
the consummation of the Merger.
9.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and
the other Credit Documents;
(ii) Existing Indebtedness outstanding on the Initial
Borrowing Date and listed on Schedule VI, without giving effect to any
subsequent extension, renewal or refinancing thereof except to the
extent set forth on Schedule VI, provided that the aggregate principal
amount of the Indebtedness to be extended, renewed or refinanced shall
not increase from that amount outstanding at the time of any such
extension, renewal or refinancing;
(iii) Indebtedness under Interest Rate Protection Agreements
entered into with respect to other Indebtedness permitted under this
Section 9.04;
-69-
(iv) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations to the extent permitted
pursuant to Section 9.08, provided that in no event shall the aggregate
principal amount of Capitalized Lease Obligations permitted by this
clause (iv) exceed $1,000,000 at any time outstanding;
(v) Indebtedness subject to Liens permitted under Sections
9.01(viii);
(vi) intercompany Indebtedness among the Borrower and its
Subsidiaries to the extent permitted by Section 9.05(ix);
(vii) Indebtedness of the Borrower and the Subsidiary
Guarantors under the Senior Subordinated Notes and the other Senior
Subordinated Note Documents in an aggregate principal amount not to
exceed $100,000,000 (as reduced by any repayments of principal
thereof), provided that, prior to the consummation of the Merger, ATC
and its Subsidiaries may not have any obligations in respect of the
Senior Subordinated Notes;
(viii) Indebtedness of a Subsidiary acquired pursuant to a
Permitted Acquisition (or Indebtedness assumed at the time of a
Permitted Acquisition of an asset securing such Indebtedness), provided
that (x) such Indebtedness was not incurred in connection with, or in
anticipation or contemplation of, such Permitted Acquisition, (y) such
Indebtedness does not constitute debt for borrowed money (other than
debt for borrowed money incurred in connection with industrial revenue
or industrial development bond financings), it being understood and
agreed that Capitalized Lease Obligations and purchase money
Indebtedness shall not constitute debt for borrowed money for purposes
of this clause (viii), and (z) at the time of such Permitted
Acquisition such Indebtedness does not exceed 10% of the total value of
the assets of the Subsidiary so acquired, or of the asset so acquired,
as the case may be;
(ix) Indebtedness of ATC and its Subsidiaries in respect of
the Indebtedness to be Refinanced, provided that such Indebtedness
shall only be permitted to remain outstanding until the consummation of
the Merger;
(x) guaranties by the Borrower and its Subsidiaries of each
other's Indebtedness otherwise permitted under this Section 9.04;
(xi) unsecured Indebtedness of the Borrower and its
Subsidiaries in connection with their financing of their insurance
premiums in the ordinary course of business and consistent with past
practices so long as no more than $2,000,000 of such Indebtedness is
outstanding at any time and the Borrower or such Subsidiary
-70-
is permitted to incur such Indebtedness under the Senior Subordinated
Note Indenture; and
(xii) unsecured Indebtedness incurred by the Borrower and its
Subsidiaries in the form of Seller Notes in an aggregate principal
amount not to exceed $10,000,000 at any one time outstanding.
9.05 Advances, Investments and Loans. Holdings will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents
(each of the foregoing an "Investment" and, collectively, "Investments"), except
that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary trade terms of the Borrower or such
Subsidiary;
(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents, provided that during any time that Revolving
Loans or Swingline Loans are outstanding the aggregate amount of cash
and Cash Equivalents permitted to be held by the Borrower and its
Subsidiaries shall not exceed $1,000,000 for any period of five
consecutive Business Days;
(iii) Holdings and its Subsidiaries may hold the Investments
held by them on the Initial Borrowing Date and described on Schedule
IX, provided that any additional Investments made with respect thereto
shall be permitted only if independently justified under the other
provisions of this Section 9.05;
(iv) the Borrower and its Subsidiaries may acquire and own
investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and in good
faith settlement of delinquent obligations of, and other disputes with,
customers and suppliers arising in the ordinary course of business;
(v) the Borrower and its Subsidiaries may make loans and
advances in the ordinary course of business to their respective
officers and employees so long as the aggregate principal amount
thereof at any time outstanding (determined
-71-
without regard to any write-downs or write-offs of such loans and
advances) shall not exceed $500,000;
(vi) Holdings may acquire and hold obligations of one or more
officers or other employees of Holdings or any of its Subsidiaries in
connection with such officers' or employees' acquisition of shares of
common stock of Holdings (or options to purchase such common stock) so
long as no cash is paid by Holdings or any of its Subsidiaries to such
officers or employees in connection with the acquisition of any such
obligations;
(vii) the Borrower may enter into Interest Protection
Agreements to the extent permitted by Section 9.04(iii);
(viii) (x) Holdings may make cash common equity contributions
to the capital of the Borrower, (y) until the consummation of the
Merger, Acquisition Corp. may make cash common equity contributions to
the capital of ATC, and (z) the Borrower and the Subsidiary Guarantors
may make cash common equity contributions to the capital of their
respective Subsidiaries which are Subsidiary Guarantors;
(ix) the Borrower and the Subsidiary Guarantors may make
intercompany loans and advances between or among one another
(collectively, "Intercompany Loans"), so long as each Intercompany Loan
shall not be evidenced by a promissory note other than by an
Intercompany Note that is pledged to the Collateral Agent pursuant to
the Pledge Agreement;
(x) guaranties by the Borrower and its Subsidiaries of each
other's Indebtedness otherwise permitted under this Section 9.04;
(xi) Permitted Acquisitions shall be permitted in accordance
with Section 9.02(xii); and
(xii) the Borrower and its Subsidiaries may acquire and hold
non-cash consideration issued by the purchaser of assets in connection
with a sale of such assets to the extent permitted by Section 9.02(iv).
9.06 Transactions with Affiliates. Holdings will not, and will not permit
any of its Subsidiaries to, enter into any transaction or series of related
transactions, whether or not in the ordinary course of business, with any
Affiliate of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained
-72-
by Holdings or such Subsidiary at that time in a comparable arm's-length
transaction with a Person other than an Affiliate, except that the following in
any event shall be permitted:
(i) Dividends may be paid to the extent provided in Section
9.03;
(ii) loans may be made and other transactions may be entered
into by Holdings and its Subsidiaries to the extent permitted by
Sections 9.02, 9.04 and 9.05;
(iii) customary fees may be paid to non-officer directors of
Holdings and its Subsidiaries;
(iv) the Borrower and its Subsidiaries may pay ordinary and
reasonable compensation to their respective officers (including
compensation in the form of options to purchase shares of common stock
of Holdings, insurance and other employee benefits) and may enter into
employment agreements with such officers in connection therewith
(including those employment agreements described in the Offering
Memorandum relating to the Senior Subordinated Notes); and
(v) Holdings and its Subsidiaries may enter and perform
their obligations under any Tax Sharing Agreement entered into among
themselves in accordance with the terms of this Agreement.
9.07 Capital Expenditures. (a) Holdings will not, and will not permit any
of its Subsidiaries to, make any Capital Expenditures, except that (i) during
the period from the Effective Date through and including February 28, 1999, the
Borrower and its Subsidiaries may make Capital Expenditures in an aggregate
amount not to exceed $3,400,000 and (ii) during any fiscal year of Holdings set
forth below (taken as one accounting period), the Borrower and its Subsidiaries
may make Capital Expenditures so long as the aggregate amount of all such
Capital Expenditures does not exceed in any fiscal year of Holdings set forth
below the amount set forth opposite such fiscal year below:
Fiscal Year Ending Amount
------------------ ------
February 29, 2000 $3,500,000
February 28, 2001 $5,200,000
February 28, 2002 $4,500,000
February 28, 2003 $5,000,000
-73-
(b) In addition to the foregoing, in the event that the amount
of Capital Expenditures permitted to be made by the Borrower and its
Subsidiaries pursuant to clause (a) above in any fiscal year of the Borrower
(before giving effect to any increase in such permitted Capital Expenditure
amount pursuant to this clause (b)) is greater than the amount of Capital
Expenditures actually made by the Borrower and its Subsidiaries during such
fiscal year, the lesser of (x) such excess and (y) 25% of the applicable
permitted scheduled Capital Expenditure amount as set forth in such clause (a)
above may be carried forward and utilized to make Capital Expenditures in the
immediately succeeding fiscal year, provided that no amounts once carried
forward pursuant to this Section 9.07(b) may be carried forward to any fiscal
year thereafter and such amounts may only be utilized after the Borrower and its
Subsidiaries have utilized in full the permitted Capital Expenditure amount for
such fiscal year as set forth in the table in clause (a) above (without giving
effect to any increase in such amount by operation of this clause (b)).
(c) In addition to the foregoing, the Borrower and it
Subsidiaries may make Capital Expenditures with the amount of Net Sale Proceeds
received by the Borrower or any of its Subsidiaries from any Asset Sale so long
as such Net Sale Proceeds are reinvested in replacement assets within 300 days
following the date of such Asset Sale to the extent such Net Sale Proceeds are
not otherwise required to be applied to repay outstanding Term Loans (or reduce
the Total Term Loan Commitment, as the case may be) pursuant to Section 4.02(e)
or reduce the Total Revolving Loan Commitment pursuant to Section 3.03(d), as
the case may be.
(d) In addition to the foregoing, the Borrower and its
Subsidiaries may make Capital Expenditures with the amount of Net Insurance
Proceeds received by the Borrower or any of its Subsidiaries from any Recovery
Event so long as such Net Insurance Proceeds are used to replace or restore any
properties or assets in respect of which such Net Insurance Proceeds were paid
within 300 days following the date of receipt of such Net Insurance Proceeds
from such Recovery Event to the extent such Net Insurance Proceeds are not
otherwise required to be applied to repay outstanding Term Loans (or reduce the
Total Term Loan Commitment, as the case may be) pursuant to Section 4.02(g) or
reduce the Total Revolving Loan Commitment pursuant to Section 3.03(d), as the
case may be.
(e) In addition to the foregoing, the Borrower and the
Subsidiary Guarantors may make Capital Expenditures consisting of Permitted
Acquisitions to the extent permitted by Section 9.02(xii).
9.08 Consolidated Interest Coverage Ratio. Holdings will not permit the
Consolidated Interest Coverage Ratio for any Test Period ending on the last day
of a fiscal quarter set forth below to be less than the ratio set forth opposite
such fiscal quarter below:
-74-
Fiscal Quarter Ending Ratio
--------------------- -----
May 31, 1998 1.60:1.00
August 31, 1998 1.70:1.00
November 30, 1998 1.70:1.00
February 28, 1999 1.70:1.00
May 31, 1999 1.80:1.00
August 31, 1999 1.80:1.00
November 30, 1999 1.80:1.00
February 29, 2000 1.80:1.00
May 31, 2000 2.00:1.00
August 31, 2000 2.00:1.00
November 30, 2000 2.00:1.00
February 28, 2001 2.00:1.00
May 31, 2001 2.10:1.00
August 31, 2001 2.10:1.00
November 30, 2001 2.10:1.00
February 28, 2002 2.10:1.00
May 31, 2002 2.20:1.00
August 31, 2002 2.20:1.00
November 30, 2002 2.20:1.00
9.09 Maximum Leverage Ratio. Holdings will not permit the Leverage Ratio
at any time during a period set forth below to be greater than the ratio set
forth opposite such period below:
Period Ratio
------ -----
Initial Borrowing Date through and including
May 31, 1998 5.60:100
June 1, 1998 through and including August
31, 1998 5.50:1.00
-75-
September 1, 1998 through and including
February 28, 1999 5.30:1.00
March 1, 1999 through and including February
29, 2000 5.00:1.00
March 1, 2000 through and including February
29, 2001 4.50:1.00
March 1, 2001 through and including February
28, 2002 4.00:1.00
Thereafter 3.50:1.00
9.10 Limitation on Payments of Certain Indebtedness,;Modifications of
Certain 0.1 Limitation on Payments of Certain Indebtedness,; Modifications of
Certain Indebtedness; ents; etc. Modifications of Certificate of Incorporation,
By-Laws and Certain Other Agreements; etc. Holdings will not, and will not
permit any of its Subsidiaries to, (i) make (or give any notice in respect of)
any voluntary or optional payment or prepayment on or redemption or acquisition
for value of, or any prepayment or redemption as a result of any asset sale,
change of control or similar event of (including in each case, without
limitation, by way of depositing with the trustee with respect thereto or any
other Person money or securities before due for the purpose of paying when due)
the Senior Subordinated Notes, (ii) amend or modify, or permit the amendment or
modification of, any provision of the Senior Subordinated Note Documents, (iii)
make (or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption or acquisition for value of, or any prepayment or
redemption as a result of any asset sale, change of control or similar event of,
any Seller Note, provided that the Borrower and its Subsidiaries may voluntarily
prepay certain of the ATEC Obligations in an amount not to exceed $75,000 on or
prior to the Initial Borrowing Date and may voluntarily prepay any Seller Note
(including the ATEC Obligations) after March 1, 1999 so long as no Default or
Event of Default then exists or would result therefrom, (iv) after the execution
and delivery thereof, amend, modify or change any provision of any Seller Note
(including the ATEC Obligations) to the extent that any such amendment,
modification or change could be more restrictive on the Borrower or any of its
Subsidiaries or could be adverse to the interests of the Banks in any material
respect, (v) amend, modify or change its certificate of incorporation
(including, without limitation, by the filing or modification of any certificate
of designation) or by-laws (or the equivalent organizational documents) or any
agreement entered into by it with respect to its capital stock (including any
Shareholders' Agreement), or enter into any new agreement with respect to its
capital stock, unless such amendment, modification, change or other action
contemplated by this clause (v) would not violate or be inconsistent with any of
the terms or provisions of this Agreement or could not reasonably be expected to
be adverse to the interests of the Banks in any material respect, (vi) amend,
modify or change any provision of (x) any Management Agreement
-76-
or enter into any new management agreement, financial advisory agreement or
similar agreement with any Affiliate of Holdings or any of its Subsidiaries or
(y) any Tax Sharing Agreement or enter into any new tax sharing agreement, tax
allocation agreement or similar agreements without the prior written consent of
the Agent in the case of this clause (y) or (vii) amend, modify or change any
provision of the ATEC Subordination Agreement.
9.11 Limitation on Certain Restrictions on Subsidiaries. Holdings will not,
and will not permit any of its Subsidiaries to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Subsidiary to (a) pay dividends or make
any other distributions on its capital stock or any other interest or
participation in its profits owned by Holdings or any Subsidiary Holdings, or
pay any Indebtedness owed to Holdings or any Subsidiary of Holdings, (b) make
loans or advances to Holdings or any Subsidiary of Holdings or (c) transfer any
of its properties or assets to Holdings or any Subsidiary of Holdings, except
for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii) the
Senior Subordinated Note Documents, (iv) customary provisions restricting
subletting or assignment of any lease governing a leasehold interest of Holdings
or any Subsidiary of Holdings, (v) customary provisions restricting assignment
of any licensing agreement or other contract entered into by Holdings or any
Subsidiary of Holdings in the ordinary course of business and (vi) restrictions
on the transfer of any asset subject to a Lien permitted by Sections 9.01(vii),
(viii), (xiv) and (xv).
9.13 Limitation on Issuance of Capital Stock. (a) Holdings will not, and
will not permit any of its Subsidiaries to, issue (i) any preferred stock other
than Qualified Preferred Stock of Holdings or (ii) any redeemable common stock
(other than common stock that is redeemable at the sole option of Holdings or
such Subsidiary).
(b) Holdings will not permit any of its Subsidiaries to issue
any capital stock (including by way of sales of treasury stock) or any options
or warrants to purchase, or securities convertible into, capital stock, except
(i) for transfers and replacements of then outstanding shares of capital stock,
(ii) for stock splits, stock dividends and issuances which do not decrease the
percentage ownership of Holdings or any of its Subsidiaries in any class of the
capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law, (iv) for issuances by newly created or acquired
Subsidiaries in accordance with the terms of this Agreement or (v) for the
common stock to be issued by the Borrower to Holdings as part of the Merger.
9.13 Business. (a) Holdings and its Subsidiaries will not engage in any
business other than the businesses engaged in by the Borrower and its
Subsidiaries as of the Initial Borrowing Date and reasonable extensions thereof
and businesses complimentary thereto, provided that in no event shall Holdings
or any of its Subsidiaries engage in any
-77-
business related to insurance other than as an insurance broker in each case
without the incurrence of any underwriting risk.
(b) Notwithstanding the foregoing or anything else in this
Agreement, Holdings will not engage in any business and will not own any
significant assets or have any material liabilities other than its ownership of
the capital stock of the Borrower and having those liabilities which it is
responsible for under this Agreement and the other Documents to which it is a
party, provided that Holdings may engage in those activities that are incidental
to (x) the maintenance of its corporate existence in compliance with applicable
law, (y) legal, tax and accounting matters in connection with any of the
foregoing activities and (z) the entering into, and performing its obligations
under, this Agreement and the other Documents to which it is a party.
(c) Notwithstanding the foregoing or anything else in this
Agreement, Acquisition Corp. will not engage in any business and will not have
any significant assets or material liabilities other than its ownership of the
capital stock of ATC and having those liabilities which it is responsible for
under this Agreement and the other Documents to which it is a party; provided
that Acquisition Corp. may engage in those activities that are incidental to (i)
the maintenance of its corporate existence in compliance with applicable law,
(ii) legal, tax and accounting matters in connection with the foregoing
activities and (iii) the entering into, and performance of its obligations
under, this Agreement and the other Documents to which it is a party.
9.14 Limitation on Creation of Subsidiaries. Notwithstanding anything to
the contrary contained in this Agreement, Holdings will not, and will not permit
any of its Subsidiaries to, establish, create or acquire after the Effective
Date any Subsidiary, provided that, after the consummation of the Merger, the
Borrower and its Wholly-Owned Subsidiaries shall be permitted to establish,
create or, to the extent permitted by this Agreement, acquire Wholly-Owned
Subsidiaries (or, to the extent permitted by clause (vii) of Section 9.02(xii),
non-Wholly-Owned Subsidiaries) so long as (i) the capital stock or other equity
interests of each such new Subsidiary is pledged pursuant to, and to the extent
required by, the Pledge Agreement and the certificates representing such stock
or other equity interests, together with stock or other powers duly executed in
blank, are delivered to the Collateral Agent for the benefit of the Secured
Creditors, (ii) each such new Subsidiary executes and delivers to the Agent a
counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the Security
Agreement, and (iii) each such new Subsidiary, to the extent requested by the
Agent or the Required Banks, takes all actions required pursuant to Section
8.11. In addition, each new Subsidiary shall execute and deliver, or cause to be
executed and delivered, to the Agent all other relevant documentation of the
type described in Section 5 as such new Subsidiary would have had to deliver if
such new Subsidiary were a Credit Party on the Initial Borrowing Date.
-78-
9.15 Senior Subordinated Notes. Neither Holdings nor any of its
Subsidiaries shall designate any Indebtedness, other than the Obligations, as
"Designated Senior Debt" for purposes of the Senior Subordinated Notes and the
other Senior Subordinated Note Documents.
SECTION 10. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when due of
any principal of any Loan or any Note or (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note, any Unpaid Drawing or any Fees or any other
amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation, warranty or statement made
(or deemed made) by any Credit Party herein or in any other Credit Document or
in any certificate delivered to the Agent or any Bank pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made or
deemed made; or
10.03 Covenants. Any Credit Party shall (i) default in the due performance
or observance by it of any term, covenant or agreement contained in Section
8.01(g)(i), 8.08, 8.12 or Section 9 or (ii) default in the due performance or
observance by it of any other term, covenant or agreement contained in this
Agreement or any other Credit Document (other than those set forth in Sections
10.01 and 10.02) and such default shall continue unremedied for a period of 30
days after written notice thereof to the defaulting party by the Agent or the
Required Banks; or
10.04 Default Under Other Agreements. (i) Holdings or any of its
Subsidiaries shall (x) default in any payment of any Indebtedness (other than
the Obligations) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (y) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Obligations) or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or holders of such Indebtedness
(or a trustee or agent on behalf of such holder or holders) to cause (determined
without regard to whether any notice is required), any such Indebtedness to
become due prior to its stated maturity, or (ii) any Indebtedness (other than
the Obligations) of Holdings or any of its Subsidiaries shall be declared to be
(or shall become) due and payable, or required to be prepaid other than by a
regularly scheduled required prepayment, prior to the stated maturity thereof,
provided that it shall not be a Default or an Event of Default under this
Section 10.04 unless the
-79-
aggregate principal amount of all Indebtedness as described in preceding
clauses (i) and (ii) is at least $2,000,000; or
10.05 Bankruptcy, etc. Holdings or any of its Subsidiaries shall commence a
voluntary case concerning itself under Title 11 of the United States Code
entitled "Bankruptcy," as now or hereafter in effect, or any successor thereto
(the "Bankruptcy Code"); or an involuntary case is commenced against Holdings or
any of its Subsidiaries, and the petition is not controverted within 10 days, or
is not dismissed within 60 days, after commencement of the case; or a custodian
(as defined in the Bankruptcy Code) is appointed for, or takes charge of, all or
substantially all of the property of Holdings or any of its Subsidiaries, or
Holdings or any of its Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings or any of its Subsidiaries, or there is
commenced against Holdings or any of its Subsidiaries any such proceeding which
remains undismissed for a period of 60 days, or Holdings or any of its
Subsidiaries is adjudicated insolvent or bankrupt; or any order of relief or
other order approving any such case or proceeding is entered; or Holdings or any
of its Subsidiaries suffers any appointment of any custodian or the like for it
or any substantial part of its property to continue undischarged or unstayed for
a period of 60 days; or Holdings or any of its Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
Holdings or any of its Subsidiaries for the purpose of effecting any of the
foregoing; or
10.06 ERISA. (a) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or a
Foreign Pension Plan has not been timely made, Holdings or any Subsidiary of
Holdings or any ERISA Affiliate has incurred or is likely to incur any liability
to or on account of a Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or 4975 of
the Code or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under
-80-
Section 4980B of the Code, or Holdings or any Subsidiary of Holdings has
incurred or is likely to incur liabilities pursuant to one or more employee
welfare benefit plans (as defined in Section 3(1) of ERISA) that provide
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) or Plans or Foreign Pension Plans; (b) there shall
result from any such event or events the imposition of a lien, the granting of a
security interest, or a liability or a material risk of incurring a liability;
and (c) such lien, security interest or liability, individually, and/or in the
aggregate, in the reasonable opinion of the Required Banks, has had, or could
reasonably be expected to have, a material adverse effect on the business,
operations, properties, assets, liabilities, condition (financial or otherwise)
or prospects of Holdings and its Subsidiaries taken as a whole; or
10.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral (other than an immaterial portion of the
Security Agreement Collateral), in favor of the Collateral Agent, superior to
and prior to the rights of all third Persons (except as permitted by Section
9.01), and subject to no other Liens (except as permitted by Section 9.01); or
10.08 Guaranties. At any time after the execution and delivery thereof, any
Guaranty or any provision thereof shall cease to be in full force or effect as
to any Guarantor, or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor's obligations under its
Guaranty or any Guarantor shall default in the due performance or observance of
any term, covenant or agreement on its part to be performed or observed pursuant
to its Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered against
Holdings or any Subsidiary of Holdings involving in the aggregate for Holdings
and its Subsidiaries a liability (not paid or fully covered by a reputable and
solvent insurance company) and such judgments and decrees either shall be final
and non-appealable or shall not be vacated, discharged or stayed or bonded
pending appeal for any period of 30 consecutive days, and the aggregate amount
of all such judgments equals or exceeds $2,000,000; or
10.10 Change of Control. A Change of Control shall occur; or
10.11 ATEC Subordination Agreement. The ATEC Subordination Agreement or
material any provision thereof shall cease to be in full force and effect, or
any party to the ATEC Subordination Agreement shall default in the performance
or observance of any term, covenant or agreement on its part to be performed or
observed pursuant thereto;
-81-
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Agent, upon the written request of the Required
Banks, shall by written notice to the Borrower, take any or all of the following
actions, without prejudice to the rights of any Agent, any Bank or the holder of
any Note to enforce its claims against any Credit Party (provided, that, if an
Event of Default specified in Section 10.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Agent as specified in clauses (i) and (ii) below shall occur automatically
without the giving of any such notice): (i) declare the Total Commitment
terminated, whereupon all Commitments of each Bank shall forthwith terminate
immediately and any Commitment Commission shall forthwith become due and payable
without any other notice of any kind; (ii) declare the principal of and any
accrued interest in respect of all Loans and the Notes and all Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) direct the
Borrower to pay (and the Borrower agrees that upon receipt of such notice, or
upon the occurrence of an Event of Default specified in Section 10.05 with
respect to the Borrower, it will pay) to the Collateral Agent at the Payment
Office such additional amount of cash or Cash Equivalents, to be held as
security by the Collateral Agent, as is equal to the aggregate Stated Amount of
all Letters of Credit issued for the account of the Borrower and then
outstanding; (v) enforce, as Collateral Agent, all of the Liens and security
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral held by the Agent pursuant to Section 4.02 to the repayment of the
Obligations.
SECTION 11. Definitions and Accounting Terms.ions and
Accounting Terms
11.01 Defined Terms. As used in this Agreement, the following terms shall
have the following meanings (such meanings to be equally applicable to both the
singular and plural forms of the terms defined):
"Acknowledgment and Joinder Agreement" shall have the meaning
provided in Section 5.15.
"Acquired Entity or Business" shall have the meaning provided
in the definition of Consolidated Net Income.
"Acquisition" shall mean, collectively, (x) the purchase by
Acquisition Corp. for cash of the outstanding Shares pursuant to the Offer to
Purchase and (y) the Merger.
"Acquisition Corp." shall have the meaning provided in the
first paragraph of this Agreement.
-82-
"Acquisition Documents" shall mean and include the Tender
Offer Documents and the Merger Documents.
"Acquisition Loan" shall mean any Revolving Loan incurred by
the Borrower to finance the consideration paid to, or on behalf of, a Seller in
connection with a Permitted Acquisition.
"Additional Security Documents" shall have the meaning
provided in Section 8.11.
"Acquisition Sub-Limit" shall mean, at any time (x)
$23,000,000 less (y)(i) except as otherwise provided in clause (ii) below, 77%
of the aggregate reductions to the Total Revolving Loan Commitment theretofore
effected or (ii) with respect to reductions effected pursuant to Section
3.02(a), such other amount as may be specified by the Borrower pursuant to such
Section.
"Adjusted Consolidated Net Income" shall mean, for any period,
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period, less the amount of all net non-cash gains (exclusive of
items reflected in Adjusted Consolidated Working Capital) which were included in
arriving at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" shall mean, at any
time, Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities at such time.
"Affiliate" shall mean, with respect to any Person, any other
Person directly or indirectly controlling (including, but not limited to, all
directors and officers of such Person), controlled by, or under direct or
indirect common control with, such Person. A Person shall be deemed to control
another Person if such Person possesses, directly or indirectly, the power (i)
to vote 10% or more of the securities having ordinary voting power for the
election of directors of such corporation or (ii) to direct or cause the
direction of the management and policies of such other Person, whether through
the ownership of voting securities, by contract or otherwise.
"Agent" shall mean BTCo, in its capacity as Agent for the
Banks hereunder, and shall include any successor to the Agent appointed pursuant
to Section 12.09.
-83-
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated (including any amendment and restatement
hereof), extended, renewed, refinanced or replaced from time to time.
"Applicable Base Rate Margin" shall mean (i) for the period
from the Initial Borrowing Date through but not including the first Start Date
after the Initial Borrowing Date, 1.25% and (ii) from and after any Start Date
to and including the corresponding End Date, the respective percentage per annum
set forth in clause (A), (B) or (C) below if, but only if, as of the Test Date
for such Start Date the applicable condition set forth in clause (A), (B) or (C)
below, as the case may be, is met:
(A) 1.25% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be greater than or equal to 3.50:1:00;
(B) 1.00% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 3.50:1.00 and greater than or equal to 3.00:1.00;
and
(C) 0.75% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 3.00:1.00.
Notwithstanding anything to the contrary above in this definition, the
Applicable Base Rate Margin shall be 1.25% at all times when a Default or an
Event of Default shall exist.
"Applicable Commitment Commission Percentage" shall mean
.500%.
"Applicable Eurodollar Rate Margin" shall mean (i) for the
period from the Initial Borrowing Date through but not including the first Start
Date after the Initial Borrowing Date, 2.25%, and (ii) from and after any Start
Date to and including the corresponding End Date, the respective percentage per
annum set forth in clause (A), (B) or (C) below if, but only if, as of the Test
Date for such Start Date the applicable condition set forth in clause (A), (B)
or (C) below, as the case may be, is met:
(A) 2.25% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test period ended on such Test Date
shall be greater than or equal to 3.50:1:00;
(B) 2.00% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 3.50:1.00 and greater than or equal to 3.00:1.00;
and
-84-
(C) 1.75% if, but only if, as of the Test Date for such Start
Date the Leverage Ratio for the Test Period ended on such Test Date
shall be less than 3.00:1.00.
Notwithstanding anything to the contrary above in this definition, the
Applicable Eurodollar Rate Margin shall be 2.25% at all times when a Default or
an Event of Default shall exist.
"Applicable Excess Cash Flow Percentage" shall mean (i) in
respect of the Excess Cash Payment Period ending on February 28, 1999, 75%, and
(ii) in respect of each Excess Cash Payment Period thereafter, 50%.
"Applicable Margin Period" shall mean each period which shall
commence on a date on which the financial statements are delivered pursuant to
Section 8.01(b) or (c), as the case may be, and which shall end on the earlier
of (i) the date of the actual delivery of the next financial statements pursuant
to Section 8.01(b) or (c), as the case may be, and (ii) the latest date on which
the next financial statements are required to be delivered pursuant to Section
8.01(b) or (c), as the case may be, provided that the first Applicable Margin
Period shall commence with the delivery of Holdings' financial statements for
the Test Period ending on February 28, 1999.
"Asset Sale" shall mean any sale, transfer or other
disposition by Holdings or any of its Subsidiaries to any Person (including
by-way-of redemption by such Person) other than to Holdings or a Wholly-Owned
Subsidiary of Holdings of any asset (including, without limitation, any capital
stock or other securities of, or equity interests in, another Person) other than
sales of assets pursuant to Sections 9.02 (ii), (iii), (vii) and (ix).
"Assignment and Assumption Agreement" shall mean an Assignment
and Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"ATC" shall mean ATC Group Services Inc., a Delaware
corporation.
"ATEC" shall mean American Testing and Engineering
Corporation, an Indiana corporation.
"ATEC Obligation" shall mean the obligations currently owing
by the Borrower to American Testing and Engineering Corporation, an Indiana
corporation, which obligations were originally incurred as part of the
acquisition by the Borrower of certain assets of American Testing and
Engineering Corporation.
"ATEC Subordination Agreement" shall have the meaning
provided in Section 5.09.
-85-
"Bank" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Bank" hereunder pursuant to
Section 1.13 or 13.04(b).
"Bank Default" shall mean (i) the refusal (which has not been
retracted) or the failure of a Bank to make available its portion of any
Borrowing (including any Mandatory Borrowing) or to fund its portion of any
unreimbursed payment under Section 2.04(c) or (ii) a Bank having notified in
writing the Borrower and/or the Agent that such Bank does not intend to comply
with its obligations under Section 1.01(a), 1.01(b), 1.01(d) or 2, in the case
of either clause (i) or (ii) as a result of any takeover or control (including,
without limitation, as a result of the occurrence of any event of the type
described in Section 10.05 with respect to such Bank) of such Bank by any
regulatory authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
10.05.
"Base Rate" shall mean, at any time, the higher of (i) the
Prime Lending Rate and (ii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii)
each other Loan designated or deemed designated as such by the Borrower at the
time of the incurrence thereof or conversion thereto.
"Bing Yen" shall mean Bing Yen & Associates, Inc., a
California corporation.
"Bing Yen Acquisition" shall mean the acquisition by ATC of
all of the outstanding shares of capital stock of Bing Yen pursuant to, and in
accordance with the terms set forth in, the Bing Yen Acquisition Agreement.
"Bing Yen Acquisition Agreement" shall mean the Stock Purchase
Agreement dated as of November 26, 1997 by and among Bing Yen Associates, Inc.,
Bing Yen, Xxxxx Xxxxxx and ATC.
"Borrower" shall mean (i) prior to the consummation of the
Merger, Acquisition Corp., and (ii) from and after the consummation of the
Merger, ATC as the surviving corporation of the Merger.
"Borrowing" shall mean the borrowing of one Type of Loan of a
single Tranche from all the Banks having Commitments of the respective Tranche
(or from the Swingline Bank in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same
-86-
Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company, in its individual
capacity, and any successor corporation thereto by merger, consolidation or
otherwise.
"Business Day" shall mean (i) for all purposes other than as
covered by clause (ii) below, any day except Saturday, Sunday and any day which
shall be in New York City, New York, a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day which
is a Business Day described in clause (i) above and which is also a day for
trading by and between banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, with respect to any Person,
all expenditures by such Person which should be capitalized in accordance with
generally accepted accounting principles and, without duplication, the amount of
Capitalized Lease Obligations incurred by such Person.
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under generally
accepted accounting principles, are or will be required to be capitalized on the
books of such Person, in each case taken at the amount thereof accounted for as
indebtedness in accordance with such principles.
"Cash Equivalents" shall mean, as to any Person, (i)
securities issued or directly and fully guaranteed or insured by the United
States or any agency or instrumentality thereof (provided that the full faith
and credit of the United States is pledged in support thereof) having maturities
of not more than six months from the date of acquisition, (ii) marketable direct
obligations issued by any state of the United States or any political
subdivision or public instrumentality of such state, in each case having
maturities of not more than six months from the date of acquisition and, at the
time of acquisition thereof, having one of the two highest ratings obtainable
from either Standard & Poor's Ratings Services or Xxxxx'x Investors Service,
Inc., (iii) Dollar denominated time deposits and certificates of deposit of any
commercial bank having, or which is the principal banking subsidiary of a bank
holding company having, a long-term unsecured debt rating of at least "A" or the
equivalent thereof from Standard & Poor's Ratings Services or "A2" or the
equivalent thereof from Xxxxx'x Investors Service, Inc. with maturities of not
more than six months from the date of acquisition by such Person, (iv)
repurchase obligations with a term of not more than seven days for underlying
securities of the types described in clause (i) above entered into with any bank
meeting the qualifications specified in clause (iii) above, (v) commercial paper
issued by any Person incorporated in the United States rated
-87-
at least A-1 or the equivalent thereof by Standard & Poor's Ratings Services or
at least P-1 or the equivalent thereof by Xxxxx'x Investors Service, Inc. and in
each case maturing not more than six months after the date of acquisition by
such Person and (vi) investments in money market funds substantially all of
whose assets are comprised of securities of the types described in clauses (i)
through (v) above.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time
to time, 42 U.S.C. ss. 9601 et seq.
"Change of Control" shall mean (i) WPG and its Affiliates
shall cease to own on a fully diluted basis in the aggregate at least 51% of the
economic and voting interest in Holdings' capital stock, (ii) Holdings shall
cease to own 100% of the economic and voting interest in the Borrower's capital
stock or (iii) a "change of control" or similar event shall occur under, and as
defined in, the Senior Subordinated Note Documents.
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Security Agreement Collateral,
the Mortgaged Properties and all cash and Cash Equivalents delivered as
collateral pursuant to Section 4.02 or 10.
"Collateral Agent" shall mean the Agent acting as collateral
agent for the Secured Creditors pursuant to the Security Documents.
"Collective Bargaining Agreements" shall have the meaning
provided in Section 5.05.
"Commitment" shall mean any of the commitments of any Bank,
i.e., whether the Term Loan Commitment or the Revolving Loan Commitment.
"Commitment Commission" shall mean the Revolving Loan
Commitment Commission and the Term Loan Commitment Commission.
"Consolidated Current Assets" shall mean, at any time, the
consolidated current assets of Holdings and its Subsidiaries at such time.
-88-
"Consolidated Current Liabilities" shall mean, at any time,
the consolidated current liabilities of Holdings and its Subsidiaries at such
time, but excluding the current portion of any Indebtedness under this Agreement
and the current portion of any other long-term Indebtedness which would
otherwise be included therein.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period before Consolidated Interest Expense and provision
for taxes for such period and without giving effect (x) to any extraordinary
gains or losses and (y) to any gains or losses from sales of assets other than
from sales of inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period, Consolidated
EBIT for such period, adjusted by adding thereto (i) the amount of all
amortization of intangibles and depreciation that were deducted in arriving at
Consolidated EBIT for such period and (ii) the amount of all amortization of
non-compete and consulting payments made to Xxxxxx Xxxxx and Xxxxx X. Xxxxx that
were deducted in arriving at Consolidated EBIT for such period, which amount
shall not exceed $346,500 in the aggregate in any fiscal quarter of Holdings or
$4,714,000 in the aggregate during the term of this Agreement and with such
amortization and any cash payments made in connection with such non-compete and
consulting arrangements to be consistent with that set forth in the Projections.
"Consolidated Indebtedness" shall mean, at any time, the
principal amount of all Indebtedness of Holdings and its Subsidiaries at such
time as determined on a consolidated basis (excluding, for this purpose,
Indebtedness permitted by Section 9.04(x)).
"Consolidated Interest Coverage Ratio" shall mean, for any
period, the ratio of Consolidated EBITDA to Consolidated Interest Expense for
such period.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of Holdings and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of Holdings and its Subsidiaries representing the interest factor
for such period, provided that the amortization of deferred financing, legal and
accounting costs with respect to the Transaction shall be excluded from
Consolidated Interest Expense to the extent same would otherwise have been
included therein.
"Consolidated Net Income" shall mean, for any period, the net
income (or loss) of Holdings and its Subsidiaries for such period, determined on
a consolidated basis (after any deduction for minority interests), provided that
in determining Consolidated Net Income, (i) the net income of any other Person
which is not a Subsidiary of Holdings or is accounted for by Holdings by the
equity method of accounting shall be included only to the extent of the payment
of cash dividends or distributions by such other Person to
-89-
Holdings or a Subsidiary thereof during such period, (ii) the net income (or
loss) of any other Person acquired by such specified Person or a Subsidiary of
such Person in a pooling of interests transaction for any period prior to the
date of such acquisition shall be excluded and (iii) the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the declaration
or payment of dividends or similar distributions by that Subsidiary of its
income is not at the time permitted by operation of the terms of its charter or
any agreement, instrument or law applicable to such Subsidiary; provided that
for purposes of Section 9.09 and the definitions of Applicable Base Rate Margin
and Applicable Eurodollar Rate Margin, there shall be included (to the extent
not already included) in determining Consolidated Net Income for any period the
net income (or loss) of any Person, business, property or asset acquired during
such period pursuant to a Permitted Acquisition and not subsequently sold or
otherwise disposed of by the Borrower or one of its Subsidiaries during such
period (each such Person, business, property or asset acquired and not
subsequently disposed of during such period, an "Acquired Entity or Business"),
in each case based on the actual net income (or loss) of such Acquired Entity or
Business for the entire period (including the portion thereof occurring prior to
such acquisition).
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner of
the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the holder of such
primary obligation against loss in respect thereof; provided, however, that the
term Contingent Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Contingent Obligation shall be deemed to be an amount equal to the stated or
determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, the Acknowledgment and Joinder Agreement, the Subsidiaries Guaranty and
each Security Document.
-90-
"Credit Event" shall mean the making of any Loan or the
issuance of any Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and each
Subsidiary Guarantor.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which a
Bank Default is in effect.
"Dividend" shall mean, with respect to any Person, that such
Person has declared or paid a dividend or returned any equity capital to its
stockholders or partners or authorized or made any other distribution, payment
or delivery of property (other than common stock of such Person) or cash to its
stockholders or partners as such, or redeemed, retired, purchased or otherwise
acquired, directly or indirectly, for a consideration any shares of any class of
its capital stock or any partnership interests outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect to
its capital stock), or set aside any funds for any of the foregoing purposes, or
shall have permitted any of its Subsidiaries to purchase or otherwise acquire
for a consideration any shares of any class of the capital stock or any
partnership interests of such Person outstanding on or after the Effective Date
(or any options or warrants issued by such Person with respect to its capital
stock). Without limiting the foregoing, "Dividends" with respect to any Person
shall also include all payments made or required to be made by such Person with
respect to any stock appreciation rights, plans, equity incentive or achievement
plans or any similar plans or setting aside of any funds for the foregoing
purposes.
"Documents" shall mean and include (i) the Credit Documents,
(ii) the Tender Offer Documents, (iii) the Refinancing Documents, (iv) the
Equity Financing Documents, (v) the Merger Documents and (vi) the Senior
Subordinated Note Documents.
"Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section
13.10.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in loans or any other
"accredited investor" (as defined in Regulation D of the Securities Act).
-91-
"Employment Agreements" shall have the meaning provided in
Section 5.05.
"End Date" shall mean, for any Applicable Margin Period, the
last day of such Applicable Margin Period.
"Environmental Claims" shall mean any and all administrative,
regulatory or judicial actions, suits, demands, demand letters, directives,
claims, liens, notices of noncompliance or violation, investigations or
proceedings relating in any way to any Environmental Law or any permit issued,
or any approval given, under any such Environmental Law (hereafter, "Claims"),
including, without limitation, (a) any and all Claims by governmental or
regulatory authorities for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and (b)
any and all Claims by any third party seeking damages, contribution,
indemnification, cost recovery, compensation or injunctive relief in connection
with alleged injury or threat of injury to health, safety or the environment due
to the presence of Hazardous Materials.
"Environmental Law" shall mean any Federal, state, foreign or
local statute, law, rule, regulation, ordinance, code, guideline, written policy
and rule of common law now or hereafter in effect and in each case as amended,
and any judicial or administrative interpretation thereof, including any
judicial or administrative order, consent decree or judgment, relating to the
environment, employee health and safety or Hazardous Materials, including,
without limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33
U.S.C. ss. 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. ss. 2601 et
seq.; the Clean Air Act, 42 U.S.C. ss. 7401 et seq.; the Safe Drinking Water
Act, 42 U.S.C. ss. 3803 et seq.; the Oil Pollution Act of 1990, 33 U.S.C. ss.
2701 et seq.; the Emergency Planning and the Community Right-to-Know Act of
1986, 42 U.S.C. ss. 11001 et seq.; the Hazardous Material Transportation Act, 49
U.S.C. ss. 1801 et seq. and the Occupational Safety and Health Act, 29 U.S.C.
ss. 651 et seq.; and any state and local or foreign counterparts or equivalents,
in each case as amended from time to time.
"Equity Financing" shall mean the issuance by Holdings of (x)
shares of its common stock (or options to purchase shares of its common stock)
to WPG Corporate Development, JNL, Old Hickory and existing management of ATC
and (y) shares of its Qualified Preferred Stock and warrants to purchase shares
of its common stock to JNL and Old Hickory, in each case pursuant to the Equity
Financing Documents.
"Equity Financing Documents" shall mean each of the documents
and agreements entered into in connection with the consummation of the Equity
Financing.
"ERISA" shall mean the Employee Retirement Income Security Act
of 1974,
-92-
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with Holdings or a Subsidiary of Holdings
would be deemed to be a "single employer" (i) within the meaning of Section
414(b), (c), (m) or (o) of the Code or (ii) as a result of Holdings or a
Subsidiary of Holdings being or having been a general partner of such person.
"Eurodollar Loan" shall mean each Loan (other than a Swingline
Loan) designated as such by the Borrower at the time of the incurrence thereof
or conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to
first-class banks in the New York interbank Eurodollar market by BTCo for Dollar
deposits of amounts in immediately available funds comparable to the outstanding
principal amount of the Eurodollar Loan of BTCo with maturities comparable to
the Interest Period applicable to such Eurodollar Loan commencing two Business
Days thereafter as of 11:00 A.M. (New York time) on the date which is two
Business Days prior to the commencement of such Interest Period, divided (and
rounded upward to the nearest 1/16 of 1%) by (b) a percentage equal to 100%
minus the then stated maximum rate of all reserve requirements (including,
without limitation, any marginal, emergency, supplemental, special or other
reserves required by applicable law) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section
10.
"Excess Cash Flow" shall mean, for any period, the remainder
of (a) the sum of (i) Adjusted Consolidated Net Income for such period and (ii)
the decrease, if any, in Adjusted Consolidated Working Capital from the first
day to the last day of such period, minus (b) the sum of (i) the amount of all
Capital Expenditures made by Holdings and its Subsidiaries during such period
pursuant to Sections 9.07(a) and (b) (other than Capital Expenditures to the
extent financed with equity proceeds or Indebtedness (other than with Revolving
Loans or Swingline Loans)), (ii) the amount of all Permitted Acquisitions made
by the Borrower and its Subsidiaries during such period (other than Permitted
Acquisitions to the extent financed through the issuance of capital stock, with
equity proceeds or Indebtedness (other than with Revolving Loans or Swingline
Loans), (iii) the aggregate amount of permanent principal payments of
Indebtedness for borrowed money of Holdings and its Subsidiaries during such
period (other than repayments of Loans, provided that
-93-
repayments of Loans shall be deducted in determining Excess Cash Flow if such
repayments were (x) required as a result of a Scheduled Repayment under Section
4.02(b) or (y) made as a voluntary prepayment with internally generated funds
(but in the case of a voluntary prepayment of Revolving Loans or Swingline
Loans, only to the extent accompanied by a voluntary reduction to the Total
Revolving Loan Commitment)) and (iv) the increase, if any, in Adjusted
Consolidated Working Capital from the first day to the last day of such period.
"Excess Cash Payment Date" shall mean the date occurring 95
days after the last day of each fiscal year of Holdings (beginning with its
fiscal year ending on February 28, 1999).
"Excess Cash Payment Period" shall mean, with respect to the
repayment required on each Excess Cash Payment Date, the immediately preceding
fiscal year of the Borrower.
"Existing Indebtedness" shall have the meaning provided in
Section 7.22.
"Existing Indebtedness Agreements" shall have the meaning
provided in Section 5.05.
"EWI" shall mean Environmental Warranty Inc., a Connecticut
corporation.
"EWI Acquisition" shall mean the acquisition by ATC of 90.1%
of the outstanding shares of capital stock of EWI pursuant to, and in accordance
with the terms set forth in, the EWI Acquisition Agreement.
"EWI Acquisition Agreement" shall mean the Stock Purchase
Agreement dated as of November 4, 1997, by and among Conning Insurance Capital
Limited Partnership II, Conning Insurance Capital International Partners II,
Xxxxxxxxx and Xxxxxxxx Venture Partners, Limited Partnership, Lawyers Title
Environmental Insurance Services Agency, Inc., Xxxxxxx X. Xxxxx, Xx. and ATC.
"Facing Fee" shall have the meaning provided in Section
3.01(d).
"Federal Funds Rate" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quota-
-94-
tions for such day on such transactions received by the Agent from three Federal
Funds brokers of recognized standing selected by the Agent.
"Fees" shall mean all amounts payable pursuant to or referred
to in Section 3.01.
"Foreign Pension Plan" shall mean any plan, fund (including,
without limitation, any superannuation fund) or other similar program
established or maintained outside the United States of America by Holdings or
any one or more of its Subsidiaries primarily for the benefit of employees of
Holdings or such Subsidiaries residing outside the United States of America,
which plan, fund or other similar program provides, or results in, retirement
income, a deferral of income in contemplation of retirement or payments to be
made upon termination of employment, and which plan is not subject to ERISA or
the Code.
"Guaranteed Creditors" shall mean and include each of the
Agent, the Collateral Agent, the Issuing Bank, the Banks and each party (other
than any Credit Party) party to an Interest Rate Protection Agreement or Other
Hedging Agreement to the extent such party constitutes a Secured Creditor under
the Security Documents.
"Guaranteed Obligations" shall mean (i) the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of the principal and interest on each Note issued by, and Loans made to, the
Borrower under this Agreement and all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, together with all the other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities
(including, without limitation, indemnities, fees and interest thereon) of the
Borrower to the Banks, the Agent, the Issuing Bank and the Collateral Agent now
existing or hereafter incurred under, arising out of or in connection with this
Agreement or any other Credit Document and the due performance and compliance by
the Borrower with all the terms, conditions and agreements contained in the
Credit Documents and (ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) of the Borrower owing under any Interest Rate
Protection Agreement or Other Hedging Agreement entered into by the Borrower
with any Bank or any affiliate thereof (even if such Bank subsequently ceases to
be a Bank under this Agreement for any reason) so long as such Bank or affiliate
participates in such Interest Rate Protection Agreement or Other Hedging
Agreement, and their subsequent assigns, if any, whether now in existence or
hereafter arising, and the due performance and compliance with all terms,
conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
-95-
"Guaranty" shall mean and include the Parent Guaranty and the
Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or
petroleum products, radioactive materials, asbestos in any form that is friable,
urea formaldehyde foam insulation, transformers or other equipment that contain
dielectric fluid containing levels of polychlorinated biphenyls, and radon gas;
(b) any chemicals, materials or substances defined as or included in the
definition of "hazardous substances," "hazardous waste," "hazardous materials,"
"extremely hazardous substances," "restricted hazardous waste," "toxic
substances," "toxic pollutants," "contaminants," or "pollutants," or words of
similar import, under any applicable Environmental Law; and (c) any other
chemical, material or substance, the Release of which is prohibited, limited or
regulated by any governmental authority.
"Holdings" shall have the meaning provided in the first
paragraph of this Agreement.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price of
property or services, (ii) the maximum amount available to be drawn under all
letters of credit issued for the account of such Person and all unpaid drawings
in respect of such letters of credit, (iii) all Indebtedness of the types
described in clause (i), (ii), (iv), (v), (vi) or (vii) of this definition
secured by any Lien on any property owned by such Person, whether or not such
Indebtedness has been assumed by such Person (provided, that, if the Person has
not assumed or otherwise become liable in respect of such Indebtedness, such
Indebtedness shall be deemed to be in an amount equal to the fair market value
of the property to which such Lien relates as determined in good faith by such
Person), (iv) the aggregate amount required to be capitalized under leases under
which such Person is the lessee, (v) all obligations of such Person to pay a
specified purchase price for goods or services, whether or not delivered or
accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person and (vii) all obligations under any Interest Rate
Protection Agreement, any Other Hedging Agreement or under any similar type of
agreement. Notwithstanding the foregoing, Indebtedness shall not include trade
payables and accrued expenses incurred by any Person in accordance with
customary practices and in the ordinary course of business of such Person.
"Indebtedness to be Refinanced" shall mean all Indebtedness
set forth on Schedule X which is to be repaid in full on the Initial Borrowing
Date.
"Initial Borrowing Date" shall mean the date occurring on or
after the Effective Date on which the initial Borrowing of Loans occurs.
-96-
"Intercompany Loan" shall have the meaning provided in
Section 9.05(ix).
"Intercompany Note" shall mean a promissory note, in the form
of Exhibit L, evidencing Intercompany Loans.
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest collar agreement,
interest rate hedging agreement or other similar agreement or arrangement.
"Investments" shall have the meaning provided in Section 9.05.
"Issuing Bank" shall mean BTCo.
"JNL" shall mean Xxxxxxx National Life Insurance Company.
"L/C Supportable Obligations" shall mean (i) obligations of
the Borrower or any of its Subsidiaries with respect to workers compensation,
surety bonds and other similar statutory obligations and (ii) such other
obligations of the Borrower or any of its Subsidiaries as are reasonably
acceptable to the Issuing Bank and otherwise permitted to exist pursuant to the
terms of this Agreement.
"Leaseholds" of any Person shall mean all the right, title and
interest of such Person as lessee or licensee in, to and under leases or
licenses of land, improvements and/or fixtures.
"Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Letter of Credit Fee" shall have the meaning provided in
Section 3.01(c).
"Letter of Credit Outstandings" shall mean, at any time, the
sum of (i) the aggregate Stated Amount of all outstanding Letters of Credit and
(ii) the amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in
Section 2.03(a).
-97-
"Leverage Ratio" shall mean, at any time, the ratio of
Consolidated Indebtedness at such time to Consolidated EBITDA for the Test
Period then most recently ended, provided that, (x) in the case of the Test
Period ending on May 31, 1998, Consolidated EBITDA for such Test Period shall be
the actual Consolidated EBITDA for such Test Period multiplied by 4, (y) in the
case of the Test Period ending on August 31, 1998, Consolidated EBITDA for such
Test Period shall be the actual Consolidated EBITDA for such Test Period
multiplied by 2, and (z) in the case of the Test Period ending November 30,
1998, Consolidated EBITDA for such Test Period shall be the actual Consolidated
EBITDA for such Test Period multiplied by a fraction the numerator of which is 4
and the denominator of which is 3.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other),
preference, priority or other security agreement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Loan" shall mean each Term Loan, each Revolving Loan and
each Swingline Loan.
"Management Agreements" shall have the meaning provided in
Section 5.05.
"Mandatory Borrowing" shall have the meaning provided in
Section 1.01(d).
"Margin Stock" shall have the meaning provided in
Regulation U.
"Maturity Date" shall mean, with respect to any Tranche of
Loans, the Term Loan Maturity Date, the Revolving Loan Maturity Date or the
Swingline Expiry Date, as the case may be.
"Maximum Swingline Amount" shall mean $2,000,000.
"Merger" shall mean the merger of Acquisition Corp. with and
into ATC, with ATC being the surviving corporation of such merger.
"Merger Agreement" shall mean the Agreement and Plan of
Merger, dated as of November 26, 1997, among Holdings, Acquisition Corp.
and ATC.
"Merger Documents" shall mean the Merger Agreement, the
certificate of merger attached thereto as an exhibit and all other agreements
and documents related to the Merger.
-98-
"Minimum Borrowing Amount" shall mean (i) for Term Loans,
$5,000,000, (ii) for Revolving Loans, $500,000 and (iii) for Swingline Loans,
$100,000.
"Mortgage" shall mean each mortgage, deed to secure debt or
deed of trust pursuant to which any Credit Party shall have granted to the
Collateral Agent a mortgage lien on such Credit Party's Mortgaged Property.
"Mortgaged Property" shall mean each parcel of Real Property
owned or leased by any Credit Party which is encumbered by a Mortgage.
"Net Debt Proceeds" shall mean, with respect to any incurrence
of Indebtedness for borrowed money, the cash proceeds (net of underwriting
discounts and commissions and other costs associated therewith) received by the
respective Person from the respective incurrence of such Indebtedness for
borrowed money.
"Net Equity Proceeds" shall mean, with respect to each
issuance or sale of any equity by any Person or any capital contribution to such
Person, the cash proceeds (net of underwriting discounts and commissions and
other costs associated therewith) received by such Person from the respective
sale or issuance of its equity or from the respective capital contribution.
"Net Insurance Proceeds" shall mean, with respect to any
Recovery Event, the cash proceeds (net of costs, expenses and taxes incurred in
connection with such Recovery Event) received by the respective Person in
connection with the respective Recovery Event.
"Net Sale Proceeds" shall mean, for any Asset Sale, the gross
cash proceeds (including any cash received by way of deferred payment pursuant
to a promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the costs, expenses of such sale
(including fees and commissions, payments of unassumed liabilities relating to
the assets sold and required payments of any Indebtedness (other than
Indebtedness secured pursuant to the Security Documents) which is secured by the
respective assets which were sold), and the incremental taxes paid or payable as
a result of such Asset Sale.
"Non-Compete Agreements" shall have the meaning provided in
Section 5.05.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
-99-
"Note" shall mean each Term Note, each Revolving Note and the
Swingline Note.
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxx Xxxxx or such other office as the Agent may hereafter designate
in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Agent, the
Collateral Agent, the Issuing Bank or any Bank pursuant to the terms of this
Agreement or any other Credit Document.
"Offer to Purchase" shall mean the Offer to Purchase, dated
December 4, 1997, issued by Acquisition Corp. in connection with the Tender
Offer.
"Old Hickory" shall mean Old Hickory Fund I, L.L.C.
"Other Hedging Agreement" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values.
"Parent Guaranty" shall mean the guaranty of Holdings
pursuant to Section 14.
"Participant" shall have the meaning provided in Section
2.04(a).
"Payment Office" shall mean the office of the Agent located at
One Bankers Trust Plaza, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such
other office as the Agent may hereafter designate in writing as such to the
other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall have the meaning provided in
Section 9.02(xii).
"Permitted Encumbrance" shall mean, with respect to any
Mortgaged Property, such exceptions to title as are set forth in the Mortgage
Policy delivered with
-100-
respect thereto, all of which exceptions must be reasonably acceptable to the
Agent in its reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section
9.01.
"Person" shall mean any individual, partnership, joint
venture, firm, corporation, association, limited liability company, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2)
of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) Holdings or a Subsidiary of Holdings or an ERISA
Affiliate, and each such plan for the five year period immediately following the
latest date on which the Holdings, or a Subsidiary of Holdings or an ERISA
Affiliate maintained, contributed to or had an obligation to contribute to such
plan.
"Pledge Agreement" shall have the meaning provided in Section
5.12.
"Pledge Agreement Collateral" shall mean all "Collateral"
as defined in the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as
defined in the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. BTCo may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Projections" shall mean the projections prepared by Holdings,
dated January 28, 1998 and furnished to the Banks prior to the Initial Borrowing
Date.
"Proxy Materials" shall mean all proxy materials sent by
Acquisition Corp. and ATC to the shareholders of ATC in connection with the
Acquisition.
"Qualified Preferred Stock" shall mean the preferred stock of
Holdings issued to JNL as part of the Equity Financing (as constituted on the
Effective Date) and any other preferred stock of Holdings so long as the terms
of any such preferred stock (i) do not contain any mandatory put, redemption,
repayment, sinking fund or other similar provision occurring before December 31,
2005, (ii) do not require the cash payment of dividends, (iii) do not contain
any covenants other than those covenants of the type (but no
-101-
more restrictive than those) set forth in the preferred stock issued to JNL as
part of the Equity Financing (as constituted on the Effective Date), (iv) do not
grant the holders thereof any voting rights except for (x) voting rights
required to be granted to such holders under applicable law and (y) limited
customary voting rights on fundamental matters such as mergers, consolidations,
sales of all or substantially all of the assets of Holdings, liquidations
involving Holdings or the creation of any class of equity on a parity with, or
prior to, such Qualified Preferred Stock, and (v) are otherwise reasonably
satisfactory to the Agent.
"Quarterly Payment Date" shall mean each February 28, May 31,
August 31 and November 30 occurring after the Initial Borrowing Date.
"RCRA" shall mean the Resource Conservation and Recovery
Act, as the same may be amended from time to time, 42 U.S.C. ss. 6901 et seq.
"Real Property" of any Person shall mean all the right, title
and interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Recovery Event" shall mean the receipt by Holdings or any of
its Subsidiaries of any cash insurance proceeds or condemnation awards payable
by reason of theft, loss, physical destruction, damage, taking or any other
similar event with respect to any property or assets of Holdings or any of its
Subsidiaries.
"Refinancing" shall mean the repayment in full by the
Borrower of the Indebtedness to be Refinanced.
"Refinancing Documents" shall mean all agreements and
documents related to the Refinancing.
"Register" shall have the meaning provided in Section 13.15.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
-102-
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Release" shall mean the disposing, discharging, injecting,
spilling, pumping, leaking, leaching, dumping, emitting, escaping, emptying,
pouring or migrating, into or upon any land or water or air, or otherwise
entering into the environment.
"Replaced Bank" shall have the meaning provided in Section
1.13.
"Replacement Bank" shall have the meaning provided in Section
1.13.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Plan that is subject to Title IV of ERISA
other than those events as to which the 30-day notice period is waived under
subsection .22, .23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose outstanding Term Loans (or, if prior to the Initial Borrowing Date, Term
Loan Commitments) and Revolving Loan Commitments (or after the termination
thereof, outstanding Revolving Loans and RL Percentages of outstanding Swingline
Loans and Letter of Credit Outstandings) represent an amount greater than 50% of
the sum of all outstanding Term Loans of Non-Defaulting Banks (or, if prior to
the Initial Borrowing Date, the Total Term Loan Commitment less the Term Loan
Commitments of all Defaulting Banks) and the Total Revolving Loan Commitment
less the Revolving Loan Commitments of all Defaulting Banks (or after the
termination thereof, the sum of the then total outstanding Revolving Loans of
Non-Defaulting Banks and the aggregate RL Percentages of all Non-Defaulting
Banks of the total outstanding Swingline Loans and Letter of Credit Outstandings
Swingline Loans at such time).
"Revolving Loan" shall have the meaning provided in Section
1.01(b)(A).
"Revolving Loan Commitment" shall mean, for each Bank, the
amount set forth opposite such Bank's name in Schedule I directly below the
column entitled "Revolving Loan Commitment," as same may be (x) reduced from
time to time pursuant to Sections 3.02, 3.03 and/or 10 or (y) adjusted from time
to time as a result of assignments to or from such Bank pursuant to Section 1.13
or 13.04(b).
-103-
"Revolving Loan Commitment Commission" shall have the meaning
provided in Section 3.01(b).
"Revolving Loan Maturity Date" shall mean January 29, 2003.
"Revolving Note" shall have the meaning provided in Section
1.05(a).
"RL Percentage" of any Bank at any time shall mean a fraction
(expressed as a percentage) the numerator of which is the Revolving Loan
Commitment of such Bank at such time and the denominator of which is the Total
Revolving Loan Commitment at such time, provided that if the RL Percentage of
any Bank is to be determined after the Total Revolving Loan Commitment has been
terminated, then the RL Percentages of the Banks shall be determined immediately
prior (and without giving effect) to such termination.
"Scheduled Repayments" shall have the meaning provided in
Section 4.02(b).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning
provided in Section 4.04(b)(ii).
"Secured Creditors" shall have the meaning assigned that term
in the respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange
Act of 1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in
Section 5.13.
"Security Agreement Collateral" shall mean all "Collateral"
as defined in the Security Agreement.
"Security Document" shall mean and include each of the
Security Agreement, the Pledge Agreement, each Mortgage and, after the execution
and delivery thereof, each Additional Security Document.
-104-
"Seller Notes" shall mean and include (i) each of the notes
issued (and other deferred consideration owing) by the Borrower or any of its
Subsidiaries as partial consideration for acquisitions consummated prior to the
Initial Borrowing Date and designated as such on Schedule VI (including the ATEC
Obligations) and (ii) each of the unsecured notes that may be issued (and other
deferred consideration owing) by the Borrower or any of its Subsidiaries from
time to time after the Initial Borrowing Date in connection with Permitted
Acquisitions to the extent such notes are permitted to be issued in accordance
with the terms of Sections 9.02(xii) and 9.04.
"Senior Subordinated Documents" shall mean the Senior
Subordinated Note Indenture, the Senior Subordinated Notes and each other
document or agreement relating to the issuance of the Senior Subordinated Notes.
"Senior Subordinated Note Indenture" shall mean the Indenture,
dated as of January 29, 1998, between the Borrower and State Street Bank and
Trust Company, as Trustee.
"Senior Subordinated Notes" shall mean the Borrower's 12%
Senior Subordinated Notes due 2008 (which term shall include the Series A Senior
Subordinated Notes and the Series B Senior Subordinated Notes issued in exchange
therefor pursuant to the Senior Subordinated Note Documents).
"Shareholders' Agreements" shall have the meaning provided in
Section 5.05.
"Shares" shall mean all outstanding shares of common stock of
ATC.
"Start Date" shall mean, with respect to any Applicable Margin
Period, the first day of such Applicable Margin Period.
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing could then be
met).
"Sub-Limit" shall mean and include each of the Acquisition
Sub-Limit and the Working Capital Sub-Limit.
"Subsidiary" shall mean, as to any Person, (i) any corporation
more than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such
-105-
Person and/or one or more Subsidiaries of such Person and (ii) any partnership,
limited liability company, association, joint venture or other entity in which
such Person and/or one or more Subsidiaries of such Person has more than a 50%
equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 5.14.
"Supermajority Banks" shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if (x) all outstanding Obligations in respect of the Revolving Loan
Commitment were repaid in full and the Total Revolving Loan Commitment was
terminated and (y) the percentage "50%" contained therein were changed to
"66-2/3%."
"Swingline Bank" shall mean BTCo.
"Swingline Expiry Date" shall mean that date which is five
Business Days prior to the Revolving Loan Maturity Date.
"Swingline Loan" shall have the meaning provided in Section
1.01(c).
"Swingline Note" shall have the meaning provided in Section
1.05(a).
"Syndication Date" shall mean that date upon which the Agent
determines (and notifies the Borrower) that the primary syndication (and
resultant addition of Persons as Banks pursuant to Section 13.04(b)) has been
completed.
"Tax Sharing Agreements" shall have the meaning provided in
Section 5.05.
"Taxes" shall have the meaning provided in Section 4.04(a).
"Tender Offer" shall mean the tender offer commenced by
Acquisition Corp. pursuant to the Offer to Purchase.
"Tender Offer Documents" shall mean the Offer to Purchase, the
Schedule 14D-1 filed by Acquisition Corp. and all amendments and exhibits
thereto and related documents filed with the SEC or distributed to the
shareholders of the Borrower in connection with the Tender Offer.
"Term Loan" shall have the meaning provided in Section
1.01(a).
-106-
"Term Loan Commitment" shall mean, for each Bank, the amount
set forth opposite such Bank's name in Schedule I directly below the column
entitled "Term Loan Commitment," as same may be (x) reduced from time to time
pursuant to Sections 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a
result of assignments to or from such Bank pursuant to Section 1.13 or 13.04(b).
"Term Loan Commitment Commission" shall have the meaning
provided in Section 3.01(a).
"Term Loan Maturity Date" shall mean January 29, 2003.
"Test Date" shall mean, with respect to any Start Date, the
last day of the most recent fiscal quarter of Holdings ended immediately prior
to such Start Date.
"Test Period" shall mean (i) for any determination made on or
prior to November 30, 1998, the period from March 1, 1998 to the last day of the
fiscal quarter of Holdings then last ended (in each case taken as one accounting
period), provided that the first Test Period shall end on May 31, 1998, and (ii)
for any determination made thereafter, each period of four consecutive fiscal
quarters of Holdings then last ended (in each case taken as one accounting
period).
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Revolving Loan Commitment" shall mean, at any time, the
sum of the Revolving Loan Commitments of each of the Banks.
"Total Term Loan Commitment" shall mean, at any time, the sum
of the Term Loan Commitments of each of the Banks.
"Total Unutilized Revolving Loan Commitment" shall mean, at
any time, an amount equal to the remainder of (x) the Total Revolving Loan
Commitment then in effect less (y) the sum of the aggregate principal amount of
all Revolving Loans and Swingline Loans then outstanding plus the then aggregate
amount of all Letter of Credit Outstandings.
"Tranche" shall mean the respective facility and commitments
utilized in making Loans hereunder, with there being three separate Tranches,
i.e., Term Loans, Revolving Loans and Swingline Loans.
"Transaction" shall mean, collectively, (i) the consummation
of the Tender Offer, (ii) the issuance of the Senior Subordinated Notes, (iii)
the consummation of the
-107-
Equity Financing, (iv) the consummation of the Refinancing, (v) the entering
into of the Credit Documents and the incurrence of all Loans on the Initial
Borrowing Date, (vi) the consummation of the Merger and (vii) the payment of
fees and expenses in connection with the foregoing.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under the Plan as of the close of its most recent plan year, determined
in accordance with actuarial assumptions at such time consistent with Statement
of Financial Accounting Standards No. 87, exceeds the market value of the assets
allocable thereto.
"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided for in
Section 2.05(a).
"Unutilized Acquisition Sub-Limit" shall mean, at any time,
(i) the Acquisition Sub-Limit at such time less (ii) the sum of the aggregate
outstanding principal amount of all Acquisition Loans at such time.
"Unutilized Revolving Loan Commitment" shall mean, with
respect to any Bank at any time, such Bank's Revolving Loan Commitment at such
time less the sum of (i) the aggregate outstanding principal amount of all
Revolving Loans made by such Bank at such time and (ii) such Bank's RL
Percentage of the Letter of Credit Outstandings at such time.
"Unutilized Working Capital Sub-Limit" shall mean, at any
time, (i) the Working Capital Sub-Limit at such time less (ii) the sum of the
aggregate principal amount of all Working Capital Loans at such time.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i)
any corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, limited liability company,
association, joint venture or other entity in which such Person and/or one or
more Wholly-Owned Subsidiaries of such Person has a 100% equity interest at such
time.
-108-
"Working Capital Loan" shall mean each Revolving Loan incurred
by the Borrower which does not constitute an Acquisition Loan.
"Working Capital Sub-Limit" shall mean, at any time, (x)
$15,000,000 less (y)(i) except as otherwise provided in clause (ii) below, 23%
of the aggregate reduction to the Total Revolving Loan Commitment theretofore
effected or (ii) with respect to the reductions effected pursuant to Section
3.02(a), such other amount as may be specified by the Borrower pursuant to such
Section, it being understood and agreed that in no event may the Borrower elect
a reduction of the Working Capital Sub-Limit pursuant to Section 3.02(a) to an
amount less than $10,000,000.
"WPG" shall mean Xxxxx, Xxxx & Xxxxx, L.L.C., a Delaware
limited liability company.
SECTION 12. The Agent.
12.01 Appointment. The Banks hereby irrevocably designate BTCo as Agent
(for purposes of this Section 12, the term "Agent" also shall include BTCo in
its capacity as Collateral Agent pursuant to the Security Documents) to act as
specified herein and in the other Credit Documents. Each Bank hereby irrevocably
authorizes, and each holder of any Note by the acceptance of such Note shall be
deemed irrevocably to authorize, the Agent to take such action on their behalf
under the provisions of this Agreement, the other Credit Documents and any other
instruments and agreements referred to herein or therein and to exercise such
powers and to perform such duties hereunder and thereunder as are specifically
delegated to or required of the Agent by the terms hereof and thereof and such
other powers as are reasonably incidental thereto. The Agent may perform any of
its duties hereunder by or through its officers, directors, agents, employees or
affiliates.
12.02 Nature of Duties. The Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement and in the
other Credit Documents. Neither the Agent nor any of its officers, directors,
agents, employees or affiliates shall be liable for any action taken or omitted
by them hereunder or under any other Credit Document or in connection herewith
or therewith, unless caused by its or their gross negligence or willful
misconduct. The duties of the Agent shall be mechanical and administrative in
nature; the Agent shall not have by reason of this Agreement or any other Credit
Document a fiduciary relationship in respect of any Bank or the holder of any
Note; and nothing in this Agreement or any other Credit Document, expressed or
implied, is intended to or shall be so construed as to impose upon the Agent any
obligations in respect of this Agreement or any other Credit Document except as
expressly set forth herein or therein.
-109-
12.03 Lack of Reliance on the Agent. Independently and without reliance
upon the Agent, each Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of Holdings and its
Subsidiaries in connection with the making and the continuance of the Loans and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of Holdings and its Subsidiaries and, except
as expressly provided in this Agreement, the Agent shall not have any duty or
responsibility, either initially or on a continuing basis, to provide any Bank
or the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or at
any time or times thereafter. The Agent shall not be responsible to any Bank or
the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectability, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings or any of its Subsidiaries or be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any other Credit Document, or the
financial condition of Holdings or any of its Subsidiaries or the existence or
possible existence of any Default or Event of Default.
12.04 Certain Rights of the Agent. If the Agent shall request instructions
from the Required Banks with respect to any act or action (including failure to
act) in connection with this Agreement or any other Credit Document, the Agent
shall be entitled to refrain from such act or taking such action unless and
until the Agent shall have received instructions from the Required Banks; and
the Agent shall not incur liability to any Bank by reason of so refraining.
Without limiting the foregoing, no Bank or the holder of any Note shall have any
right of action whatsoever against the Agent as a result of the Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks.
12.05 Reliance. The Agent shall be entitled to rely, and shall be fully
protected in relying, upon any note, writing, resolution, notice, statement,
certificate, telex, teletype or telecopier message, cablegram, radiogram, order
or other document or telephone message signed, sent or made by any Person that
the Agent believed to be the proper Person, and, with respect to all legal
matters pertaining to this Agreement and any other Credit Document and its
duties hereunder and thereunder, upon advice of counsel selected by the Agent.
12.06 Indemnification. To the extent the Agent is not reimbursed and
indemnified by the Credit Parties, the Banks will reimburse and indemnify the
Agent in proportion to their respective "percentage" as used in determining the
Required Banks (determined as if there were no Defaulting Banks) for and against
any and all liabilities,
-110-
obligations, losses, damages, penalties, claims, actions, judgments, costs,
expenses or disbursements of whatsoever kind or nature which may be imposed on,
asserted against or incurred by the Agent in performing its duties hereunder or
under any other Credit Document or in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements to the extent
resulting from the Agent's gross negligence or willful misconduct (as finally
determined by a court of competent jurisdiction).
12.07 The Agent in its Individual Capacity. With respect to its obligation
to make Loans, or issue or participate in Letters of Credit, under this
Agreement, the Agent shall have the rights and powers specified herein for a
"Bank" and may exercise the same rights and powers as though it were not
performing the duties specified herein; and the term "Banks," "Required Banks,"
"Supermajority Banks," "holders of Notes" or any similar terms shall, unless the
context clearly otherwise indicates, include the Agent in its respective
individual capacities. The Agent and its affiliates may accept deposits from,
lend money to, and generally engage in any kind of banking, investment banking,
trust or other business with, or provide debt financing, equity capital or other
services (including financial advisory services) to, any Credit Party or any
Affiliate of any Credit Party (or any Person engaged in a similar business with
any Credit Party or any Affiliate thereof) as if they were not performing the
duties specified herein, and may accept fees and other consideration from any
Credit Party or any Affiliate of any Credit Party for services in connection
with this Agreement and otherwise without having to account for the same to the
Banks.
12.08 Holders. The Agent may deem and treat the payee of any Note as the
owner thereof for all purposes hereof unless and until a written notice of the
assignment, transfer or endorsement thereof, as the case may be, shall have been
filed with the Agent. Any request, authority or consent of any Person who, at
the time of making such request or giving such authority or consent, is the
holder of any Note shall be conclusive and binding on any subsequent holder,
transferee, assignee or indorsee, as the case may be, of such Note or of any
Note or Notes issued in exchange therefor.
12.09 Resignation by the Agent. (a) The Agent may resign from the
performance of all its respective functions and duties hereunder and/or under
the other Credit Documents at any time by giving 15 Business Days' prior written
notice to the Banks. Such resignation shall take effect upon the appointment of
a successor Agent pursuant to clauses (b) and (c) below or as otherwise provided
below.
(b) Upon any such notice of resignation by the Agent, the
Required Banks shall appoint a successor Agent hereunder or thereunder who shall
be a commercial bank or trust company reasonably acceptable to the Borrower.
-111-
(c) If a successor Agent shall not have been so appointed
within such 15 Business Day period, the Agent with the consent of the Borrower
(which consent shall not be unreasonably withheld or delayed), shall then
appoint a successor Agent who shall serve as Agent hereunder or thereunder until
such time, if any, as the Required Banks appoint a successor Agent as provided
above.
(d) If no successor Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Agent, the Agent's resignation shall become
effective and the Required Banks shall thereafter perform all the duties of the
Agent hereunder and/or under any other Credit Document until such time, if any,
as the Required Banks appoint a successor Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not the
transactions herein contemplated are consummated, pay all reasonable
out-of-pocket costs and expenses of the Agent (including, without limitation,
the reasonable fees and disbursements of White & Case LLP and of the Agent's
local counsel and consultants) in connection with the preparation, execution and
delivery of this Agreement and the other Credit Documents and the documents and
instruments referred to herein and therein and any amendment, waiver or consent
relating hereto or thereto, of the Agent in connection with its syndication
efforts with respect to this Agreement and of the Agent and, after the
occurrence and during the continuance of an Event of Default, each of the Banks
in connection with the enforcement of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein or in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or pursuant to any
insolvency or bankruptcy proceedings (including, without limitation, in each
case the reasonable fees and disbursements of counsel for the Agent and, after
the occurrence of an Event of Default, for each of the Banks); (ii) pay and hold
each of the Banks harmless from and against any and all present and future
stamp, excise and other similar documentary taxes with respect to the foregoing
matters and save each of the Banks harmless from and against any and all
liabilities with respect to or resulting from any delay or omission (other than
to the extent attributable to such Bank) to pay such taxes; and (iii) indemnify
the Agent and each Bank, and each of their respective officers, directors,
employees, representatives and agents from and hold each of them harmless
against any and all liabilities, obligations (including removal or remedial
actions), losses, damages, penalties, claims, actions, judgments, suits, costs,
expenses and disbursements (including reasonable attorneys' and consultants'
fees and disbursements) incurred by, imposed on or assessed against any of them
as a result of, or arising out of, or in any way related to, or by reason of,
(a) any investigation, litigation or other proceeding (whether or not the Agent
-112-
or any Bank is a party thereto and whether or not such investigation, litigation
or other proceeding is brought by or on behalf of any Credit Party) related to
the entering into and/or performance of this Agreement or any other Credit
Document or the use of any Letter of Credit or the proceeds of any Loans
hereunder or the consummation of the Transaction or any other transactions
contemplated herein or in any other Credit Document or the exercise of any of
their rights or remedies provided herein or in the other Credit Documents, or
(b) the actual or alleged presence of Hazardous Materials in the air, surface
water or groundwater or on the surface or subsurface of any Real Property owned
or at any time operated by Holdings or any of its Subsidiaries, the generation,
storage, transportation, handling or disposal of Hazardous Materials by Holdings
or any of its Subsidiaries at any location, whether or not owned or operated by
Holdings or any of its Subsidiaries, the non-compliance of any Real Property
with any Environmental Law (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim asserted against Holdings, any
of its Subsidiaries or any Real Property owned or at any time operated by
Holdings or any of its Subsidiaries, including, in each case, without
limitation, the reasonable fees and disbursements of counsel and other
consultants incurred in connection with any such investigation, litigation or
other proceeding (but excluding, in each case any losses, liabilities, claims,
damages or expenses to the extent incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified (as finally determined by a
court of competent jurisdiction)). To the extent that the undertaking to
indemnify, pay or hold harmless the Agent or any Bank set forth in the preceding
sentence may be unenforceable because it is violative of any law or public
policy, the Borrower shall make the maximum contribution to the payment and
satisfaction of each of the indemnified liabilities which is permissible under
applicable law.
13.02 Right of Setoff. (a) In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence and during the continuance of an Event of
Default, each Bank is hereby authorized at any time or from time to time,
without presentment, demand, protest or other notice of any kind to any Credit
Party or to any other Person, any such notice being hereby expressly waived, to
set off and to appropriate and apply any and all deposits (general or special)
and any other Indebtedness at any time held or owing by such Bank (including,
without limitation, by branches and agencies of such Bank wherever located) to
or for the credit or the account of any Credit Party against and on account of
the Obligations and liabilities of the Credit Parties to such Bank under this
Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 13.06(b), and all other claims of any nature or description arising out
of or connected with this Agreement or any other Credit Document, irrespective
of whether or not such Bank shall have made any demand hereunder and although
said Obligations, liabilities or claims, or any of them, shall be contingent or
unmatured.
-113-
(b) NOTWITHSTANDING THE FOREGOING SUBSECTION (a), AT ANY TIME
THAT THE LOANS OR ANY OTHER OBLIGATION SHALL BE SECURED BY REAL PROPERTY LOCATED
IN CALIFORNIA, NO BANK SHALL EXERCISE A RIGHT OF SETOFF, BANKER'S LIEN OR
COUNTERCLAIM OR TAKE ANY COURT OR ADMINISTRATIVE ACTION OR INSTITUTE ANY
PROCEEDING TO ENFORCE ANY PROVISION OF THIS AGREEMENT OR ANY NOTE THAT IS NOT
TAKEN BY THE REQUIRED BANKS OR APPROVED IN WRITING BY THE REQUIRED BANKS IF SUCH
SETOFF OR ACTION OR PROCEEDING WOULD OR MIGHT (PURSUANT TO SECTIONS 580a, 580b,
580d AND 726 OF THE CALIFORNIA CODE OF CIVIL PROCEDURE OR SECTION 2924 OF THE
CALIFORNIA CIVIL CODE, IF APPLICABLE, OR OTHERWISE) AFFECT OR IMPAIR THE
VALIDITY, PRIORITY OR ENFORCEABILITY OF THE LIENS GRANTED TO THE COLLATERAL
AGENT PURSUANT TO THE SECURITY DOCUMENTS OR THE ENFORCEABILITY OF THE NOTES AND
OTHER OBLIGATIONS HEREUNDER, AND ANY ATTEMPTED EXERCISE BY ANY BANK OF ANY SUCH
RIGHT WITHOUT OBTAINING SUCH CONSENT OF THE REQUIRED BANKS SHALL BE NULL AND
VOID. THIS SUBSECTION (b) SHALL BE SOLELY FOR THE BENEFIT OF EACH OF THE BANKS
HEREUNDER AND MAY BE AMENDED, MODIFIED OR WAIVED IN ANY RESPECT BY THE REQUIRED
BANKS WITHOUT THE REQUIREMENT OF PRIOR NOTICE TO OR CONSENT BY ANY CREDIT PARTY
AND DOES NOT CONSTITUTE A WAIVER OF ANY RIGHTS AGAINST ANY CREDIT PARTY OR
AGAINST ANY COLLATERAL.
13.03 Notices. Except as otherwise expressly provided herein, all notices
and other communications provided for hereunder shall be in writing (including
telegraphic, telex, telecopier or cable communication) and mailed, telegraphed,
telexed, telecopied, cabled or delivered: if to any Credit Party, at the address
specified opposite its signature below or in the other relevant Credit
Documents; if to the Bank, at its address specified on Schedule II; and if to
the Agent, at the Notice Office; or, as to any Credit Party or the Agent, at
such other address as shall be designated by such party in a written notice to
the other parties hereto and, as to each Bank, at such other address as shall be
designated by such Bank in a written notice to the Borrower and the Agent. All
such notices and communications shall, when mailed, telegraphed, telexed,
telecopied, or cabled or sent by overnight courier, be effective when deposited
in the mails, delivered to the telegraph company, cable company or overnight
courier, as the case may be, or sent by telex or telecopier, except that notices
and communications to the Agent and the Borrower shall not be effective until
received by the Agent or the Borrower, as the case may be.
13.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the
-114-
prior written consent of the Banks and, provided further, that, although any
Bank may transfer, assign or grant participations in its rights hereunder, such
Bank shall remain a "Bank" for all purposes hereunder (and may not transfer or
assign all or any portion of its Commitments hereunder except as provided in
Sections 1.13 and 13.04(b)) and the transferee, assignee or participant, as the
case may be, shall not constitute a "Bank" hereunder and, provided further, that
no Bank shall transfer or grant any participation under which the participant
shall have rights to approve any amendment to or waiver of this Agreement or any
other Credit Document except to the extent such amendment or waiver would (i)
extend the final scheduled maturity of any Loan, Note or Letter of Credit
(unless such Letter of Credit is not extended beyond the Revolving Loan Maturity
Date) in which such participant is participating, or reduce the rate or extend
the time of payment of interest or Fees thereon (except in connection with a
waiver of applicability of any post-default increase in interest rates) or
reduce the principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that a
waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment, shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be permitted
without the consent of any participant if the participant's participation is not
increased as a result thereof), (ii) consent to the assignment or transfer by
the Borrower of any of its rights and obligations under this Agreement or (iii)
release all or substantially all of the Collateral under all of the Security
Documents (except as expressly provided in the Credit Documents) supporting the
Loans hereunder in which such participant is participating. In the case of any
such participation, the participant shall not have any rights under this
Agreement or any of the other Credit Documents (the participant's rights against
such Bank in respect of such participation to be those set forth in the
agreement executed by such Bank in favor of the participant relating thereto)
and all amounts payable by the Borrower hereunder shall be determined as if such
Bank had not sold such participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Commitments and related outstanding Obligations (or, if the Commitments with
respect to the relevant Tranche have terminated, outstanding Obligations)
hereunder to (i) its parent company and/or any affiliate of such Bank which is
at least 50% owned by such Bank or its parent company or to one or more Banks or
(ii) in the case of any Bank that is a fund that invests in loans, any other
fund that invests in loans and is managed or advised by the same investment
advisor of such Bank or by an Affiliate of such investment advisor or (y) assign
all, or if less than all, a portion equal to at least $2,500,000 in the
aggregate for the assigning Bank or assigning Banks, of such Commitments and
related outstanding Obligations (or, if the Commitments with respect to the
relevant Tranche have terminated, outstanding Obligations) hereunder to one or
more Eligible Transferees (treating any fund that invests in loans and any other
fund that invests in loans and is managed or advised by the same investment
advisor of such fund or by an Affiliate of such investment advisor as a single
Eligible Transferee), each of
-115-
which assignees shall become a party to this Agreement as a Bank by execution of
an Assignment and Assumption Agreement, provided that, (i) at such time Schedule
I shall be deemed modified to reflect the Commitments and/or outstanding Loans,
as the case may be, of such new Bank and of the existing Banks, (ii) upon the
surrender of the relevant Notes by the assigning Bank (or, upon such assigning
Bank's indemnifying the Borrower for any lost Note pursuant to a customary
indemnification agreement) new Notes will be issued, at the Borrower's expense,
to such new Bank and to the assigning Bank upon the request of such new Bank or
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Commitments and/or outstanding Loans, as the case may be, (iii) the
consent of the Agent and, so long as no Default under Section 10.01 or 10.05
then exists or no Event of Default then exists, the consent of the Borrower,
shall be required in connection with any assignment to an Eligible Transferee
pursuant to clause (y) above (each of which consents shall not be unreasonably
withheld or delayed), (iv) the Agent shall receive at the time of each such
assignment, from the assigning or assignee Bank, the payment of a non-refundable
assignment fee of $3,500 and (v) no such transfer or assignment will be
effective until recorded by the Agent on the Register pursuant to Section 13.15.
To the extent of any assignment pursuant to this Section 13.04(b), the assigning
Bank shall be relieved of its obligations hereunder with respect to its assigned
Commitments and outstanding Loans. At the time of each assignment pursuant to
this Section 13.04(b) to a Person which is not already a Bank hereunder and
which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for Federal income tax purposes, the respective
assignee Bank shall, to the extent legally entitled to do so, provide to the
Borrower the appropriate Internal Revenue Service Forms (and, if applicable, a
Section 4.04(b)(ii) Certificate) described in Section 4.04(b). To the extent
that an assignment of all or any portion of a Bank's Commitments and related
outstanding Obligations pursuant to Section 1.13 or this Section 13.04(b) would,
at the time of such assignment, result in increased costs under Section 1.10,
2.06 or 4.04 from those being charged by the respective assigning Bank prior to
such assignment, then the Borrower shall not be obligated to pay such increased
costs (although the Borrower, in accordance with and pursuant to the other
provisions of this Agreement, shall be obligated to pay any other increased
costs of the type described above resulting from changes after the date of the
respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and, with
the consent of the Agent, any Bank which is a fund may pledge all or any portion
of its Loans and Notes to its trustee in support of its obligations to its
trustee. No pledge pursuant to this clause (c) shall release the transferor Bank
from any of its obligations hereunder.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part of
the Agent, the Collateral Agent, the Issuing Bank or any Bank in exercising any
right,
-116-
power or privilege hereunder or under any other Credit Document and no course of
dealing between the Borrower or any other Credit Party and the Agent, the
Collateral Agent, the Issuing Bank or any Bank shall operate as a waiver
thereof; nor shall any single or partial exercise of any right, power or
privilege hereunder or under any other Credit Document preclude any other or
further exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any other
Credit Document expressly provided are cumulative and not exclusive of any
rights, powers or remedies which the Agent, the Collateral Agent, the Issuing
Bank or any Bank would otherwise have. No notice to or demand on any Credit
Party in any case shall entitle any Credit Party to any other or further notice
or demand in similar or other circumstances or constitute a waiver of the rights
of the Agent, the Collateral Agent, the Issuing Bank or any Bank to any other or
further action in any circumstances without notice or demand.
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Agent agrees that promptly after its receipt of each payment from
or on behalf of the Borrower in respect of any Obligations hereunder, it shall
distribute such payment to the Banks (other than any Bank that has consented in
writing to waive its pro rata share of any such payment) pro rata based upon
their respective shares, if any, of the Obligations with respect to which such
payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Banks
is in a greater proportion than the total of such Obligation then owed and due
to such Bank bears to the total of such Obligation then owed and due to all of
the Banks immediately prior to such receipt, then such Bank receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Banks an interest in the Obligations of the respective Credit Party to
such Banks in such amount as shall result in a proportional participation by all
the Banks in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Bank, such purchase shall be rescinded
and the purchase price restored to the extent of such recovery, but without
interest.
(c) Notwithstanding anything to the contrary contained herein,
the provisions of the preceding Sections 13.06(a) and (b) shall be subject to
the express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Banks as opposed to Defaulting Banks.
-117-
13.07 Calculations; Computations; Accounting Terms. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks); provided that, except as otherwise specifically provided
herein, all computations of Excess Cash Flow, the Applicable Base Rate Margin
and the Applicable Eurodollar Rate Margin, and all computations and all
definitions used in determining compliance with Sections 9.07 through 9.09,
inclusive, shall utilize accounting principles and policies in conformity with
those used to prepare the historical financial statements of ATC referred to in
Section 7.05(a).
(b) All computations of interest (other than in respect of
Base Rate Loans), Commitment Commission and other Fees hereunder shall be made
on the basis of a year of 360 days for the actual number of days (including the
first day but excluding the last day; except that in the case of Letter of
Credit Fees, the last day shall be included) occurring in the period for which
such interest, Commitment Commission or Fees are payable. All computations of
interest on Base Rate Loans hereunder shall be made on the basis of a year of
365/366 days for the actual number of days (including the first day but
excluding the last day) occurring in the period for which such interest is
payable.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, EXCEPT AS OTHERWISE
PROVIDED IN THE MORTGAGES, BE CONSTRUED IN ACCORDANCE WITH AND BE GOVERNED BY
THE LAW OF THE STATE OF NEW YORK. ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK,
AND, BY EXECUTION AND DELIVERY OF THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT,
EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR ITSELF AND IN
RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE
AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY FURTHER IRREVOCABLY
WAIVES ANY CLAIM THAT ANY SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
CREDIT PARTY, AND AGREES NOT TO PLEAD OR CLAIM, IN ANY LEGAL ACTION PROCEEDING
WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENTS BROUGHT IN ANY OF
THE AFOREMENTIONED COURTS, THAT SUCH COURTS LACK PERSONAL JURISDICTION OVER SUCH
CREDIT PARTY. EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO
THE SERVICE OF
-118-
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING
BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE
PREPAID, TO SUCH CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE
BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF
HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH
SERVICE OF PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR
CLAIM IN ANY ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT
DOCUMENT THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING
HEREIN SHALL AFFECT THE RIGHT OF THE AGENT, ANY BANK OR THE HOLDER OF ANY NOTE
TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL
PROCEEDINGS OR OTHERWISE PROCEED AGAINST HOLDINGS OR THE BORROWER IN ANY OTHER
JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED
TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY, TO THE EXTENT PERMITTED
BY APPLICABLE LAW, WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT
THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN
AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Agent.
13.10 Effectiveness. This Agreement shall become effective on the date
the "Effective Date") on which Holdings, the Borrower, the Agent and each of the
Banks shall have signed a counterpart hereof (whether the same or different
counterparts) and shall
-119-
have delivered the same to the Agent at the Notice Office or, in the case of the
Banks, shall have given to the Agent telephonic (confirmed in writing), written
or telex notice (actually received) at such office that the same has been signed
and mailed to it. The Agent will give Holdings, the Borrower and each Bank
prompt written notice of the occurrence of the Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver; etc. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Banks, provided that no such change, waiver, discharge or termination
shall, without the consent of each Bank (other than a Defaulting Bank) (with
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
expiration date of any Letter of Credit beyond the Revolving Loan Maturity Date,
or reduce the rate or extend the time of payment of interest or Fees thereon, or
reduce the principal amount thereof (except to the extent repaid in cash) (it
being understood that any amendment or modification to the financial definitions
in this Agreement or to Section 13.07(a) shall not constitute a reduction in the
rate of interest or Fees for the purposes of this clause (i)), (ii) release all
or substantially all of the Collateral (except as expressly provided in the
Credit Documents) under all the Security Documents, (iii) amend, modify or waive
any provision of this Section 13.12, (iv) reduce the percentage specified in the
definition of Required Banks (it being understood that, with the consent of the
Required Banks, additional extensions of credit pursuant to this Agreement may
be included in the determination of the Required Banks on substantially the same
basis as the extensions of Term Loan Commitments and Revolving Loan Commitments
are included on the Effective Date) or (v) consent to the assignment or transfer
by the Borrower of any of its rights and obligations under this Agreement;
provided further, that no such change, waiver, discharge or termination shall
(u) increase the Commitments of any Bank over the amount thereof then in effect
without the consent of such Bank (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Bank, and that an increase in the available
portion of any Commitment of any Bank shall not constitute an increase of the
Commitment of such Bank), (v) without the consent of the Issuing Bank, amend,
modify or waive any provision of Section 2 or alter its rights or obligations
with respect to Letters of Credit, (w) without the consent of the Swingline
Bank, alter the Swingline Bank's rights or obligations with respect to Swingline
Loans, (x) without the consent of the Agent, amend, modify or waive any
provision of Section 12 or any other provision as same relates to the rights or
obligations
-120-
of the Agent, (y) without the consent of the Collateral Agent, amend, modify or
waive any provision relating to the rights or obligations of the Collateral
Agent, or (z) without the consent of the Supermajority Banks, reduce the amount
of, or extend the date of, any Scheduled Repayment, or amend the definition of
Supermajority Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Supermajority Banks on substantially the
same basis as the extensions of Term Loan Commitments and Revolving Loan
Commitments are included on the Effective Date).
(b) If, in connection with any proposed change, waiver,
discharge or termination to any of the provisions of this Agreement as
contemplated by clauses (i) through (v), inclusive, of the first proviso to
Section 13.12(a), the consent of the Required Banks is obtained but the consent
of one or more of such other Banks whose consent is required is not obtained,
then the Borrower shall have the right, so long as all non-consenting Banks
whose individual consent is required are treated as described in either clauses
(A) or (B) below, to either (A) replace each such non-consenting Bank or Banks
with one or more Replacement Banks pursuant to Section 1.13 so long as at the
time of such replacement, each such Replacement Bank consents to the proposed
change, waiver, discharge or termination or (B) terminate such non-consenting
Bank's Commitments and/or repay each Tranche of outstanding Loans of such Bank
in accordance with Sections 3.02(b) and/or 4.01(b), provided that, unless the
Commitments that are terminated, and Loans repaid, pursuant to preceding clause
(B) are immediately replaced in full at such time through the addition of new
Banks or the increase of the Commitments and/or outstanding Loans of existing
Banks (who in each case must specifically consent thereto), then in the case of
any action pursuant to preceding clause (B) the Required Banks (determined after
giving effect to the proposed action) shall specifically consent thereto,
provided further, that in any event the Borrower shall not have the right to
replace a Bank, terminate its Commitments or repay its Loans solely as a result
of the exercise of such Bank's rights (and the withholding of any required
consent by such Bank) pursuant to the second proviso to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Bank may transfer and carry its Loans at, to
or for the account of any office, Subsidiary or Affiliate of such Bank.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 2.06 or 4.04 from those
being charged by the respective Bank prior to such transfer, then the Borrower
shall not be obligated to pay such increased costs (although the
-121-
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Register. The Borrower hereby designates the Agent to serve as the
Borrower's agent, solely for purposes of this Section 13.15, to maintain a
register (the "Register") on which it will record the Commitments from time to
time of each of the Banks, the Loans made by each of the Banks and each
repayment in respect of the principal amount of the Loans of each Bank. Failure
to make any such recordation, or any error in such recordation shall not affect
the Borrower's obligations in respect of such Loans. With respect to any Bank,
the transfer of the Commitments of such Bank and the rights to the principal of,
and interest on, any Loan made pursuant to such Commitments shall not be
effective until such transfer is recorded on the Register maintained by the
Agent with respect to ownership of such Commitments and Loans and prior to such
recordation all amounts owing to the transferor with respect to such Commitments
and Loans shall remain owing to the transferor. The registration of assignment
or transfer of all or part of any Commitments and Loans shall be recorded by the
Agent on the Register only upon the acceptance by the Agent of a properly
executed and delivered Assignment and Assumption Agreement pursuant to Section
13.04(b). Coincident with the delivery of such an Assignment and Assumption
Agreement to the Agent for acceptance and registration of assignment or transfer
of all or part of a Loan, or as soon thereafter as practicable, the assigning or
transferor Bank shall surrender the Note evidencing such Loan, and thereupon one
or more new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Agent in performing its duties under this Section 13.15.
13.16 Confidentiality. (a) Subject to the provisions of clause (b) of this
Section 13.16, each Bank agrees that it will not disclose without the prior
consent of the Borrower (other than to its employees, auditors, advisors or
counsel or to another Bank if the Bank or such Bank's holding or parent company
in its reasonable discretion determines that any such party should have access
to such information, provided such Persons shall be subject to the provisions of
this Section 13.16 to the same extent as such Bank) any information with respect
to Holdings or any of its Subsidiaries which is now or in the future furnished
pursuant to this Agreement or any other Credit Document and which is designated
by the Borrower to the Banks in writing as confidential, provided that any Bank
may disclose any such information (i) as has become generally available to the
public other than by virtue of a breach of this Section 13.16(a) by the
respective Bank, (ii) as may be required or appropriate in any report, statement
or testimony submitted to any municipal, state or Federal regulatory body having
or claiming to have jurisdiction over such Bank or to the Federal Reserve Board,
the Federal Deposit Insurance Corporation or the NAIC or similar organizations
(whether in the United States or elsewhere) or their successors, (iii)
-122-
as may be required or appropriate in respect to any summons or subpoena or in
connection with any litigation, (iv) in order to comply with any law, order,
regulation or ruling applicable to such Bank, (v) to the Agent or the Collateral
Agent and (vi) to any prospective or actual transferee or participant in
connection with any contemplated transfer or participation of any of the Notes
or Commitments or any interest therein by such Bank, provided that such
prospective transferee agrees to be bound by the confidentiality provisions
contained in this Section 13.16.
(b) Each of Holdings and the Borrower hereby acknowledges and
agrees that each Bank may share with any of its affiliates any information
related to Holdings or any of its Subsidiaries (including, without limitation,
any nonpublic customer information regarding the creditworthiness of Holdings
and its Subsidiaries), provided such Persons shall be subject to the provisions
of this Section 13.16 to the same extent as such Bank).
SECTION 14. Parent Guaranty.
14.01 Guaranty. In order to induce the Agent, the Collateral Agent, the
Issuing Bank and the Banks to enter into this Agreement and to extend credit
hereunder, and to induce the other Guaranteed Creditors to enter into Interest
Rate Protection Agreements or Other Hedging Agreements, and in recognition of
the direct benefits to be received by Holdings from the proceeds of the Loans,
the issuance of the Letters of Credit and the entering into of such Interest
Rate Protection Agreements or Other Hedging Agreements, Holdings hereby agrees
with the Guaranteed Creditors as follows: hereby unconditionally and irrevocably
guarantees as primary obligor and not merely as surety the full and prompt
payment when due, whether upon maturity, acceleration or otherwise, of any and
all of the Guaranteed Obligations of the Borrower to the Guaranteed Creditors.
If any or all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors becomes due and payable hereunder, Holdings unconditionally and
irrevocably promises to pay such indebtedness to the Agent and/or the other
Guaranteed Creditors, or order, on demand, together with any and all expenses
which may be incurred by the Agent or the other Guaranteed Creditors in
collecting any of the Guaranteed Obligations. If claim is ever made upon any
Guaranteed Creditor for repayment or recovery of any amount or amounts received
in payment or on account of any of the Guaranteed Obligations and any of the
aforesaid payees repays all or part of said amount by reason of (i) any
judgment, decree or order of any court or administrative body having
jurisdiction over such payee or any of its property or (ii) any settlement or
compromise of any such claim effected by such payee with any such claimant
(including the Borrower), then and in such event Holdings agrees that any such
judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty or other instrument
evidencing any liability of the Borrower, and Holdings shall be and remain
liable to the afore-
-123-
said payees hereunder for the amount so repaid or recovered to the same extent
as if such amount had never originally been received by any such payee.
14.02 Bankruptcy. Additionally, Holdings unconditionally and irrevocably
guarantees the payment of any and all of the Guaranteed Obligations of the
Borrower to the Guaranteed Creditors whether or not due or payable by the
Borrower upon the occurrence of any of the events specified in Section 10.05,
and irrevocably and unconditionally, and jointly and severally, promises to pay
such indebtedness to the Guaranteed Creditors, or order, on demand, in lawful
money of the United States.
14.03 Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder shall
not be affected or impaired by any circumstance or occurrence whatsoever (other
than the indefeasible payment in full in cash of the Guaranteed Obligations),
including, without limitation, (a) any direction as to application of payment by
the Borrower or by any other party, (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrower, (c) any payment on or in reduction of
any such other guaranty or undertaking, (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, (e) any payment made
to any Guaranteed Creditor on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Guaranteed Creditors as contemplated in Section 14.05 or (g) any
invalidity, irregularity or unenforceability of all or any part of the
Guaranteed Obligations or any security therefor.
14.04 Independent Obligation. The obligations of Holdings hereunder are
independent of the obligations of any other guarantor, any other party or the
Borrower, and a separate action or actions may be brought and prosecuted against
Holdings whether or not action is brought against any other guarantor, any other
party or the Borrower and whether or not any other guarantor, any other party or
the Borrower be joined in any such action or actions. Holdings waives, to the
fullest extent permitted by law, the benefit of any statute of limitations
affecting its liability hereunder or the enforcement thereof. Any payment by the
Borrower or other circumstance which operates to toll any statute of limitations
as to the Borrower shall operate to toll the statute of limitations as to
Holdings.
14.05 Authorization. Holdings authorizes the Guaranteed Creditors without
notice or demand (except as shall be required by applicable statute and cannot
be waived), and without affecting or impairing its liability hereunder, from
time to time to:
-124-
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate or
alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest or fees thereon), any security
therefor, or any liability incurred directly or indirectly in respect
thereof, and the Guaranty herein made shall apply to the Guaranteed
Obligations as so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize
upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain
from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower, other Credit Parties or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
its creditors other than the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Guaranteed
Creditors regardless of what liability or liabilities of the Borrower
remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, this Agreement, any other Credit Document or any of the
instruments or agreements referred to herein or therein, or otherwise
amend, modify or supplement this Agreement, any other Credit Document
or any of such other instruments or agreements;
(h) act or fail to act in any manner which may deprive
Holdings of its right to subrogation against the Borrower to recover
full indemnity for any payments made pursuant to this Guaranty; and/or
-125-
(i) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable discharge
of Holdings from its liabilities under this Guaranty.
14.06 Reliance. It is not necessary for any Guaranteed Creditor to inquire
into the capacity or powers of Holdings or any of its Subsidiaries or the
officers, directors, partners or agents acting or purporting to act on their
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any indebtedness of the Borrower now or hereafter
owing to Holdings is hereby subordinated to the Guaranteed Obligations of the
Borrower owing to the Guaranteed Creditors; and if the Agent so requests at a
time when an Event of Default exists, all such indebtedness of the Borrower to
Holdings shall be collected, enforced and received by Holdings for the benefit
of the Guaranteed Creditors and be paid over to the Agent on behalf of the
Guaranteed Creditors on account of the Guaranteed Obligations of the Borrower to
the Guaranteed Creditors, but without affecting or impairing in any manner the
liability of Holdings under the other provisions of this Guaranty. Prior to the
transfer by Holdings of any note or negotiable instrument evidencing any such
indebtedness of the Borrower to Holdings, Holdings shall xxxx such note or
negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, Holdings hereby
agrees with the Guaranteed Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code or otherwise)
until all Guaranteed Obligations have been irrevocably paid in full in cash.
14.08 Waiver. (a) Holdings waives any right (except as shall be required by
applicable statute and cannot be waived) to require any Guaranteed Creditor to
(i) proceed against the Borrower, any other guarantor or any other party, (ii)
proceed against or exhaust any security held from the Borrower, any other
guarantor or any other party or (iii) pursue any other remedy in any Guaranteed
Creditor's power whatsoever. Holdings waives any defense based on or arising out
of any defense of the Borrower, any other guarantor or any other party, other
than payment in full of the Guaranteed Obligations, based on or arising out of
the disability of the Borrower, any other guarantor or any other party, or the
validity, legality or unenforceability of the Guaranteed Obligations or any part
thereof from any cause, or the cessation from any cause of the liability of the
Borrower other than payment in full of the Guaranteed Obligations. The
Guaranteed Creditors may, at their election, foreclose on any security held by
the Agent, the Collateral Agent or any other Guaranteed Creditor by one or more
judicial or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Guaranteed Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in
-126-
any way the liability of Holdings hereunder except to the extent the Guaranteed
Obligations have been paid. Holdings waives any defense arising out of any such
election by the Guaranteed Creditors, even though such election operates to
impair or extinguish any right of reimbursement or subrogation or other right or
remedy of Holdings against the Borrower or any other party or any security.
(b) Holdings waives all presentments, demands for performance,
protests and notices, including without limitation notices of nonperformance,
notices of protest, notices of dishonor, notices of acceptance of this Guaranty,
and notices of the existence, creation or incurring of new or additional
Guaranteed Obligations. Holdings assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which Holdings assumes
and incurs hereunder, and agrees that the Agent and the Banks shall have no duty
to advise Holdings of information known to them regarding such circumstances or
risks.
(c) Holdings hereby acknowledges and affirms that it
understands that to the extent the Guaranteed Obligations are secured by Real
Property located in California, Holdings shall be liable for the full amount of
the liability hereunder notwithstanding the foreclosure on such Real Property by
trustee sale or any other reason impairing Holdings' or any Guaranteed
Creditor's right to proceed against the Borrower or any other guarantor of the
Guaranteed Obligations. In accordance with Section 2856 of the California Civil
Code, Holdings hereby waives:
(i) all rights of subrogation, reimbursement,
indemnification, and contribution and any other rights and defenses
that are or may become available to Holdings by reason of Sections 2787
to 2855, inclusive, 2899 and 3433 of the California Civil Code;
(ii) all rights and defenses that Holdings may have because
the Guaranteed Obligations are secured by Real Property located in
California. This means, among other things: (A) the Guaranteed
Creditors may collect from Holdings without first foreclosing on any
real or personal property collateral pledged by the Borrower or any
other Credit Party; and (B) if the Guaranteed Creditors foreclose on
any Real Property collateral pledged by the Borrower or any other
Credit Party, (1) the amount of the Guaranteed Obligations may be
reduced only by the price for which that collateral is sold at the
foreclosure sale, even if the collateral is worth more than the sale
price, and (2) the Guaranteed Creditors may collect from Holdings even
if the Guaranteed Creditors, by foreclosing on the Real Property
collateral, have destroyed any right Holdings may have to collect from
the Borrower. This is an unconditional and irrevocable waiver of any
rights and defenses Holdings may have because the Guaranteed
Obligations are secured by
-127-
Real Property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d or 726
of the California Code of Civil Procedure; and
(iii) all rights and defenses arising out of an election of
remedies by the Guaranteed Creditors, even though that election of
remedies, such as a nonjudicial foreclosure with respect to security
for the Guaranteed Obligations, has destroyed Holdings' rights of
subrogation and reimbursement against the Borrower by the operation of
Section 580d of the Code of Civil Procedure or otherwise.
Holdings warrants and agrees that each of the waivers set forth above is made
with full knowledge of its significance and consequences and that if any of such
waivers are determined to be contrary to any applicable law or public policy,
such waivers shall be effective only to the maximum extent permitted by law.
14.09 Nature of Liability. It is the desire and intent of Holdings and the
Guaranteed Creditors that this Guaranty shall be enforced against Holdings to
the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of Holdings under this Guaranty shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of Holdings obligations under this Guaranty shall be
deemed to be reduced and Holdings shall pay the maximum amount of the Guaranteed
Obligations which would be permissible under applicable law.
* * *
-128-
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
c/x Xxxxx, Xxxx and Xxxxx ACQUISITION HOLDINGS, INC.
Private Equity Group
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000 By /s/ Xxxxxx Xxxx
Attention: President --------------------
Telephone No.: (000) 000-0000 Title: President
Telecopier No.: (212) 908-0112
000 Xxxx 00xx Xxxxxx ACQUISITION CORP.
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: President By /s/ Xxxxxx Xxxx
Telephone No.: (000) 000-0000 ---------------------
Telecopier No.: (000) 000-0000 Title: President
BANKERS TRUST COMPANY,
Individually and as Agent
By /s/ Xxxxxxxx Xxxxx
---------------------
Title: Principal
