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EXHIBIT 10.3
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TRAINING MEDIA OPERATING LLC
CREDIT AGREEMENT
Dated as of February 10, 2000
FLEET NATIONAL BANK,
Administrative Agent
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
Syndication Agent
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TABLE OF CONTENTS
1. Definitions: Certain Rules of Construction..............................................................13
2. The Credits..............................................................................................43
2.1 Revolving Credit...............................................................................43
2.1.1 Revolving Loan.........................................................................43
2.1.2 Maximum Amount of Revolving Credit.....................................................44
2.1.3 Borrowing Requests.....................................................................46
2.1.4 Revolving Notes........................................................................46
2.2 Acquisition Credit.............................................................................47
2.2.1 Request for Acquisition Facilities.....................................................47
2.2.2 Borrowing Requests.....................................................................48
2.2.3 Conversion Upon Acquisition Facility Revolver Termination
Date.................................................................................48
2.2.4 Acquisition Notes......................................................................48
2.3 Letters of Credit..............................................................................49
2.3.1 Issuance of Letters of Credit..........................................................49
2.3.2 Requests for Letters of Credit.........................................................49
2.3.3 Form and Expiration of Letters of Credit...............................................49
2.3.4 Lenders' Participation in Letters of Credit............................................50
2.3.5 Reimbursement of Payment...............................................................50
2.3.6 UCP; ISP...............................................................................50
2.3.7 Subrogation............................................................................52
2.3.8 Modification. Consent, etc.............................................................53
2.4 Application of Proceeds........................................................................53
2.4.1 Revolving Loan.........................................................................53
2.4.2 Acquisition Loan.......................................................................53
2.4.3 Letters of Credit......................................................................53
2.4.4 Specifically Prohibited Applications...................................................53
3. Interest; LIBOR Pricing Options; Fees....................................................................54
3.1 Interest.......................................................................................54
3.2 LIBOR Pricing Options..........................................................................54
3.2.1 Election of LIBOR Pricing Options......................................................54
3.2.2 Notice to Lenders and Company..........................................................55
3.2.3 Selection of LIBOR Interest Periods....................................................55
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3.2.4 Additional Interest....................................................................56
3.2.5 Violation of Legal Requirements........................................................56
3.2.6 Funding Procedure......................................................................57
3.3 Commitment Fees................................................................................57
3.4 Letter of Credit Fees..........................................................................57
3.5 Changes in Circumstances; Yield Protection.....................................................58
3.5.1 Reserve Requirements, etc..............................................................58
3.5.2 Taxes..................................................................................58
3.5.3 Capital Adequacy.......................................................................59
3.5.4 Regulatory Changes.....................................................................60
3.5.5 Compensation Claims....................................................................60
3.5.6 Mitigation.............................................................................60
3.6 Computations of Interest and Fees..............................................................61
3.7 Maximum Lawful Interest Rate...................................................................61
4. Payment..................................................................................................61
4.1 Payment at Maturity............................................................................61
4.2 Scheduled Required Prepayments.................................................................61
4.3 Contingent Required Prepayments................................................................63
4.3.1 Excess Credit Exposure.................................................................63
4.3.2 Excess Cash Flow.......................................................................63
4.3.3 Net Asset Sale Proceeds................................................................63
4.3.4 Net Debt Proceeds......................................................................64
4.3.5 Net Equity Proceeds....................................................................64
4.4 Voluntary Prepayments..........................................................................64
4.5 Letters of Credit..............................................................................64
4.6 Reborrowing; Application of Payments. etc......................................................65
4.6.1 Reborrowing............................................................................65
4.6.2 Order of Application...................................................................65
4.6.3 Payments for Lenders...................................................................65
5. Conditions to Extending Credit...........................................................................66
5.1 Conditions on Initial Closing Date.............................................................66
5.1.1 Notes..................................................................................66
5.1.2 Payment of Fees........................................................................66
5.1.3 Legal Opinions.........................................................................66
5.1.4 Guarantee and Security Agreement.......................................................66
5.1.5 Internet Investor Pledge Agreement.....................................................66
5.1.6 Perfection of Security.................................................................67
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5.1.7 Organization of Content Entity.........................................................67
5.1.8 Organization of Internet Entity........................................................67
5.1.9 Acquisition............................................................................68
5.1.10 Capitalization, EBITDA, etc...........................................................68
5.1.11 Adverse Market Change.................................................................69
5.1.12 Proper Proceedings....................................................................70
5.1.13 General...............................................................................70
5.2 Conditions to Each Extension of Credit.........................................................70
5.2.1 Officer's Certificate..................................................................70
5.2.2 Legality, etc..........................................................................71
5.3 Conditions on Acquisition Facility Initial Closing Date........................................71
5.3.1 Acquisition Notes......................................................................71
5.3.2 Joinder Agreement......................................................................71
5.3.3 Legal Opinions.........................................................................71
5.3.4 Financed Acquisitions..................................................................71
5.3.5 General................................................................................72
6. General Covenants........................................................................................72
6.1 Taxes and Other Charges; Accounts Payable......................................................73
6.1.1 Taxes and Other Charges................................................................73
6.1.2 Accounts Payable.......................................................................73
6.2 Conduct of Business. etc.......................................................................73
6.2.1 Types of Business......................................................................73
6.2.2 Maintenance of Properties..............................................................74
6.2.3 Statutory Compliance...................................................................74
6.2.4 Compliance with Material Agreements....................................................74
6.3 Insurance......................................................................................75
6.3.1 Business Interruption Insurance........................................................75
6.3.2 Property Insurance.....................................................................75
6.3.3 Liability Insurance....................................................................75
6.3.4 Key Executive Life Insurance...........................................................75
6.4 Financial Statements and Reports...............................................................75
6.4.1 Annual Reports.........................................................................76
6.4.2 Quarterly Reports......................................................................78
6.4.3 Monthly Reports........................................................................80
6.4.4 Other Reports..........................................................................80
6.4.5 Notice of Litigation. Defaults, etc....................................................81
6.4.6 ERISA Reports..........................................................................81
6.4.7 Other Information; Audit...............................................................82
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6.5 Certain Financial Tests........................................................................82
6.5.1 Consolidated Total Debt to Consolidated EBITDA.........................................82
6.5.2 Consolidated EBITDA to Consolidated Interest Expense...................................83
6.5.3 Consolidated EBITDA to Consolidated Fixed Charges......................................83
6.6 Indebtedness...................................................................................84
6.6.1 Indebtedness in respect of the Credit Obligations......................................84
6.6.2 .....................................................................................84
6.6.3 .....................................................................................84
6.6.4 .....................................................................................84
6.6.5 .....................................................................................84
6.6.6 .....................................................................................84
6.6.7 .....................................................................................85
6.6.8 .....................................................................................85
6.6.9 .....................................................................................85
6.6.10 .....................................................................................85
6.6.11 .....................................................................................85
6.6.12 .....................................................................................85
6.6.13 .....................................................................................85
6.6.14 .....................................................................................85
6.6.15 .....................................................................................86
6.7 Liens..........................................................................................86
6.7.1 .....................................................................................86
6.7.2 .....................................................................................86
6.7.3 .....................................................................................86
6.7.4 .....................................................................................87
6.7.5 .....................................................................................87
6.7.6 .....................................................................................87
6.7.7 .....................................................................................87
6.7.8 .....................................................................................87
6.7.9 .....................................................................................87
6.7.10 .....................................................................................87
6.7.11 .....................................................................................87
6.8 Investments and Acquisitions...................................................................88
6.8.1 .....................................................................................88
6.8.2 .....................................................................................88
6.8.3 .....................................................................................88
6.8.4 .....................................................................................88
6.8.5 .....................................................................................88
6.8.6 .....................................................................................88
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6.8.7 .....................................................................................89
6.8.8 .....................................................................................90
6.8.9 .....................................................................................90
6.8.10 .....................................................................................90
6.8.11 .....................................................................................90
6.9 Distributions..................................................................................90
6.9.1 .....................................................................................90
6.9.2 .....................................................................................90
6.9.3 .....................................................................................91
6.9.4 .....................................................................................91
6.9.5 .....................................................................................91
6.9.6 .....................................................................................91
6.9.7 .....................................................................................92
6.9.8 .....................................................................................93
6.10 Asset Dispositions and Mergers.................................................................93
6.10.1 .....................................................................................93
6.10.2 .....................................................................................93
6.10.3 .....................................................................................93
6.10.4 .....................................................................................94
6.10.5 .....................................................................................94
6.10.6 .....................................................................................94
6.10.7 .....................................................................................94
6.11 Issuance of Stock by Subsidiaries; Subsidiary Distributions....................................94
6.11.1 Issuance of Stock by Subsidiaries.....................................................94
6.11.2 No Restrictions on Subsidiary Distributions...........................................95
6.12 Voluntary Prepayments of Other Indebtedness....................................................95
6.13 Derivative Contracts...........................................................................95
6.14 Negative Pledge Clauses........................................................................95
6.14.1 .....................................................................................95
6.14.2 .....................................................................................96
6.15 ERISA. etc.....................................................................................96
6.16 Transactions with Affiliates...................................................................96
6.17 Interest Rate Protection.......................................................................97
6.18 Restricted Operations of Restricted Affiliates.................................................97
6.19 Real Estate Collateral.........................................................................98
7. Representations and Warranties...........................................................................98
7.1 Organization and Business......................................................................98
7.1.1 The Company............................................................................99
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7.1.2 Subsidiaries and Restricted Affiliates.................................................99
7.1.3 Qualification.........................................................................100
7.1.4 Capitalization........................................................................100
7.2 Financial Statements and Other Information: Material Agreements...............................100
7.2.1 Financial Statements and Other Information............................................100
7.2.2 Material Agreements...................................................................101
7.3 Agreements Relating to Financing Debt. Investments. etc.......................................102
7.3.1 ....................................................................................102
7.3.2 ....................................................................................102
7.3.3 ....................................................................................102
7.3.4 ....................................................................................102
7.3.5 ....................................................................................102
7.3.6 ....................................................................................102
7.3.7 ....................................................................................102
7.4 Changes in Condition..........................................................................102
7.5 Title to Assets...............................................................................102
7.6 Operations in Conformity With Law. etc........................................................103
7.7 Litigation....................................................................................103
7.8 Authorization and Enforceability..............................................................103
7.9 No Legal Obstacle to Agreements...............................................................103
7.10 Defaults......................................................................................104
7.11 Licenses, etc.................................................................................105
7.12 Tax Returns...................................................................................105
7.13 Certain Business Representations..............................................................105
7.13.1 Labor Relations......................................................................105
7.13.2 Year 2000 Issues.....................................................................106
7.14 Pension Plans.................................................................................106
7.15 Acquisition Agreement. etc....................................................................106
7.16 Government Regulation; Margin Stock...........................................................107
7.16.1 Government Regulation................................................................107
7.16.2 Margin Stock.........................................................................107
7.17 Disclosure....................................................................................107
8. Defaults................................................................................................107
8.1 Events of Default.............................................................................107
8.1.1 Payment...............................................................................107
8.1.2 Specified Covenants...................................................................108
8.1.3 Other Covenants.......................................................................108
8.1.4 Representations and Warranties........................................................108
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8.1.5 Material Financing Debt Cross Default. etc............................................108
8.1.6 Ownership; Liquidation; etc...........................................................109
8.1.7 Enforceability, etc...................................................................110
8.1.8 Judgments.............................................................................110
8.1.9 ERISA.................................................................................110
8.1.10 Bankruptcy. etc......................................................................110
8.2 Certain Actions Following an Event of Default.................................................111
8.2.1 Terminate Obligation to Extend Credit.................................................111
8.2.2 Specific Performance; Exercise of Rights..............................................112
8.2.3 Acceleration..........................................................................112
8.2.4 Enforcement of Payment; Credit Security; Setoff.......................................112
8.2.5 Cumulative Remedies...................................................................113
8.3 Annulment of Defaults.........................................................................113
8.4 Waivers.......................................................................................113
9. Expenses: Indemnity.....................................................................................113
9.1 Expenses......................................................................................113
9.2 General Indemnity.............................................................................114
9.3 Indemnity With Respect to Letters of Credit...................................................115
10. Operations; Agent.......................................................................................115
10.1 Interests in Credits..........................................................................115
10.2 Agent's Authority to Act. etc.................................................................115
10.3 Company to Pay Agent, etc.....................................................................116
10.4 Lender Operations for Advances, Letters of Credit, etc........................................116
10.4.1 Advances.............................................................................116
10.4.2 Letters of Credit....................................................................116
10.4.3 Agent to Allocate Payments, etc......................................................117
10.4.4 Nonperforming Lenders................................................................117
10.5 Sharing of Payments, etc......................................................................118
10.6 Agent's Resignation...........................................................................119
10.7 Concerning the Agent..........................................................................119
10.7.1 Action in Good Faith. etc............................................................119
10.7.2 No Implied Duties, etc...............................................................120
10.7.3 Validity, etc........................................................................120
10.7.4 Compliance...........................................................................120
10.7.5 Employment of Agents and Counsel.....................................................120
10.7.6 Reliance on Documents and Counsel....................................................121
10.7.7 Agent's Reimbursement................................................................121
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10.8 Rights as a Lender............................................................................121
10.9 Independent Credit Decision...................................................................122
10.10 Indemnification...............................................................................122
11. Successors and Assigns; Lender Assignments and Participations...........................................122
11.1 Assignments by Lenders........................................................................123
11.1.1 Assignees and Assignment Procedures..................................................123
11.1.2 Terms of Assignment and Acceptance...................................................124
11.1.3 Register.............................................................................125
11.1.4 Acceptance of Assignment and Assumption..............................................125
11.1.5 Federal Reserve Bank.................................................................126
11.1.6 Further Assurances...................................................................126
11.1.7 Credit Participants..................................................................126
11.2 Replacement of Lender.........................................................................127
12. Confidentiality.........................................................................................129
13. Notices.................................................................................................130
14. Amendments, Consents, Waivers, etc......................................................................131
14.1 Lender Consents for Amendments................................................................131
14.2 Course of Dealing; No Implied Waivers.........................................................133
15. General Provisions......................................................................................133
15.1 Defeasance....................................................................................133
15.2 No Strict Construction........................................................................134
15.3 Certain Obligor Acknowledgments...............................................................134
15.4 Venue; Service of Process; Certain Waivers....................................................135
15.5 WAIVER OF JURY TRIAL..........................................................................135
15.6 Interpretation; Governing Law: etc............................................................136
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EXHIBITS
2.1.4 - Revolving Note
2.2.2 - Acquisition Note
5.1.4 - Guarantee and Security Agreement
5.1.5 - Internet Investor Pledge Agreement
5.2.1 - Officer's Certificate
6.4. - Computation Covenants Compliance Certificate
6.6.13 - Seller Financing Subordination Terms
6.8.2 - Foreign Subsidiary Subordination Agreement
6.16 - Transactions with Affiliates
7.1 - Company, its Subsidiaries and Restricted Affiliates
7.2.2 - Material Agreements
7.3.1 - Financing Debt
7.3.2 - Company Liens and Guarantees
7.3.3 - Investment Agreements
7.3.4 - Material License Agreements
7.3.5 - Trademarks
7.3.6 - Copyrights
7.7 - Litigation
7.11 - Intellectual Property - Enforceability and Compliance
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7.14 - Multi-employer and Defined Benefit Plans
10.1 - Percentage Interests
11.1.1 - Assignment and Acceptance
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TRAINING MEDIA OPERATING LLC
CREDIT AGREEMENT
This Agreement, dated as of February 10, 2000, is among Training Media
Operating LLC, a Delaware limited liability company, the Subsidiaries and
Restricted Affiliates of the Company from time to time party hereto, the Lenders
from time to time party hereto and Fleet National Bank, both in its capacity as
a Lender and in its capacity as agent for the Lenders. The parties agree as
follows:
Recitals: Pursuant to this Agreement, the Lenders are extending to
the Company a $55,000,000 revolving credit facility, including a $5,000,000
sub-allotment for Letters of Credit, and may make available in their discretion
as requested by the Company up to $20,000,000 in additional revolving credit
loans (which would convert into term loans on the first anniversary hereof)
pursuant to one or more acquisition facilities. All the credit facilities mature
on March 31, 2006. These credit facilities are guaranteed by the Company's
Subsidiaries, Company Holdings, the Content Entity and, prior to a Qualified
Public Offering, the Internet Entity and Internet Holdings. These credit
facilities are secured by liens on substantially all the assets (including the
stock of Subsidiaries) of the Company and its Subsidiaries, on the equity
interests in the Company, on the assets of and equity interests in the Content
Entity, prior to a Qualified Public Offering, the assets of and equity interests
in the Internet Entity and Internet Holdings and, after a Qualified Public
Offering, subject to Section 6.18(e), certain equity interests in Internet
Holdings. The Content Entity, Company Holdings, the Internet Entity and Internet
Holdings are initially subject to all the covenants in this Agreement other than
the financial ratios; and as otherwise set forth herein and, in particular,
after a Qualified Public Offering, the Internet Entity and Internet Holdings are
not subject to any covenants under this Agreement other than covenants relating
expressly to their relationship with the Company and the Content Entity. The
proceeds of these credit facilities may be used to acquire the education
division of ZD Inc. on the Initial Closing Date and for general business
purposes as provided herein.
1. Definitions: Certain Rules of Construction. Certain capitalized terms are
used in this Agreement and in the other Credit Documents with the specific
meanings defined below in this Section 1. Except as otherwise explicitly
specified to the contrary or unless the context clearly requires otherwise, (a)
the capitalized term "Section" refers to sections of this Agreement, (b) the
capitalized term "Exhibit"
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refers to exhibits to this Agreement, (c) references to a particular Section
include all subsections thereof, (d) the word "including" shall be construed as
"including without limitation", (e) accounting terms not otherwise defined
herein have the meaning provided under GAAP, (f) references to a particular
statute or regulation include all rules and regulations thereunder and any
successor statute, regulation or rules, in each case as from time to time in
effect, (g) references to a particular Person include such Person's successors
and assigns to the extent not prohibited by this Agreement and the other Credit
Documents and (h) references to "Dollars" or "$" mean United States Funds.
References to "the date hereof" mean the date first set forth above.
"Accumulated Benefit Obligations" means the actuarial present value of
the accumulated benefit obligations under any Plan, calculated in accordance
with Statement No. 87 of the Financial Accounting Standards Board.
"Acquisition" means the acquisition of all the assets of the education
division of the Seller by the Company, the Content Entity and the Internet
Entity pursuant to the Acquisition Agreement.
"Acquisition Agreement" means the Purchase Agreement between the Seller
and Company Holdings (whose interests therein have been assigned to and assumed
by the Company, the Content Entity and the Internet Entity), dated as of
November 17, 1999, as amended through the date hereof and previously furnished
to the Agent and as subsequently amended or modified in accordance with Section
6.2.4.
"Acquisition Facility" is defined in Section 2.2.1.
"Acquisition Facility Revolver Termination Date" is defined in Section
2.2.1.
"Acquisition Loan" is defined in Section 2.2.4.
"Acquisition Note" is defined in Section 2.2.4.
"Acquisition Term Loan" is defined in Section 2.2.3.
"Affected Lender" is defined in Section 11.3.
"Affiliate" means, with respect to the Company (or any other specified
Person), any other Person directly or indirectly controlling, controlled by or
under
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direct or indirect common control with the Company (or such specified Person),
and shall include (a) any officer or director or general partner of the Company
(or such specified Person), (b) any Person of which the Company (or such
specified Person) or any Affiliate (as defined in clause (a) above) of the
Company (or such specified Person) shall, directly or indirectly, beneficially
own either (i) at least 5 % of the outstanding equity securities having the
general power to vote or (ii) at least 5 % of all equity interests, (c) any
Person directly or indirectly controlling the Company (or such specified Person)
through a management agreement, voting agreement or other contract and (d) the
Content Entity, the Internet Entity and Internet Holdings.
"Agent" means Fleet in its capacity as agent for the Lenders hereunder,
as well as its successors and assigns in such capacity pursuant to Section 10.6.
"Agreement" means this Credit Agreement as from time to time amended,
modified and in effect.
"Annualized" means, with respect to Consolidated EBITDA, Consolidated
Fixed Charges, Consolidated Interest Expense (or any other specified item), (a)
for periods ending prior to March 31, 2001, the product of (i) Consolidated
EBITDA, Consolidated Fixed Charges, Consolidated Interest Expense (or such other
item), as the case may be, since the Initial Closing Date multiplied by (ii) a
fraction, the numerator of which is 365 and the denominator of which is the
number of days elapsed since the Initial Closing Date; and (b) for periods
ending on or after March 31, 2001, 100% of Consolidated EBITDA, Consolidated
Fixed Charges, Consolidated Interest Expense (or such other item), as the case
may be.
"Applicable Margin" means (a) through the third Banking Day after the
Agent receives quarterly financial statements under Section 6.4.2 for the fiscal
quarter ending March 31, 2000, the highest applicable percentage rate set forth
in the table below and (b) on each day thereafter, the percentage in the table
below set opposite the Reference Leverage Ratio for such date:
Base Rate LIBOR
Reference Leverage Ratio Applicable Margin Applicable Margin
------------------------ ----------------- -----------------
>=4.00x 2.50% 3.50%
>=3.00x and <4.00x 2.25% 3.25%
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>=2.00x and <3.00x 2.00% 3.00%
<2.00x 1.75% 2.75%
Changes in the Applicable Margin shall occur on the third Banking Day after
quarterly financial statements have been furnished to the Agent in accordance
with Sections 6.4.1 or 6.4.2 from time to time. In the event that the financial
statements required to be delivered pursuant to Section 6.4.1 or 6.4.2, as
applicable, are not delivered when due, then during the period from the third
Banking Day following the date such financial statements were due until the
third Banking Day following the date on which they are actually delivered, the
Applicable Margin shall be the maximum amount set forth in the table above.
"Applicable Rate" means, at any date, the sum of:
(a) (i) with respect to each portion of the Loan subject to a
LIBOR Pricing Option, the sum of the Applicable Margin (which may change
during the LIBOR Interest Period for such LIBOR Pricing Option in
accordance with the definition of "Applicable Margin") the LIBOR Rate
with respect to such LIBOR Pricing Option;
(ii) with respect to each other portion of the
Loan, the sum of the Applicable Margin ~2hi~ the Base Rate;
(iii) with respect to any Acquisition Facility, the
rate per annum agreed in writing by the Company and the Lenders
extending such Acquisition Facility;
plus (b) an additional 2% per annum effective on the day the Agent
provides written notice to the Company that the interest rates hereunder
are increasing as a result of the occurrence and continuance of an Event
of Default until the earlier of such time as (i) such Event of Default
is no longer continuing or (ii) such Event of Default is deemed no
longer to exist, in each case pursuant to Section 8.3.
"Assignee" is defined in Section 11.1.1.
"Assignment and Acceptance" is defined in Section 11.1.1.
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"Available Excess Cash Flow" means, so long as immediately before and
after giving effect thereto no Default exists and the Reference Leverage Ratio
calculated as of the end of the most recently completed fiscal year is less than
3.Ox, 50% of Consolidated Excess Cash Flow (if positive) for the fiscal year
then most recently ended, which amount may be applied by the Company toward
Capital Expenditures, Permitted Acquisitions or Distributions permitted by
Section 6.9.2 as specified in written notice from the Company to the Agent from
time to time prior to such application.
"Banking Day" means any day other than Saturday, Sunday or a day on which
banks in Boston, Massachusetts are authorized or required by law or other
governmental action to close and, if such term is used with reference to a LIBOR
Pricing Option, any such day on which dealings are effected in the eurodollar
market by first-class banks in the inter-bank markets in London, United Kingdom.
"Bankruptcy Code" means Title 11 of the United States Code.
"Bankruptcy Default" means an Event of Default referred to in Section
8.1.10.
"Base Rate" means, on any date, the greater of (a) the rate of interest
announced by Fleet at the Boston Office as its prime rate or (b) the sum of 1/2%
plus the Federal Funds Rate. The Base Rate is a reference rate and does not
necessarily represent the lowest or best rate being charged to any customer.
Changes in the rate of interest resulting from changes in the Base Rate shall
take place immediately without notice or demand of any kind.
"Boston Office" means the principal banking office of Fleet in Boston,
Massachusetts.
"By-laws" means all written by-laws, rules, regulations and all other
documents relating to the management, governance or internal regulation of any
Person other than an individual, all as from time to time in effect.
"Capital Expenditures" means, for any period, amounts added or required
to be added to the property, plant and equipment or other fixed assets account
on the Consolidated balance sheet of the Company and its Subsidiaries, prepared
in accordance with GAAP, including expenditures in respect of (a) the
acquisition, construction, improvement or replacement of land, buildings,
machinery, equipment, lease-
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holds and any other real or personal property, (b) to the extent not included in
clause (a) above, materials, contract labor and direct labor relating thereto
(excluding amounts properly expensed as repairs and maintenance in accordance
with GAAP) and (c) software development costs to the extent not expensed;
provided, however, that Capital Expenditures shall not include (i) the purchase
price for the acquisition of another Person (or substantially all the assets of
another Person) as a going concern permitted by Section 6.8 or (ii) expenditures
made in accordance with this Agreement with the proceeds of insurance claims,
condemnation awards or the Reinvestment Reserve from permitted asset sales.
"Capitalized Lease" means any lease which is required to be capitalized
on the balance sheet of the lessee in accordance with GAAP, including Statement
Nos. 13 and 98 of the Financial Accounting Standards Board.
"Capitalized Lease Obligations" means the amount of the liability
reflecting the aggregate discounted amount of future payments under all
Capitalized Leases calculated in accordance with GAAP, including Statement Nos.
13 and 98 of the Financial Accounting Standards Board.
"Cash Equivalents" means:
(a) negotiable certificates of deposit, time deposits
(including sweep accounts), demand deposits and bankers' acceptances
having a maturity of nine months or less and issued by any United States
financial institution having capital and surplus and undivided profits
aggregating at least $100,000,000 and rated at least Prime-1 by Xxxxx'x
or A-1 by S&P or issued by any Lender;
(b) corporate obligations having a maturity of nine months or
less and rated at least Prime-1 by Xxxxx'x or A-1 by S&P or issued by any
Lender;
(c) any direct obligation of the United States of America or
any agency or instrumentality thereof, or of any state or municipality
thereof, (i) which has a remaining maturity at the time of purchase of
not more than one year or which is subject to a fully collateralized
repurchase agreement with any Lender (or any other financial institution
referred to in clause (a) above) exercisable within one year from the
time of purchase and (ii) which, in the
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case of obligations of any state or municipality, is rated at least Aaa
by Xxxxx'x or AAA by S&P;
(d) any mutual fund or other pooled investment vehicle rated at
least Aa by Xxxxx'x or AA by S&P which invests principally in obligations
described above and is registered as an investment company under
applicable federal securities laws; and
(e) any Investment by a Foreign Subsidiary in its local
jurisdiction comparable to the items described above.
"Charter" means the articles of organization, certificate of
incorporation, statute, constitution, joint venture agreement, partnership
agreement, trust indenture, limited liability company agreement or other charter
document of any Person other than an individual, each as from time to time in
effect.
"Closing Date" means the Initial Closing Date and each other date on
which any extension of credit is made pursuant to Sections 2.1, 2.2 or 2.3.
"Code" means the federal Internal Revenue Code of 1986.
"Commitment" means, with respect to any Lender, such Lender's obligations
to extend the respective credits contemplated by Section 2 and its interests in
such credits at any time outstanding. The original Commitments are set forth in
Exhibit 10.1 and the subsequent Commitments are recorded from time to time in
the Register.
"Commitment Notice" is defined in Section 2.2.1.
"Company" means Training Media Operating LLC, a Delaware limited
liability company.
"Company Content License" means the Content License Agreement dated as of
the date hereof between the Company and the Content Entity as in effect on the
date hereof and previously furnished to the Agent and as subsequently amended or
modified in accordance with Section 6.2.4.
"Company Holdings" means Training Media Holdings LLC, a Delaware limited
liability company.
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"Computation Covenants" means Sections 6.5, 6.6.2, 6.6.12, 6.6.13,
6.6.14, 6.6.15, 6.7.11, 6.8.6, 6.8.7, 6.8.8, 6.8.11, 6.9.2, 6.9.3, 6.9.4, 6.9.6,
6.9.7, 6.9.8, 6.10.5, 6.10.6 and 6.15.
"Consolidated" and "Consolidating", when used with reference to any term,
mean that term as applied to the accounts of the Company (or other specified
Person) and all of its Subsidiaries (or other specified group of Persons), or
such of its Subsidiaries as may be specified, consolidated (or combined) or
consolidating (or combining), as the case may be, in accordance with GAAP and
with appropriate deductions for minority interests in Subsidiaries.
"Consolidated Current Assets" means, at any date, all amounts carried as
current assets on the balance sheet of the Company and its Subsidiaries,
determined in accordance with GAAP on a Consolidated basis, excluding cash and
Cash Equivalents.
"Consolidated Current Liabilities" means, at any date, all amounts that
are or should be carried as current liabilities on the balance sheet of the
Company and its Subsidiaries determined in accordance with GAAP on a
Consolidated basis, excluding the current portion of long-term Financing Debt.
"Consolidated EBITDA" means, for any period, the total of:
(a) Consolidated Net Income;
plus (b) all amounts deducted in computing such Consolidated Net
Income in respect of:
(i) depreciation, amortization (including
amortization of deferred financing charges) and other noncash
charges (other than the write-down of current assets),
(ii) Consolidated Interest Expense,
(iii) income tax expense, and
(iv) non-capitalized fees and expenses incurred in
connection with the Acquisition,
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minus (c) all cash payments made during such period on account of
reserves, restructuring charges and other noncash charges added to
Consolidated Net Income pursuant to clause (b) above in a previous
period,
minus (d) all amounts included in Consolidated Net Income in respect
of deferred income tax benefits and other noncash income items;
provided, however, that for purposes of Section 6.5, Consolidated EBITDA for
periods prior to March 31, 2001 shall be on an Annualized basis.
"Consolidated Excess Cash Flow" means, for any period, the total of:
(a) Consolidated EBITDA,
minus (b) Consolidated Fixed Charges (but in no event including
contingent prepayments required by Section 4.3, mandatory dividends or
Capital Expenditures attributable to Capitalized Lease Obligations or
otherwise financed with the proceeds of Financing Debt),
minus (c) the amount, if any, by which Consolidated Net Working
Capital increased during such period,
plus (d) the amount, if any, by which Consolidated Net Working
Capital decreased during such period.
"Consolidated Fixed Charges" means, for any period, the sum of:
(a) Consolidated Interest Expense,
plus (b) the aggregate amount of all mandatory scheduled payments
and mandatory reductions in revolving loans as a result of mandatory
reductions in revolving credit availability, all with respect to
Financing Debt of the Company and its Subsidiaries in accordance with
GAAP on a Consolidated basis, including payments in the nature of
principal under Capitalized Leases, but in no event including contingent
prepayments required by Section 4.3.2 through 4.3.5,
(c) any mandatory dividends paid or payable in cash by the
Company or any of its Subsidiaries to third parties,
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(d) Capital Expenditures (to the extent not paid with the
proceeds of Available Excess Cash Flow that had not been applied to
Permitted Acquisitions or Distributions permitted by Section 6.9.2),
plus (e) taxes, based upon or measured by net income that are
actually paid in cash;
provided, however, that for purposes of Section 6.5, Consolidated Fixed Charges
for periods prior to March 31, 2001 shall be on an Annualized basis.
"Consolidated Interest Expense" means, for any period, the total of:
(a) the aggregate amount of interest, including commitment
fees, payments in the nature of interest under Capitalized Leases and net
payments under Hedge Agreements, accrued by the Company and its
Subsidiaries (whether such interest is reflected as an item of expense or
capitalized) in accordance with GAAP on a Consolidated basis,
minus (b) to the extent otherwise included in clause (a) above, the
amortization of deferred financing fees and costs, original issue
discount relating to Indebtedness and accrued interest on Indebtedness
not paid in cash to the extent permitted by the terms, including
subordination terms, of such Indebtedness,
plus (c) actual cash payments with respect to accrued and unpaid
interest that has previously reduced Consolidated Interest Expense
pursuant to clause (b) above;
provided, however, that for purposes of Section 6.5, Consolidated Interest
Expense for periods prior to March 31, 2001 shall be on an Annualized basis.
"Consolidated Net Income" means, for any period, the net income (or loss)
of the Company and its Subsidiaries, determined in accordance with GAAP on a
Consolidated basis; provided, however, that Consolidated Net Income shall not
include:
(a) (except with respect to determinations made on a pro forma
basis with respect to a proposed acquisition) the income (or loss) of any
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Person accrued prior to the date such Person becomes a Subsidiary or is
merged into or consolidated with the Company or any of its Subsidiaries;
(b) the income (or loss) of any Person (other than a
Subsidiary) in which the Company or any of its Subsidiaries has an
ownership interest; provided, however, that (i) Consolidated Net Income
shall include amounts in respect of the income of such Person when
actually received in cash by the Company or such Subsidiary in the form
of dividends or similar Distributions and (ii) Consolidated Net Income
shall be reduced by the aggregate amount of all Investments, regardless
of the form thereof, made by the Company or any of its Subsidiaries for
the purpose of funding any deficit or loss of such Person;
(c) all amounts included in computing such net income (or loss)
in respect of (i) the write-up of any asset or (ii) the retirement of any
Indebtedness or equity at less than face value;
(d) extraordinary and nonrecurring gains and gains from the
sale of assets or investment activities;
(e) the income of any Subsidiary to the extent the payment of
such income in the form of a Distribution or repayment of Indebtedness to
the Company or a Wholly Owned Subsidiary is not permitted, whether on
account of any Charter or By-law restriction, any agreement, instrument,
deed or lease or any law, statute, judgment, decree or governmental
order, rule or regulation applicable to such Subsidiary; and
(f) any after-tax gains or losses attributable to returned
surplus assets of any Plan.
"Consolidated Net Working Capital" means, at any date, the amount
(whether positive or negative) equal to (a) Consolidated Current Assets minus
(b)Consolidated Current Liabilities. Consolidated Net Working Capital increases
when it becomes more positive or less negative, and decreases when it becomes
less positive or more negative.
"Consolidated Total Debt" means, at any date, all Financing Debt of the
Company and its Subsidiaries on a Consolidated basis.
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"Content Entity" means Content Media LLC, a Delaware limited liability
company.
"Credit Documents" means:
(a) this Agreement, the Notes, each Letter of Credit, each
draft presented or accepted under a Letter of Credit, the Guarantee and
Security Agreement, the Internet Investor Pledge Agreement, the fee
agreement contemplated by Section 5.1.2 and each Hedge Agreement provided
by a Lender (or an Affiliate of a Lender) to the Company or any of its
Subsidiaries, each as from time to time in effect; and
(b) any other present or future agreement or instrument from
time to time entered into among the Company, any of its Subsidiaries or
any other Obligor, on one hand, and the Agent, the Syndication Agent, any
Letter of Credit Issuer or all the Lenders, on the other hand, relating
to, amending or modifying this Agreement or any other Credit Document
referred to above or which is stated to be a Credit Document, each as
from time to time in effect.
"Credit Obligations" means all present and future liabilities,
obligations and Indebtedness of the Company, any of its Subsidiaries or any
other Obligor owing to the Agent or any Lender (or any Affiliate of a Lender)
under or in connection with this Agreement or any other Credit Document,
including obligations in respect of principal, interest, reimbursement
obligations under Letters of Credit and Hedge Agreements provided by a Lender
(or an Affiliate of a Lender) at the time of the issuance thereof, commitment
fees, Letter of Credit fees, amounts provided for in Sections 3.2.4, 3.5 and 9
and other fees, charges, indemnities and expenses from time to time owing
hereunder or under any other Credit Document (all whether accruing before or
after a Bankruptcy Default and regardless of whether allowed as a claim in
bankruptcy or similar proceedings).
"Credit Participant" is defined in Section 11.2.
'"Credit Security" means all assets now or from time to time hereafter
subjected to a security interest, mortgage or charge (or intended or required so
to be subjected pursuant to the Guarantee and Security Agreement, the Internet
Investor Pledge Agreement or any other Credit Document) to secure the payment or
performance of any of the Credit Obligations on a pari passu, ratable basis
among the holders of the Credit Obligations, including the assets described in
section 3.1 of the
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Guarantee and Security Agreement and section 2.1 of the Internet Investor Pledge
Agreement.
"Currency Exchange Agreement" means any currency swap, foreign exchange
contract or similar arrangement providing for protection against fluctuations in
currency exchange rates, either generally or under specific contingencies.
"Default" means any Event of Default and any event or condition which
with the passage of time or giving of notice, or both, would become an Event of
Default, including the filing against the Company, any of its Subsidiaries or
any other Obligor of a petition commencing an involuntary case under the
Bankruptcy Code.
"Delinquency Period" is defined in Section 10.4.4.
"Delinquent Payment" is defined in Section 10.4.4.
"Distribution" means, with respect to the Company (or other specified
Person):
(a) the declaration or payment of any dividend or distribution
on or in respect of any shares of any class of capital stock of or other
equity interests in the Company (or such specified Person);
(b) the purchase, redemption or other retirement of any shares
of any class of capital stock of or other equity interest in the Company
(or such specified Person) or any of its Subsidiaries, or of options,
warrants or other rights for the purchase of such shares, directly,
indirectly through a Subsidiary or corporate parent or otherwise;
(c) any other distribution on or in respect of any shares of
any class of capital stock of or equity or other beneficial interest in
the Company (or such specified Person);
(d) any payment of principal, interest or fees with respect to,
or any purchase, redemption or defeasance of, any Financing Debt of the
Company (or such specified Person) or any of its Subsidiaries which by
its terms or the terms of any agreement is subordinated to the payment of
the Credit Obligations; and
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(e) any payment, loan or advance by the Company (or such
specified Person) to, or any other Investment by the Company (or such
specified Person) in, the holder of any shares of any class of capital
stock of or equity interest in the Company (or such specified Person) or
any of its Subsidiaries, or any Affiliate of such holder (including the
payment of management and transaction fees and expenses);
provided, however, that the term "Distribution" shall not include (i) dividends
payable in perpetual common stock of or other similar equity interests in the
Company (or such specified Person) or (ii) payments in the ordinary course of
business in respect of (A) reasonable compensation paid to employees, officers
and directors, (B) advances and reimbursements to employees for travel expenses,
drawing accounts, relocation costs and similar expenditures, or (C) rent paid
to, or accounts payable for services rendered or goods sold by, non-Affiliates
that own capital stock of or other equity interests in the Company (or such
specified Person) or any of its Subsidiaries.
"Domestic Subsidiary" means any Subsidiary that is not a Foreign
Subsidiary.
"ECF Prepayment Percentage" means, with respect to any period, the
percentage set forth in the table below opposite the Reference Leverage Ratio
for such period:
Reference Leverage Ratio ECF Prepayment Percentage
------------------------ -------------------------
>=3.00X 75%
<3.00X and >=2.00X 50%
<2.00X 25%
"Eligible Assignee" means (a) a Lender, (b) an Affiliate of a Lender, (c)
a Related Fund and (d) subject to the prior approval of the Agent and, so long
as no Event of Default shall have occurred and be continuing, the Company, such
approval by the Agent and the Company not to be unreasonably withheld or
delayed:
(i) a commercial bank organized under the laws of
the United States of America, or any state thereof, and having
total assets in excess of $500,000,000;
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(ii) a savings and loan association or savings
bank organized under the laws of the United States of America, or
any state thereof, and having total assets in excess of
$500,000,000;
(iii) a commercial bank organized under the laws of
any other country that is a member of the Organization for
Economic Cooperation and Development or has concluded special
lending arrangements with the International Monetary Fund
associated with its General Arrangements to Borrow or of the
Cayman Islands, or a political subdivision of any such country,
and having total assets in excess of $500,000,000, so long as such
bank is acting through a branch or agency located in the United
States of America;
(iv) the central bank of any country that is a
member of the Organization for Economic Cooperation and
Development; and
(v) a finance company, insurance company or other
financial institution or fund (whether a corporation, partnership,
trust or other entity) that is engaged in making, purchasing or
otherwise investing in commercial loans in the ordinary course of
its business and having total assets in excess of $500,000,000;
provided, however, that (A) no Person shall qualify as an Eligible Assignee with
respect to assignments of obligations or Commitments in connection with Letters
of Credit unless such Person qualifies under clauses (d)(i) or (d)(iii) above
and (B) no Obligor or Affiliate of an Obligor shall qualify as an Eligible
Assignee under any circumstances.
"ERISA" means the federal Employee Retirement Income Security Act of
1974.
"ERISA Group Person" means the Company, any of its Subsidiaries and any
Person which is a member of the controlled group or under common control with
the Company or any of its Subsidiaries within the meaning of section 414 of the
Code or section 4001(a)(14) of ERISA.
"Event of Default" is defined in Section 8.1.
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"Exchange Act" means the federal Securities Exchange Act of 1934.
"Federal Funds Rate" means, for any day, the rate equal to the weighted
average (rounded upward to the nearest 1/8%) of (a) the rates on overnight
federal funds transactions with members of the Federal Reserve System arranged
by federal funds brokers, as such weighted average is published for such day
(or, if such day is not a Banking Day, for the immediately preceding Banking
Day) by the Federal Reserve Bank of New York or (b) if such rate is not so
published for such Banking Day, quotations received by the Agent from three
federal funds brokers of recognized standing selected by the Agent. Each
determination by the Agent of the Federal Funds Rate shall, in the absence of
manifest error, be conclusive.
"Final Maturity Date" means March 31, 2006.
"Financed Acquisition Agreement" is defined in Section 5.3.4.
"Financial Officer" of the Company (or other specified Person) means its
chief executive officer, chief financial officer, chief operating officer,
chairman, president, treasurer, controller or any of its vice presidents whose
primary responsibility is for its financial affairs, in each case whose
incumbency and signatures have been certified to the Agent by the secretary or
other appropriate attesting officer of the Company (or such specified Person).
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'"Financing Debt" means each of the items described in clauses (a)
through (f) of the definition of the term "Indebtedness" and, without
duplication, any Guarantees of such items.
"Fleet" means Fleet National Bank.
"Foreign Subsidiary" means each Subsidiary that is organized under the
laws of, and conducting its business primarily in a jurisdiction outside of, the
United States of America and that is not domesticated or dually incorporated
under the laws of the United States of America or the states thereof.
"Funding Liability" means (a) any LIBOR deposit which was used (or deemed
by Section 3.2.6 to have been used) to fund any portion of the Loan subject to a
LIBOR Pricing Option, and (b) any portion of the Loan subject to a LIBOR Pricing
Option funded (or deemed by Section 3.2.6 to have been funded) with the proceeds
of any such LIBOR deposit.
"GAAP" means generally accepted accounting principles as from time to
time in effect, including the statements and interpretations of the United
States Financial Accounting Standards Board; provided, however, that:
(a) for purposes of compliance with Section 6 (other than
Section 6.4) and the related definitions, "GAAP" means such principles as
in effect on:
(i) for the period from the date hereof through
the date financial statements for the period ending March 31, 2000
are approved by the Agent as reasonably acceptable with respect to
accounting methods, the date hereof as applied by the Company in
the pro forma balance sheet referred to in Section 7.2.1(d) and
described in the accompanying report by Xxxxxx Xxxxxxxx & Co. and
consistently followed, without giving effect to any subsequent
changes thereto and
(ii) thereafter, March 31, 2000 as applied by the
Company and its Subsidiaries in the financial statements for the
period ending March 31, 2000 so approved by the Agent, and
consistently followed, without giving effect to any subsequent
changes thereto; and
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(b) in the event of a change in generally accepted accounting
principles after such date, either the Company or the Required Lenders
may request a change in the definition of "GAAP", in which case the
parties hereto shall negotiate in good faith with respect to an amendment
of this Agreement implementing such change.
"Guarantee" means, with respect to the Company (or other specified
Person):
(a) any guarantee by the Company (or such specified Person) of
the payment or performance of, or any contingent obligation by the
Company (or such specified Person) in respect of, any Indebtedness or
other obligation of any primary obligor;
(b) any other arrangement whereby credit is extended to a
primary obligor on the basis of any promise or undertaking of the Company
(or such specified Person), including any binding "comfort letter" or
"keep well agreement" written by the Company (or such specified Person),
to a creditor or prospective creditor of such primary obligor, to (i) pay
the Indebtedness of such primary obligor, (ii) purchase an obligation
owed by such primary obligor, (iii) pay for the purchase or lease of
assets or services regardless of the actual delivery thereof or (iv)
maintain the capital, working capital, solvency or general financial
condition of such primary obligor;
(c) any liability of the Company (or such specified Person), as
a general partner of a partnership in respect of Indebtedness or other
obligations of such partnership;
(d) any liability of the Company (or such specified Person) as
a joint venturer of a joint venture in respect of Indebtedness or other
obligations of such joint venture;
(e) any liability of the Company (or such specified Person)
with respect to the tax liability of others as a member of a group (other
than a group consisting solely of the Company and its Subsidiaries) that
is consolidated for tax purposes; and
(f) reimbursement obligations, whether contingent or matured,
of the Company (or such specified Person) with respect to letters of
credit,
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bankers acceptances, surety bonds, other financial guarantees and Hedge
Agreements,
in each case whether or not any of the foregoing are reflected on the balance
sheet of the Company (or such specified Person) or in a footnote thereto;
provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The amount of any
Guarantee and the amount of Indebtedness resulting from such Guarantee shall be
the maximum amount that the guarantor may become obligated to pay in respect of
the obligations (whether or not such obligations are outstanding at the time of
computation).
"Guarantee and Security Agreement" is defined in Section 5.1.4.
"Guarantor" means Company Holdings, the Content Entity, each of the
Company's Subsidiaries party to, or which subsequently becomes party to, the
Guarantee and Security Agreement as a Guarantor and, prior to a Qualified Public
Offering, the Internet Entity and Internet Holdings.
"Hedge Agreement" means, collectively, Currency Exchange Agreements and
Interest Rate Protection Agreements.
"Indebtedness" means all obligations, contingent or otherwise, which in
accordance with GAAP are required to be classified upon the balance sheet of the
Company (or other specified Person) as liabilities, but in any event including
(without duplication):
(a) indebtedness for borrowed money;
(b) indebtedness evidenced by notes, debentures or similar
instruments;
(c) Capitalized Lease Obligations;
(d) the deferred purchase price of assets, services or
securities, including related noncompetition, consulting and stock
repurchase obligations (other than ordinary trade accounts payable on
customary terms in the ordinary course of business), and any long-term
contractual obligations;
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(e) mandatory redemption, purchase, retirement acquisition or
dividend rights on capital stock (or other equity) for value, including
provisions that require the exchange of such capital stock (or other
equity) for Indebtedness from the issuer;
(f) reimbursement obligations, whether contingent or matured,
with respect to letters of credit, bankers acceptances, surety bonds,
other financial guarantees and Hedge Agreements (without duplication of
other Indebtedness supported or guaranteed thereby);
(g) liabilities secured by any Lien existing on property owned
or acquired by the Company (or such specified Person), whether or not the
liability secured thereby shall have been assumed; and
(h) all Guarantees in respect of Indebtedness of others.
"Indemnified Party" is defined in Section 9.2.
"Initial Closing Date" means February 10, 2000 or such other date prior
to April 1, 2000 agreed to by the Company and the Agent as the first Closing
Date hereunder.
"Interest Rate Protection Agreement" means any interest rate swap,
interest rate cap, interest rate hedge or other contractual arrangement that
converts variable interest rates into fixed interest rates, fixed interest rates
into variable interest rates or other similar arrangements.
"Internet Content License" means the Content License Agreement dated as
of the date hereof between the Internet Entity and the Content Entity as in
effect on the date hereof and previously furnished to the Agent and as
subsequently amended or modified in accordance with Section 6.2.4.
"Internet Corp." means WBT Corp., a Delaware corporation.
"Internet Entity" means WBT Operating LLC, a Delaware limited liability
company.
"Internet Holdings" means WBT Holdings LLC, a Delaware limited liability
company.
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"Internet Investor Pledge Agreement" is defined in Section 5.1.5.
"Investment" means, with respect to the Company (or other specified
Person):
(a) any share of capital stock, partnership or other equity
interest, evidence of Indebtedness or other security issued by any other
Person;
(b) any loan, advance or extension of credit to, or
contribution to the capital of, any other Person;
(c) any acquisition of all, or any division or similar
operating unit of, the business of any other Person or the assets
comprising such business, division or unit; and
(d) any other similar investment.
The investments described in the foregoing clauses (a) through (d) shall
be included in the term "Investment" whether they are made or acquired by
purchase, exchange, issuance of stock or other securities, merger,
reorganization or any other method; provided, however, that the term
"Investment" shall not include (i) trade and customer accounts receivable for
property (including intellectual property) leased, goods furnished or services
rendered in the ordinary course of business and payable in accordance with
customary trade terms, (ii) deposits, advances or prepayments to suppliers for
property (including intellectual property) leased or licensed, goods furnished
and services rendered in the ordinary course of business, (iii) advances to
employees for relocation and travel expenses, drawing accounts and similar
expenditures, (iv) stock or other securities acquired in connection with the
satisfaction or enforcement of Indebtedness or claims due to the Company (or
such specified Person) or as security for any such Indebtedness or claim or (v)
demand deposits in banks or similar financial institutions.
In determining the amount of outstanding Investments:
(A) the amount of any Investment shall be the cost thereof
minus any returns of capital in cash on such Investment (determined in
accordance with GAAP without regard to amounts realized as income on such
Investment);
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(B) the amount of any Investment in respect of a purchase
described in clause (d) above shall include the amount of any Financing
Debt assumed in connection with such purchase or secured by any asset
acquired in such purchase (whether or not any Financing Debt is assumed)
or for which any Person that becomes a Subsidiary is liable on the date
on which the securities of such Person are acquired; and
(C) no Investment shall be increased as the result of an
increase in the undistributed retained earnings of the Person in which
the Investment was made or decreased as a result of an equity interest in
the losses of such Person.
"ISP" is defined in Section 2.3.6.
"Legal Requirement" means any present or future requirement imposed upon
any of the Lenders or the Company and its Subsidiaries by any law, statute,
rule, regulation, directive, order, decree or guideline (or any interpretation
thereof by courts or of administrative bodies) of the United States of America,
or any jurisdiction in which any LIBOR Office is located or any state or
political subdivision of any of the foregoing, or by any board, governmental or
administrative agency, central bank or monetary authority of the United States
of America, any jurisdiction in which any LIBOR Office is located or where the
Company or any of its Subsidiaries owns property or conducts its business, or
any political subdivision of any of the foregoing. Any such law, statute, rule,
regulation, directive, order, decree, guideline or interpretation imposed on any
of the Lenders not having the force of law shall be deemed to be a Legal
Requirement for purposes of Section 3 if such Lender reasonably believes that
compliance therewith is customary commercial practice.
"Lender" means each of the Persons listed as lenders on the signature
page hereto, including Fleet in its capacity as a Lender and such other Persons
who may from time to time own a Percentage Interest in the Credit Obligations,
but the term "Lender" shall not include any Credit Participant in such capacity.
"Lending Officer" means such individuals whom the Agent may designate by
notice to the Company from time to time as an officer or employee who may
receive telephone requests for extensions of credit under Sections 2.1.3 and
2.3.2.
"Letter of Credit" is defined in Section 2.3.1.
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"Letter of Credit Exposure" means, at any date, the sum of (a) the
aggregate face amount of all drafts that may then or thereafter be presented by
beneficiaries under all Letters of Credit then outstanding, plus (b) the
aggregate face amount of all drafts that the Letter of Credit Issuer has
previously accepted under Letters of Credit but for which the Letter of Credit
Issuer has not been reimbursed by the Company (whether pursuant to an automatic
advance under the Revolving Loan or otherwise).
"Letter of Credit Issuer" means, for any Letter of Credit, Fleet or, in
the event Fleet does not for any reason issue a requested Letter of Credit,
another Lender selected by the Company to issue such Letter of Credit.
"LIBOR Basic Rate" means, for any LIBOR Interest Period:
(a) the rate of interest at which deposits of United States
Funds are offered in the London interbank market for a period of time
equal to such LIBOR Interest Period that appears on Telerate Page 3750 as
of 11:00 a.m. (London time) two Banking Days prior to the Banking Day on
which such LIBOR Interest Period begins or
(b) if no such rate appears on Telerate Page 3750, the rate of
interest determined by the Agent to be the average of up to four interest
rates per annum at which deposits of United States Funds are offered in
the London interbank market for a period of time equal to such LIBOR
Interest Period which appear on the Xxxxxx'x Screen LIBO Page as of 11:00
a.m. (London time) two Banking Days prior to the Banking Day on which
such LIBOR Interest Period begins if at least two such offered rates so
appear on the Xxxxxx'x Screen LIBO Page or
(c) if no such rate appears on Telerate Page 3750 and fewer
than two offered rates appear on the Xxxxxx'x Screen LIBO Page, the rate
of interest at which deposits of United States Funds in an amount
comparable to the portion of the Loan as to which the related LIBOR
Pricing Option has been elected and which have a term corresponding to
such LIBOR Interest Period are offered to the Agent by first class banks
in the London inter-bank market for delivery in immediately available
funds at a LIBOR Office on the first day of such LIBOR Interest Period as
determined by the Agent at approximately 11:00 a.m. (London time) two
Banking Days prior to the date upon which such LIBOR Interest Period is
to commence (which determination by the Agent shall, in the absence of
manifest error, be conclusive).
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"LIBOR Interest Period" means any period, selected as provided in Section
3.2.1, of one, two, three or six months, commencing on any Banking Day and
ending on the corresponding date in the subsequent calendar month so indicated
(or, if such subsequent calendar month has no corresponding date, on the last
day of such subsequent calendar month); provided, however, that subject to
Section 3.2.3, if any LIBOR Interest Period so selected would otherwise begin or
end on a date which is not a Banking Day, such LIBOR Interest Period shall
instead begin or end, as the case may be, on the immediately preceding or
succeeding Banking Day as determined by the Agent in accordance with the then
current banking practice in the inter-bank eurodollar market with respect to
eurodollar deposits at the applicable LIBOR Office, which determination by the
Agent shall, in the absence of manifest error, be conclusive.
"LIBOR Office" means such non-United States office or international
banking facility of any Lender as such Lender may from time to time select.
"LIBOR Pricing Options" means the options granted pursuant to Section
3.2.1 to have the interest on any portion of the Loan computed on the basis of a
LIBOR Rate.
"LIBOR Rate" for any LIBOR Interest Period means the rate, rounded upward
to the nearest 1/16, obtained by dividing (a) the LIBOR Basic Rate for such
LIBOR Interest Period by (b) an amount equal to 1 minus the LIBOR Reserve Rate;
provided, however, that if at any time during such LIBOR Interest Period the
LIBOR Reserve Rate applicable to any outstanding LIBOR Pricing Option changes,
the LIBOR Rate for such LIBOR Interest Period shall automatically be adjusted to
reflect such change, effective as of the date of such change to the extent
required by the Legal Requirement implementing such change.
"LIBOR Reserve Rate" means the stated maximum rate (expressed as a
decimal) of all reserves (including any basic, supplemental, marginal or
emergency reserve or any reserve asset), if any, as from time to time in effect,
required by any Legal Requirement to be maintained by any Lender against (a)
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System applicable to LIBOR Pricing Options or
(b)any other category of extensions of credit, or other assets, that includes
loans subject to a LIBOR Pricing Option by a non-United States office of any of
the Lenders to United States residents,
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in each case without the benefits of credits for prorations, exceptions or
offsets that may be available to a Lender.
"Lien" means, with respect to the Company (or any other specified
Person):
(a) any lien, encumbrance, mortgage, pledge, charge or security
interest of any kind upon any property or assets of the Company (or such
specified Person), whether now owned or hereafter acquired, or upon the
income or profits therefrom (excluding in any event a financing statement
filed by a lessor under an operating lease not intended to be a secured
financing);
(b) the acquisition of, or the agreement to acquire, any
property or asset upon conditional sale or subject to any other title
retention agreement, device or arrangement (including a Capitalized
Lease);
(c) the sale, assignment, pledge or transfer for security of
any accounts, general intangibles or chattel paper of the Company (or
such specified Person), with or without recourse; and
(d) in the case of securities, any purchase option, call or
similar purchase right of a third party.
"Loan" means, collectively, the Revolving Loan and the Acquisition Loan.
"Margin Stock" means "margin stock" within the meaning of Regulations T,
U or X of the Board of Governors of the Federal Reserve System.
"Material Adverse Change" means, since any specified date or from the
circumstances existing immediately prior to the happening of any specified
event, a material adverse change in (a) the business, assets, financial
condition or income of the Company, its Subsidiaries and the Restricted
Affiliates (after giving effect to the Acquisition), taken as a whole (it being
understood that the Internet Entity expects to incur significant operating
losses) or (b)the ability of any Obligor to perform material obligations under
the Credit Documents or (c) the rights and remedies of the Agent and the Lenders
under the Credit Documents.
"Material Agreements" is defined in Section 7.2.2.
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"Material Financing Debt" means any Financing Debt (other than the Credit
Obligations) outstanding in an aggregate amount of principal (whether or not
due) and accrued interest exceeding $1,000,000.
"Maximum Amount of Facility Credit" is defined in Section 2.2.1.
"Maximum Amount of Revolving Credit" is defined in Section 2.1.2.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means any Plan that is a "multiemployer plan" as
defined in section 400 1(a)(3) of ERISA.
"Net Asset Sale Proceeds" means the cash proceeds of the sale or
disposition of assets (including by way of merger), and the cash proceeds of any
insurance payments or condemnation awards on account of the destruction or loss
of property, by the Company or any of its Subsidiaries or any Restricted
Affiliate after the Initial Closing Date, net of (a) any Indebtedness permitted
by Section 6.6.2 (purchase money Indebtedness and Capitalized Leases) secured by
assets being sold in such transaction required to be paid from such proceeds,
(b) income taxes that, as estimated by the Company in good faith, will be
required to be paid by the Company or any of its Subsidiaries or any Restricted
Affiliate (or, in the case of tax flowthrough entities, by their owners) in cash
as a result of, and within two years after, such sale or disposition (provided
that any such amounts that are not actually paid in taxes within such period
shall automatically become Net Asset Sale Proceeds), (c) reasonable reserves for
liabilities, indemnification, escrows and purchase price adjustments resulting
from the sale of assets (d) transfer, sales, use and other similar taxes payable
in connection with such sale or disposition and (e) all reasonable expenses of
the Company or any of its Subsidiaries or any Restricted Affiliate payable in
connection with the sale or disposition; provided, however, that "Net Asset Sale
Proceeds" shall not include cash proceeds:
(i) not exceeding $100,000 in any fiscal year, or
(ii) of mergers permitted by Section 6.10.4.
"Net Debt Proceeds" means cash proceeds (net of reasonable out-of-pocket
transaction fees and expenses) from the incurrence by the Company, any of its
Subsidiaries or the Restricted Affiliates after the Initial Closing Date of
Financing
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Debt other than Financing Debt permitted by Sections 6.6.1 (the Loan), 6.6.2
(purchase money Indebtedness and Capitalized Leases) and 6.6.9 (intercompany
Indebtedness).
"Net Equity Proceeds" means the cash proceeds (net of reasonable out-of-
pocket fees and expenses) received by the Company or any of its Subsidiaries or
any Restricted Affiliate (other than as a result of a Qualified Public Offering)
in connection with any issuance by the Company, any of its Subsidiaries or the
Restricted Affiliates after the Initial Closing Date of any shares of its
capital stock, other equity interests or options, warrants or other purchase
rights to acquire such capital stock or other equity interests to, or receipt of
a capital contribution from, any Person (other than (a) any Obligors or their
officers, employees and directors or (b) USEP (so long as USEP is an Affiliate
of Xxxxxxxxxxx Xxxxxxx & Co., Inc.) and its limited partners or similar
co-investors and their respective Affiliates or (c) any other Person investing
in the Company, any of its Subsidiaries or the Restricted Affiliates as a
minority investor with the cooperation of USEP under circumstances in which USEP
shall retain at least a controlling equity voting interest in such issuer, and
the proceeds of such equity Investment remain in such issuer to the extent
required by Sections 6.8 and 6.9 or are applied contemporaneously and directly
to finance a Permitted Acquisition.
"Nonperforming Lender" is defined in Section 10.4.4.
"Notes" means, collectively, the Revolving Notes and the Acquisition
Notes.
"Obligor" means the Company, each Guarantor and each other Person
guaranteeing or providing collateral for the Credit Obligations.
"Offering Memorandum" is defined in Section 7.2.1.
"Overdue Reimbursement Rate" means, at any date, the highest Applicable
Rate then in effect.
"Payment Date" means (a) the last Banking Day of each March, June,
September and December, beginning on the first such date after the date hereof
and (b) the Final Maturity Date.
"PBGC" means the Pension Benefit Guaranty Corporation or any successor
entity.
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"Percentage Interest" means, with respect to any Lender, the Commitment
of such Lender with respect to the respective portions of the Loan and Letter of
Credit Exposure. For purposes of determining votes or consents by the Lenders,
the Percentage Interest of any Lender shall be computed as follows: (a) at all
times when no Event of Default under Section 8.1.1 and no Bankruptcy Default
exists, the ratio that the respective Commitments of such Lender bears to the
total Commitments of all Lenders as from time to time in effect and reflected in
the Register, and (b) at all other times, the ratio that the respective amounts
of the outstanding Loan and Letter of Credit Exposure owing to such Lender bear
to the total outstanding Loan and Letter of Credit Exposure owing to all
Lenders.
"Performing Lender" is defined in Section 10.4.4.
"Permitted Acquisition" is defined in Section 6.8.7.
"Person" means any present or future natural person or any corporation,
association, partnership, joint venture, limited liability, joint stock or other
company, business trust, trust, organization, business or government or any
governmental agency or political subdivision thereof.
"Plan" means, at any date, any pension benefit plan subject to Title IV
of ERISA maintained, or to which contributions have been made or are required to
be made, by any ERISA Group Person within six years prior to such date.
"Qualified Public Offering" means an underwritten registered public
offering of stock by the Internet Entity, Internet Holdings or Internet Corp.
that (a) raises gross proceeds to the issuer of at least $25,000,000 from
customary purchasers in the public equity markets, and (b) reflects an implied
pre-offering enterprise value of the Internet Entity (and its immediate parent)
of at least $150,000,000.
"Reference Leverage Ratio" means, on any date, the ratio of (a)
Consolidated Total Debt as of the end of the most recent period of four
consecutive fiscal quarters for which financial statements have been furnished
to the Lenders in accordance with Sections 6.4.1 and 6.4.2 prior to such date to
(b) Consolidated EBITDA for such period; provided, however, in the event that
during such period the Company and its Subsidiaries (i) make an acquisition
permitted by Section 6.8 (whether through stock purchase, asset purchase, merger
or consolidation), for purposes of determining the Reference Leverage Ratio,
Consolidated Net Income shall include the income (or loss) of such acquired
Person (or acquired assets) accrued during such period prior to
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the date of such acquisition or (ii) make a disposition of assets (including
stock of a Subsidiary) permitted by Section 6.10 (whether through stock sale,
asset sale, merger or consolidation), for purposes of determining the Reference
Leverage Ratio, Consolidated Net Income shall exclude the income (or loss) of
such transferred assets (or transferred Subsidiary) accrued during such period
prior to the date of such disposition. In making the computations contemplated
by the foregoing proviso, the Company may make appropriate pro forma adjustments
to reflect cost savings and other transaction-related items so long as all such
adjustments are reasonably acceptable to the Agent.
"Register" is defined in Section 11.1.3.
"Reinvestment Reserve" means an amount of Net Asset Sale Proceeds from a
sale or other disposition permitted by Section 6.10 not exceeding (a) $1,000,000
in any fiscal year in the aggregate and (b) an additional amount (to be used
only one time prior to the Final Maturity Date) equal to the lesser of (i)
$10,000,000 and (ii) the net proceeds from such sale or other disposition of
assets constituting a line of business contributing not more than 15% of
Consolidated EBITDA for the Company's most recently completed fiscal year, in
each case that has been designated by written notice from the Company to the
Agent at a time when no Default exists within five days prior to such sale or
other disposition as a reserve to the Revolving Loan Commitments to be used to
acquire replacement or other assets within 360 days; provided, however, that if
any such reserved amount is not actually used to acquire replacement or other
assets within such 360-day period, such amount shall no longer constitute a
Reinvestment Reserve and shall reduce the Revolving Loan Commitments.
"Related Fund" means, with respect to any Lender that is a fund that
invests in senior bank loans, any other fund that invests in senior bank loans
and is managed by the same investment advisor as such Lender or by an Affiliate
of such investment advisor.
"Replacement Lender" is defined in Section 11.3.
"Required Lenders" means, with respect to any approval, consent,
modification, waiver or other action to be taken by the Agent or the Lenders
under the Credit Documents which require action by the Required Lenders, such
Lenders as own at least two-thirds of the Percentage Interests; provided,
however, that (a) at any time when only two Lenders are party hereto, "Required
Lenders" shall mean both such
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Lenders and (b) with respect to any matters referred to in the proviso to
Section 14.1, Required Lenders means such Lenders as own at least the respective
portions of the Percentage Interests required by Section 14.1.
"Restricted Affiliates" means Company Holdings, the Content Entity and,
prior to the Qualified Public Offering, the Internet Entity and Internet
Holdings.
"Revolving Loan" is defined in Section 2.1.4.
"S&P" means Standard & Poor's, a division of The McGraw Hill Companies,
Inc.
"Securities Act" means the federal Securities Act of 1933.
"Seller" means ZD Inc., a Delaware corporation.
"Subsidiary" means any Person of which the Company (or other specified
Person) shall at the time, directly or indirectly through one or more of its
Subsidiaries, (a) own at least 50% of the outstanding capital stock (or other
shares of beneficial interest) entitled to vote generally or (b) hold at least
50% of the partnership, joint venture or similar interests. Notwithstanding the
foregoing, the Content Entity shall not constitute a "Subsidiary".
"Syndication Agent" means Dresdner Bank AG, New York and Grand Cayman
Branches.
"Tax" means any present or future tax, levy, duty, impost, deduction,
withholding or other charges of whatever nature at any time required by any
Legal Requirement (a) to be paid by any Lender or (b) to be withheld or deducted
from any payment otherwise required hereby to be made to any Lender, in each
case on or with respect to its obligations hereunder, the Loan, any payment in
respect of the Credit Obligations or any Funding Liability not included in the
foregoing; provided, however, that the term "Tax" shall not include taxes
imposed upon or measured by the net income of such Lender or franchise taxes
that are imposed in lieu of net income taxes.
"Training Content Assets" means (a) all property relating to the
development, acquisition or modification of course materials, journals and other
content for information technology, business and professional training in
existence as of the date
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hereof that has been acquired from the Seller in the Acquisition and (b) all
such property developed, acquired or modified by the Content Entity, the
Company, the Internet Entity or any of their respective Affiliates on or after
the date hereof.
"Tranche" means each of the Revolving Loan and the Acquisition Loan
considered as a separate credit facility.
"UCP" is defined in Section 2.3.6.
"United States Funds" means such coin or currency of the United States of
America as at the time shall be legal tender therein for the payment of public
and private debts.
"USEP" means U.S. Equity Partners, L.P., a Delaware limited partnership
controlled by Xxxxxxxxxxx Xxxxxxx & Co., Inc.
"Wholly Owned Subsidiary" means any Subsidiary of which all of the
outstanding capital stock (or other shares of beneficial interest) entitled to
vote generally (other than directors' qualifying shares and, in the case of
Foreign Subsidiaries, shares required by Legal Requirements to be, held by
foreign nationals) is owned by the Company (or other specified Person) directly,
or indirectly through one or more Wholly Owned Subsidiaries.
"WP Management" means WP Management Partners, LLC, a Delaware limited
liability company controlled by Xxxxxxxxxxx Xxxxxxx & Co., Inc.
2. The Credits.
2.1 Revolving Credit.
2.1.1 Revolving Loan. Subject to all the terms and conditions of
this Agreement and so long as no Default exists, from time to time on and
after the Initial Closing Date and prior to the Final Maturity Date the
Lenders will, severally in accordance with their respective Commitments
in the Revolving Loan, make loans to the Company in such amounts as may
be requested by the Company in accordance with Section 2.1.3. The sum of
the aggregate principal amount of loans made under this Section 2.1.1 at
any one time outstanding plus the Letter of Credit Exposure shall in no
event exceed the Maximum Amount of Revolving Credit. In no event will the
principal
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amount of loans at any one time outstanding made by any Lender pursuant
to this Section 2.1, together with such Lender's Percentage Interest in
the Letter of Credit Exposure, exceed such Lender's Commitment with
respect to the Revolving Loan.
2.1.2 Maximum Amount of Revolving Credit. The term "Maximum
Amount of Revolving Credit" means, on any date specified in the table
below, the lesser of (a) (i) the amount specified opposite such period in
such table:
Period Amount
Prior to June 30, 2001.......................... $55,000,000
June 30, 2001 through
September 29, 2001.............................. $51,562,500
September 30, 2001 through
December 30, 2001............................... $48,125,000
December 31, 2001 through
March 30, 2002.................................. $44,687,500
March 31, 2002 through
June 29, 2002................................... $41,250,000
June 30, 2002 through
September 29, 2002.............................. $38,156,250
September 30, 2002 through
December 30, 2002............................... $35,062,500
December 31, 2002 through
March 30, 2003.................................. $31,968,750
March 31, 2003 through
June 29, 2003................................... $28,875,000
June 30, 2003 though
September 29, 2003.............................. $26,468,750
September 30, 2003 through
December 30, 2003............................... $24,062,500
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December 31, 2003 through
March 30, 2004.................................. $21,656,250
March 31, 2004 through
June 29, 2004................................... $19,250,000
June 30, 2004 through
September 29, 2004.............................. $16,843,750
September 30, 2004 through
December 30, 2004............................... $14,437,500
December 31, 2004 through
March 30, 2005.................................. $12,031,250
March 31, 2005 through
June 29, 2005................................... $9,625,000
June 30, 2005 through
September 29, 2005.............................. $7,218,750
September 30, 2005 through
December 30, 2005............................... $4,812,500
December 31, 2005 through
and up to Final
Maturity Date................................... $2,406,250
Final Maturity Date............................. $0
minus (ii) the applicable pro rata portion of Net Asset Sale Proceeds described
in Section 4.3.3 (other than the Reinvestment Reserve), Net Debt Proceeds
described in Section 4.3.4 and Net Equity Proceeds described in Section 4.3.5,
in each case to the extent allocable to the Revolving Loan in accordance with
Section 4.6.2, minus (iii) the ECF Prepayment Percentage of Consolidated Excess
Cash Flow as described in Section 4.3.2 to the extent allocable to the Revolving
Loan in accordance with Section 4.6.2, minus (iv) the portion of the
Reinvestment Reserve that is not applied to the acquisition of replacement
assets within 360 days or (b) the amount (in an integral multiple of $1,000,000)
to which the then applicable amount set forth in such table shall have been
irrevocably reduced from time to time by three Banking Days notice from the
Company to the Agent. Once any such amount has been reduced as a result of
notice from the Company pursuant to the foregoing clause (b),
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no portion thereof may be subsequently reinstated. The Company shall not give a
notice reducing the amount applicable to any period in the table above unless it
shall also reduce the amounts applicable to all subsequent periods in such table
to at least the same specified lower amount, so that the Maximum Amount of
Revolving Credit for any subsequent period shall not exceed the Maximum Amount
of Revolving Credit applicable to any prior period.
2.1.3 Borrowing Requests. The Company may from time to time
request a loan under Section 2.1.1 by providing to the Agent a notice
(which may be given by a telephone call received by a Lending Officer if
promptly confirmed in writing). Such notice must be received by the Agent
not later than noon (Boston time) on the first Banking Day (third Banking
Day if any portion of such loan will be subject to a LIBOR Pricing Option
on the requested Closing Date) prior to the requested Closing Date for
such loan. The notice must specify (a) the amount of the requested loan,
which shall be not less than $1,000,000 and an integral multiple of
$500,000, (b) the requested Closing Date therefor, which shall be a
Banking Day and (c) in the case of an advance against the Reinvestment
Reserve, the intended use of proceeds therefor. Upon receipt of such
notice, the Agent will promptly inform each other Lender (by telephone or
otherwise). Each such loan will be made at the Boston Office by
depositing the amount thereof to the general account of the Company with
the Agent. In connection with each such loan, the Company shall furnish
to the Agent a certificate in substantially the form of Exhibit 5.2.1.
2.1.4 Revolving Notes. The aggregate principal amount of the
loans outstanding from time to time under this Section 2.1 is referred to
as the "Revolving Loan". The Agent shall keep a record of the Revolving
Loan and the respective interests of the Lenders therein as part of the
Register, which shall evidence the Revolving Loan. The Revolving Loan
shall be deemed owed to each Lender having a Commitment therein severally
in accordance with such Lender's Percentage Interest therein, and all
payments thereon shall be for the account of each Lender in accordance
with its Percentage Interest therein. Upon written request of any Lender,
the Company's obligations to pay such Lender's Percentage Interest in the
Revolving Loan shall be further evidenced by a separate note of the
Company in substantially the form of Exhibit 2.1.4 (the "Revolving
Notes"), payable to such Lender in accordance with such Lender's
Percentage Interest in the Revolving Loan.
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2.2 Acquisition Credit.
2.2.1 Request for Acquisition Facilities. Subject to all the
terms of this Agreement and so long as no Default exists, from time to
time on and after the Initial Closing Date and prior to the first
anniversary of the Initial Closing Date (the "Acquisition Facility
Revolver Termination Date"), the Company may request, by written notice
to the Agent, a revolving credit facility that will convert into a term
loan in accordance with Section 2.2.3 (an "Acquisition Facility") in a
specified aggregate amount (the "Maximum Amount of Facility Credit")
that, when added to the sum of the then effective Acquisition Facilities,
does not exceed $20,000,000. Such request shall also include a diligence
package with respect to the proposed acquisition to be financed with the
proceeds of such Acquisition Facility, containing satisfactory detailed
financial statements and projections demonstrating pro forma compliance
with this Agreement. Such diligence package shall be provided to the
Agent at least 15 days prior to the closing of the proposed acquisition.
Upon receipt of such request, the Agent will promptly notify each other
Lender (by telephone or otherwise). Within 15 days after receipt by the
Lenders of such request, each Lender interested in participating in the
requested Acquisition Facility shall notify the Agent and the Company of
its intent to participate and the maximum amount of its proposed
Commitment with respect to such Acquisition Facility (a "Commitment
Notice"); provided, however, that each Lender may participate in such
Acquisition Facility in its sole discretion, and no Lender shall be
deemed to have committed to participate in any Acquisition Facility as of
the date hereof, nor shall any Lender have any obligation to participate
in any Acquisition Facility unless and until it commits to do so as
provided in this Section 2.2.1. Following receipt of such Commitment
Notices, the Agent shall allocate the Commitments with respect to such
Acquisition Facility in accordance with the Lenders' relative requested
Commitments therein and shall advise each Lender of the amount of such
Lender's Commitment with respect to the Acquisition Facility. To the
extent the Lenders decline to provide the full amount requested for such
Acquisition Facility, the Agent shall use reasonable commercial efforts
(but shall in no event be obligated) to obtain replacement Commitments
from other financial institutions (who shall become Lenders hereunder
pursuant to a joinder agreement reasonably satisfactory to the Agent and
the Company). The interest rate, commitment fee rate and amortization
schedule for each Acquisition Facility shall be determined by the
Company and the Agent at the
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time the Company requests such Acquisition Facility from the Agent, but
in any event on terms substantially similar to the terms of the Revolving
Loan.
2.2.2 Borrowing Requests. The Company may from time to time prior
to the Acquisition Facility Revolver Termination Date request a loan
under this Section 2.2 by providing to the Agent a notice. Such notice
must be not later than noon (Boston time) on the first Banking Day (third
Banking Day if any portion of such loan will be subject to a LIBOR
Pricing Option on the requested Closing Date) prior to the requested
Closing Date for such loan. The notice must specify (a) the amount of the
requested loan (which shall be not less than $250,000 and an integral
multiple of $5,000) and (b) the requested Closing Date therefor (which
shall be a Banking Day). Upon receipt of such notice, the Agent will
promptly inform each other Lender having a Commitment in such Acquisition
Facility (by telephone or otherwise). Each such loan will be made at the
Boston Office by depositing the amount thereof to the general account of
the Company with the Agent or by wire transfer as the Company may direct
in writing to the Agent. In connection with each such loan, the Company
shall furnish to the Agent a certificate in substantially the form of
Exhibit 5.2.1.
2.2.3 Conversion Upon Acquisition Facility Revolver Termination
Date. Upon the Acquisition Facility Revolver Termination Date, any unused
portion of the Acquisition Facility shall be canceled, and amounts
outstanding under each Acquisition Facility will convert into a term loan
in an aggregate amount equal to the outstanding amount of all Acquisition
Facilities on such date (the "Acquisition Term Loan"). The Acquisition
Term Loan will amortize as provided in Section 4.2.
2.2.4 Acquisition Notes. The aggregate principal amount of the
loans outstanding from time to time under this Section 2.2 is referred to
as the "Acquisition Loan". The Agent shall keep a record of the
Acquisition Loan and the interests of the respective Lenders therein as
part of the Register, which shall evidence the Acquisition Loan. The
Acquisition Loan shall be deemed owed to each Lender having a Commitment
therein severally in accordance with such Lender's Percentage Interest
therein, and all payments thereon shall be for the account of each Lender
in accordance with its Percentage Interest therein. Upon request of any
Lender, the Company's obligations to pay such Lender's Percentage
Interest in the Acquisition Loan shall be evidenced by a separate note of
the Company in substantially the form of
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Exhibit 2.2.4 (the "Acquisition Notes"), payable to such Lender in
accordance with such Lender's Percentage Interest in the Acquisition
Loan.
2.3 Letters of Credit.
2.3.1 Issuance of Letters of Credit. Subject to all the terms and
conditions of this Agreement and so long as no Default exists, from time
to time on and after the Initial Closing Date and prior to the date five
Banking Days preceding the Final Maturity Date, the Letter of Credit
Issuer will issue for the account of the Company one or more irrevocable
documentary or standby letters of credit (the "Letters of Credit"). The
sum of Letter of Credit Exposure plus the Revolving Loan shall in no
event exceed the Maximum Amount of Revolving Credit. Letter of Credit
Exposure shall in no event exceed $5,000,000.
2.3.2 Requests for Letters of Credit. The Company may from time
to time request a Letter of Credit to be issued by providing to the
Letter of Credit Issuer (and the Agent if the Letter of Credit Issuer is
not the Agent) a notice which is actually received by the Agent not less
than five Banking Days (for standby Letters of Credit) and one Banking
Day (for documentary Letters of Credit) prior to the requested Closing
Date for such Letter of Credit specifying (a) the amount of the requested
Letter of Credit, (b)the beneficiary thereof, (c) the requested Closing
Date and (d) a summary of the principal terms of the text for such Letter
of Credit, together with the customary application form required by the
Letter of Credit Issuer. In the event of any inconsistency between such
application form and this Agreement, this Agreement shall govern. Each
Letter of Credit will be issued by forwarding it to the Company or to
such other Person as directed in writing by the Company. In connection
with the issuance of any Letter of Credit, the Company shall furnish to
the Letter of Credit Issuer (and the Agent if the Letter of Credit Issuer
is not the Agent) a certificate in substantially the form of Exhibit
5.2.1.
2.3.3 Form and Expiration of Letters of Credit. Each Letter of
Credit issued under this Section 2.3 and each draft accepted or paid
under a Letter of Credit shall be issued, accepted or paid, as the case
may be, by the Letter of Credit Issuer at its principal office. No Letter
of Credit shall provide for the payment of drafts drawn thereunder, and
no draft shall be payable, at a date which is later than the earlier of
(a) the date 12 months after the date of
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issuance (which expiration date may be extended at the option of the
Letter of Credit Issuer for additional 12-month periods ending prior to
the date referred to in clause (b) below) or (b) five Banking Days prior
to the Final Maturity Date. Each Letter of Credit and each draft accepted
under a Letter of Credit shall be in such form and minimum amount, and
shall contain such terms, as the Letter of Credit Issuer and the Company
may agree upon at the time such Letter of Credit is issued.
2.3.4 Lenders' Participation in Letters of Credit. Upon the
issuance of any Letter of Credit, a participation therein, in an amount
equal to each Lender's Percentage Interest in the Revolving Loan, shall
automatically be deemed granted by the Letter of Credit Issuer to each
such Lender on the date of such issuance and such Lenders shall
automatically be obligated, as set forth in Section 10.4, to reimburse
the Letter of Credit Issuer to the extent of their respective Percentage
Interests in the Revolving Loan for all obligations incurred by the
Letter of Credit Issuer to third parties in respect of such Letter of
Credit not reimbursed by the Company. The Letter of Credit Issuer will
send to each Lender (and the Agent if the Letter of Credit Issuer is not
the Agent) a confirmation regarding the participations in Letters of
Credit outstanding during such month.
2.3.5 Reimbursement of Payment. At such time as a Letter of
Credit Issuer makes any payment on a draft presented or accepted under a
Letter of Credit, the amount of such payment shall be considered a loan
under Section 2.1.1 (regardless of whether the conditions set forth in
Section 5.2 are satisfied) and part of the Revolving Loan as if the
Company had paid in full the amount required with respect to the Letter
of Credit by borrowing such amount under Section 2.1.1, except as
provided below. In the event such amount would cause the Revolving Loan
to exceed the Maximum Amount of Revolving Credit or if during the
existence of an Event of Default the Agent provides written notice to the
Company that Letter of Credit payments will no longer be considered loans
under Section 2.1.1, the Company will on demand pay to the Agent in
immediately available funds the amount of such payment.
2.3.6 UCP; ISP. As to any Letter of Credit that is a documentary
letter of credit, the most recent Uniform Customs and Practice for
Documentary Credits adopted by a Congress of the International Chamber of
Commerce, and any subsequent revisions thereof approved by a Congress of
the International Chamber of Commerce and adhered to by the Letter of
Credit
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Issuer (the "UCP"), shall be binding on the Company and the Letter of
Credit Issuer except to the extent otherwise provided herein, in any
Letter of Credit or in any other Credit Document. As to any Letter of
Credit that is a standby letter of credit, the most recent International
Standby Practices adopted by a Congress of the International Chamber of
Commerce, and any subsequent revisions thereof approved by a Congress of
the International Chamber of Commerce and adhered to by the Letter of
Credit Issuer (the "ISP"). shall be binding on the Company and the
Letter of Credit Issuer except for to the extent otherwise provided
herein, in any Letter of Credit or in any other Credit Document. Without
limiting the foregoing, in the event of an unexpected closure of the
Letter of Credit Issuer Letter of Credit draws may be made up to only
two Banking Days after the reopening of the Letter of Credit Issuer
rather than the 30-day period provided in Rule 3.14(a) of the ISP.
Anything in the UCP or the ISP to the contrary notwithstanding:
(a) With respect to each Letter of Credit, neither the Letter
of Credit Issuer nor its correspondents shall be responsible for or shall
have any duty to ascertain (unless the Letter of Credit Issuer or such
correspondent is grossly negligent or willful in failing so to
ascertain):
(i) the genuineness of any signature or the
validity, form, sufficiency, accuracy, genuineness or legal effect
of any endorsements;
(ii) delay in giving, or failure to give, notice
of arrival, notice of refusal of documents or of discrepancies in
respect of which any Letter of Credit Issuer refuses the documents
or any other notice, demand or protest;
(iii) the performance by any beneficiary under any
Letter of Credit of such beneficiary's obligations to the Company;
(iv) inaccuracy in any notice received by the
Letter of Credit Issuer;
(v) the validity, form, sufficiency, accuracy,
genuineness or legal effect of any instrument, draft, certificate
or other document required by such Letter of Credit to be
presented before payment of a draft if such instrument, draft,
certificate or other document appears
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on its face to comply with the requirements of the Letter of
Credit, or the office held by or the authority of any Person
signing any of the same; or
(vi) failure of any instrument to bear any
reference or adequate reference to such Letter of Credit, or
failure of any Person to note the amount of any instrument on the
reverse of such Letter of Credit or to surrender such Letter of
Credit or to forward documents in the manner required by such
Letter of Credit.
(b) Except insofar as a particular Letter of Credit contains
express, contrary instructions, the Letter of Credit Issuer may honor as
complying with the terms of any Letter of Credit and with this Agreement
any drafts or other documents otherwise in order signed or issued by an
administrator, executor, conservator, trustee in bankruptcy, debtor in
possession, assignee for benefit of creditors, liquidator, receiver or
other legal representative of the party authorized under such Letter of
Credit to draw or issue such drafts or other documents.
(c) The occurrence of any of the events referred to in the UCP
or the ISP or in the preceding clauses of this Section 2.3.6 shall not
affect or prevent the vesting of any of the Letter of Credit Issuer's
rights or powers hereunder or the Company's obligation to make
reimbursement (whether by cash payment or refinancing with proceeds of
the Revolving Loan) of amounts paid under any Letter of Credit or any
draft accepted thereunder.
(d) In the event of any conflict between the provisions of this
Agreement and either the UCP or the ISP, the provisions of this Agreement
shall govern.
2.3.7 Subrogation. Upon any payment by a Letter of Credit Issuer
under any Letter of Credit and until the reimbursement of such Letter of
Credit Issuer by the Company with respect to such payment (whether by
cash payment or refinancing with proceeds of the Revolving Loan), the
Letter of Credit Issuer shall be entitled to be subrogated to, and to
acquire and retain, the rights which the Person to whom such payment is
made may have against the Company, all for the benefit of the Lenders.
The Company will take such action as the Letter of Credit Issuer may
reasonably request, including requiring the beneficiary of any Letter of
Credit to execute such documents as
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the Letter of Credit Issuer may reasonably request, to assure and confirm
to the Letter of Credit Issuer such subrogation and such rights,
including the rights, if any, of the beneficiary to whom such payment is
made in accounts receivable, inventory and other properties and assets of
any Obligor.
2.3.8 Modification. Consent, etc. If the Company requests or
consents in writing to any modification or extension of any Letter of
Credit, or waives any failure of any draft, certificate or other document
to comply with the terms of such Letter of Credit, the Letter of Credit
Issuer shall be entitled to rely on such request, consent or waiver. This
Agreement shall be binding upon the Company with respect to such Letter
of Credit as so modified or extended, and with respect to any action
taken or omitted by such Letter of Credit Issuer pursuant to any such
request, consent or waiver.
2.4 Application of Proceeds.
2.4.1 Revolving Loan. Subject to Section 2.4.4, the Company will
apply the proceeds of the Revolving Loan for the Acquisition, working
capital and other lawful corporate purposes of the Company and its
Subsidiaries; provided, however, that a Reinvestment Reserve may only be
used to acquire replacement or other assets.
2.4.2 Acquisition Loan. The Company will apply the proceeds of
the Acquisition Loan to finance Permitted Acquisitions, including the
repayment of related Indebtedness of the acquired entity that will not be
assumed by the Company and its Subsidiaries and to pay the related
transaction fees and expenses.
2.4.3 Letters of Credit. Letters of Credit shall be issued only
for such lawful corporate purposes as the Company has requested in
writing and to which the Letter of Credit Issuer agrees.
2.4.4 Specifically Prohibited Applications. The Company will not,
directly or indirectly, apply any part of the proceeds of any extension
of credit made pursuant to the Credit Documents in a manner that would
cause the borrowing or the application of such proceeds to violate any
Legal Requirements applicable to the Lenders.
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3. Interest; LIBOR Pricing Options; Fees.
3.1 Interest. The Loan shall accrue and bear interest at a rate per
annum which shall at all times equal the Applicable Rate. Prior to any stated or
accelerated maturity of the Loan, the Company will, on each Payment Date, pay
the accrued and unpaid interest on the portion of the Loan which was not subject
to a LIBOR Pricing Option. On the last day of each LIBOR Interest Period or on
any earlier termination of any LIBOR Pricing Option, the Company will pay the
accrued and unpaid interest on the portion of the Loan which was subject to the
LIBOR Pricing Option which expired or terminated on such date. In the case of
any LIBOR Interest Period longer than three months, the Company will also pay
the accrued and unpaid interest on the portion of the Loan subject to the LIBOR
Pricing Option having such LIBOR Interest Period at three-month intervals, the
first such payment to be made on the last Banking Day of the three-month period
which begins on the first day of such LIBOR Interest Period. On the stated or
any accelerated maturity of the Loan, the Company will pay all accrued and
unpaid interest on the Loan, including any accrued and unpaid interest on any
portion of the Loan which is subject to a LIBOR Pricing Option. All payments of
interest hereunder shall be made to the Agent for the account of each Lender in
accordance with such Lender's Percentage Interest therein.
3.2 LIBOR Pricing Options.
3.2.1 Election of LIBOR Pricing Options. Subject to all of the
terms and conditions hereof and so long as no Default exists, the Company
may from time to time, by irrevocable notice to the Agent actually
received by noon (Boston time) not less than three Banking Days prior to
the commencement of the LIBOR Interest Period selected in such notice,
elect to have such portion of the Loan as the Company may specify in such
notice accrue and bear interest during the LIBOR Interest Period so
selected at the Applicable Rate computed on~the basis of the LIBOR Rate.
In the event the Company at any time does not elect a LIBOR Pricing
Option under this Section 3.2.1 for any portion of the Loan (upon
termination of a LIBOR Pricing Option or otherwise), then such portion of
the Loan will accrue and bear interest at the Applicable Rate based on
the Base Rate. A single LIBOR Pricing Option may include any portion of
the Revolving Loan designated by the Company in the notice referred to
above. No election of a LIBOR Pricing Option shall become effective:
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(a) if, prior to the commencement of any such LIBOR Interest
Period, the Agent reasonably determines that, by reason of circumstances
arising after the date hereof, after consultation with the Company, (i)
the electing or granting of the LIBOR Pricing Option in question would
violate a Legal Requirement, (ii) eurodollar deposits in an amount
comparable to the amount of the Loan as to which such LIBOR Pricing
Option has been elected and which have a term corresponding to the
proposed LIBOR Interest Period are not readily available in the
inter-bank eurodollar market, or (iii) by reason of circumstances
affecting the inter-bank eurodollar market, adequate and reasonable
methods do not exist for ascertaining the interest rate applicable to
such deposits for the proposed LIBOR Interest Period; or
(b) if the Required Lenders shall have advised the Agent by
telephone or otherwise at or prior to noon (Boston time) on the second
Banking Day prior to the commencement of such proposed LIBOR Interest
Period (and shall have subsequently confirmed in writing) that, after
reasonable efforts to determine the availability of such eurodollar
deposits, the Required Lenders reasonably anticipate that eurodollar
deposits in an amount equal to the Percentage Interest of the Required
Lenders in the portion of the Loan as to which such LIBOR Pricing Option
has been elected and which have a term corresponding to the LIBOR
Interest Period in question will not be offered in the eurodollar market
to the Required Lenders at a rate of interest that does not exceed the
anticipated LIBOR Basic Rate.
3.2.2 Notice to Lenders and Company. The Agent will promptly
inform each Lender (by telephone or otherwise) of each notice received by
it from the Company pursuant to Section 3.2.1 and of the LIBOR Interest
Period specified in such notice. Upon determination by the Agent of the
LIBOR Rate for such LIBOR Interest Period or in the event such election
shall not become effective, the Agent will promptly notify the Company
and each Lender (by telephone or otherwise) of the LIBOR Rate so
determined or why such election did not become effective, as the case may
be.
3.2.3 Selection of LIBOR Interest Periods. LIBOR Interest Periods
shall be selected so that:
(a) the minimum portion of the Loan subject to any LIBOR
Pricing Option shall be $1,000,000 and an integral multiple of
$1,000,000;
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(b) no more than six LIBOR Pricing Options shall be outstanding
at any one time;
(c) no LIBOR Interest Period shall expire later than the Final
Maturity Date; and
(d) prior to the earlier of the date 60 days after the Initial
Closing Date or the date the Agent informs the Company that the proposed
initial syndication of the credit facilities provided hereby will close,
no LIBOR Interest Period shall extend beyond such date except with the
written consent of the Agent. The Company and the Agent shall confer
about the appropriate scheduling of the selection of LIBOR Interest
Periods to facilitate the anticipated syndication of the credit
facilities provided herein to other Lenders.
3.2.4 Additional Interest. If any portion of the Loan subject to
a LIBOR Pricing Option is repaid, or any LIBOR Pricing Option is
terminated for any reason (including acceleration of maturity, but
excluding a termination caused by default by a Lender), on a date which
is prior to the last Banking Day of the LIBOR Interest Period applicable
to such LIBOR Pricing Option, the Company will pay to the Agent for the
account of each Lender in accordance with such Lender's Percentage
Interest, in addition to any amounts of interest otherwise payable
hereunder, an amount equal to the losses (excluding lost profits)
incurred by such Lender as a result of such early prepayment or
termination. The determination by the Agent of such amount of such losses
shall, in the absence of manifest error, be conclusive. For purposes of
this Section 3.2.4, if any portion of the Loan which was to have been
subject to a LIBOR Pricing Option is not outstanding on the first day of
the LIBOR Interest Period applicable to such LIBOR Pricing Option other
than for reasons described in Section 3.2.1 or as a result of the failure
of any Lender to perform its obligations under Section 2, the Company
shall be deemed to have terminated such LIBOR Pricing Option.
3.2.5 Violation of Legal Requirements. If any mandatory Legal
Requirement shall prevent any Lender from funding or maintaining through
the purchase of deposits in the interbank eurodollar market any portion
of the Loan subject to a LIBOR Pricing Option or otherwise from giving
effect to such Lender's obligations as contemplated by Section 3.2, (a)
the Agent may by notice to the Company terminate all of the affected
LIBOR Pricing Options of such Lender, (b)the portion of the Loan subject
to such terminated
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LIBOR Pricing Options shall immediately bear interest thereafter at the
Applicable Rate computed on the basis of the Base Rate and (c) the
Company shall make any payment required by Section 3.2.4.
3.2.6 Funding Procedure. The Lenders may fund any portion of the
Loan subject to a LIBOR Pricing Option out of any funds available to the
Lenders. Regardless of the source of the funds actually used by any of
the Lenders to fund any portion of the Loan subject to a LIBOR Pricing
Option, however, all amounts payable hereunder, including the interest
rate applicable to any such portion of the Loan and the amounts payable
under Sections 3.2.4 and 3.5, shall be computed as if each Lender had
actually funded such Lender's Percentage Interest in such portion of the
Loan through the purchase of deposits in such amount of the type by which
the LIBOR Basic Rate was determined with a maturity the same as the
applicable LIBOR Interest Period relating thereto and through the
transfer of such deposits from an office of the Lender having the same
location as the applicable LIBOR Office to one of such Lender's offices
in the United States of America.
3.3 Commitment Fees. In consideration of the Lenders' commitments to
make the extensions of credit provided for in Section 2.1, while such
commitments are outstanding, the Company will pay to the Agent for the account
of the Lenders in accordance with the Lenders' respective Commitments in the
Revolving Loan, on each Payment Date, an amount equal to daily interest computed
at the rate of 0.500% per annum on the amount by which (a) the daily Maximum
Amount of Revolving Credit during the three-month period or portion thereof
ending on such Payment Date exceeded (b)the sum of (i) the daily Revolving Loan
during such period or portion thereof plus (ii) the daily Letter of Credit
Exposure during such period or portion thereof.
3.4 Letter of Credit Fees. The Company will pay to the Agent for the
account of the Lenders, in accordance with the Lenders' respective Percentage
Interests, on each Payment Date, a Letter of Credit fee equal to daily interest
at a rate per annum equal to the Applicable Margin indicated for the LIBOR Rate
on the daily Letter of Credit Exposure during the three-month period or portion
thereof ending on such Payment Date. The Company will pay to the Letter of
Credit Issuer for its own account on the date such Letter of Credit is issued,
extended, renewed or amended an amount equal to (a) 1/8% of the amount of such
Letter of Credit and (b) customary service charges and expenses for its services
in connection with the Letters of Credit at the times and in the amounts from
time to time in effect in accordance with its
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general rate structure, including fees and expenses relating to issuance,
amendment, negotiation, cancellation and similar operations.
3.5 Changes in Circumstances; Yield Protection.
3.5.1 Reserve Requirements, etc. If any Legal Requirement shall
(a) impose, modify, increase or deem applicable any insurance assessment,
reserve, special deposit or similar requirement against any Funding
Liability or the Letters of Credit, (b) impose, modify, increase or deem
applicable any other requirement or condition with respect to any Funding
Liability or the Letters of Credit, or (c) change the basis of taxation
of Funding Liabilities or payments in respect of any Letter of Credit
(other than changes in the rate of taxes measured by the overall net
income of such Lender) and the effect of any of the foregoing shall be to
increase the cost to any Lender of issuing, making, funding or
maintaining its respective Percentage Interest in any portion of the Loan
subject to a LIBOR Pricing Option or any Letter of Credit, to reduce the
amounts received or receivable by such Lender under this Agreement or to
require such Lender to make any payment or forego any amounts otherwise
payable to such Lender under this Agreement (other than any Tax or any
reserves that are included in computing the LIBOR Reserve Rate), then
such Lender may claim compensation from the Company under Section 3.5.5.
3.5.2 Taxes.
(a) All payments of the Credit Obligations shall be made
without set-off or counterclaim and free and clear of any deductions,
including deductions for Taxes, unless the Company is required by law to
make such deductions. If (i) any Lender shall be subject to any Tax with
respect to any payment of the Credit Obligations or its obligations
hereunder or (ii) the Company shall be required to withhold or deduct any
Tax on any payment on the Credit Obligations, then such Lender may claim
compensation from the Company under Section 3.5.5 to the extent such
Lender is then in compliance with any applicable requirements of
paragraph (b) below. Whenever Taxes must be withheld by the Company with
respect to any payments of the Credit Obligations, the Company shall
promptly furnish to the Agent for the account of the applicable Lender
official receipts (to the extent that the relevant governmental authority
delivers such receipts) evidencing payment of any such Taxes so withheld.
If the Company fails to pay any such Taxes when
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due or fails to remit to the Agent for the account of the applicable
Lender the required receipts evidencing payment of any such Taxes so
withheld or deducted, the Company shall indemnify the affected Lender for
any incremental Taxes and interest or penalties that may become payable
by such Lender as a result of any such failure. In the event any Lender
receives a refund of any Taxes for which it has received payment from the
Company under this Section 3.5.2, such Lender shall promptly pay the
amount of such refund to the Company, together with any interest thereon
actually earned by such Lender.
(b) If any Lender is not created or organized in, or under the
laws of, the United States of America or any state thereof, such Lender
shall deliver to the Company and the Agent such duly executed forms and
statements from time to time as may be necessary so that such Lender is
entitled to receive payments of the Credit Obligations payable to it
without deduction or withholding of any United States federal income
taxes, to the extent such exemption is available to such Lender. If no
such exemption is available at the time a Lender becomes party to this
Agreement or if at any time the Company and the Agent have not received
all forms and statements (including any renewals thereof) required to be
provided by any Lender pursuant to this paragraph (b), paragraph (a)
above shall not apply with respect to any amount of United States federal
income taxes required to be withheld from payments of the Credit
Obligations to such Lender.
3.5.3 Capital Adequacy. If any Lender shall reasonably determine
that compliance by such Lender with any Legal Requirement after the date
hereof regarding capital adequacy of banks or bank holding companies has
or would have the effect of reducing the rate of return on the capital of
such Lender and its Affiliates as a consequence of such Lender's
commitment to make the extensions of credit contemplated hereby, or such
Lender's maintenance of the extensions of credit contemplated hereby, to
a level below that which such Lender could have achieved but for such
compliance (taking into consideration the policies of such Lender and its
Affiliates with respect to capital adequacy immediately before such
compliance and assuming that the capital of such Lender and its
Affiliates was fully utilized prior to such compliance) by an amount
reasonably deemed by such Lender to be material, then such Lender may
claim compensation from the Company under Section 3.5.5.
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3.5.4 Regulatory Changes. If any Lender shall determine that (a)
any change in any Legal Requirement (including any new Legal Requirement)
after the date hereof shall directly or indirectly (i) reduce the amount
of any sum received or receivable by such Lender with respect to the Loan
or the Letters of Credit or the return to be earned by such Lender on the
Loan or the Letters of Credit, (ii) impose a cost on such Lender or any
Affiliate of such Lender that is attributable to the making or
maintaining of, or such Lender's commitment to make, its portion of the
Loan or the Letters of Credit, or (iii) require such Lender or any
Affiliate of such Lender to make any payment on, or calculated by
reference to, the gross amount of any amount received by such Lender
under any Credit Document (other than Taxes or income or franchise
taxes), and (b) such reduction, increased cost or payment shall not be
fully compensated for by an adjustment in the Applicable Rate or the
Letter of Credit fees, then such Lender may claim compensation from the
Company under Section 3.5.5.
3.5.5 Compensation Claims. Within 15 days after the receipt by
the Company of a certificate from any Lender setting forth why it is
claiming compensation under this Section 3.5 and computations (in
reasonable detail) of the amount thereof, the Company shall pay to such
Lender such additional amounts as such Lender sets forth in such
certificate as sufficient fully to compensate it on account of the
foregoing provisions of this Section 3.5, together with interest on such
amount from the 15th day after receipt of such certificate until payment
in full thereof at the Overdue Reimbursement Rate. The determination by
such Lender of the amount to be paid to it and the basis for computation
thereof hereunder shall be conclusive so long as (a) such determination
is made in good faith, (b) no manifest error appears therein and (c) the
Lender uses reasonable averaging and attribution methods. The Company
shall be entitled to replace any such Lender in accordance with Section
11.3.
3.5.6 Mitigation. Each Lender shall take such commercially
reasonable steps as it may determine are not disadvantageous to it,
including changing lending offices to the extent feasible, in order to
reduce amounts otherwise payable by the Company to such Lender pursuant
to Sections 3.2.4 and 3.5 or to make LIBOR Pricing Options available
under Sections 3.2.1 and 3.2.5. In addition, the Company shall not be
responsible for costs (a) under Section 3.5 arising more than 90 days
prior to receipt by the Company of the certificate from the affected
Lender pursuant to such Section 3.5 or
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(b)under Section 3.2.4 arising from the termination of LIBOR Pricing
Options more than 90 days prior to the demand by the Agent for payment
under Section 3.2.4.
3.6 Computations of Interest and Fees. For purposes of this Agreement,
interest, commitment fees and Letter of Credit fees (and any other amount
expressed as interest or such fees) shall be computed on the basis of a 360-day
year for actual days elapsed; provided, however, that interest on any portion of
the Loan calculated with respect to clause (a) of the Base Rate shall be
computed on the basis of a 365-day year. If any payment required by this
Agreement becomes due on any day that is not a Banking Day, such payment shall,
except as otherwise provided in the definition of "LIBOR Interest Period", be
made on the next succeeding Banking Day. If the due date for any payment of
principal is extended as a result of the immediately preceding sentence,
interest shall be payable for the time during which payment is extended at the
Applicable Rate.
3.7 Maximum Lawful Interest Rate. All Credit Documents are expressly
limited so that in no event, including the acceleration of the maturity of the
Credit Obligations, shall the amount paid or agreed to be paid in respect of
interest on the Credit Obligations exceed the maximum permissible amount under
applicable law, as in effect on the date hereof and as subsequently amended or
modified to allow a greater amount of interest to be paid under the Credit
Documents. If for any reason the amount in respect of interest required by the
Credit Documents exceeds such maximum permissible amount, the obligation to pay
interest under the Credit Documents shall be automatically reduced to such
maximum permissible amount and any amounts in respect of interest previously
paid to the Lenders in excess of such maximum permissible amount shall be
automatically applied to reduce the amount of the Loans and Letter of Credit
Exposure.
4. Payment.
4.1 Payment at Maturity. On the Final Maturity Date or any accelerated
maturity of the Loan, the Company will pay to the Agent an amount equal to the
Loan then due, together with all accrued and unpaid interest and fees with
respect thereto and all other Credit Obligations then outstanding.
4.2 Scheduled Required Prepayments. On each Payment Date set forth
below, the Company will pay to the Agent as a prepayment of the Acquisition Term
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Loan the lesser of (a) the percentage set forth below for such date of the
Acquisition Term Loan outstanding on the Acquisition Facility Revolver
Termination Date or (b) the amount of the Acquisition Term Loan then
outstanding.
Payment Date Percentage Amount
------------ -----------------
June 30,2001..................................................6.250%
September 30, 2001............................................6.250%
December 31, 2001.............................................6.250%
March 31, 2002................................................6.250%
June 30, 2002.................................................5.625%
September 30, 2002............................................5.625%
December 31, 2002.............................................5.625%
March 31, 2003................................................5.625%
June 30, 2003.................................................4.375%
September 30, 2003............................................4.375%
December 31, 2003.............................................4.375%
March 31, 2004................................................4.375%
June 30, 2004.................................................4.375%
September 30, 2004............................................4.375%
December 31, 2004.............................................4.375%
March 31, 2005................................................4.375%
June 30, 2005.................................................4.375%
September 30, 2005............................................4.375%
December 31, 2005.............................................4.375%
March 31, 2006................................................4.375%
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4.3 Contingent Required Prepayments.
4.3.1 Excess Credit Exposure. If at any time the Revolving Loan
exceeds the limits set forth in Section 2.1, the Company shall within one
Banking Day pay the amount of such excess to the Agent as a prepayment of
the Revolving Loan. If at any time the Letter of Credit Exposure exceeds
the limits set forth in Section 2.2, the Company shall within one Banking
Day pay the amount of such excess to the Agent to be applied as provided
in Section 4.5. If at any time any portion of the Acquisition Loan
exceeds the applicable Maximum Amount of Facility Credit, or the
aggregate Acquisition Loan exceeds $20,000,000, the Company shall within
one Banking Day pay the amount of such excess to the Agent as a
prepayment of the Acquisition Loan.
4.3.2 Excess Cash Flow. Within five Banking Days after the date
annual financial statements have been (or are required to have been)
furnished by the Company to the Lenders in accordance with Section 6.4.1,
commencing with financial statements for the fiscal year ending December
31, 2000, the Company shall pay to the Agent as a prepayment of the Loan
to be applied as provided in Section 4.6.2 an amount equal to the lesser
of (a) the remainder, if any of (i) the ECF Prepayment Percentage of
Consolidated Excess Cash Flow for its most recently completed fiscal year
minus (ii) to the extent such amount does not reduce Consolidated Fixed
Charges, voluntary prepayments of the Acquisition Term Loan and other
term Financing Debt of the Company, and its Subsidiaries permitted by
this Agreement during such year and prepayments of the Revolving Loan
during such year to the extent necessary to reduce the Revolving Loan to
the level established by a voluntary reduction of the Maximum Amount of
Revolving Credit, or (b) the amount of the Loan.
4.3.3 Net Asset Sale Proceeds. Upon receipt of Net Asset Sale
Proceeds by the Company, any of its Subsidiaries or any Restricted
Affiliates, the Company shall within three Banking Days pay to the Agent
as a prepayment of the Loan to be applied as provided in Section 4.6.2
the lesser of: (a) the amount of such Net Asset Sale Proceeds or (b) the
amount of the Loan; provided, however, that Net Asset Sale Proceeds
constituting part of a Reinvestment Reserve are not required to be
applied to repay the Loan.
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4.3.4 Net Debt Proceeds. Upon receipt of Net Debt Proceeds by the
Company, any of its Subsidiaries or any Restricted Affiliates, the
Company shall within three Banking Days pay to the Agent as a prepayment
of the Loan to be applied as provided in Section 4.6.2 the lesser of (a)
the amount of such Net Debt Proceeds or (b) the amount of the Loan.
4.3.5 Net Equity Proceeds. Upon receipt of Net Equity Proceeds by
the Company, any of its Subsidiaries or any Restricted Affiliates, the
Company shall within three Banking Days pay to the Agent as a prepayment
of the Loan to be applied as provided in Section 4.6.2 the lesser of (a)
the amount of such Net Equity Proceeds sufficient to reduce the Reference
Leverage Ratio, on a pro forma basis assuming that all such Net Equity
Proceeds were applied to reduce Consolidated Total Debt to no greater
than 3.00X, or (b) the amount of the Loan.
4.4 Voluntary Prepayments. In addition to the prepayments required by
Sections 4.2 and 4.3, the Company may from time to time prepay all or any
portion of the Loan (in a minimum amount of $1,000,000 and an integral multiple
of $500,000 with respect to the Revolving Loan, and in a minimum amount of
$250,000 and an integral multiple of $5,000 with respect to the Acquisition
Loan, or in each case, such lesser amount as is then outstanding), without
premium or penalty of any type (except as provided in Section 3.2.4 with respect
to the early termination of LIBOR Pricing Options). The Company shall give the
Agent at least one Banking Day prior notice of its intention to prepay the
Revolving Loan or the Acquisition Loan under this Section 4.4, specifying the
date of payment, which Acquisition Facility, if any, will be repaid, and the
total amount of the Revolving Loan or the Acquisition Loan to be paid on such
date.
4.5 Letters of Credit. If on the Final Maturity Date or any
accelerated maturity of the Credit Obligations the Lenders shall be obligated in
respect of a Letter of Credit or a draft accepted under a Letter of Credit, the
Company will either:
(a) prepay such obligation by depositing cash with the Agent,
or
(b) deliver to the Agent a standby letter of credit
(designating the Letter of Credit Issuer as beneficiary and issued by a
bank and on terms reasonably acceptable to the Letter of Credit Issuer),
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in each case in an amount equal to the portion of the then Letter of Credit
Exposure issued for the account of the Company. Any such cash so deposited and
the cash proceeds of any draw under any standby Letter of Credit so furnished,
including any interest thereon, shall be returned by the Agent to the Company
only when, and to the extent that, the amount of such cash held by the Agent
exceeds the Letter of Credit Exposure at such time and no Default then exists;
provided, however, that if an Event of Default occurs and the Credit Obligations
become or are declared immediately due and payable, the Agent may apply such
cash, including any interest thereon, to the payment of any of the Credit
Obligations.
4.6 Reborrowing; Application of Payments. etc.
4.6.1 Reborrowing. The amounts of the Revolving Loan or the
Acquisition Loan prepaid pursuant to Section 4.4 may be reborrowed from
time to time prior to the Final Maturity Date for the Revolving Loan, and
prior to the Acquisition Facility Revolver Termination Date for the
Acquisition Loan, in accordance with Section 2.1 and 2.2, subject to the
limits set forth therein.
4.6.2 Order of Application. Any prepayment of the Loan pursuant
to Sections 4.3.2, 4.3.3, 4.3.4 or 4.3.5 shall be applied pro rata to the
Revolving Loan and the Acquisition Loan in accordance with the relative
outstanding principal and' unfunded Commitments with respect thereto, pro
rata to each Acquisition Facility in accordance with the respective
amounts thereof (and, except in the case of the Reinvestment Reserve, to
the permanent reduction of the Revolving Loan Commitments or the
Acquisition Loan Commitments whether or not any portion of the Revolving
Loan or the Acquisition Loan is then outstanding). Partial prepayments of
the Acquisition Term Loan made pursuant to Sections 4.3 or 4.4 must be
applied pro rata to the remaining installments thereof under Section 4.2.
Subject to the foregoing, any prepayment of the Loan shall be applied
first to the portion of the Loan, as the case may be, not then subject to
LIBOR Pricing Options, then the balance of any such prepayment shall be
applied to the portion of the Loan then subject to LIBOR Pricing Options,
in the chronological order of the respective maturities thereof (or as
the Company may otherwise specify in writing), together with any payments
required by Section 3.2.4.
4.6.3 Payments for Lenders. All payments of principal hereunder
shall be made to the Agent for the account of the Lenders in accordance
with
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the Lenders' respective Percentage Interests in the Credit Obligations so
repaid.
5. Conditions to Extending Credit.
5.1 Conditions on Initial Closing Date. The obligations of the Lenders
to make the initial extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Initial Closing Date, of the conditions
set forth in this Section 5.1 as well as the further conditions in Section 5.2.
If the conditions set forth in this Section 5.1 are not met on or prior to the
Initial Closing Date, the Lenders shall have no obligation to make any
extensions of credit hereunder.
5.1.1 Notes. The Company shall have duly executed and delivered
to the Agent a Revolving Note for each Lender having a Commitment with
respect thereto who has requested delivery of a Note prior to the Initial
Closing Date.
5.1.2 Payment of Fees. The Company shall have paid to the Agent
and the Syndication Agent the fees contemplated by the separate agreement
among the Agent, the Syndication Agent and the Company on or prior to the
date hereof.
5.1.3 Legal Opinions. On the Initial Closing Date, the Lenders
shall have received from Skadden, Arps, Slate, Xxxxxxx & Xxxx, LLP,
special counsel for the Company, its Subsidiaries and the Restricted
Affiliates their opinion with respect to the transactions contemplated by
the Credit Documents, which opinion shall be in form and substance
reasonably satisfactory to the Required Lenders. The Company authorizes
and directs its special counsel to furnish the foregoing opinion.
5.1.4 Guarantee and Security Agreement. Each of the Company and
the Guarantors shall have duly authorized, executed and delivered to the
Agent a Guarantee and Security Agreement in substantially the form of
Exhibit 5.1.4 (the "Guarantee and Security Agreement").
5.1.5 Internet Investor Pledge Agreement. The holders of equity
interests (and options, warrants, conversion rights and other purchase
rights with respect thereto, if any) of Internet Holdings shall have duly
authorized,
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executed and delivered to the Agent a pledge agreement in substantially
the form of Exhibit 5.1.5 (the "Internet Investor Pledge Agreement").
5.1.6 Perfection of Security. Each Obligor shall have duly
authorized, executed, acknowledged, delivered, filed, registered and
recorded such security agreements, notices, financing statements,
memoranda of intellectual property security interests and other
instruments as the Agent may have reasonably requested in order to
perfect the Liens purported or required pursuant to the Credit Documents
to be created in the Credit Security and shall have paid all filing or
recording fees or taxes required to be paid in connection therewith,
including any recording, mortgage, documentary, transfer or intangible
taxes.
5.1.7 Organization of Content Entity. The Training Content Assets
shall be owned by the Content Entity, which shall own no assets and
conduct no business other than the ownership, development, acquisition
and license to the Company and the Internet Entity of the Training
Content Assets. The Content Entity shall have duly authorized, executed
and delivered each of the Company Content License and the Internet
Content License, each of which shall be in full force and effect. The
Content Entity shall be owned solely by the Company and the Internet
Entity, and the Company shall own at least 50% (which shall constitute a
controlling portion upon request of the Agent after the occurrence and
during the continuance of an Event of Default) of the equity interests
entitled to vote generally in the management of, or election of the
managers or other governing body of, the Content Entity. The Internet
License Agreement, the Company Content License and the contractual
arrangements and allocation of assets, operations, expenses and
governance among the Content Entity, the Internet Entity, the Company,
Company Holdings and Internet Holdings shall be reasonably satisfactory
to the Lenders.
5.1.8 Organization of Internet Entity. The Internet Entity shall
own no assets and conduct no operations other than developing, marketing
and providing information technology and business training and
information using the Training Content Assets through electronic media.
The Internet Entity shall be owned solely by Internet Holdings, which
shall be controlled by USEP.
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5.1.9 Acquisition. Other than as consented to by the Agent in
writing:
(a) The provisions of the Acquisition Agreement shall not have
been amended, modified, waived or terminated.
(b) All of the representations and warranties of the Seller set
forth in the Acquisition Agreement shall be complete and correct in all
material respects on and as of the Initial Closing Date with the same
force and effect as though made on and as of such date.
(c) All of the other conditions to the obligations of Company
Holdings and its Subsidiaries set forth in the Acquisition Agreement
shall have been satisfied.
(d) Any material consent, authorization, order or approval of
any Person required in connection with the transactions contemplated by
the Acquisition Agreement shall have been obtained and shall be in full
force and effect.
(e) All of the items required to be delivered under the
Acquisition Agreement shall have been so delivered.
(f) Contemporaneously with the making by the Lenders of the
first extension of credit hereunder, the Company shall have furnished to
the Lenders a certificate, signed by a Financial Officer, to the effect
that the closing has occurred under the Acquisition Agreement and to the
effect that each of the conditions set forth in this Section 5.1.9 has
been satisfied.
5.1.10 Capitalization, EBITDA, etc.
(a) The Company shall have net members' equity of at least
$50,000,000.
(b) The total of the cash equity investment in the Company and
the Internet Entity (indirectly through Company Holdings and Internet
Holdings) by U.S. Equity Partners, L.P. and its Affiliates shall be not
less than $127,000,000 in the aggregate.
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(c) On the Initial Closing Date, the pro forma Consolidated
EBITDA for the previous 12 months shall be not less than $10,000,000, and
the pro forma Reference Leverage Ratio shall be not greater than 4.50x.
(d) Since December 31, 1998, no Material Adverse Change shall
have occurred.
(e) The divestiture and allocation of assets and liabilities
acquired in connection with the Acquisition and the related transactions
by Company Holdings to the Company, the Content Partnership and the
Internet Entity shall be reasonably satisfactory to the Agent.
(f) After giving effect to the Acquisition and the incurrence
of the Credit Obligations, each of the Company, each of its Subsidiaries
and each Restricted Affiliate:
(i) will be solvent;
(ii) will have assets having a fair saleable value
in excess of the amount required to pay their probable liability
on their existing debts (including the Credit Obligations) as such
debts become absolute and mature; business; and
(iii) will have access to adequate capital for the
conduct of their business; and
(iv) will have the ability to pay their debts from
time to time incurred as such debts mature.
(g) The Company shall have furnished to the Lenders a
certificate, signed by a Financial Officer, to such effect, together with
detailed computations verifying the items in clauses (a), (b)and (c)
above and a balance sheet of the Company and its Subsidiaries on a
Consolidated basis giving pro forma effect to the Acquisition and the
incurrence of the Credit Obligations.
5.1.11 Adverse Market Change. Since January 5, 2000 no material
adverse change shall have occurred in the syndication markets for credit
facilities similar in nature to this Agreement and no material disruption
of or material adverse change in the financial, banking or capital
markets that
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would have an adverse effect on such syndication market shall have
occurred, in each case as determined by the Agent and the Syndication
Agent in their sole discretion.
5.1.12 Proper Proceedings. This Agreement, each other Credit
Document and the transactions contemplated hereby and thereby shall have
been authorized by all necessary corporate, limited liability company or
other proceedings. All necessary consents, approvals and authorizations
of any governmental or administrative agency or any other Person of any
of the transactions contemplated hereby or by any other Credit Document
shall have been obtained and shall be in full force and effect.
5.1.13 General. All legal, corporate and limited liability company
proceedings in connection with the transactions contemplated by this
Agreement shall be reasonably satisfactory in form and substance to the
Agent and the Agent shall have received copies of all documents,
including certified copies of the Charter and By-Laws of the Company and
the other Obligors, records of corporate and limited liability company
proceedings. certificates as to signatures and incumbency of officers and
opinions of counsel, which the Agent may have reasonably requested in
connection therewith, such documents where appropriate to be certified
by proper corporate, limited liability company or governmental
authorities.
5.2 Conditions to Each Extension of Credit. The obligations of the
Lenders to make any extension of credit pursuant to Section 2 shall be subject
to the satisfaction, on or before the Closing Date for such extension of credit,
of the following conditions:
5.2.1 Officer's Certificate. The representations and warranties
contained in Section 7 shall be true and correct in all material respects
on and as of such Closing Date with the same force and effect as though
made on and as of such date (except as to any representation or warranty
which refers to a specific earlier date); no Default shall exist on such
Closing Date prior to or immediately after giving effect to the requested
extension of credit; no Material Adverse Change shall have occurred since
the Initial Closing Date and the Company shall have furnished to the
Agent in connection with the requested extension of credit a certificate
to these effects, in substantially the form of Exhibit 5.2.1, signed by a
Financial Officer.
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5.2.2 Legality, etc. The making of the requested extension of
credit shall not (a) be prohibited by any Legal Requirement or (b)
violate any credit restraint program of the executive branch of the
government of the United States of America, the Board of Governors of the
Federal Reserve System or any other governmental or administrative agency
so long as any Lender reasonably believes that compliance therewith is
customary commercial practice.
5.3 Conditions on Acquisition Facility Initial Closing Date.
The obligations of the Lenders to make any extension of an Acquisition Facility
pursuant to Section 2.2 (to the extent the Lenders agreed to become so
obligated) shall be subject to the satisfaction, on or before the Closing Date
for such Acquisition Facility, of the conditions set forth in this Section 5.3,
as well as the further conditions of Section 5.2.
5.3.1 Acquisition Notes. The Company shall have duly executed and
delivered to the Agent the appropriate Acquisition Notes for each Lender
having a Commitment therein who has requested delivery of an Acquisition
Note prior to such Closing Date.
5.3.2 Joinder Agreement. Any new Lenders participating in such
Acquisition Facility shall have executed and delivered a joinder
agreement reasonably satisfactory to the Agent pursuant to which such new
Lender agrees to become a party to and be bound by this Agreement.
5.3.3 Legal Opinions. On such Closing Date, the Lenders shall
have received a legal opinion reasonably satisfactory to the Required
Lenders from the counsel of the Company in substantially the form
delivered pursuant to Section 5.1.3.
5.3.4 Financed Acquisitions. Other than as consented to by the
Agent in writing, which consent shall not be unreasonably withheld:
(a) The principal terms and provisions of any acquisition
agreement in connection with the acquisition for which such Acquisition
Facility is being requested (the "Financed Acquisition Agreement") shall
be reasonably satisfactory to the Required Lenders and shall not have
been amended, modified, waived or terminated in any material respect.
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(b) All of the material representations and warranties of the
sellers set forth in the Financed Acquisition Agreement shall be complete
and correct in all material respects on and as of such Closing Date for
the Acquisition Facility with the same force and effect as though made on
and as of such date.
(c) All of the other material conditions to the obligations of
the Company and its Subsidiaries set forth in the Financed Acquisition
Agreement shall have been satisfied in all material respects.
(d) Any material consent, authorization, order or approval of
any Person required in connection with the transactions contemplated by
the Financed Acquisition Agreement shall have been obtained and shall be
in full force and effect.
(e) All of the material items required to be delivered to the
Company and its Subsidiaries under the Financed Acquisition Agreement
shall have been so delivered.
(f) Contemporaneously with the making by the Lenders of the
extension of credit under such Acquisition Facility, the Company shall
have furnished to the Lenders a certificate of the Company signed on its
behalf by a Financial Officer to the effect that the closing is occurring
under the Financed Acquisition Agreement contemporaneously with such
extension of credit and to the effect that each of the conditions set
forth in this Section 5.3.4 has been satisfied.
5.3.5 General. All legal, corporate and limited liability company
proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the Agent and
the Agent shall have received copies of all documents which the Agent may
have reasonably requested in connection with such Acquisition Facility.
All other conditions as may be determined by the Agent and set forth in
the written commitments with respect to such Acquisition Facility,
including the payment of any syndication or closing fees which are so set
forth, shall be reasonably satisfactory in form and substance to the
Agent.
6. General Covenants. Each of the Company and the other Guarantors covenants
that, until all of the Credit Obligations shall have been paid in full and until
the
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Lenders' commitments to extend credit under this Agreement and any other Credit
Document shall have been irrevocably terminated, the Company, its Subsidiaries
and (except as specified to the contrary below for specific covenants) the
Restricted Affiliates will comply with the following provisions as are
applicable to it:
6.1 Taxes and Other Charges; Accounts Payable.
6.1.1 Taxes and Other Charges. Each of the Company, its
Subsidiaries and the Restricted Affiliates shall duly pay and discharge,
or cause to be paid and discharged, before any penalty applies with
respect thereto, all taxes, assessments and other governmental charges
imposed upon such Person and its properties, sales or activities, or upon
the income or profits therefrom, as well as all claims for labor,
materials or supplies which if unpaid might by law become a Lien upon any
of its property; provided, however, that any such tax, assessment, charge
or claim need not be paid if the validity or amount thereof shall at the
time be contested in good faith by appropriate proceedings and if such
Person shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto; and provided, further, that each
of the Company, its Subsidiaries and the Restricted Affiliates shall pay
or bond, or cause to be paid or bonded, all such taxes, assessments,
charges or other governmental claims immediately upon the commencement of
proceedings to foreclose any Lien which may have attached as security
therefor (except to the extent such proceedings have been dismissed or
stayed).
6.1.2 Accounts Payable. Each of the Company, its Subsidiaries and
the Restricted Affiliates shall promptly pay when due, or in conformity
with customary trade terms, all accounts payable incident to the
operations of such Person not referred to in Section 6.1.1; provided,
however, that any such accounts payable need not be paid if the validity
or amount thereof shall at the time be contested in good faith and if
such Person shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto.
6.2 Conduct of Business. etc.
6.2.1 Types of Business. The Company and its Subsidiaries shal
engage only in the business of (a) developing, marketing and providing
training with regard to information technology and other business-related
matters, print courseware materials and information technology journals
and
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(b) other activities reasonably related thereto. The Restricted Affiliates shall
engage only in the respective businesses permitted by Section 6.18.
6.2.2 Maintenance of Properties. Each of the Company, its
Subsidiaries and the Restricted Affiliates:
(a) shall keep its material properties used or useful in its
business in such repair, working order and condition (ordinary wear and
tear excepted), and shall from time to time make such repairs,
replacements, additions and improvements thereto, as are necessary for
the operation of its businesses and shall comply at all times in all
material respects with all material franchises, licenses and leases to
which it is party so as to prevent any loss or forfeiture thereof or
thereunder, except where (i) compliance is at the time being contested in
good faith by appropriate proceedings and (ii) failure to comply with the
provisions being contested has not resulted, and is not reasonably likely
to result, in the aggregate in any Material Adverse Change; and
(b) shall do all things necessary to preserve, renew and keep
in full force and effect and in good standing its legal existence and
authority necessary to continue its business; provided, however, that
this Section 6.2.2(b) shall not prevent the merger, consolidation or
liquidation of Subsidiaries permitted by Section 6.10.
6.2.3 Statutory Compliance. Each of the Company, its Subsidiaries
and the Restricted Affiliates shall comply in all material respects with
all valid Legal Requirements applicable to it, except where (a)
compliance therewith shall at the time be contested in good faith by
appropriate proceedings and (b) failure so to comply with the provisions
being contested has not resulted, and is not reasonably likely to result,
in the aggregate in any Material Adverse Change.
6.2.4 Compliance with Material Agreements. Each of the Company,
its Subsidiaries and the Restricted Affiliates shall comply in all
material respects with the Material Agreements (to the extent not in
violation of the other provisions of this Agreement or any other Credit
Document). Without the prior written consent of the Required Lenders, no
Material Agreement shall be amended, modified, waived or terminated in
any manner that would have any material adverse effect on the interests
of the Lenders.
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6.3 Insurance.
6.3.1 Business Interruption Insurance. Each of the Company, its
Subsidiaries and the Restricted Affiliates shall maintain with
financially sound and reputable insurers insurance related to
interruption of business, either for loss of revenues or for extra
expense, in the manner customary for businesses of similar size engaged
in similar activities.
6.3.2 Property Insurance. Each of the Company, its Subsidiaries
and the Restricted Affiliates shall keep its assets which are of an
insurable character insured by financially sound and reputable insurers
against theft and fraud and against loss or damage by fire, explosion and
hazards insured against by extended coverage to the extent, in amounts
and with deductibles in the manner customarily maintained by businesses
of similar size engaged in similar activities.
6.3.3 Liability Insurance. Each of the Company, its Subsidiaries
and the Restricted Affiliates shall maintain with financially sound and
reputable insurers insurance against liability for hazards, risks and
liability to persons and property, including errors and omissions
insurance, to the extent, in amounts and with deductibles in the manner
customarily maintained by businesses of similar size engaged in similar
activities; provided, however, that it may effect workers' compensation
insurance or similar coverage with respect to operations in any
particular state or other jurisdiction, through an insurance fund
operated by such state or jurisdiction or by meeting the self-insurance
requirements of such state or jurisdiction.
6.3.4 Key Executive Life Insurance. From and after May 15, 2000
the Company shall maintain with financially sound and reputable insurers
customary life insurance policies on Xxxxx Xxxxx in an amount of at least
$3,000,000 (to the extent available on customary terms).
6.4 Financial Statements and Reports. Each of the Company, its
Subsidiaries and the Restricted Affiliates shall maintain a system of accounting
in which correct entries shall be made of all transactions in relation to their
business and affairs in accordance with generally accepted accounting practice.
The fiscal year of the Company, its Subsidiaries and the Re-stricted Affiliates
shall end on December 31 in each year and the fiscal quarters of the Company,
its Subsidiaries and the Re-
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stricted Affiliates shall end on March 31, June 30, September 30 and December 31
in each year; provided, however, that any such fiscal periods may be changed
upon at least 30 days prior written notice to the Agent. In the event of such
change, the parties hereto shall negotiate in good faith a conforming amendment
to Section 6.5 and any other affected provisions hereof.
6.4.1 Annual Reports. The Company shall furnish to the Lenders as
soon as available, and in any event within 90 days after the end of each
fiscal year, commencing with the year ending December 31, 2000, the
Consolidated and summary Consolidating balance sheets of (i) the Company
and its Subsidiaries, (ii) the Internet Entity (which may be presented
with Internet Holdings after a Qualified Public Offering), (iii) the
Content Entity, (iv) Company Holdings and (v) Internet Holdings as at the
end of such fiscal year, the Consolidated and summary Consolidating
statements of income and Consolidated statements of changes in members'
equity and of cash flows of (i) the Company and its Subsidiaries, (ii)
the Internet Entity (which may be presented with Internet Holdings as
part of its report on Form 10-K under the Exchange Act after a Qualified
Public Offering), (iii) the Content Entity, (iv) Company Holdings and (v)
Internet Holdings for such fiscal year (all in reasonable detail) and, in
the case of Consolidated financial statements, comparative figures for
the immediately preceding fiscal year, all accompanied by:
(a) Reports of Xxxxxx Xxxxxxxx & Co. or other independent
certified public accountants of recognized national standing selected by
the Company and reasonably satisfactory to the Agent to the effect that
they have audited the foregoing Consolidated financial statements in
accordance with generally accepted auditing standards and that such
Consolidated financial statements present fairly, in all material
respects, the financial position of the Persons covered thereby at the
dates thereof and the results of their operations for the periods covered
thereby in conformity with GAAP and containing no material qualification.
(b) The statement of such accountants that they have caused
this Agreement to be reviewed and that in the course of their audit of
the Company, its Subsidiaries, the Internet Entity, the Content Entity,
Company Holdings and Internet Holdings no facts have come to their
attention that cause them to believe that any Default exists with respect
to Sections 6.5, 6.6.2, 6.6.12 and 6.6.13 or, if such is not the case,
specifying such Default
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and the nature thereof. This statement is furnished by such accountants
with the understanding that the examination of such accountants cannot be
relied upon to give such accountants knowledge of any such Default except
as it relates to accounting or auditing matters within the scope of their
audit.
(c) A certificate of the Company signed by a Financial Officer
to the effect that such officer has caused this Agreement to be reviewed
and has no knowledge of any Default, or if such officer has such
knowledge, specifying such Default and the nature thereof, and what
action the Company has taken, is taking or proposes to take with respect
thereto.
(d) Computations by the Company comparing the financial
statements referred to above with the most recent budget for such fiscal
year furnished to the Lenders in accordance with Section 6.4.4.
(e) Computations by the Company in substantially the form of
Exhibit 6.4 demonstrating, as of the end of such fiscal year, compliance
with the Computation Covenants, signed by a Financial Officer.
(f) Calculations, as at the end of such fiscal year, of (i) the
Accumulated Benefit Obligations for each Plan (other than Multiemployer
Plans) and (ii) the fair. market value of the assets of such Plan
allocable to such benefits.
(g) Supplements to Exhibits 7.1, 7.3 and 7.14 showing any
changes in the information set forth in such exhibits not previously
furnished to the Lenders in writing, as well as any changes in the
Charter, Bylaws or incumbency of officers of the Obligors from those
previously certified to the Agent.
(h) In the event of a change in GAAP, computations by the
Company, signed by a Financial Officer, reconciling the financial
statements referred to above with financial statements prepared in
accordance with GAAP as applied to the other covenants in Section 6 and
related definitions.
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(i) In reasonable detail, management's discussion and analysis
of the results of operations and the financial condition of the Company,
its Subsidiaries, and the Internet Entity as at the end of and for the
year covered by such financial statements.
6.4.2 Quarterly Reports. The Company shall furnish to the Lenders
as soon as available and, in any event, within 45 days after the end of
each of the first three fiscal quarters of the Company in each year (90
days in the case of the fiscal quarter ending March 31, 2000), the
internally prepared Consolidated balance sheet of (i) the Company and its
Subsidiaries, (ii) the Internet Entity (which may be presented with
Internet Holdings as part of its report on Form 10-Q under the Exchange
Act after a Qualified Public Offering) and (iii) the Content Entity as of
the end of such fiscal quarter, the Consolidated statements of income, of
changes in members' equity and of cash flows of (i) the Company and its
Subsidiaries, (ii) the Internet Entity (which may be presented with
Internet Holdings after a Qualified Public Offering) and (iii) the
Content Entity for such fiscal quarter and for the portion of the fiscal
year then ended (all in reasonable detail) and comparative figures for
the same period in the preceding fiscal year, all accompanied by:
(a) A certificate of the Company signed by a Financial Officer
to the effect that such financial statements have been prepared in
accordance with GAAP and present fairly, in all material respects, the
financial position of the Company and its Subsidiaries covered thereby at
the dates thereof and the results of their operations for the periods
covered thereby, subject only to normal year-end audit adjustments and
the addition of footnotes. In addition, the financial statements for the
fiscal quarter ending March 31, 2000 shall be accompanied by the report
of Xxxxxx Xxxxxxxx & Co. as to their review of such financial statements,
which report shall be reasonably satisfactory to the Required Lenders.
(b) A certificate of the Company signed by a Financial Officer
to the effect that such officer has caused this Agreement to be reviewed
and has no knowledge of any Default, or if such officer has such
knowledge, specifying such Default and the nature thereof and what action
the Company has taken, is taking or proposes to take with respect
thereto.
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(c) Computations by the Company comparing the financial
statements referred to above with the most recent budget for the period
covered thereby furnished to the Lenders in accordance with Section
6.4.4.
(d) Computations by the Company in substantially the form of
Exhibit 6.4 demonstrating, as of the end of such quarter, compliance with
the Computation Covenants, signed by a Financial Officer.
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(e) In reasonable detail, management's discussion and analysis
of the results of operations and financial condition of the Company and
its Subsidiaries and the Internet Entity as at the end of and for the
fiscal period covered by the financial statements referred to above.
6.4.3 Monthly Reports. The Company shall furnish to the Lenders
as soon as available and, in any event, within 25 days after the end of
each month, the internally prepared Consolidated balance sheet, of the
Company and its Subsidiaries, as at the end of such month and the
Consolidated statement of income of the Company and its Subsidiaries for
such month (all in reasonable detail), all accompanied by (a) a
certificate of the Company signed by a Financial Officer to the effect
that such financial statements were prepared in accordance with GAAP and
present fairly, in all material respects, on a summary basis the
financial position of the Persons covered thereby at the dates thereof
and the results of their operations for the periods covered thereby,
subject only to normal year-end audit adjustments and the addition of
footnotes, (b) comparative figures for the same period in the preceding
fiscal year and (c) computations by the Company comparing the financial
statements referred to in this Section 6.4.3 with the most recent budget
for the period covered thereby furnished to the Lenders in accordance
with Section 6.4.4.
6.4.4 Other Reports. The Company shall promptly furnish to the
Lenders:
(a) As soon as prepared and in any event before the beginning
of each fiscal year, an annual budget and operating projections for such
fiscal year of the Company and its Subsidiaries, prepared in a manner
consistent with the manner in which the financial projections described
in Section 7.2.1 were prepared.
(b) Any material updates of such budget and projections.
(c) Any management letters furnished to the Company, any of its
Subsidiaries, the Internet Entity or the Content Entity by their
auditors.
(d) All budgets, projections, statements of operations and
other reports furnished generally to the shareholders of the Company.
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(e) Such registration statements, proxy statements and reports,
including Forms X-0, X-0, X-0, X-0, 10-K, 10-Q and 8-K, as may be filed
by the Company, any of its Subsidiaries, any Restricted Affiliate, the
Internet Entity, Internet Holdings or Internet Corp. with the Securities
and Exchange Commission.
(f) Any 90-day letter or 30-day letter from the federal
Internal Revenue Service (or the equivalent notice received from state or
other taxing authorities) asserting tax deficiencies against the Company
or any of its Subsidiaries.
6.4.5 Notice of Litigation. Defaults, etc. The Company shall
promptly furnish to the Lenders notice of any litigation or any
administrative or arbitration proceeding (a) which creates a material
risk of resulting, after giving effect to any applicable insurance, in
the payment by the Company, its Subsidiaries or any Restricted Affiliate
of more than $500,000 or (b) which results, or creates a material risk of
resulting, in a Material Adverse Change. Promptly upon acquiring
knowledge thereof, the Company shall notify the Lenders of the existence
of any Default or Material Adverse Change, specifying the nature thereof
and what action the Company, any of its Subsidiaries or any Restricted
Affiliate has taken, is taking or proposes to take with respect thereto.
6.4.6 ERISA Reports. The Company shall furnish to the Lenders as
soon as reasonably available the following items with respect to any
Plan:
(a) any request for a waiver of the funding standards or an
extension of the amortization period,
(b) notice of any reportable event (as defined in section 4043
of ERISA), unless the notice requirement with respect thereto has been
waived by regulation,
(c) any notice received by any ERISA Group Person that the PBGC
has instituted or intends to institute proceedings to terminate any Plan,
or that any Multiemployer Plan is insolvent or in reorganization,
(d) notice of the possibility of the termination of any Plan by
its administrator pursuant to section 4041 of ERISA, and
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(e) notice of the intention of any ERISA Group Person to
withdraw, in whole or in part, from any Multiemployer Plan.
6.4.7 Other Information; Audit. From time to time at reasonable
intervals upon request of any authorized officer of any Lender, each of
the Company, its Subsidiaries and the Restricted Affiliates shall furnish
to such Lender such other information regarding the business, assets,
financial condition, income or prospects of the Company, its Subsidiaries
or the Restricted Affiliates as such officer may reasonably request,
including copies of all tax returns, licenses, agreements, leases and
instruments to which any of the Company, its Subsidiaries or the
Restricted Affiliates is party. Each Lender's authorized officers and
representatives shall have the right during normal business hours upon
reasonable notice and at reasonable intervals to examine the books and
records of the Company, its Subsidiaries and the Restricted Affiliates,
to make copies and notes therefrom for the purpose of ascertaining
compliance with or obtaining enforcement of this Agreement or any other
Credit Document. The Lenders and the Agent will use reasonable efforts,
after consultation with the Company, to coordinate such requests and
visits by the Lenders to minimize disruption to the Company, its
Subsidiaries and the Restricted Affiliates. The Agent, upon reasonable
advance notice, may undertake to have the Company, its Subsidiaries and
the Restricted Affiliates reviewed by the Agent's commercial financial
examiners and fixed asset appraisers.
6.5 Certain Financial Tests.
6.5.1 Consolidated Total Debt to Consolidated EBITDA. On the last
day of each fiscal quarter of the Company, the ratio of Consolidated
Total Debt to Consolidated EBITDA for the period of four consecutive
fiscal quarters ending on such date shall not exceed the ratio set forth
in the table below; provided, however, that in the event during such
period the Company and its Subsidiaries (a) make an acquisition permitted
by Section 6.8 (whether through stock purchase, asset purchase, merger or
consolidation), for purposes of this covenant Consolidated Net Income
shall include the income (or loss) of such acquired Person (or acquired
assets) accrued during such period prior to the date of such acquisition
or (b) make a disposition of assets (including stock of a Subsidiary)
permitted by Section 6.10 (whether through stock sale, asset sale, merger
or consolidation), for purposes of
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determining the Reference Leverage Ratio, Consolidated Net Income shall
exclude the income (or loss) of such transferred assets (or transferred
Subsidiary) accrued during such period prior to the date of such
disposition. In making the computations contemplated by the foregoing
proviso, the Company may make appropriate pro forma adjustments to
reflect cost savings and other transaction-related items so long as all
such adjustments are reasonably acceptable to the Agent.
Period Ratio
------ -----
Initial Closing Date through September 29, 2000.................5.00x
September 30, 2000 through December 30, 2000....................4.50x
December 31, 2000 through June 29, 2001.........................4.00x
June 30, 2001 through December 30, 2001.........................3 50x
December 31, 2001 through December 30, 2002.....................3.00x
December 31, 2002 through December 30, 2003.....................2.50x
After December 30, 2003.........................................2.00x
6.5.2 Consolidated EBITDA to Consolidated Interest Expense. For
each period of four consecutive fiscal quarters of the Company, the ratio
of Consolidated EBITDA to Total Interest Expense shall equal or exceed
the ratio set forth in the table below.
Period Ratio
------ -----
Initial Closing Date through December 30, 2000..................1.75x
December 31, 2000 through September 29, 2001....................2.00x
September 30, 2001 through September 29, 2002...................2.25x
After September 29, 2002........................................2.50x
6.5.3 Consolidated EBITDA to Consolidated Fixed Charges. For each
period of four consecutive fiscal quarters of the Company, Consolidated
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EBITDA shall at all times equal or exceed 110% of Consolidated Fixed
Charges for such period.
6.6 Indebtedness. Neither the Company nor any of its Subsidiaries nor
any of the Restricted Affiliates shall create, incur, assume or otherwise become
or remain liable with respect to any Indebtedness, including Guarantees of
Indebtedness of others and reimbursement obligations, whether contingent or
matured, under letters of credit or other financial guarantees by third parties,
(or become contractually committed to do so), except the following:
6.6.1 Indebtedness in respect of the Credit Obligations.
6.6.2 To the extent permitted by Section 6.7.2, Indebtedness in
respect of Capitalized Lease Obligations or secured by purchase money
security interests; provided, however, that the aggregate principal
amount of all Indebtedness permitted by this Section 6.6.2 at any one
time outstanding shall not exceed $1,000,000.
6.6.3 Current liabilities, other than Financing Debt, incurred in
the ordinary course of business and Hedge Agreements permitted by the
other provisions of this Agreement.
6.6.4 To the extent that payment thereof shall not at the time be
required by Section 6.1, Indebtedness in respect of taxes, assessments,
governmental charges and claims for labor, materials and supplies.
6.6.5 Indebtedness secured by Liens of carriers, warehouses,
mechanics, landlords and other Persons permitted by Sections 6.7.5 and
6.7.6.
6.6.6 Indebtedness in respect of judgments or awards (a) which
have been in force for less than the applicable appeal period or (b) in
respect of which the Company, any Subsidiary or any Restricted Affiliate
shall at the time in good faith be prosecuting an appeal or proceedings
for review and, in the case of each of clauses (a) and (b), the Company,
such Subsidiary or such Restricted Affiliate shall have taken appropriate
reserves therefor in accordance with GAAP.
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6.6.7 Guarantees by the Company of Indebtedness and other
obligations incurred by its Subsidiaries and permitted by the other
provisions of this Section 6.6.
6.6.8 Indebtedness in respect of deferred taxes arising in the
ordinary course of business.
6.6.9 Indebtedness in respect of inter-company loans and advances
among the Company and its Subsidiaries which are not prohibited by
Section 6.8.
6.6.10 Unfunded pension liabilities and obligations with respect
to Plans so long as the Company and all other ERISA Group Persons are in
compliance with Section 6.15.
6.6.11 Other Indebtedness outstanding on the date hereof and
described in Exhibit 7.3 and all refinancings and extensions thereof not
in excess of the amount thereof outstanding immediately prior to such
refinancing or extension.
6.6.12 Indebtedness of Foreign Subsidiaries in an aggregate
principal amount not exceeding $500,000 at any one time outstanding in an
equivalent amount of United States Funds.
6.6.13 Indebtedness consisting of (a) unsecured deferred payment
obligations of the Company owing to sellers in Permitted Acquisitions not
exceeding $7,000,000 in the aggregate at any one time outstanding and
subordinated to the Credit Obligations on substantially the terms set
forth in Exhibit 6.6.13 and (b) customary purchase price adjustments,
indemnification obligations and similar items of the Company and its
Subsidiaries in connection with Permitted Acquisitions and asset sales
permitted by Section 6.10.
6.6.14 Indebtedness acquired or assumed by the Company and its
Subsidiaries in connection with acquisitions permitted by Section 6.8 in
an aggregate amount not exceeding $2,000,000 at any one time outstanding;
provided, however, that such Indebtedness was not incurred in
anticipation of such acquisition.
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6.6.15 Unsecured Indebtedness of the Company and its Subsidiaries
in addition to the foregoing; provided, however, that the aggregate
amount of all such Indebtedness at any one time outstanding shall not
exceed $1,000,000.
6.7 Liens. Neither the Company nor any of its Subsidiaries nor any of
the Restricted Affiliates shall create, incur or enter into, or suffer to be
created or incurred or to exist, any Lien (or become contractually committed to
do so), except the following:
6.7.1 Liens on the Credit Security that secure the Credit
Obligations.
6.7.2 Liens constituting (a) purchase money security interests
(including mortgages, conditional sales, Capitalized Leases and any other
title retention or deferred purchase devices) in real property, interests
in leases or tangible personal property (other than inventory) existing
or created on the date on which such property is acquired or within 90
days thereafter, and (b) the renewal, extension or refunding of any
security interest referred to in the foregoing clause (a) in an amount
not to exceed the amount thereof remaining unpaid immediately prior to
such renewal, extension or refunding; provided, however, that (i) each
such security interest shall attach solely to the particular item of
property so acquired, and the principal amount of Indebtedness (including
Indebtedness in respect of Capitalized Lease Obligations) secured thereby
shall not exceed the cost (including all such Indebtedness secured
thereby, whether or not assumed) of such item of property; and (ii) the
aggregate principal amount of all Indebtedness secured by Liens permitted
by this Section 6.7.2 shall not exceed the amount permitted by Section
6.6.2.
6.7.3 Deposits or pledges made (a) in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old age
pensions or other social security, (b) in connection with casualty
insurance maintained in accordance with Section 6.3, (c) to secure the
performance of bids, tenders, contracts (other than contracts relating to
Financing Debt) or leases, (d) to secure statutory obligations or surety
or appeal bonds, (e) to secure indemnity, performance or other similar
bonds in the ordinary course of business or (0 in connection with
contested amounts to the extent that payment thereof shall not at that
time be required by Section 6.1.
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6.7.4 Liens in respect of judgments or awards, to the extent that
such judgments or awards are permitted by Section 6.6.6 but only to the
extent that such Liens are junior to the Liens on the Credit Security
granted to secure the Credit Obligations.
6.7.5 Liens of carriers, warehouses, mechanics and similar Liens,
in each case (a) in existence less than 90 days from the date of creation
thereof or (b) being contested in good faith by the Company or any
Subsidiary in appropriate proceedings (so long as the Company or such
Subsidiary shall, in accordance with GAAP, have set aside on its books
adequate reserves with respect thereto).
6.7.6 Encumbrances in the nature of (a) zoning restrictions, (b)
easements, (c) restrictions of record on the use of real property, (d)
landlords' and lessors' Liens on rented premises, (e) restrictions on
transfers or assignment of leases and (f) licenses, subleases and leases
granted in the ordinary course of business, which in each case do not
materially detract from the value of the encumbered property or impair
the use thereof in the business of the Company or any Subsidiary.
6.7.7 Liens to secure taxes, assessments and other governmental
charges, to the extent that payment thereof shall not at the time be
required by Section 6.1.
6.7.8 Restrictions under federal and state securities laws on the
transfer of securities.
6.7.9 The sale of doubtful accounts receivable for collection in
the ordinary course of business.
6.7.10 Liens as in effect on the date hereof described in Exhibit
7.3 (and renewals and replacements thereof) and securing Indebtedness
permitted by Section 6.6.11.
6.7.11 Liens on real property and other fixed assets acquired in a
Permitted Acquisition securing Indebtedness permitted by Section 6.6.14
in an aggregate principal amount not exceeding $1,000,000 at any one time
outstanding.
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6.8 Investments and Acquisitions. Neither the Company nor any of its
Subsidiaries nor any of the Restricted Affiliates (other than the Internet
Entity and Internet Holdings) shall have outstanding, acquire or hold any
Investment (including any Investment consisting of the acquisition of any
business) (or become contractually committed to do so), except the following:
6.8.1 Investments of the Company and its Subsidiaries in (a)
Wholly Owned Subsidiaries which are Guarantors as of the date hereof or
(b) Persons that have become Wholly Owned Subsidiaries and Guarantors
after the date hereof in accordance with Section 6.8.7; provided,
however, that no such Investment shall involve the transfer by the
Company of any material assets other than cash.
6.8.2 Intercompany loans and advances from any Wholly Owned
Subsidiary or Company Holdings to the Company; provided, however, that
loans and advances from a Foreign Subsidiary to the Company or a Domestic
Subsidiary must be subordinated to the Credit Obligations pursuant to an
intercompany subordination agreement in substantially the form of Exhibit
6.8.2.
6.8.3 Investments in Cash Equivalents and Hedge Agreements
permitted by Section 6.13.
6.8.4 Guarantees permitted by Section 6.6.
6.8.5 The Acquisition on the Initial Closing Date as contemplated
by the Acquisition Agreement.
6.8.6 So long as immediately before and after giving effect
thereto no Default exists, Investments of the Company and its Wholly
Owned Subsidiaries in Foreign Wholly Owned Subsidiaries as of the date
hereof or that have become Foreign Subsidiaries after the date hereof in
accordance with Section 6.8.7; provided, however, that (a) such
Investments shall not involve the transfer of material assets from the
Company and its Domestic Subsidiaries to its Foreign Subsidiaries, other
than cash and surplus equipment, and (b) Investments of the Company and
its Domestic Subsidiaries in Foreign Subsidiaries made pursuant to this
Section shall not exceed $1,000,000 at any one time outstanding.
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6.8.7 The Company and its Subsidiaries may make acquisitions
("Permitted Acquisitions") of businesses in the same or a substantially
similar line of business so long as:
(a) The Company has provided the Agent at least 15 days prior
written notice of the Closing of such acquisition and copies of all
letters of intent and agreements relating thereto.
(b) At least 15 days prior to such acquisition the Company has
provided written computations, historical financial statements and
projections reasonably satisfactory to the Agent demonstrating pro forma
compliance with Section 6 and the absence of any Default immediately
after giving effect to such acquisition.
(c) Either (i) the aggregate purchase price consisting of cash,
assumed debt, earnout payments, seller debt and noncompetition payments
for such acquisition (including any related acquisitions) is less than
the sum of $10,000,000 plus Available Excess Cash Flow to the extent not
applied to Capital Expenditures or Distributions permitted by Section
6.9.2 or (ii) the aggregate purchase price consisting of equity in
Company Holdings (or the direct proceeds from the sale of equity in
Company Holdings) for such acquisition (including any related
acquisition) is less than $15,000,000 in equivalent value or (iii) the
written consent of the Required Lenders shall have been obtained.
(d) If the Reference Leverage Ratio is greater than 3.0x after
giving effect to such acquisition, the written consent of the Required
Lenders shall have been obtained.
(e) The Company or one of its Wholly Owned Subsidiaries is the
surviving entity of such acquisition or, in the event of a stock
acquisition, the Company or one of its Wholly Owned Subsidiaries will own
at least 80% of the capital stock, as well as at least 80% of the capital
stock entitled to vote generally for the election of directors, of the
acquired entity.
(f) The acquired business, if an acquired or newly created
domestic entity, will become a Guarantor and pledge its assets to secure
the credit facility. The Company and the other Subsidiaries that are
Guarantors will pledge the stock (up to 66% of the voting stock of a
Foreign Subsidiary) of
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the acquired or newly-created entity. All steps reasonably requested by
the Agent shall be taken to pledge the acquired assets as part of the
Credit Security.
(g) The Lenders will have received a customary legal opinion
from special counsel to the Company with respect to the new Guarantor.
6.8.8 Investments by the Company and its Subsidiaries not
exceeding $1,000,000 at any one time outstanding in joint ventures
engaged in a business described in Section 6.2.1.
6.8.9 Investments listed on Exhibit 7.3.3 as of the Initial
Closing Date without giving effect to any additions thereto or
replacements thereof.
6.8.10 The Restricted Affiliates may acquire and hold obligations
of officers or other employees of the Company, its Subsidiaries and the
Restricted Affiliates in connection with such officer's or employees'
acquisition of shares of the Restricted Affiliates' capital stock so long
as no cash is actually advanced by the Company, its Subsidiaries or
Restricted Affiliates to such officer or employee in connection with such
obligations.
6.8.11 In addition to the foregoing Investments, Investments by
the Company and its Subsidiaries in an aggregate amount not to exceed
$1,000,000 at any time outstanding.
6.9 Distributions. Neither the Company nor any of its Subsidiaries
nor any of the Restricted Affiliates shall make any Distribution (or become
contractually committed to do so), except the following:
6.9.1 So long as immediately before and after giving effect
thereto no Default exists, Restricted Affiliates and Subsidiaries of the
Company may make Distributions to the Company or any Wholly Owned
Subsidiary of the Company, and the Company and its Subsidiaries may make
Investments permitted by Sections 6.8.1 and 6.8.2.
6.9.2 So long as immediately before and after giving effect
thereto no Default exists, the Company may make Distributions to Company
Holdings and Company Holdings may make Distributions to its members in an
aggregate amount (without duplication) which shall not exceed Available
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Excess Cash Flow to the extent not applied to Capital Expenditures or
Permitted Acquisitions.
6.9.3 The Company and the Restricted Affiliates may make
Distributions to their respective members to the extent and at the times
necessary for such members to pay their respective federal (and, if
applicable, state) income taxes arising from such members' respective
allocable shares of the Company's or such Restricted Affiliate's income
taxable directly to such members for federal (and, if applicable, state)
income tax purposes; provided, however, that such Distributions may be
made only to the extent that the member in question has realized income
arising from such allocable share of the Company's or such Restricted
Affiliate's income in excess of such member's previously realized losses
arising from such member's allocable share of the Company's or such
Restricted Affiliate's losses applicable to such member for federal (and,
if applicable, state) income tax purposes.
6.9.4 So long as immediately before and after giving effect
thereto no Default exists, the Company and the Restricted Affiliates may
make Distributions in an amount which shall not exceed $250,000 in any
fiscal year to repurchase Restricted Affiliate equity interests and
options to acquire such equity interests owned by employees, former
employees, directors or former directors of the Company, its Subsidiaries
and the Restricted Affiliates.
6.9.5 The Company, the Content Entity and the Internet Entity may
perform their respective obligations under the Company Content License,
the Internet Content License and the other intercompany agreements among
such parties listed in clause (a) of Section 6.16.
6.9.6 The Company and the Restricted Affiliates (other than the
Internet Entity and Internet Holdings) may pay, to the extent required by
the applicable Financial Advisory Services Agreement and Letter Agreement
listed in clause (b) of Section 6.16:
(a) on a quarterly basis in arrears, management fees to WP
Management in an aggregate amount (for all such Persons taken together)
not to exceed $125,000 in any fiscal quarter of the Company,
(b) reimbursement to WP Management for the reasonable out-of-
pocket expenses incurred in connection with performing management ser-
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vices to the Company, its Subsidiaries and the Restricted Affiliates
(other than the Internet Entity and Internet Holdings) and
(c) a one-time fee to WP Management in connection with each
Permitted Acquisition, such fee to be payable at the closing of such
Permitted Acquisition and not to exceed 2% of the aggregate consideration
paid by the Company, its Subsidiaries and the Restricted Affiliates
(other than the Internet Entity and Internet Holdings) for such Permitted
Acquisition;
provided, however, that (i) if an Event of Default (other than an Event of
Default under Section 8.1.1 or a Bankruptcy Default) occurs and is continuing,
the Company, its Subsidiaries and the Restricted Affiliates (other than the
Internet Entity and Internet Holdings) may pay 50% of the amount that would have
been permitted to be paid under this Section 6.9.6 if no Event of Default had
then existed and (ii) if an Event of Default under Section 8.1.1 or a Bankruptcy
Default occurs and is continuing, no Distributions may be made under this
Section 6.9.6.
6.9.7 Prior to a Qualified Public Offering, the Internet Entity
and Internet Holdings may pay, to the extent required by the applicable
Financial Advisory Services Agreement and Letter Agreement listed in
clause (b) of Section 6.16:
(a) on a quarterly basis in arrears, management fees to WP
Management in an aggregate amount (for both such Persons taken together)
not to exceed $125,000 in any fiscal quarter of such Persons,
(b) reimbursement to WP Management for the reasonable out-of-
pocket expenses incurred in connection with performing management
services to the Internet Entity and Internet Holdings, and
(c) a one-time fee to WP Management in connection with each
acquisition by the Internet Entity or Internet Holdings permitted by this
Agreement, such fee to be payable at the closing of such acquisition and
not to exceed 2% of the aggregate consideration paid by the Internet
Entity and Internet Holdings for such acquisition;
provided, however, that (i) if an Event of Default (other than an Event of
Default under Section 8.1.1 or a Bankruptcy Default) occurs and is continuing,
the Internet Entity and Internet Holdings may pay 50% of the amount that would
have been
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permitted to be paid under this Section 6.9.7 if no Event of Default had then
existed, (ii) if an Event of Default under Section 8.1.1 or a Bankruptcy Default
occurs and is continuing, no Distributions may be made under this Section 6.9.7
and (iii) after a Qualified Public Offering the Internet Entity and Internet
Holdings shall no longer be subject to this Section 6.9.
6.9.8 So long as immediately before and after giving effect
thereto no Event of Default exists, the Company may pay (a) to the
Content Entity and the Internet Entity on the Initial Closing Date cash
Distributions of the Loan proceeds to finance an allocable portion of
their respective purchase obligations with respect to the Acquisition and
(b) to Company Holdings amounts in respect of income taxes and overhead
expenses of Company Holdings reasonably allocable to the Company and its
Subsidiaries.
6.10 Asset Dispositions and Mergers. Neither the Company nor any of its
Subsidiaries nor any of the Restricted Affiliates shall merge or enter into a
consolidation or sell, lease, exchange, sell and lease back, sublease or
otherwise dispose of any of its assets (or become contractually committed to do
so), except the following:
6.10.1 The Company, any of its Subsidiaries and any of the
Restricted Affiliates may sell or otherwise dispose of (a) inventory and
Cash Equivalents in the ordinary course of business, (b) assets (i) that
will be replaced in the ordinary course of business within 12 months by
other assets of equal or greater value or (ii) that are no longer used or
useful in the business of the Company, such Subsidiary or such Restricted
Affiliate; provided, however that the aggregate fair market value (book
value, if greater) of all assets sold under this clause (b) in any fiscal
year shall not be material and (c) doubtful accounts receivable for
collection purposes in the ordinary course of business.
6.10.2 Licensing or leasing of assets by the Company, its
Subsidiaries and the Internet Entity for fair value in the ordinary
course of business (so long as such assets are still available to be used
by the Company, its Subsidiaries and the Internet Entity if required to
be used in their respective businesses) and by the Content Entity in
accordance with the Company Content License and the Internet Content
License.
6.10.3 Any Subsidiary of the Company may merge, consolidate or be
liquidated into the Company or any Subsidiary of the Company that is a
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Guarantor so long as after giving effect to any such merger the Company
(if it is party thereto) or such Guarantor shall be the surviving or
resulting Person.
6.10.4 Mergers constituting Investments permitted by Section
6.8.7.
6.10.5 So long as immediately before and after giving effect
thereto no Default exists and the Net Asset Sale Proceeds thereof are
applied to repay the Loan as required by Section 4.3.3, the Company and
its Subsidiaries may sell for fair value assets during any fiscal year
contributing not more than 15% of Consolidated EBITDA for the Company's
most recently completed fiscal year for a purchase price constituting at
least 75 % cash; provided, however, that the sum of the foregoing
percentages of Consolidated EBITDA for all assets sold pursuant to this
Section 6.10.5 since the date hereof shall not exceed 15 %.
6.10.6 So long as immediately before and after giving effect
thereto no Default exists and the Net Asset Sale Proceeds thereof are
applied to repay the Loan as required by Section 4.3.3, the Internet
Entity may sell for fair value consideration constituting at least 75 %
cash assets constituting in the aggregate after the date hereof not more
than 50% of the highest amount of total net assets of the Internet Entity
after the date hereof.
6.10.7 So long as immediately before and after giving effect
thereto no Default exists, any Subsidiary may sell or otherwise dispose
of any of its assets to the Company or any other Subsidiary of the
Company that is a Guarantor on reasonable terms.
6.11 Issuance of Stock by Subsidiaries; Subsidiary Distributions.
6.11.1 Issuance of Stock by Subsidiaries. No Subsidiary or
Restricted Affiliate (other than Company Holdings or Internet Holdings)
shall issue or sell any shares of its capital stock or other evidence of
beneficial ownership to any Person other than (a) the Company or any
Wholly Owned Subsidiary of the Company or, in the case of the Content
Entity, to the Company or to the Internet Entity, which shares shall have
been pledged to the Agent as part of the Credit Security to the extent
required by the Guarantee and Security Agreement, (b) directors of
Subsidiaries as qualifying shares to the extent required by Legal
Requirements and, in the case of Foreign
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Subsidiaries, shares required by Legal Requirements to be held by foreign
nationals and (c) as otherwise expressly permitted by this Agreement.
6.11.2 No Restrictions on Subsidiary Distributions. Except for
this Agreement and the Credit Documents, neither the Company nor any
Subsidiary nor any of the Restricted Affiliates (other than the Internet
Entity and Internet Holdings) shall enter into or be bound by any
agreement (including covenants requiring the maintenance of specified
amounts of net worth or working capital) restricting the right of any
Subsidiary or Restricted Affiliate (other than the Internet Entity and
Internet Holdings) to make Distributions or extensions of credit to the
Company (directly or indirectly through another Subsidiary); provided,
however, that Foreign Subsidiaries may become subject to such
restrictions pursuant to loan agreements with respect to Indebtedness
permitted by Section 6.6.12.
6.12 Voluntary Prepayments of Other Indebtedness. Neither the Company
nor any of its Subsidiaries nor any of the Restricted Affiliates (other than the
Internet Entity and Internet Holdings) shall make any voluntary prepayment of
principal of or interest on any Financing Debt (other than the Credit
Obligations) or make any voluntary redemptions or repurchases of Financing Debt
(other than the Credit Obligations), in each case except in order to facilitate
a refinancing of Indebtedness permitted by Section 6.6.
6.13 Derivative Contracts. Neither the Company nor any of its
Subsidiaries nor any of the Restricted Affiliates (other than the Internet
Entity and Internet Holdings) shall enter into any Hedge Agreement or other
financial or commodity derivative contracts except to provide hedge protection
for an underlying economic transaction in the ordinary course of business.
6.14 Negative Pledge Clauses. Neither the Company nor any of its
Subsidiaries nor any of the Restricted Affiliates (other than the Internet
Entity and Internet Holdings) shall enter into any agreement, instrument, deed
or lease which prohibits or limits the ability of the Company or any of its
Subsidiaries or any of the Restricted Affiliates to create, incur, assume or
suffer to exist any Lien upon any of their respective properties, assets or
revenues, whether now owned or hereafter acquired, or which requires the grant
of any collateral for such obligation if collateral is granted for another
obligation, except the following:
6.14.1 This Agreement and the other Credit Documents.
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6.14.2 Covenants in documents creating Liens permitted by Section
6.7 prohibiting further Liens on the assets encumbered thereby.
6.15 ERISA. etc. Each of the Company, its Subsidiaries and the
Restricted Affiliates (other than the Internet Entity and Internet Holdings)
shall comply, and shall cause all ERISA Group Persons to comply, in all material
respects, with the provisions of ERISA and the Code applicable to each Plan.
Each of the Company, its Subsidiaries and the Restricted Affiliates (other than
the Internet Entity and Internet Holdings) shall meet, and shall cause all ERISA
Group Persons to meet, all minimum funding requirements applicable to them with
respect to any Plan pursuant to section 302 of ERISA or section 412 of the Code.
At no time shall the Accumulated Benefit Obligations under any Plan that is not
a Multiemployer Plan exceed the fair market value of the assets of such Plan
allocable to such benefits by more than $1,000,000. The Company, its
Subsidiaries and the Restricted Affiliates (other than the Internet Entity and
Internet Holdings) shall not withdraw, and shall cause all other ERISA Group
Persons not to withdraw, in whole or in part, from any Multiemployer Plan so as
to give rise to withdrawal liability exceeding $500,000 in the aggregate. At no
time shall the actuarial present value of unfunded liabilities for
post-employment health care benefits (other than COBRA continuation coverage
benefits), whether or not provided under a Plan, calculated in a manner
consistent with Statement No. 106 of the Financial Accounting Standards Board,
exceed $1,000,000.
6.16 Transactions with Affiliates. Neither the Company nor any of its
Subsidiaries nor any of the Restricted Affiliates shall effect any transaction
with any of their respective Affiliates (except for the Company and its
Subsidiaries) on a basis less favorable to the Company and its Subsidiaries than
would be the case if such transaction had been effected with a non-Affiliate;
provided, however, that the following shall be permitted: (a) performance of the
following agreements, as listed on Exhibit 6.16: the Non-Compete Agreement, the
Company Content License, the Internet Content License, the Trademark License
Agreement, the Shared Services Agreement, the Reseller Agreement and, subject to
Section 6.9, the Company Option Plan and the Company's Option Agreements, in
each case as in effect on the date hereof and previously furnished to the Agent
and as subsequently amended or modified in accordance with Section 6.2.4,
(b)subject to Sections 6.9.6 and 6.9.7, the payment by the Company and the
Internet Entity for financial advisory and management fees and related costs and
expenses to WP Management pursuant to the respective Financial Advisory Services
Agreements and Letter Agreements listed on
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Exhibit 6.16, each as in effect on the date hereof and previously furnished to
the Agent and as subsequently amended or modified in accordance with Section
6.2.4, (c) intercompany transactions among the Company, its Subsidiaries and
Restricted Affiliates permitted by the other provisions of this Agreement, (d)
customary fees to non-officer directors of the Company, its Subsidiaries and the
Restricted Affiliates, (e) the Company, its Subsidiaries and the Restricted
Affiliates may enter into employment arrangements with their respective officers
and employees in the ordinary course of business, (f) the payment of consulting,
management or other fees to the Company or any of its Subsidiaries that is a
Guarantor by any of their respective Subsidiaries in the ordinary course of
business and (g) Distributions permitted by Section 6.9.
6.17 Interest Rate Protection. Within 90 days after the Initial Closing
Date, the Company shall obtain and thereafter keep in effect one or more
Interest Rate Protection Agreements conforming to International Securities
Dealers Association standards, each in form and substance reasonably
satisfactory to the Agent, covering an amount at least equal to 50% of the total
outstanding amounts under the Revolving Loan in each case for an aggregate
period of not less than two years.
6.18 Restricted Operations of Restricted Affiliates.
(a) Prior to the closing of a Qualified Public Offering, the
Internet Entity shall have no obligations or Indebtedness except to the
extent reasonably necessary in connection with its business as described
in the Internet Content License. So long as no Default exists immediately
before or after giving effect thereto, the Agent shall release the
Internet Entity and Internet Holdings as a Guarantor and a Restricted
Affiliate and release all of the assets of the Internet Entity and
Internet Holdings from the Credit Security (except for the pledge of
equity and debt interests in the Content Entity) upon the closing of a
Qualified Public Offering.
(b) The Content Entity shall conduct no operations other than
engaging in the business of owning, developing and licensing to the
Company and the Internet Entity the Training Content Assets. The Content
Entity shall own all the content-related property relating to information
technology, business training and journals in existence as of the date
hereof for the Company, all its Subsidiaries and the Internet Entity. The
Content Entity shall own no material assets used for any other purpose
and shall have no
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obligations except to the extent reasonably necessary in connection with
such business.
(c) Company Holdings shall conduct no operations other than
owning equity interests in the Company and shall own no material assets
used for any other purpose and shall have no obligations except to the
extent reasonably necessary in connection with such ownership.
(d) Upon the written request of the Agent to the Company and
the Content Entity upon the occurrence and during the continuance of an
Event of Default, the percentage of voting interests in the Content
Entity owned by the Company shall without payment of additional
consideration, constitute a controlling interest.
(e) As set forth in the Internet Investor Pledge Agreement,
after a Qualified Public Offering if at the time no Event of Default
exists, the Agent shall (i) release all the pledged Internet Holdings
stock when the Reference Leverage Ratio is less than 2.0x and (ii)
release the portion of the pledged Internet Holdings stock with a market
value that exceeds 400% of the outstanding Credit Obligations and unused
Commitments.
6.19 Real Estate Collateral. No later than May 1, 2000 the Company
shall have duly authorized, executed, acknowledged and delivered to the Agent
leasehold mortgage on the Company's headquarters facility in Rochester, New
York, with a landlord's consent and waiver and any other documents required to
allow for the recording or filing of a leasehold mortgage, in each case in form
and substance reasonably satisfactory to the Agent, together with: (a) title
insurance with such insurer, in such amount, in such form and with such
exceptions as are reasonably satisfactory to the Agent and (b) a legal opinion
of counsel with respect to the recording and enforceability of such leasehold
mortgage in form and substance reasonably satisfactory to the Agent.
7. Representations and Warranties. In order to induce the Lenders to extend
credit to the Company hereunder, each of the Company and the other Guarantors
jointly and severally represents and warrants as follows:
7.1 Organization and Business.
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7.1.1 The Company. The Company is a duly organized and validly
existing limited liability company, in good standing under the laws of
Delaware, with all power and authority, limited liability company or
otherwise, necessary to (a) enter into and perform this Agreement and
each other Credit Document to which it is party, (b) incur the Credit
Obligations, (c) grant the Agent for the benefit of the Lenders the
security interests in the Credit Security owned by it to secure the
Credit Obligations and (d) own its properties and carry on the business
now conducted or proposed to be conducted by it. Certified copies of the
Charter and By-laws of the Company have been previously delivered to the
Agent and are correct and complete. Exhibit 7.1, as from time to time
hereafter supplemented in accordance with Section 6.4.1, sets forth, as
of the later of the date hereof or the end of the most recent fiscal
quarter for which financial statements are required to be furnished in
accordance with such Sections, (i) the jurisdiction of organization of
the Company, (ii) the address of the Company's principal executive office
and chief place of business, (iii) each name, including any trade name,
under which the Company conducts its business, (iv) the jurisdictions in
which the Company owns real or tangible personal property and (v) the
number of authorized and issued shares or membership interests, and
ownership thereof, of the Company.
7.1.2 Subsidiaries and Restricted Affiliates. Each Subsidiary of
the Company and each Restricted Affiliate is duly organized, validly
existing and in good standing under the laws of the jurisdiction in which
it is organized, with all power and authority, corporate, limited
liability company or otherwise, necessary to (a) enter into and perform
this Agreement and each other Credit Document to which it is party, (b)
guarantee the Credit Obligations, (c) grant the Agent for the benefit of
the Lenders the security interest in the Credit Security owned by such
Subsidiary or Restricted Affiliate to secure the Credit Obligations and
(d) own its properties and carry on the business now conducted or
proposed to be conducted by it. Certified copies of the Charter and
By-laws of each Subsidiary of the Company and each Restricted Affiliate
have been previously delivered to the Agent and are correct and complete.
Exhibit 7.1, as from time to time hereafter supplemented in accordance
with Section 6.4.1, sets forth, as of the later of the date hereof or the
end of the most recent fiscal quarter for which financial statements are
required to be furnished in accordance with such Sections, (i) the name
and jurisdiction of organization of each Subsidiary of the Company and
each Restricted Affiliate, (ii) the address of the chief executive office
and principal place of
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business of each such Subsidiary and Restricted Affiliate, (iii) each
name under which each such Subsidiary and Restricted Affiliate conducts
its business, (iv) each jurisdiction in which each such Subsidiary and
each Restricted Affiliate owns real or tangible personal property, and
(v) the number of authorized and issued shares or membership interests,
and ownership thereof, of each such Subsidiary and Restricted Affiliate.
7.1.3 Qualification. Each of the Company, its Subsidiaries and
the Restricted Affiliates is duly and legally qualified to do business as
a foreign corporation, limited liability company or other entity and is
in good standing in each state or jurisdiction in which such
qualification is required and is duly authorized, qualified and licensed
under all laws, regulations, ordinances or orders of public authorities,
or otherwise, to carry on its business in the places and in the manner in
which it is conducted, except for failures to be so qualified, authorized
or licensed which would not in the aggregate result, or be reasonably
likely to result, in any Material Adverse Change.
7.1.4 Capitalization. Except as set forth in Exhibit 7.1, no
options, warrants, conversion rights, preemptive rights or other
statutory or contractual rights to purchase shares of capital stock or
other securities of any Subsidiary or any Restricted Affiliate now exist,
nor has any Subsidiary or any Restricted Affiliate authorized any such
right, nor is any Subsidiary or any Restricted Affiliate obligated in any
other manner to issue shares of its capital stock or other securities.
7.2 Financial Statements and Other Information: Material Agreements.
7.2.1 Financial Statements and Other Information. The Lenders have
previously been furnished with copies of the following:
(a) The unaudited summary balance sheets of the Seller's
education division as at December 31 in each of 1997, 1998 and 1999 and
the unaudited summary statements of income of the Seller's education
division for the years then ended.
(b) The ten-year financial and operational projections for the
Company and its Subsidiaries dated as of January 2000.
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(c) Consolidated pro forma opening balance sheet of the Company
and its Subsidiaries as of the Initial Closing Date, together with a
summary prepared by Xxxxxx Xxxxxxxx & Co. describing the principal
accounting procedures and principles under GAAP used in the preparation
of such pro forma opening balance sheet.
(d) Confidential Offering Memorandum for the Financing of the
Acquisition of the Company and the Restricted Affiliates presented by
FleetBoston Xxxxxxxxx Xxxxxxxx Inc., dated January 2000 (the "Offering
Memorandum").
The unaudited summary financial statements referred to in clause (a)
above were prepared in accordance with GAAP and fairly present in all material
respects the financial position of the Seller's education division at the
respective dates thereof and the results of its operations for the periods
covered thereby, subject to the addition of footnotes. Neither the Company, nor
any of its Subsidiaries nor any of the Restricted Affiliates has any known
contingent liability material to the Company, its Subsidiaries or the Restricted
Affiliates on a Consolidated basis which is not reflected in the most recent
balance sheet referred to in clause (a) above (or delivered pursuant to Sections
6.4.1 or 6.4.2) or in the notes thereto.
In the Company's judgment, the financial and operational projections
referred to in clause (b) above constitute a reasonable basis as of the Initial
Closing Date for the assessment of the future performance of the Company and its
Subsidiaries during the periods indicated therein, it being understood that any
projected financial information represents an estimate, based on various
assumptions, of future results of operations which may or may not in fact occur.
In the Company's judgment, the pro forma opening balance sheet referred
to in clause (c) above constitutes a reasonable basis as of the Initial Closing
Date for the assessment of the financial condition of the Company and its
Subsidiaries.
7.2.2 Material Agreements. The Company has previously furnished
to the Lenders correct and complete copies, including all exhibits,
schedules and amendments thereto, of the agreements and instruments, each
as in effect on the date hereof, listed in Exhibit 7.2.2, which
constitute all agreements and instruments material to the Company and its
Subsidiaries on a Consolidated basis, or to the Restricted Affiliates
(the "Material Agreements").
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7.3 Agreements Relating to Financing Debt. Investments. etc. Exhibit
7.3, as from time to time hereafter supplemented in accordance with Section
6.4.1, sets forth:
7.3.1 The amounts (as of the dates indicated in Exhibit 7.3, as
so supplemented) of all Financing Debt of the Company, its Subsidiaries
or the Restricted Affiliates, and all agreements which relate to such
Financing Debt.
7.3.2 All Liens and Guarantees with respect to such Financing
Debt.
7.3.3 All agreements which directly or indirectly require the
Company, any Subsidiary or any Restricted Affiliate to make any
Investment.
7.3.4 Material license agreements with respect to the products of
the Company, its Subsidiaries or the Restricted Affiliates, including the
parties thereto and the expiration dates thereof.
7.3.5 All trademarks, tradenames, service marks, service names
and patents owned by the Company, its Subsidiaries or the Restricted
Affiliates that are registered with the federal Patent and Trademark
Office (or with respect to which applications for such registration have
been filed).
7.3.6 All copyrights owned by the Company, its Subsidiaries or
the Restricted Affiliates that are registered with the federal Copyright
Office.
7.3.7 All bank and deposit accounts owned by the Company, its
Subsidiaries or the Restricted Affiliates.
The Company has furnished the Lenders correct and complete copies of any
agreements described above in this Section 7.3 requested by the Required
Lenders.
7.4 Changes in Condition. Since the Initial Closing Date, no Material
Adverse Change has occurred.
7.5 Title to Assets. The Company, its Subsidiaries and the Restricted
Affiliates have valid and marketable title to all assets necessary for or used
in the operations of their business as now conducted by them and reflected in
the most recent balance sheet referred to in Section 7.2.1 (or the balance sheet
most recently furnished to the Lenders pursuant to Sections 6.4.1 or 6.4.2), and
to all assets
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acquired subsequent to the date of such balance sheet, subject to no Liens
except for Liens permitted by Section 6.7 and except for assets disposed of as
permitted by Section 6.10.
7.6 Operations in Conformity With Law. etc. The operations of the
Company, its Subsidiaries and the Restricted Affiliates as now conducted or
proposed to be conducted are not in violation of, nor is the Company, its
Subsidiaries or the Restricted Affiliates in default under any Legal Requirement
presently in effect, except for such violations and defaults as do not and will
not, in the aggregate, result, or be reasonably likely to result, in any
Material Adverse Change. The Company, its Subsidiaries and the Restricted
Affiliates have received no notice of any such violation or default and have no
knowledge of any basis on which the operations of the Company, its Subsidiaries
or the Restricted Affiliates, as now conducted and as currently proposed to be
conducted after the date hereof, would be held so as to violate or to give rise
to any such violation or default.
7.7 Litigation. No litigation, at law or in equity, or any proceeding
before any court, board or other governmental or administrative agency or any
arbitrator is pending or, to the knowledge of the Company or any Guarantor,
threatened which involves any material risk of any final judgment, order or
liability which, after giving effect to any applicable insurance, has resulted,
or would be reasonably likely to result, in any Material Adverse Change or which
seeks to enjoin the consummation, or which questions the validity, of any of the
transactions contemplated by this Agreement or any other Credit Document. No
judgment, decree or order of any court, board or other governmental or
administrative agency or any arbitrator has been issued against or binds the
Company, any of its Subsidiaries or any of the Restricted Affiliates which has
resulted, or would be reasonably likely to result, in any Material Adverse
Change.
7.8 Authorization and Enforceability. Each of the Company and each
other Obligor has taken all actions required to execute, deliver and perform
this Agreement and each other Credit Document to which it is party. Each of this
Agreement and each other Credit Document constitutes the legal, valid and
binding obligation of each Obligor party thereto and is enforceable against such
Obligor in accordance with its terms, subject to bankruptcy, moratorium and
other similar laws affecting creditors' rights generally and general principles
of equity.
7.9 No Legal Obstacle to Agreements. Neither the execution and
delivery of this Agreement or any other Credit Document, nor the making of any
borrowings
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hereunder, nor the guaranteeing of the Credit Obligations, nor the securing of
the Credit Obligations with the Credit Security, nor the consummation of any
transaction (other than the Acquisition) referred to in or contemplated by this
Agreement or any other Credit Document, nor the fulfillment of the terms hereof
or thereof (other than the consummation of the Acquisition) or of any other
agreement, instrument, deed or lease contemplated by this Agreement or any other
Credit Document (other than the Acquisition Agreement), has constituted or
resulted in or will constitute or result in:
(a) any breach or termination of the provisions of any
agreement, instrument, deed or lease to which the Company, any of its
Subsidiaries or any other Obligor is a party or by which it is bound, or
of the Charter or By-laws of the Company, any of its Subsidiaries or any
other Obligor;
(b) the violation of any law, statute, judgment, decree or
governmental order, rule or regulation applicable to the Company, any of
its Subsidiaries or any other Obligor;
(c) the creation under any agreement, instrument, deed or lease
of any Lien (other than Liens on the Credit Security which secure the
Credit Obligations) upon any of the assets of the Company, any of its
Subsidiaries or any other Obligor; or
(d) any redemption, retirement or other repurchase obligation
of the Company, any of its Subsidiaries or any other Obligor under any
Charter, By-law, agreement, instrument, deed or lease.
No approval, authorization or other action by, or declaration to or filing with,
any governmental or administrative authority or any other Person is required to
be obtained or made by the Company, any of its Subsidiaries or any other Obligor
in connection with the execution, delivery and performance of this Agreement or
any other Credit Document, the transactions contemplated hereby or thereby, the
making of any borrowing hereunder, the guaranteeing of the Credit Obligations or
the securing of the Credit Obligations with the Credit Security (other than
filings necessary to perfect the Agent's security interest in the Credit
Security).
7.10 Defaults. Neither the Company, any of its Subsidiaries or any
other Obligor is in default under any provision of its Charter or By-laws or of
this Agreement or any other Credit Document. Neither the Company, any of its
Subsidiaries or any other Obligor is in default under any provision of any
agreement, instrument,
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deed or lease to which it is party or by which it or its property is bound so as
to result, or be reasonably likely to result, in any Material Adverse Change.
7.11 Licenses, etc. The Company, its Subsidiaries and the Restricted
Affiliates have all patents, patent applications, patent licenses, patent
rights, trademarks, trademark rights, trade names, trade name rights,
copyrights, licenses, franchises, permits, authorizations and other rights as
are reasonably necessary for the conduct of the business of the Company, its
Subsidiaries and the Restricted Affiliates as now conducted by them. All of the
foregoing are in full force and effect in all material respects, and each of the
Company, its Subsidiaries and the Restricted Affiliates are in substantial
compliance with the foregoing without any known conflict with the valid rights
of others which has resulted, or would be reasonably likely to result, in any
Material Adverse Change. No event has occurred which permits, or after notice or
lapse of time or both would permit, the revocation or termination of any such
license, franchise or other right or which affects the rights of any of the
Company, its Subsidiaries or the Restricted Affiliates thereunder so as to
result, or to be reasonably likely to result, in ~any Material Adverse Change.
7.12 Tax Returns. Each of the Company, its Subsidiaries, and the
Restricted Affiliates has filed all material tax and information returns which
are required to be filed by it and has paid, or made adequate provision for the
payment of, all taxes which have or may become due pursuant to such returns or
to any assessment received by it, other than taxes and assessments being
contested by the Company, its Subsidiaries or the Restricted Affiliates in good
faith by appropriate proceedings and for which adequate reserves have been taken
in accordance with GAAP. Neither the Company, any of its Subsidiaries nor any
other Obligor knows of any material additional assessments or any basis
therefor. The Company reasonably believes that the charges, accruals and
reserves on the books of the Company, its Subsidiaries and the Restricted
Affiliates in respect of taxes or other governmental charges are adequate.
7.13 Certain Business Representations.
7.13.1 Labor Relations. No dispute or controversy between the
Company, any of its Subsidiaries or any of the Restricted Affiliates and
any of their respective employees has resulted, or is reasonably likely
to result, in any Material Adverse Change, and none of the Company, any
of its Subsidiaries or any of the Restricted Affiliates anticipates that
its relationships with its unions or employees will result, or are
reasonably likely to result, in any
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Material Adverse Change. The Company, each of its Subsidiaries and each
of the Restricted Affiliates are in compliance in all material respects
with all federal and state laws with respect to (a) non-discrimination in
employment with which the failure to comply, in the aggregate, has
resulted, or would be reasonably likely to result, in a Material Adverse
Change and (b) the payment of wages.
7.13.2 Year 2000 Issues. Based on a review of the operations of
the Company, its Subsidiaries and the Restricted Affiliates as they
relate to the processing, storage and retrieval of data, the Company does
not believe that a Material Adverse Change is reasonably likely to occur
as a result of computer software and hardware that will not function with
respect to periods commencing January 1, 2000 at least as effectively as
with respect to periods ending on or prior to December 31, 1999.
7.14 Pension Plans. Each Plan (other than a Multiemployer Plan) and, to
the knowledge of the Company, each Multiemployer Plan is in material compliance
with the applicable provisions of ERISA and the Code. Each Multiemployer Plan
and each Plan that constitutes a "defined benefit plan" (as defined in ERISA)
are set forth in Exhibit 7.14 (as from time to time hereafter supplemented in
accordance with Sections 6.4.1 and 6.4.2). Each ERISA Group Person has met all
of the funding standards applicable to all Plans that are not Multiemployer
Plans, and no condition exists which would permit the institution of proceedings
to terminate any Plan that is not a Multiemployer Plan under section 4042 of
ERISA. To the knowledge of the Company, no Plan that is a Multiemployer Plan is
currently insolvent or in reorganization or has been terminated within the
meaning of ERISA.
7.15 Acquisition Agreement. etc. The Acquisition Agreement is a valid
and binding contract as to Company Holdings and, to the Company's knowledge, as
to the Seller. Company Holdings is not in default in any material respect of its
obligations under the Acquisition Agreement and, to the Company's knowledge, the
Seller is not in default in any material respect of any of its obligations
thereunder. The representations and warranties of Company Holdings set forth in
the Acquisition Agreement are true and correct in all material respects as of
the date hereof (except to the extent referring specifically only to an earlier
date) with the same force and effect as though made on and as of the date
hereof. To the Company's knowledge all of the representations and warranties of
the Seller set forth in the Acquisition Agreement are true and correct in all
material respects as of the date hereof with the same force and effect as though
made on and as of the date hereof.
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7.16 Government Regulation; Margin Stock.
7.16.1 Government Regulation. Neither the Company nor any of its
Subsidiaries nor any of the Restricted Affiliates is subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Investment Company Act, the Interstate Commerce
Act or any statute or regulation which regulates the incurring by the
Company, any of its Subsidiaries or any of the Restricted Affiliates of
Financing Debt as contemplated by this Agreement and the other Credit
Documents.
7.16.2 Margin Stock. Neither the Company, any of its Subsidiaries
nor any of the Restricted Affiliates owns any Margin Stock.
7.17 Disclosure. Neither this Agreement nor any other Credit Document
nor the Offering Memorandum nor any financial statement, report, notice,
mortgage, assignment or certificate furnished to the Lenders or the Agent by or
on behalf of USEP, the Company, any of its Subsidiaries or any of the Restricted
Affiliates in connection with the transactions contemplated hereby or by such
Credit Document contains any untrue statement of material fact or omits to state
a material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances under which they were made
(it being understood that representations and warranties about projected
financial performance are subject to the applicable qualifications contained in
Section 7.2.1).
8. Defaults.
8.1 Events of Default. The following events are referred to as
"Events of Default":
8.1.1 Payment. The Company shall fail to make any payment in
respect of:
(a) interest or any fee on or in respect of any of the Credit
Obligations owed by it as the same shall become due and payable, and
such failure shall continue for a period of three Banking Days, or (b)
any Credit Obligation with respect to payments made by any Letter of
Credit Issuer under any Letter of Credit or any draft drawn thereunder
within three Banking Days or
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(c) principal of any of the Credit Obligations owed by it as the same
shall become due, whether at maturity or by acceleration or otherwise.
8.1.2 Specified Covenants. The Company, any of its Subsidiaries
or any of the Restricted Affiliates shall fail to perform or observe any
of the provisions of Section 6.4.5 or Sections 6.5 through 6.19.
8.1.3 Other Covenants. The Company, any of its Subsidiaries or
any other Obligor shall fail to perform or observe any other covenant,
agreement or provision to be performed or observed by it under this
Agreement or any other Credit Document, and such failure shall not be
rectified or cured to the written satisfaction of the Required Lenders
within 30 days after the earlier of (a) notice thereof by the Agent to
the Company or (b) a Financial Officer shall have actual knowledge
thereof.
8.1.4 Representations and Warranties. Any representation or
warranty of or with respect to the Company, any of its Subsidiaries or
any other Obligor made to the Lenders or the Agent in, pursuant to or in
connection with this Agreement or any other Credit Document, or in any
financial statement, report, notice, mortgage, assignment or certificate
delivered to the Agent or any of the Lenders by the Company, any of its
Subsidiaries or any other Obligor in connection herewith or therewith,
shall be false in any material respect on the date as of which it was
made.
8.1.5 Material Financing Debt Cross Default. etc.
(a) The Company, any of its Subsidiaries or any of the
Restricted Affiliates shall fail to make any payment when due (after
giving effect to any applicable grace periods) in respect of any Material
Financing Debt;
(b) the Company, any of its Subsidiaries or any of the
Restricted Affiliates shall fail to perform or observe the terms of any
agreement or instrument relating to any Material Financing Debt, and such
failure shall continue, without having been duly cured, waived or
consented to, beyond the period of grace, if any, specified in such
agreement or instrument, and such failure shall permit the acceleration
of such Material Financing Debt;
(c) all or any part of any Material Financing Debt of the
Company, any of its Subsidiaries or any of the Restricted Affiliates
shall be
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accelerated or shall become due or payable prior to its stated maturity
(except with respect to voluntary prepayments thereof or mandatory
prepayments that do not result from a default thereunder or an event
similar to an Event of Default hereunder) for any reason whatsoever;
(d) any Lien on any property of the Company, any of its
Subsidiaries or any of the Restricted Affiliates securing any Material
Financing Debt shall be enforced by foreclosure or similar action; or
(e) any holder of any Material Financing Debt shall exercise
any right of rescission with respect to the issuance thereof or put,
mandatory prepayment or repurchase rights against the Company, any of its
Subsidiaries or any Restricted Affiliate with respect to such Material
Financing Debt (other than any such rights that may be satisfied with
"payment in kind" notes or other similar securities).
8.1.6 Ownership; Liquidation; etc. Except as permitted by Section
6.10:
(a) the Company shall cease to own, directly or indirectly, all
the capital stock of its Subsidiaries, except to the extent permitted by
Section 6.11.1; or
(b) Xxxxxxxxxxx Xxxxxxx & Co., Inc. shall cease to, directly or
indirectly, control at least a majority of the voting interests of the
Company, Company Holdings, the Content Entity and, prior to a Qualified
Public Offering, the Internet Entity and Internet Holdings, entitled to
vote generally for the election of directors or managers as the case may
be; or
(c) the Company shall cease to control at least 50% (which
shall constitute a controlling interest upon request of the Agent after
the occurrence and during the continuance of an Event of Default) of the
voting rights of the Content Entity; or
(d) the Company or any of its Subsidiaries or any other Obligor
shall initiate any action to dissolve, liquidate or otherwise terminate
its existence.
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8.1.7 Enforceability, etc. Any Credit Document shall cease for
any reason (other than the scheduled termination thereof in accordance
with its terms) to be enforceable in accordance with its terms or in full
force and effect; or any party to any Credit Document shall so assert in
a judicial or similar proceeding; or the security interests created by
this Agreement or any other Credit Documents shall cease to be
enforceable and of the same effect and priority purported to be created
hereby or thereby.
8.1.8 Judgments. A final judgment (a) which, with other
outstanding final judgments against the Company, its Subsidiaries or the
Restricted Affiliates exceeds an aggregate of $500,000 in excess of
applicable insurance coverage shall be rendered against the Company, any
of its Subsidiaries or any of the Restricted Affiliates, or (b) which
grants injunctive relief that results, or creates a material risk of
resulting, in a Material Adverse Change and in either case if (i) within
30 days after entry thereof, such judgment shall not have been
discharged, stayed, vacated or bonded pending appeal or (ii) within 30
days after the expiration of any such stay, such judgment shall not have
been discharged.
8.1.9 ERISA. Any "reportable event" (as defined in section 4043
of ERISA) shall have occurred that reasonably could be expected to result
in termination of a Plan or the appointment by the appropriate United
States District Court of a trustee to administer any Plan or the
imposition of a Lien in favor of a Plan; or any ERISA Group Person shall
fail to pay when due amounts aggregating in excess of $ 500,000 which it
shall have become liable to pay to the PBGC or to a Plan under Title IV
of ERISA; or notice of intent to terminate a Plan shall be filed under
Title IV of ERISA by any ERISA Group Person or administrator; or the PBGC
shall institute proceedings under Title IV of ERISA to terminate or to
cause a trustee to be appointed to administer any Plan or a proceeding
shall be instituted by a fiduciary of any Plan against any ERISA Group
Person to enforce section 515 or 4219(c)(5) of ERISA and such proceeding
shall not have been dismissed within 30 days thereafter; or a condition
shall exist by reason of which the PBGC would be entitled to obtain a
decree adjudicating that any Plan must be terminated.
8.1.10 Bankruptcy. etc. The Company, any of its Subsidiaries or
any other Obligor shall:
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(a) commence a voluntary case under the Bankruptcy Code or
authorize, by appropriate proceedings of its board of directors or other
governing body, the commencement of such a voluntary case;
(b) (i) have filed against it a petition commencing an
involuntary case under the Bankruptcy Code that shall not have been
dismissed within 60 days after the date on which such petition is filed,
or (ii) file an answer or other pleading within such 60-day period
admitting or failing to deny the material allegations of such a petition
or seeking, consenting to or acquiescing in the relief therein provided,
or (iii) have entered against it an order for relief in any involuntary
case commenced under the Bankruptcy Code;
(c) seek relief as a debtor under any applicable law, other
than the Bankruptcy Code, of any jurisdiction relating to the liquidation
or reorganization of debtors or to the modification or alteration of the
rights of creditors, or consent to or acquiesce in such relief;
(d) have entered against it an order by a court of competent
jurisdiction (i) finding it to be bankrupt or insolvent, (ii) ordering or
approving its liquidation or reorganization as a debtor or any
modification or alteration of the rights of its creditors or (iii)
assuming custody of, or appointing a receiver or other custodian for, all
or a substantial portion of its property; or
(e) make an assignment for the benefit of, or enter into a
composition with, its creditors, or appoint, or consent to the
appointment of, or suffer to exist a receiver or other custodian for, all
or a substantial portion of its property.
8.2 Certain Actions Following an Event of Default. If any one or more
Events of Default shall occur and be continuing, then in each and every such
case:
8.2.1 Terminate Obligation to Extend Credit. Upon written request
of the Required Lenders, the Agent shall terminate the obligations of the
Lenders to make any further extensions of credit under the Credit
Documents by furnishing notice of such termination to the Company;
provided, however, that if a Bankruptcy Default shall have occurred, the
obligations of the Lenders to make any further extensions of credit under
the Credit Documents shall automatically terminate.
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8.2.2 Specific Performance; Exercise of Rights. Upon written
request of the Required Lenders, the Agent shall proceed to protect and
enforce the Lenders' rights by suit in equity, action at law and/or other
appropriate proceeding, either for specific performance of any covenant
or condition contained in this Agreement or any other Credit Document
(other than Hedge Agreements) or in any instrument or assignment
delivered to the Lenders pursuant to this Agreement or any other Credit
Document (other than Hedge Agreements), or in aid of the exercise of any
power granted in this Agreement or any other Credit Document (other than
Hedge Agreements) or any such instrument or assignment.
8.2.3 Acceleration. Upon written request of the Required Lenders,
the Agent shall by notice in writing to the Company (a) declare all or
any part of the unpaid balance of the Credit Obligations (other than
amounts under Hedge Agreements) then outstanding to be immediately due
and payable, and (b) require the Company immediately to deposit with the
Agent in cash an amount equal to the then Letter of Credit Exposure
(which cash shall be held and applied as provided in Section 4.5), and
thereupon such unpaid balance or part thereof and such amount equal to
the Letter of Credit Exposure shall become so due and payable without
presentation, protest or further demand or notice of any kind, all of
which are hereby expressly waived; provided, however, that if a
Bankruptcy Default shall have occurred, the unpaid balance of the Credit
Obligations (other than amounts under Hedge Agreements) shall
automatically become immediately due and payable.
8.2.4 Enforcement of Payment; Credit Security; Setoff. Upon
written request of the Required Lenders, the Agent shall proceed to
enforce payment of the Credit Obligations in such manner as it may elect,
to cancel, or instruct other Letter of Credit Issuers to cancel, any
outstanding Letters of Credit which permit the cancellation thereof and
to realize upon any and all rights in the Credit Security. The Lenders
may offset and apply toward the payment of the Credit Obligations (and/or
toward the curing of any Event of Default) any Indebtedness from the
Lenders to the respective Obligors, including any Indebtedness
represented by deposits in any account maintained with the Lenders,
regardless of the adequacy of any security for the Credit Obligations.
The Lenders shall have no duty to determine the adequacy of any such
security in connection with any such offset.
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8.2.5 Cumulative Remedies. To the extent not prohibited by
applicable law which cannot be waived, all of the Lenders' rights
hereunder and under each other Credit Document shall be cumulative.
8.3 Annulment of Defaults. No waiver of a Default by the Lenders or
the Agent shall extend to or affect any subsequent Event of Default or impair
any rights of the Lenders upon the occurrence thereof. The making of any
extension of credit during the existence of any Default or Event of Default
shall not constitute a waiver thereof.
8.4 Waivers. To the extent that such waiver is not prohibited by the
provisions of applicable law that cannot be waived, each of the Company and the
other Obligors waives:
(a) all presentments, demands for performance, notices of
nonperformance (except to the extent required by this Agreement or any
other Credit Document), protests, notices of protest and notices of
dishonor; and
(b) any requirement of diligence or promptness on the part of
the Agent or any Lender in the enforcement of its rights under this
Agreement or any other Credit Document.
9. Expenses: Indemnity.
9.1 Expenses. Whether or not the transactions contemplated hereby
shall be consummated, the Company will pay:
(a) all reasonable expenses of the Agent and the Syndication
Agent (including the out-of-pocket expenses related to forming the group
of Lenders and reasonable fees and disbursements of the counsel to the
Agent and the Syndication Agent) in connection with the negotiation,
preparation and duplication of this Agreement and each other Credit
Document, examinations by, and reports of, the Agent's commercial
financial examiners, fixed asset appraisers and environmental
consultants, the transactions contemplated hereby and thereby and
amendments, waivers, consents and other operations hereunder and
thereunder;
(b) all recording and filing fees and transfer and documentary
stamp and similar taxes at any time payable in respect of this Agreement,
any
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other Credit Document, any Credit Security or the incurrence of the
Credit Obligations; and
(c) all other reasonable expenses incurred by the Agent, the
Lenders or the holder of any Credit Obligation in connection with the
enforcement of any rights hereunder or under any other Credit Document or
any work-out negotiations relating to the Credit Obligations, including
costs of collection and reasonable attorneys' fees, (including a
reasonable allowance for the hourly cost of attorneys employed by the
Lenders on a salaried basis) and expenses.
9.2 General Indemnity. The Company shall indemnify the Lenders and the
Agent and hold them harmless from any liability, loss or damage resulting from
the violation by the Company of Section 2.4. In addition, the Company shall
indemnify each Lender, the Agent, the Syndication Agent, each of the Lenders' or
the Agent's or the Syndication Agent's directors, officers, employees, agents,
attorneys, accountants, consultants and each Person, if any, who controls any
Lender or the Agent (each Lender, the Agent and each of such directors,
officers, employees, agents, attorneys, accountants, consultants and control
Persons is referred to as an "Indemnified Party") and hold each of them harmless
from and against any and all claims, damages, loss, liabilities, cost and
reasonable expenses (including reasonable fees and disbursements of counsel with
whom any Indemnified Party may consult in connection therewith and all
reasonable expenses of litigation or preparation therefor) which any Indemnified
Party may incur or which may be asserted against any Indemnified Party in
connection with (a) the Indemnified Party's compliance with or contest of any
subpoena or other process issued against it in any proceeding involving the
Company, any of its Subsidiaries or their Affiliates, (b) any litigation or
investigation involving the Company, any of its Subsidiaries, any of the
Restricted Affiliates or their Affiliates, or any officer, director or employee
thereof, (c) the existence or exercise of any security rights with respect to
the Credit Security in accordance with the Credit Documents, or (d) this
Agreement, any other Credit Document or any transaction contemplated hereby or
thereby or the proposed use of proceeds thereof; provided, however, that the
foregoing indemnity shall not apply (i) to litigation commenced by the Company
against the Lenders or the Agent or the Syndication Agent which seeks
enforcement of any of the rights of the Company hereunder or under any other
Credit Document and is determined adversely to the Lenders or the Agent or the
Syndication Agent in a final nonappealable judgment or (ii) to the extent such
claims, damages, liabilities and expenses result from the Indemnified Party's
own gross negligence or willful misconduct. THE COMPANY
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EXPRESSLY ACKNOWLEDGES THAT IT MAY BE REQUIRED TO INDEMNIFY PERSONS AGAINST
THEIR OWN NEGLIGENCE.
9.3 Indemnity With Respect to Letters of Credit. The Company shall
indemnify each Letter of Credit Issuer and its correspondents and hold each of
them harmless from and against any and all claims, losses, liabilities, damages
and reasonable expenses (including reasonable attorneys' fees) arising from or
in connection with any Letter of Credit, including any such claim, loss,
liability, damage or expense arising out of any transfer, sale, delivery,
surrender or endorsement of any invoice, xxxx of lading, warehouse receipt or
other document at any time held by the Agent, such Letter of Credit Issuer or
held for their respective accounts by any of their correspondents, in connection
with any Letter of Credit, except to the extent such claims, losses,
liabilities, damages and expenses result from gross negligence or willful
misconduct on the part of the Agent or any other Letter of Credit Issuer.
10. Operations; Agent.
10.1 Interests in Credits. The Percentage Interest of each Lender in
the respective portions of the Loan and Letter of Credit Exposure, and the
related Commitments, shall be computed based on the maximum principal amount for
each Lender as set forth in the Register, as from time to time in effect. The
current Percentage Interests are set forth in Exhibit 10.1, which may be updated
by the Agent from time to time to conform to the Register.
10.2 Agent's Authority to Act. etc. Each of the Lenders appoints and
authorizes Fleet to act for the Lenders as the Lenders' Agent in connection with
the transactions contemplated by this Agreement and the other Credit Documents
(other than Hedge Agreements) on the terms set forth herein. All action in
connection with the enforcement of, or the exercise of any remedies (other than
the Lenders' rights of set-off as provided in Section 8.2.4 or in any Credit
Document) in respect of the Credit Obligations and Credit Documents shall be
taken by the Agent. Neither the Syndication Agent nor any other agent named
hereunder (other than the Agent) shall have any obligations, liabilities,
responsibilities or duties under this Agreement or any other Credit Document
other than as applicable to all Lenders in such capacity. Without limiting the
foregoing, the Syndication Agent shall not have, or be deemed to have, any
fiduciary relationship with any other Lender. Each Lender acknowledges that it
has not relied, and will not rely, on the Syndication Agent in deciding to enter
into this Agreement or any other Credit Document to which it is a party or in
taking or not taking action hereunder or thereunder.
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10.3 Company to Pay Agent, etc. The Company and each Guarantor shall be
fully protected in making all payments in respect of the Credit Obligations
(other than payments under Hedge Agreements) to the Agent, in relying upon
consents, modifications and amendments executed by the Agent purportedly on the
Lenders' behalf, and in dealing with the Agent as herein provided. The Agent may
charge the accounts of the Company, on the dates when the amounts thereof become
due and payable, with the amounts of the principal of and interest on the Loan,
any amounts paid by the Letter of Credit Issuers to third parties under Letters
of Credit or drafts presented thereunder, commitment fees, Letter of Credit fees
and all other fees and amounts owing under any Credit Document (other than Hedge
Agreements).
10.4 Lender Operations for Advances, Letters of Credit, etc.
10.4.1 Advances. On each Closing Date, each Lender shall advance
to the Agent in immediately available funds such Lender's Percentage
Interest in the portion of the Loan advanced on such Closing Date prior
to 12:00 noon (Boston time). If such funds are not received at such time,
but all applicable conditions set forth in Section 5 have been satisfied,
each Lender authorizes and requests the Agent to advance for the Lender's
account, pursuant to the terms hereof, the Lender's respective Percentage
Interest in such portion of the Loan and agrees to reimburse the Agent in
immediately available funds for the amount thereof prior to 2:00 p.m.
(Boston time) on the day any portion of the Loan is advanced hereunder;
provided, however, that the Agent is not authorized to make any such
advance for the account of any Lender who has previously notified the
Agent in writing that such Lender will not be performing its obligations
to make further advances hereunder; and provided, further, that the Agent
shall be under no obligation to make any such advance.
10.4.2 Letters of Credit. Each of the Lenders authorizes and
requests each Letter of Credit Issuer to issue the Letters of Credit
provided for in Section 2.3 and to grant each Lender a participation in
each of such Letters of Credit in an amount equal to its Percentage
Interest in the amount of each such Letter of Credit. Promptly upon the
request of the Letter of Credit Issuer, each Lender shall reimburse the
Letter of Credit Issuer in immediately available funds for such Lender's
Percentage Interest in the amount of all obligations to third parties
incurred by the Letter of Credit Issuer in respect of each Letter of
Credit and each draft accepted under a Letter of Credit to the
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extent not reimbursed by the Company by 2:00 p.m. (Boston time) on the
Banking Day when due. The Letter of Credit Issuer will notify each Lender
of the issuance of any Letter of Credit, the amount and date of payment
of any draft drawn or accepted under a Letter of Credit and whether in
connection with the payment of any such draft the amount thereof was
added to the Revolving Loan or was reimbursed by the Company.
10.4.3 Agent to Allocate Payments, etc. All payments of principal
and interest in respect of the extensions of credit made pursuant to this
Agreement, reimbursement of amounts paid by any Letter of Credit Issuer
to third parties under Letters of Credit or drafts presented thereunder,
commitment fees, Letter of Credit fees and other fees under this
Agreement shall, as a matter of convenience, be made by the Company and
the Guarantors to the Agent in immediately available funds by noon
(Boston time) on any Banking Day. The share of each Lender shall be
credited to such Lender by the Agent in immedi ately available funds by
2:00 p.m. (Boston time) on such Banking Day in such manner that the
principal amount of the Credit Obligations to be paid shall be paid
proportionately in accordance with the Lenders' respective Percentage
Interests in such Credit Obligations, except as otherwise provided in
this Agreement. Under no circumstances shall any Lender be required to
produce or present its Notes as evidence of its interests in the Credit
Obligations in any action or proceeding relating to the Credit
Obligations.
10.4.4 Nonperforming Lenders. In the event that any Lender fails
to reimburse the Agent pursuant to Sections 10.4.1 or 10.4.2 for the
Percentage Interest of such lender (a "Nonperforming Lender") in any
credit advanced by the Agent pursuant hereto, overdue amounts (the
"Delinquent Payment") due from the Nonperforming Lender to the Agent
shall bear interest, payable by the Nonperforming Lender on demand, at a
per annum rate equal to (a) the Federal Funds Rate for the first three
days overdue and (b) the sum of 2% plus the Federal Funds Rate for any
longer period. Such interest shall be payable to the Agent for its own
account for the period commencing on the date of the Delinquent Payment
and ending on the date the Nonperforming Lender reimburses the Agent on
account of the Delinquent Payment (to the extent not paid by any Obligor
as provided below) and the accrued interest thereon (the "Delinquency
Period"), whether pursuant to the assignments referred to below or
otherwise. Upon notice by the Agent, the Company will pay to the Agent
the principal (but not the interest) portion of the Delinquent Payment.
During the Delinquency Period, in order to make reimbursements
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for the Delinquent Payment and accrued interest thereon, the
Nonperforming Lender shall be deemed to have assigned to the Agent all
interest, commitment fees and other payments made by the Company under
Section 3 that would have thereafter otherwise been payable under the
Credit Documents to the Nonperforming Lender. During any period in which
any Nonperforming Lender is not performing its obligations to extend
credit under Section 2, the Nonperforming Lender shall be deemed to have
assigned to each Lender that is not a Nonperforming Lender (a "Performing
Lender") all principal and other payments made by the Company under
Section 4 that would have thereafter otherwise been payable under the
Credit Documents to the Nonperforming Lender. The Agent shall credit a
portion of such payments to each Performing Lender in an amount equal to
the Percentage Interest of such Performing Lender in an amount equal to
the Percentage Interest of such Performing Lender divided by one minus
the Percentage Interest of the Nonperforming Lender until the respective
portions of the Loan owed to all the Lenders are the same as the
Percentage Interests of the Lenders immediately prior to the failure of
the Nonperforming Lender to perform its obligations under Section 2. The
foregoing provisions shall be in addition to any other remedies the
Agent, the Performing Lenders or the Company may have under law or equity
against the Nonperforming Lender as a result of the Delinquent Payment or
as a result of its failure to perform its obligations under Section 2.
10.5 Sharing of Payments, etc. Each Lender agrees that (a) if by
exercising any right of set-off or counterclaim or otherwise, it shall receive
payment of (i) a proportion of the aggregate amount due with respect to its
Percentage Interest in the Loan and Letter of Credit Exposure which is greater
than (ii) the proportion received by any other Lender in respect of the
aggregate amount due with respect to such other Lender's Percentage Interest in
the Loan and Letter of Credit Exposure and (b) if such inequality shall continue
for more than 10 days, the Lender receiving such proportionately greater
payment shall purchase participations in the Percentage Interests in the Loan
and Letter of Credit Exposure held by the other Lenders, and such other
adjustments shall be made from time to time (including rescission of such
purchases of participations in the event the unequal payment originally received
is recovered from such Lender through bankruptcy proceedings or otherwise), as
may be required so that all such payments of principal and interest with respect
to the Loan and Letter of Credit Exposure held by the Lenders shall be shared by
the Lenders pro rata in accordance with their respective Percentage Interests;
provided, however, that this Section 10.5 shall not impair the right of any
Lender to exercise
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any right of set-off or counterclaim it may have and to apply the amount subject
to such exercise to the payment of Indebtedness of any Obligor other than such
Obligor's Indebtedness with respect to the Loan and Letter of Credit Exposure.
Each Lender that grants a participation in the Credit Obligations to a Credit
Participant shall require as a condition to the granting of such participation
that such Credit Participant agree to share payments received in respect of the
Credit Obligations as provided in this Section 10.5. The provisions of this
Section 10.5 are for the sole and exclusive benefit of the Lenders and no
failure of any Lender to comply with the terms hereof shall be available to any
Obligor as a defense to the payment of the Credit Obligations.
10.6 Agent's Resignation. The Agent may resign at any time by giving at
least 60 days' prior written notice of its intention to do so to each of the
Lenders and the Company and upon the appointment by the Required Lenders of a
successor Agent reasonably satisfactory to the Company. If no successor Agent
shall have been so appointed and shall have accepted such appointment within 45
days after the retiring Agent's giving of such notice of resignation, then the
retiring Agent may appoint a successor Agent which shall be a bank or a trust
company organized under the laws of the United States of America or any state
thereof and having a combined capital, surplus and undivided profit of at least
$500,000,000 (so long as no Default exists) with the consent of the Company,
which shall not be unreasonably withheld; provided, however, 'that any successor
Agent appointed under this sentence may be removed upon the written request of
the Required Lenders, which request shall also appoint a successor Agent (so
long as no Default exists) reasonably satisfactory to the Company. Upon the
appointment of a new Agent hereunder, the term "Agent" shall for all purposes of
this Agreement thereafter mean such successor. After any retiring Agent's
resignation hereunder as Agent, or the removal hereunder of any successor Agent,
the provisions of this Agreement shall continue to inure to the benefit of such
retiring or removed Agent as to any actions taken or omitted to be taken by it
while it was Agent under this Agreement.
10.7 Concerning the Agent.
10.7.1 Action in Good Faith. etc. The Agent and its officers,
directors, employees and agents shall be under no liability to any of the
Lenders or to any future holder of any interest in the Credit Obligations
for any action or failure to act taken or suffered in good faith, and any
action or failure to act in accordance with an opinion of its counsel
shall conclusively be deemed to be in good faith. The Agent shall in all
cases be entitled to rely, and shall be
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fully protected in relying, on instructions given to the Agent by the
Required Lenders.
10.7.2 No Implied Duties, etc. The Agent shall have and may
exercise such powers as are specifically delegated to the Agent under
this Agreement or any other Credit Document together with all other
powers incidental thereto. The Agent shall have no implied duties to any
Person or any obligation to take any action under this Agreement or any
other Credit Document except for action specifically provided for in this
Agreement or any other Credit Document to be taken by the Agent.
10.7.3 Validity, etc. The Agent shall not be responsible to any
Lender or any future holder of any interest in the Credit Obligations (a)
for the legality, validity, enforceability or effectiveness of this
Agreement or any other Credit Document, (b) for any recitals, reports,
representations, warranties or statements contained in or made in
connection with this Agreement or any other Credit Document, (c) for the
existence or value of any assets included in any security for the Credit
Obligations, (d) for the effectiveness of any Lien purported to be
included in the Credit Security, (e) for the specification or failure to
specify any particular assets to be included in the Credit Security, or
(0 unless the Agent shall have failed to comply with Section 10.7.1, for
the perfection of the security interests in the Credit Security.
10.7.4 Compliance. The Agent shall not be obligated to ascertain
or inquire as to the performance or observance of any of the terms of
this Agreement or any other Credit Document; and in connection with any
extension of credit under this Agreement or any other Credit Document,
the Agent shall be fully protected in relying on a certificate of the
Company as to the fulfillment by the Company of any conditions to such
extension of credit.
10.7.5 Employment of Agents and Counsel. The Agent may execute any
of its duties as Agent under this Agreement or any other Credit Document
by or through employees, agents and attorneys-in-fact and shall not be
responsible to any of the Lenders, the Company or any other Obligor for
the default or misconduct of any such agents or attorneys-in-fact
selected by the Agent acting in good faith. The Agent shall be entitled
to advice of counsel concerning all matters pertaining to the agency
hereby created and its duties hereunder or under any other Credit
Document.
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10.7.6 Reliance on Documents and Counsel. The Agent shall be
entitled to rely, and shall be fully protected in relying, upon any
affidavit, certificate, cablegram, consent, instrument, letter, notice,
order, document, statement, telecopy, telegram, telex or teletype message
or writing reasonably believed in good faith by the Agent to be genuine
and correct and to have been signed, sent or made by the Person in
question, including any telephonic or oral statement made by such Person,
and, with respect to legal matters, upon an opinion or the advice of
counsel selected by the Agent.
10.7.7 Agent's Reimbursement. Each of the Lenders severally agrees
to reimburse the Agent, pro rata in accordance with such Lender's
Percentage Interest, for any reasonable expenses not reimbursed by the
Company or the Guarantors (without limiting the obligation of the Company
or the Guarantors to make such reimbursement): (a) for which the Agent is
entitled to reimbursement by the Company or the Guarantors under this
Agreement or any other Credit Document, and (b) after the occurrence and
during the continuance of a Default, for any other reasonable expenses
incurred by the Agent on the Lenders' behalf in connection with the
enforcement of the Lenders' rights under this Agreement or any other
Credit Document; provided, however, that the Agent shall not be
reimbursed for any such expenses arising as a result of its gross
negligence or willful misconduct.
10.8 Rights as a Lender. With respect to any credit extended by it
hereunder, Fleet shall have the same rights, obligations and powers hereunder as
any other Lender and may exercise such rights and powers as though it were not
the Agent, and unless the context otherwise specifies, Fleet shall be treated in
its individual capacity as though it were not the Agent hereunder. Without
limiting the generality of the foregoing, the Percentage Interest of Fleet shall
be included in any computations of Percentage Interests. Fleet and its
Affiliates may accept deposits from, lend money to, act as trustee for and
generally engage in any kind of banking or trust business with the Company, any
of its Subsidiaries or any Affiliate of any of them and any Person who may do
business with or own an equity interest in the Company, any of its Subsidiaries
or any Affiliate of any of them, all as if Fleet were not the Agent and without
any duty to account therefor to the other Lenders.
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10.9 Independent Credit Decision. Each of the Lenders acknowledges that
it has independently and without reliance upon the Agent, based on the financial
statements and other documents referred to in Section 7.2, on the other
representations and warranties contained herein and on such other information
with respect to the Company and its Subsidiaries as such Lender deemed
appropriate, made such Lender's own credit analysis and decision to enter into
this Agreement and to make the extensions of credit provided for hereunder. Each
Lender represents to the Agent that such Lender will continue to make its own
independent credit and other decisions in taking or not taking action under this
Agreement or any other Credit Document. Each Lender expressly acknowledges that
neither the Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact or Affiliates has made any representations or warranties to
such Lender, and no act by the Agent taken under this Agreement or any other
Credit Document, including any review of the affairs of the Company and its
Subsidiaries, shall be deemed to constitute any representation or warranty by
the Agent. Except for notices, reports and other documents expressly required to
be furnished to each Lender by the Agent under this Agreement or any other
Credit Document, the Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, condition, financial or otherwise, or creditworthiness of
the Company or any Subsidiary which may come into the possession of the Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
Affiliates.
10.10 Indemnification. The Lenders shall severally indemnify the Agent
and its officers, directors, employees, agents, attorneys, accountants,
consultants and controlling Persons (to the extent not reimbursed by the
Obligors and without limiting the obligation of any of the Obligors to do so),
pro rata in accordance with their respective Percentage Interests, from and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind
whatsoever which may at any time be imposed on, incurred by or asserted against
the Agent or such Persons relating to or arising out of this Agreement, any
other Credit Document, the transactions contemplated hereby or thereby, or any
action taken or omitted by the Agent in connection with any of the foregoing;
provided, however, that the foregoing shall not extend to actions or omissions
which are taken by the Agent with gross negligence or willful misconduct.
11. Successors and Assigns; Lender Assignments and Participations. Any
reference in this Agreement or any other Credit Document to any of the parties
hereto shall be deemed to include the successors and assigns of such party, and
all covenants and agreements by or on behalf of the Company, the other Obligors,
the
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Agent or the Lenders that are contained in this Agreement or any other Credit
Document shall bind and inure to the benefit of their respective successors and
assigns; provided, however, that (a) the Company and its Subsidiaries may not
assign their rights or obligations under this Agreement or any other Credit
Document except for mergers or liquidations permitted by Section 6.10, and
(b)the Lenders shall be not entitled to assign their respective Percentage
Interests in the credits extended hereunder or their Commitments except as set
forth below in this Section 11.
11.1 Assignments by Lenders.
11.1.1 Assignees and Assignment Procedures. Each Lender may, in
compliance with applicable laws in connection with such assignment,
assign to one or more Eligible Assignees (each, an "Assignee") all or a
portion of its interests, rights and obligations under this Agreement and
the other Credit Documents, including all or a portion, which need not be
pro rata between the Revolving Loan and the Letter of Credit Exposure, of
its Commitment, the portion of the Loan and Letter of Credit Exposure at
the time owing to it and any Notes held by it, but excluding its rights
and obligations as a Letter of Credit Issuer; provided, however, that:
(i) the aggregate amount of the Commitment of the
assigning Lender subject to each such assignment to any Assignee
other than another Lender, a Related Fund or an Affiliate of a
Lender (determined as of the date the Assignment and Acceptance
with respect to such assignment is delivered to the Agent) shall
be not less than $5,000,000 and in increments of $1,000,000 (or,
if less, the entire remaining amount of the assigning Lender's
Commitment); and
(ii) the parties to each such assignment shall
execute and deliver to the Agent an Assignment and Acceptance (the
"Assignment and Acceptance") substantially in the form of Exhibit
11.1.1, together with the Note subject to such assignment and,
except in the event of a transfer pursuant to Section 11.3 or to
another Lender, a Related Fund or an Affiliate of a Lender, a
processing and recordation fee of $3,500 payable to the Agent by
the assigning Lender (or as the assigning Lender and the Assignee
may otherwise agree between themselves).
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Upon acceptance and recording pursuant to Section 11.1.4, from and after the
effective date specified in each Assignment and Acceptance (which effective date
shall be at least five Banking Days after the execution thereof unless waived by
the Agent):
(A) the Assignee shall be a party hereto and, to
the extent provided in such Assignment and Acceptance, have the rights
and obligations of a Lender under this Agreement and
(B) the assigning Lender shall, to the extent
provided in such assignment, be released from its obligations under this
Agreement (and, in the case of an Assignment and Acceptance covering all
or the remaining portion of an assigning Lender's rights and obligations
under this Agreement, such Lender shall cease to be a party hereto but
shall continue to be entitled to the benefits of Sections 3.2.4, 3.5 and
9, as well as to any fees accrued for its account hereunder and not yet
paid).
11.1.2 Terms of Assignment and Acceptance. By executing and
delivering an Assignment and Acceptance, the assigning Lender and the
Assignee shall be deemed to confirm to and agree with each other and the
other parties hereto as follows:
(a) other than the representation and warranty that it is the
legal and beneficial owner of the interest being assigned thereby free
and clear of any adverse claim, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to
any statements, warranties or representations made in or in connection
with this Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, any other Credit
Document or any other instrument or document furnished pursuant hereto;
(b) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of
the Company, its Subsidiaries or the Restricted Affiliates or the
performance or observance by the Company, or any of Subsidiaries or the
Restricted Affiliates of any of the obligations under this Agreement, any
other Credit Document or any other instrument or document furnished
pursuant hereto;
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(c) such Assignee confirms that it has received a copy of this
Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 7.2 or Section 6.4 and such other documents
and information as it has deemed appropriate to make its own credit
analysis and decision to enter into such Assignment and Acceptance;
(d) such Assignee will independently and without reliance upon
the Agent, such assigning Lender or any other Lender, and based on such
documents and information as it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action
under this Agreement;
(e) such Assignee appoints and authorizes the Agent to take
such action as agent on its behalf and to exercise such powers under this
Agreement as are delegated to the Agent by the terms hereof, together
with such powers as are reasonably incidental thereto; and
(f) such Assignee agrees that it will perform in accordance
with the terms of this Agreement all the obligations which are required
to be performed by it as a Lender.
11.1.3 Register. The Agent shall maintain at the Boston Office
(solely for the limited purpose set forth in this Section 11.1.3, as the
agent of the Company) a register (the "Register") for the recordation of
(a) the names and addresses of the Lenders and the Assignees which assume
rights and obligations pursuant to an assignment under Section 11.1.1,
(b)the Percentage Interest of each such Lender as set forth in Exhibit
10.1 and (c) the amount of the Loan and Letter of Credit Exposure owing
to each Lender from time to time. The entries in the Register shall be
conclusive; in the absence of manifest error, and the Company, the Agent
and the Lenders may treat each Person whose name is registered therein
for all purposes as a party to this Agreement. The Register shall be
available for inspection by the Company or any Lender at any reasonable
time and from time to time upon reasonable prior notice.
11.1.4 Acceptance of Assignment and Assumption. Upon its receipt
of a completed Assignment and Acceptance executed by an assigning Lender
and an Assignee (and any necessary consent of the Agent and the Company)
together with the processing and recordation fee referred to in Section
11.1.1
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and, to the extent necessary, the Note being assigned, the Agent shall
(a) accept such Assignment and Acceptance, (b)record the information
contained therein in the Register and (c) give prompt notice thereof to
the Company. Within five Banking Days after receipt of notice, the
Company, at its own expense, shall execute and deliver to the Agent (in
exchange for the surrendered Note if such Note must be surrendered or
reissued as a result of such assignment) a new Note to the order of such
Assignee in a principal amount equal to the applicable Commitment and
Loan assumed by it pursuant to such Assignment and Acceptance. If the
assigning Lender has retained a Commitment and Loan, its Note shall be
deemed to be then outstanding in a principal amount equal to the
applicable Commitment and Loan retained by it.
11.1.5 Federal Reserve Bank. Notwithstanding the foregoing
provisions of this Section 11 (without the consent of or notice to the
Agent or the Company), any Lender may at any time pledge all or any
portion of such Lender's rights under this Agreement and the other Credit
Documents to a Federal Reserve Bank or, in the case of any Lender that is
a fund, to the trustee of such fund to support the fund's obligations to
such trustee; provided, however, that no such pledge or assignment shall
release such Lender from such Lender's obligations hereunder or under any
other Credit Document.
11.1.6 Further Assurances. The Company, its Subsidiaries and the
Restricted Affiliates shall sign such documents and take such other
actions from time to time reasonably requested by an Assignee to enable
it to share in the benefits of the rights created by the Credit
Documents.
11.1.7 Credit Participants. Each Lender may, without the consent
of the Company or the Agent, in compliance with applicable laws in
connection with such participation, sell to one or more commercial banks,
other financial institutions or funds in the business of making or
purchasing loans similar to the Credit Obligations (each a "Credit
Participant") participations in all or a portion of its interests, rights
and obligations under this Agreement and the other Credit Documents
(including all or a portion of its Commitment, the Loan and Letter of
Credit Exposure owing to it and the Note held by it); provided, however,
that:
(a) such Lender's obligations under this Agreement shall remain
unchanged;
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(b) such Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations;
(c) the Credit Participant shall be entitled to the benefit of
the cost protection provisions contained in Sections 3.2.4, 3.5 and 9,
but shall not be entitled to receive any greater payment thereunder than
the selling Lender would have been entitled to receive with respect to
the interest so sold if such interest had not been sold; and
(d) the Company, the Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement and, under any
agreements between such Lender and such Credit Participant, such Lender
shall retain the sole right as one of the Lenders to vote (and to
determine how to vote) with respect to the enforcement of the obligations
of the Obligors relating to the Loan and Letter of Credit Exposure and
the approval of any amendment, modification or waiver of any provision of
this Agreement (other than amendments, modifications, consents or waivers
described in clause (b)of the proviso to Section 15.1, with respect to
which the Credit Participant may determine how to vote).
Each Obligor agrees, to the fullest extent permitted by applicable law, that any
Credit Participant and any Lender purchasing a participation from another Lender
pursuant to Section 10.5 may exercise all rights of payment (including the right
of set-off), with respect to its participation as fully as if such Credit
Participant or such Lender were the direct creditor of the Obligors and a Lender
hereunder in the amount of such participation.
11.2 Replacement of Lender. In the event that any Lender or, to the
extent applicable, any Credit Participant (the "Affected Lender"):
(a) fails to perform its obligations to fund any portion of the
Loan or to issue any Letter of Credit on any Closing Date when required
to do so by the terms of the Credit Documents, or fails to provide its
portion of any LIBOR Pricing Option pursuant to Section 3.2.1 or on
account of a Legal Requirement as contemplated by Section 3.2.5;
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(b) demands payment under the provisions of Section 3.5 in an
amount materially in excess of the amounts with respect thereto demanded
by the other Lenders; or
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(c) refuses to consent to a proposed amendment, modification,
waiver or other action requiring consent of the holders of 100% of the
Percentage Interests under Section 15.1 that is consented to by Lenders
owning at least 80% of the Percentage Interests;
then, so long as no Event of Default exists, the Company shall have the right to
seek a replacement lender which is reasonably satisfactory to the Agent (the
"Replacement Lender"). The Replacement Lender shall purchase the interests of
the Affected Lender in the Loan, Letters of Credit and its Commitment and shall
assume the obligations of the Affected Lender hereunder and under the other
Credit Documents upon execution by the Replacement Lender of an Assignment and
Acceptance and the tender by it to the Affected Lender of a purchase price
agreed between it and the Affected Lender (or, if they are unable to agree, a
purchase price in the amount of the Affected Lender's Percentage Interest in the
Loan and Letter of Credit Exposure, or appropriate credit support for contingent
amounts included therein, and all other outstanding Credit Obligations then owed
to the Affected Lender). No assignment fee pursuant to Section 11.1.1(u) shall
be required in connection with such assignment. Such assignment by any Affected
Lender who has performed its obligations hereunder shall be deemed an early
termination of any LIBOR Pricing Option to the extent of such Affected Lender's
portion thereof, and the Company will pay to such Affected Lender any resulting
amounts due under Section 3.2.4. Upon consummation of such assignment, the
Replacement Lender shall become party to this Agreement as a signatory hereto
and shall have all the rights and obligations of the Affected Lender under this
Agreement and the other Credit Documents with a Percentage Interest equal to the
Percentage Interest of the Affected Lender, the Affected Lender shall be
released from its obligations hereunder and under the other Credit Documents,
and no further consent or action by any party shall be required. Upon the
consummation of such assignment, the Company, the Agent and the Affected Lender
shall make appropriate arrangements so that a new Note is issued to the
Replacement Lender if it has acquired a portion of the Loan. The Company and the
Guarantors shall sign such documents and take such other actions reasonably
requested by the Replacement Lender to enable it to share in the benefits of the
rights created by the Credit Documents. Until the consummation of an assignment
in accordance with the foregoing provisions of this Section 11.3, the Company
shall continue to pay to the Affected Lender any Credit Obligations as they
become due and payable.
12. Confidentiality. Each Lender will make no disclosure of confidential
information furnished to it by the Company, any of its Subsidiaries or any of
the Restricted Affiliates unless such information shall have become public,
except:
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(a) in connection with operations under or the enforcement of
this Agreement or any other Credit Document to Persons who have a
reasonable need to be furnished such confidential information and who
agree to comply with the restrictions contained in this Section 12 with
respect to such informa tion;
(b) pursuant to any statutory or regulatory requirement or any
mandatory court order, subpoena or other legal process;
(c) to any parent or corporate Affiliate of such Lender or to
any Credit Participant, proposed Credit Participant or proposed Assignee;
provided, however, that any such Person shall agree to comply with the
restrictions set forth in this Section 12 with respect to such
information;
(d) to its independent counsel, auditors and other professional
advisors with an instruction to such Person to keep such information
confidential; and
(e) with the prior written consent of the Company, to any other
Person.
13. Notices. Except as otherwise specified in this Agreement or any other
Credit Document, any notice required to be given pursuant to this Agreement or
any other Credit Document shall be given in writing. Any notice, consent,
approval, demand or other communication in connection with this Agreement or any
other Credit Document shall be deemed to be given if given in writing (including
by telecopy) addressed as provided below (or to the addressee at such other
address as the addressee shall have specified by notice actually received by the
addressor), and if either (a) actually delivered in fully legible form to such
address or (b) in the case of a letter, unless actual receipt of the notice is
required by any Credit Document five days shall have elapsed after the same
shall have been deposited in the United States mails, with first-class postage
prepaid and registered or certified.
If to the Company, any of its Subsidiaries or any of the Restricted
Affiliates, to it at its address set forth in Exhibit 7.1 (as supplemented
pursuant to Section 6.4.1), to the attention of the chief financial officer.
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If to any Lender or the Agent, to it at its address set forth on the
signature pages of this Agreement or in the Register, with a copy to the Agent.
14. Amendments, Consents, Waivers, etc.
14.1 Lender Consents for Amendments. Except as otherwise set forth
herein, the Agent may (and upon the written request of the Required Lenders the
Agent shall) take or refrain from taking any action under this Agreement or any
other Credit Document, including giving its written consent to any modification
of or amendment to and waiving in writing compliance with any covenant or
condition in this Agreement or any other Credit Document (other than a Hedge
Agreement) or any Default or Event of Default, all of which actions shall be
binding upon all of the Lenders; provided, however, that:
(a) Except as provided below, without the written consent of
the Lenders owning at least a majority of the Percentage Interests
(disregarding the Percentage Interest of any Nonperforming Lender so long
as such Lender is treated equally with the other Lenders with respect to
any actions enumerated below), no written modification of, amendment to,
consent with respect to, waiver of compliance with or waiver of a Default
under, any of the Credit Documents (other than a Hedge Agreement) shall
be made.
(b) Without the written consent of such Lenders as own 100% of
the Percentage Interests (disregarding the Percentage Interest of any
Nonperforming Lender so long as such Lender is treated equally with the
other Lenders with respect to any actions enumerated below):
(i) No release of all or substantially all of the
Credit Security or release of the Company or any material
Guarantor shall be made (in any event, without the written consent
of the Lenders, the Agent may release particular items of Credit
Security or particular Guarantors in dispositions permitted by
Sections 6.10 or 6.18, as modified by amendments thereto approved
by the Required Lenders, and may release all Credit Security
pursuant to Section 15.1 upon payment in full of the Credit
Obligations and termination of the Commitments).
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(ii) No incurrence or existence of any Lien on all
or substantially all of the Credit Security shall be
permitted (other than Liens securing the Credit
Obligations).
(iii) No alteration shall be made of the Lenders'
rights of set-off contained in Section 8.2.4.
(iv) No amendment to or modification of this
Section 14.1 or the definition of "Required Lenders" shall
be made.
(c) Without the written consent of each Lender that is
directly affected thereby, as well as such Lenders as own at least
a majority of the Percentage Interests (disregarding the
Percentage Interest of Nonperforming Lender so long as such Lender
is treated equally with the other Lenders with respect to any
actions enumerated below):
(i) No reduction shall be made in (A) the amount
of principal of the Loan owing to such Lender or
reimbursement obligations for payments made under Letters
of Credit payable or participated to such Lender, (B) the
interest rate on the portion of the Loan owing to such
Lender or (C) the Letter of Credit fees or commitment fees
owing to such Lender with respect to the credit facility
provided herein (other than amendments and waivers approved
by the Required Lenders that modify defined terms used in
calculating the Applicable Margin or Consolidated Excess
Cash Flow or that waive an increase in the Applicable Rate
as a result of an Event of Default).
(ii) No change shall be made in the stated,
scheduled time of payment of any portion of the Loan owing
to such Lender or interest thereon or reimbursement of
payments made under Letters of Credit or fees relating to
any of the foregoing payable to such Lender and no waiver
shall be made of any Default under Section 8.1.1 with
respect to such Lender (other than amendments and waivers
approved by the Required Lenders that modify defined terms
used in calculating the Applicable Margin or Consolidated
Excess Cash Flow).
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(iii) No increase shall be made in the amount, or
extension of the term, of the stated Commitments of such Lender beyond
that provided for under Section 2.
(d) Without the written consent of the Agent, no amendment or
modification of any Credit Document shall affect the rights or duties of
the Agent under the Credit Documents.
(e) Without the written consent of a Letter of Credit Issuer,
no amendment or modification of any Credit Document shall affect the
rights or duties of such Letter of Credit Issuer under the Credit
Documents.
(f) Without the written consent of Lenders owning at least
two-thirds of the Percentage Interests in a particular Tranche
(disregarding the Percentage Interest of any Delinquent Lenders during
the existence of a Delinquency Period so long as each such Delinquent
Lender is treated the same as the other Lenders with respect to any
actions enumerated below) voting as a separate class, no change may be
made in the allocation of mandatory prepayments under Section 4.3 between
the Acquisition Loan and the Revolving Loan.
14.2 Course of Dealing; No Implied Waivers. No course of dealing
between any Lender or the Agent, on one hand, and the Company or any other
Obligor, on the other hand, shall operate as a waiver of any of the Lenders' or
the Agent's rights under this Agreement or any other Credit Document or with
respect to the Credit Obligations. In particular, no delay or omission on the
part of any Lender or the Agent in exercising any right under this Agreement or
any other Credit Document or with respect to the Credit Obligations shall
operate as a waiver of such right or any other right hereunder or thereunder. A
waiver on any one occasion shall not be construed as a bar to or waiver of any
right or remedy on any future occasion. No waiver, consent or amendment with
respect to this Agreement or any other Credit Document shall be binding unless
it is in writing and signed by the Agent or the Required Lenders.
15. General Provisions.
15.1 Defeasance. When all Credit Obligations have been paid, performed
and indefeasibly discharged in full, and if at the time no Lender continues to
be committed to extend any credit to the Company hereunder or under any other
Credit Document, this Agreement and the other Credit
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Document, this Agreement and the other Credit Documents shall terminate and, at
the Company's written request, the Credit Security shall revert to the Obligors
and the right, title and interest of the Agent and the Lenders therein shall
terminate. Thereupon, on the Obligors' demand and at their cost and expense,
the Agent shall execute proper instruments, acknowledging satisfaction of and
discharging this Agreement and the other Credit Documents, and shall redeliver
to the Obligors any Credit Security then in its possession; provided, however,
that Sections 3.2.4, 3.5, 9, 10.7.7, 10.10, 12 and 15 shall survive the
termination of this Agreement. In addition, upon the closing of a Qualified
Public Offering, the Agent shall release the Internet Entity and Internet
Holdings as a Guarantor, Restricted Affiliate and party to this Agreement, and
release all of its assets from the Credit Security as provided in Section 6.18;
provided, however, that the Internet Entity shall continue to be party to the
Guarantee and Security Agreement for the limited purpose of pledging its debt
and equity interests in the Content Entity, which shall continue to be subject
to the Credit Security as provided therein.
15.2 No Strict Construction. The parties have participated jointly in
the negotiation and drafting of this Agreement and the other Credit Documents
with counsel sophisticated in financing transactions. In the event an ambiguity
or question of intent or interpretation arises, this Agreement and the other
Credit Documents shall be construed as if drafted jointly by the parties and no
presumption or burden of proof shall arise favoring or disfavoring any party by
virtue of the authorship of any provisions of this Agreement and the other
Credit Documents.
15.3 Certain Obligor Acknowledgments. Each of the Company and the other
Obligors acknowledges that:
(a) it has been advised by counsel in the negotiation,
execution and delivery of this Agreement and the other Credit Documents;
(b) neither the Agent nor any Lender has any fiduciary
relationship with or duty to the Obligors arising out of or in connection
with this Agreement or any other Credit Document, and the relationship
between the Agent and Lenders, on one hand, and the Obligors, on the
other hand, in connection herewith or therewith is solely that of debtor
and creditor; and
(c) no joint venture is created hereby or by the other Credit
Documents or otherwise exists by virtue of the transactions contemplated
hereby or thereby among the Obligors and the Lenders.
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15.4 Venue; Service of Process; Certain Waivers. Each of the Company,
the other Obligors, the Agent and the Lenders:
(a) Irrevocably submits to the nonexclusive jurisdiction of the
state courts of The Commonwealth of Massachusetts and to the nonexclusive
jurisdiction of the United States District Court for the District of
Massachusetts for the purpose of any suit, action or other proceeding
arising out of or based upon this Agreement or any other Credit Document
or the subject matter hereof or thereof;
(b) Waives to the extent not prohibited by applicable law that
cannot be waived, and agrees not to assert, by way of motion, as a
defense or otherwise, in any such proceeding brought in any of the
above-named courts, any claim that it is not subject personally to the
jurisdiction of such court, that its property is exempt or immune from
attachment or execution, that such proceeding is brought in an
inconvenient forum, that the venue of such proceeding is improper, or
that this Agreement or any other Credit Document, or the subject matter
hereof or thereof, may not be enforced in or by such court;
(c) Consents to service of process in any such proceeding in
any manner at the time permitted by Chapter 223A of the General Laws of
The Commonwealth of Massachusetts and agrees that service of process by
registered or certified mail, return receipt requested, at its address
specified in or pursuant to Section 13 is reasonably calculated to give
actual notice; and
(d) Waives to the extent not prohibited by applicable law that
cannot be waived any right it may have to claim or recover in any such
proceeding any special, exemplary, punitive or consequential damages.
15.5 WAIVER OF JURY TRIAL. TO THE EXTENT NOT PROHIBITED BY APPLICABLE
LAW THAT CANNOT BE WAIVED, EACH OF THE COMPANY, THE OTHER OBLIGORS, THE AGENT
AND THE LENDERS WAIVES, AND COVENANTS THAT IT WILL NOT ASSERT (WHETHER AS
PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY FORUM IN
RESPECT OF ANY ISSUE, CLAIM OR PROCEEDING ARISING OUT OF THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT OR THE SUBJECT MATTER HEREOF OR THEREOF OR ANY CREDIT
OBLIGATION OR IN ANY WAY CONNECTED WITH THE DEALINGS OF
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THE LENDERS, THE AGENT, THE COMPANY OR ANY OTHER OBLIGOR IN CONNECTION WITH ANY
OF THE ABOVE, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING AND WHETHER
IN CONTRACT, TORT OR OTHERWISE. Each of the Company and the other Obligors
acknowledges that it has been informed by the Agent that the foregoing sentence
constitutes a material inducement upon which each of the Lenders has relied and
will rely in entering into this Agreement and any other Credit Document. Any
Lender, the Agent, the Company or any other Obligor may file an original
counterpart or a copy of this Agreement with any court as written evidence of
the consent of the Company, the other Obligors, the Agent and the Lenders to the
waiver of their rights to trial by jury.
15.6 Interpretation; Governing Law: etc. Time is (and shall be) of the
essence in this Agreement and the other Credit Documents. All covenants,
agreements, representations and warranties made in this Agreement or any other
Credit Document or in certificates delivered pursuant hereto or thereto shall be
deemed to have been relied on by each Lender, notwithstanding any investigation
made by any Lender on its behalf, and shall survive the execution and delivery
to the Lenders hereof and thereof. The invalidity or unenforceability of any
provision hereof shall not affect the validity or enforceability of any other
provision hereof, and any invalid or unenforceable provision shall be modified
so as to be enforced to the maximum extent of its validity or enforceability.
The headings in this Agreement are for convenience of reference only and shall
not limit or otherwise affect the meaning hereof. This Agreement and the other
Credit Documents constitute the entire understanding of the parties with respect
to the subject matter hereof and thereof and supersede all prior and
contemporaneous understandings and agreements, whether written or oral. This
Agreement may be executed in any number of counterparts which together shall
constitute one instrument. This Agreement shall be governed by and construed in
accordance with the laws (other than the conflict of laws rules) of The
Commonwealth of Massachusetts.
[The remainder of this page is intentionally blank]
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Each of the undersigned has caused this Agreement to be executed and
delivered by its duly authorized officer as an agreement under seal as of the
date first above written.
TRAINING MEDIA OPERATING LLC
By
---------------------------
Title:
CONTENT MEDIA CORP. (US)
By
---------------------------
Title:
TRAINING MEDIA HOLDINGS LLC
By
---------------------------
Title:
CONTENT MEDIA LLC
By
---------------------------
Title:
WBT HOLDINGS LLC
By
---------------------------
Title:
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WBT OPERATING LLC
By
---------------------------
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138
1.1 Credit Agreement
FLEET NATIONAL BANK
By
---------------------------
Title:
Fleet National Bank
Media & Communications Division
Xxx Xxxxxxx Xxxxxx - 0xx Xxxxx
Xxxxxx, Xxxxxxxxxxxxx 00000
Telecopy: (000) 000-0000
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139
1.1 Credit Agreement
DRESDNER BANK AG, NEW YORK
AND GRAND CAYMAN BRANCHES
By
---------------------------
Title:
By
---------------------------
Title:
Dresdner Bank AG. New York and
Grand Cayman Branches
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
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140
1.1 Credit Agreement
CITY NATIONAL BANK
By
---------------------------
Title:
City National Bank
000 X. Xxxxxxx Xxxxx, 0xx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Telecopy:(000) 000-0000
139
