AMENDMENT NO. 1
Dated as of November 20, 1998
This AMENDMENT AND CONSENT (this "Amendment") made by and among NFO
WORLDWIDE, INC., a Delaware corporation (the "Borrower"), FLEET NATIONAL BANK, a
national banking association organized under the laws of the United States of
America (the "Administrative Agent"), THE CHASE MANHATTAN BANK, a New York
banking corporation (together with the Administrative Agent, the "Co-Agents")
and the BANKS (the "Banks") parties to the Credit Agreement referred to below.
PRELIMINARY STATEMENTS:
WHEREAS, the Borrower, the Co-Agents, and the Banks have heretofore
entered into that certain Credit Agreement, dated as of March 9, 1998 (the
"Credit Agreement"; the capitalized terms not otherwise defined herein being
used herein as therein defined).
WHEREAS, the Borrower has requested that the Banks amend the Credit
Agreement (i) to permit the Borrower to incur additional Debt in an aggregate
principal amount of US$72,000,000 in order for the Borrower to acquire (the
"Infratest Acquisition") for a total purchase price of approximately
DM205,000,000, 100% of the common stock of Infratest Xxxxx Aktiengesellschaft
Holding ("IBH"), a German stock corporation, (ii) to consent to the assumption
of certain existing Debt of IBH by the Borrower and its Subsidiaries, and (iii)
to adjust certain financial covenants as set forth herein, and the Banks and the
Co-Agents have agreed to amend the Credit Agreement as hereinafter set forth.
NOW, THEREFORE, in consideration of the foregoing premises, and for
other good and valuable consideration, the Borrower, the Banks and the Co-Agents
hereby agree as follows:
SECTION 1. AMENDMENTS TO CREDIT AGREEMENT. The Credit Agreement is,
effective as of the date hereof and subject to the satisfaction of the
conditions precedent set forth in Section 3 hereof, hereby amended as follows:
(a) Section 1.1 of the Credit Agreement is hereby amended by
adding the following definitions in the appropriate alphabetical order to such
Section, or replacing definitions in the case of terms which currently exist in
the Credit Agreement, as follows:
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"Acquisition" has the meaning set forth on Schedule B,
provided that the reference to the term "Restricted Subsidiaries"
contained therein shall mean and be a reference to the Subsidiaries
hereunder.
"Attributable Debt" has the meaning set forth on Schedule B.
"Average Adjusted Leverage Ratio" means the sum of (a)
Consolidated Funded Debt plus (b) either (i) zero, if there shall have
been a period of 30 consecutive days during the period of four
consecutive fiscal quarters of the Borrower then most recently ended
when Consolidated Current Debt was zero, or (ii) the lowest average
daily amount of Consolidated Current Debt outstanding during any period
of 30 consecutive days during the period of four consecutive fiscal
quarters of the Borrower then most recently ended, if Consolidated
Current Debt was not zero during any such period of 30 consecutive
days, to (ii) Pro Forma EBITDA for such period of four consecutive
fiscal quarters.
"Average Senior Adjusted Leverage Ratio" means the sum of (a)
Consolidated Senior Funded Debt plus (b) either (i) zero, if there
shall have been a period of 30 consecutive days during the period of
four consecutive fiscal quarters of the Borrower then most recently
ended when Consolidated Current Debt was zero, or (ii) the lowest
average daily amount of Consolidated Current Debt outstanding during
any period of 30 consecutive days during the period of four consecutive
fiscal quarters of the Borrower then most recently ended, if
Consolidated Current Debt was not zero during any such period of 30
consecutive days, to (ii) Pro Forma EBITDA for such period of four
consecutive fiscal quarters.
"Consolidated Current Debt" has the meaning set forth on
Schedule B.
"Consolidated Funded Debt" has the meaning set forth on
Schedule B.
"Consolidated Senior Funded Debt" has the meaning set forth on
Schedule B.
"Domestic Subsidiary" means any Subsidiary of the Borrower
organized and existing under the laws of one of the states comprising
the United States of America.
3
"Euro" means the single unit of currency under the European
Monetary Union which may be utilized by any country which issues one of
the Alternative Currencies (other than the Euro) as such country's
lawful currency in substitution of such country's Alternative Currency
(other than the Euro).
"Eurodollar Rate" means, for any Eurodollar Loan or LIBOR
Market Loan for any Interest Period therefor, a rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) determined by the
Administrative Agent to be equal to the quotient of (i) the Eurodollar
Base Rate for such Loan for such Interest Period, divided by (ii) one
minus the Reserve Requirement for such Loan for such Interest Period.
The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Requirement, or may be
adjusted on and as of the date on which the Euro shall be legally
substituted for any Alternative Currency (excluding the Euro) as may be
deemed appropriate by the Administrative Agent and the Banks.
"Existing Note Purchase Agreement" means that certain Note
Purchase Agreement, dated as of March 9, 1998, as amended by Amendment
No. 1, dated as of November 20, 1998, among the Borrower and the
Purchasers identified therein for the issuance of Debt in an aggregate
principal amount not to exceed $40,000,000, as the same may be further
amended, restated or supplemented from time to time.
"Facility Documents" means this Agreement, the Notes, the
Guaranty, the Authorization Letter, the Environmental Indemnification
and each of the documents, certificates or other instruments referred
to in Article 4 as well as any other documents, instruments or
certificates to be delivered by the Borrower or the Guarantors in
connection with this Agreement or in connection with the documents,
instruments or certificates referred to in Article 4, including
documents delivered in connection with any Borrowing, as each such
Facility Document may be amended and/or restated from time to time.
"Funded Debt" means, with respect to any Person, all Debt of
such Person for money borrowed, including any indebtedness incurred
pursuant to the provisions of any revolving credit agreement or other
similar agreement; provided, that, for purposes of Article 8, the
definition of "Funded Debt" has the meaning set forth in Schedule B.
"Guaranty" means the guaranty in substantially the form of
Exhibit K hereto executed and delivered by each of the Guarantors under
the terms of this Agreement, and any future guaranty delivered by a
Subsidiary pursuant to Section 6.9.
4
"Guarantors" means each of PSI Holding Corp., Plog Research,
Inc., Prognostics Corp., Xxxxxxxx/Xxxxxx Associates, Inc., NFO
Research, Inc., and Xxxx-Xxxxxx-Xxxx, Inc., each of the foregoing being
Delaware corporations and Domestic Subsidiaries , and any other
Domestic Subsidiary that delivers a Guaranty pursuant to Section 6.9.
"IBH" means Infratest Xxxxx Aktiengesellschaft Holding, a
stock corporation formed and existing under the laws of Germany.
"IBH Acquisition Debt" has the meaning set forth in Section
7.1(j).
"Incentive Amount" means 0.5% of the aggregate principal
amount of the Interim Loan.
"Increase" has the meaning set forth in the definition of
"Interim Margin" set forth in this Section 1.1.
"Interim Loan" means the Revolving Loan in an aggregate
principal amount of $8,000,000 made by the Banks as of November 20,
1998, the proceeds of which shall be utilized by the Borrower, together
with the other sources of funding described in Section 7.1(j), to
acquire IBH.
"Interim Margin" means the Margin effective after the StepDown
Date that applies to Revolving Loans plus an amount (the "Increase")
equal to 25 basis points per calendar quarter for each successive
calendar quarter, on a cumulative basis, thereafter; provided, that, in
no event shall the Increase exceed 100 basis points.
"Lien" means any lien (statutory or otherwise), security
interest, mortgage, deed of trust, priority, pledge (other than a
negative pledge), charge, conditional sale, title retention agreement,
financing lease or other encumbrance or similar right of others, or any
agreement to give any of the foregoing.
"Margin" means, (a) for any Variable Rate Loan, 0 basis
points; and (b) for any Eurodollar Loan, the margin for such type of
Loan that would apply as set forth in Section 2.13; provided, that, 30
basis points shall be added to any applicable Margin (for Variable Rate
Loans and Eurodollar Loans) for the period beginning on the date that
the Interim Loan is made hereunder and ending on the Step-Down Date,
provided, however, that if the Borrower shall fail to repay in full the
Interim Loan by the Step-Down Date, such 30 basis points shall be
permanently added to the Margin for all Revolving Loans, including
Variable Rate Loans and Eurodollar Loans.
5
"Noteholders Documents" means, collectively, the Existing Note
Purchase Agreement, the Note Purchase Agreement, and the Subordinated
Note Purchase Agreement.
"Note Purchase Agreement" means that certain Note Purchase
Agreement, dated as of November 20, 1998, among the Borrower and the
Purchasers identified therein, for the issuance of Debt in an aggregate
principal amount of $55,000,000, as the same may be amended, restated,
or supplemented from time to time.
"Pro Forma EBITDA" has the meaning set forth on Schedule B.
"Schedule B" shall mean and be a reference to Schedule B to
the Note Purchase Agreement delivered to the Banks on November 20,
1998, a copy of which is attached hereto as Schedule B. For purposes of
the definitions set forth in Schedule B which are utilized by reference
herein, the reference to the word "Company" shall mean and be deemed to
be the Borrower, and the reference to the words "Restricted
Subsidiaries" shall mean and be deemed to be those Subsidiaries which
may qualify as a "Restricted Subsidiary" under the Note Purchase
Agreement, and any other capitalized terms utilized within any
definition contained on Schedule B that is utilized herein shall be
construed such that the practical effect of any such definitions shall
be applied herein as applied in the Note Purchase Agreement.
"Senior Adjusted Leverage Ratio" means for any Person, as at
any date, a ratio on a consolidated basis in accordance with GAAP of
(i) the Senior Funded Debt of such Person to (ii) Pro Forma EBITDA of
such Person.
"Senior Funded Debt" means all Funded Debt, including the
Loans, of the Borrower that is senior or equal in priority to the
Loans.
"Step-Down Date" means the earlier to occur of (i) the date
that the Borrower shall have received Net Cash Proceeds as described in
Section 6.10 sufficient to repay in full the Interim Loan, or (ii)
September 30, 1999.
"SubNote Debt" has the meaning set forth in Section 7.1(j).
"Subordinated Note Purchase Agreement" means that certain Note
Purchase Agreement, dated as of November 20, 1998, among the Borrower
and the Purchasers identified therein, for the issuance of Subordinated
Debt in an aggregate principal amount of $17,000,000, as the same may
be amended, restated, or supplemented from time to time.
6
(b) The introductory language contained in Section 2.5(a)(i)
is hereby amended to read as follows:
"(i) Application of Net Cash Proceeds (except as provided
elsewhere in this Agreement)."
(c) Section 2.5(a) of the Credit Agreement is hereby amended
by adding a new Section 2.5(a)(v) to the end of that Section to read as follows:
"(v) Interim Loan. The Borrower shall repay, on the StepDown
Date, the entire principal amount of the Interim Loan, provided, that,
if the Step-Down Date (and the repayment) shall occur on a Banking Day
other than the last day of any applicable Interest Period for such
Loan, the Borrower shall compensate the Banks for any losses, costs,
expenses, or reduction in return as provided in Section 3.5 incurred by
the Banks and the Administrative Agent in connection with such
repayment. The Borrower's failure to repay the Interim Loan in full by
the Step-Down Date shall result in (i) the permanent increase in the
Margin as provided in Section 6.10, and (ii) the application of the
Interim Margin to the Interim Loan until paid in full, but shall not
result in a Payment Default or an Event of Default so long as the
Borrower is in compliance with all other terms and conditions of this
Agreement and the other Facility Documents on the Step-Down Date."
(d) Section 2.10 of the Credit Agreement is hereby amended by
adding a new Section 2.10(e) to read as follows:
"(e) The margin rate on the Interim Loan commencing from the
first date of the third calendar quarter of 1999 until the Interim Loan
is paid in full shall be the applicable Margin then in effect plus the
Increase, without duplication after the Step-Down Date."
(e) The Adjusted Leverage Ratio Margin grid contained in
Section 2.13 of the Credit Agreement is hereby amended and replaced in its
entirety to read as follows:
Margin
Eurodollar Loans
Adjusted Leverage Ratio (Basis Points)
----------------------- --------------
Greater than or equal to 3.50 125.0
Greater than or equal to 3.00, but less than 3.50 105.0
Greater than or equal to 2.50, but less than 3.00 85.0
Greater than or equal to 2.00, but less than 2.50 65.0
Greater than or equal to 1.50, but less than 2.00 57.5
Greater than or equal to 1.00, but less than 1.50 50.0
Less than 1.00 40.0
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(f) The Adjusted Leverage Ratio facility fee grid contained in
Section 2.14 of the Credit Agreement is hereby amended and replaced in its
entirety to read as follows:
Facility Fee Rate
Adjusted Leverage Ratio (Basis Points)
----------------------- --------------
Greater than or equal to 3.50 50.0
Greater than or equal to 3.00, but less than 3.50 45.0
Greater than or equal to 2.50, but less than 3.00 40.0
Greater than or equal to 2.00, but less than 2.50 35.0
Greater than or equal to 1.50, but less than 2.00 30.0
Greater than or equal to 1.00, but less than 1.50 25.0
Less than 1.0 22.5
(g) Section 3.1 of the Credit Agreement is hereby amended by
adding a new Section 3.1(e) to read as follows:
"(e) The Borrower agrees, at the request of the Administrative
Agent, to compensate the Banks for any reasonable losses, costs,
expenses or reductions in return that shall be incurred or sustained by
the Banks as a result of the implementation of the Euro, that would not
have been incurred or sustained by the Banks but for the transactions
provided for herein. A certificate of the Administrative Agent setting
forth (x) the amount or amounts necessary to compensate the
Administrative Agent and the Banks, (y) the nature of the loss or
expense sustained or incurred by the Administrative Agent and the Banks
as a consequence thereof, and (z) a reasonably detailed explanation of
the calculation thereof, shall be delivered to the Borrower and shall
be conclusive absent manifest error. The Borrower shall pay to the
Administrative Agent for the ratable benefit of the Banks entitled
thereto, the amount shown as due on any such certificate within ten
(10) days after receipt thereof."
8
(h) Section 5.9 of the Credit Agreement is hereby amended by
adding the following sentence at the end of the Section:
"The Guarantors (a) represent all of the major operating
Domestic Subsidiaries (other than the Subsidiaries of PSI Holding
Corp., a holding company), as of November 20, 1998, as described in
Schedule 5.9, as amended, and (b) have duly executed and delivered to
the Administrative Agent a Guaranty."
(i) Section 6.8(i) of the Credit Agreement is hereby amended
by replacing the reference to the number "10" contained therein with the number
"5".
(j) Article 6 of the Credit Agreement is hereby amended by
adding to the end of that Article the following new Sections:
"Section 6.9. Release of Guarantors. Promptly, but in no event
later than 10 days following the merger, consolidation, sale or
transfer of 100 percent of the assets or capital stock of any Guarantor
(such transferring Guarantor, an "Original Guarantor") to or into
another Domestic Subsidiary which is not already a Guarantor hereunder,
cause such Domestic Subsidiary to become a Guarantor pursuant to
Section 7.10. Following such merger, consolidation, sale or transfer,
any Original Guarantor that does not then own any material assets
(whether in the form of Cash and Cash Equivalents or otherwise) shall
be released from its obligations under the Guaranty.
Section 6.10. Step-Down Requirement. By the Step-Down Date,
have received Net Cash Proceeds from the issuance of (i) new
subordinated debt, in substantially the form of subordinated debt
issued in connection with the Subordinated Note Purchase Agreement or
on such other terms as shall be satisfactory to the Administrative
Agent and the Banks in their sole discretion, or (ii) capital stock,
securities or other equity of the Borrower, in an aggregate amount
equal to at least the Interim Loan . Such Net Cash Proceeds shall be
applied to the entire Interim Loan by the Borrower as set forth in
Section 2.5(a)(v). In the event the Borrower fails to comply with the
preceding sentences, no Payment Default or Event of Default shall
result, provided, that, the following shall occur hereunder without any
further action or notice on the part of the Administrative Agent or the
Banks or any modification or amendment to any Facility Document: (x) a
permanent increase in the margin for Revolving Loans (including
Variable Rate Loans and Eurodollar Loans) by 30 basis points as set
forth in the definition of "Margin" contained in Section 1.1, and (y)
the application of the Interim
9
Margin to the Interim Loan until payment in full from Net Cash Proceeds
of the type described in this Section 6.10 above."
(k) Section 7.1(c) of the Credit Agreement is hereby amended
to read as follows:
"(c) Debt of the Borrower which is (i) Subordinated Debt, or
(ii) subordinated debt in an aggregate principal amount not to exceed
US$8,000,000, for purposes of repaying the Interim Loan pursuant to
Section 2.5(a)(v), provided, that, such subordinated debt shall be in
substantially the form of the subordinated debt issued pursuant to the
Subordinated Note Purchase Agreement or on such other terms which shall
be satisfactory to the Administrative Agent and the Banks in their sole
discretion.
(l) Section 7.1(j) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(j) Debt incurred by the Borrower (other than Debt pursuant
to Section 7.1(a)) in connection with the acquisition (the "Infratest
Acquisition") of IBH pursuant to that certain Stock Purchase Agreement,
dated as of November 10, 1998, among the Borrower, NFO EUROPE
(Deutschland) GMBH & Co. KG, a German limited partnership and
Subsidiary of the Borrower, and the shareholders of IBH signatories
thereto in a maximum aggregate principal amount not to exceed
US$72,000,000, as such Debt is described in the Note Purchase
Agreement, and the Subordinated Note Purchase Agreement (the "SubNote
Debt"; and all of the foregoing Debt being collectively referred to as
the "IBH Acquisition Debt"), provided, that, (i) no Liens or
encumbrances upon any of the properties or assets of any kind
whatsoever of the Borrower or any Subsidiary shall be created pursuant
to the terms of the IBH Acquisition Debt; (ii) the IBH Acquisition
Debt, together with the Debt described in the Existing Note Purchase
Agreement, shall at no time be greater in priority than the Debt of the
Borrower and its Subsidiaries in connection with the Facility
Documents; and (iii) so long as any Facility Document shall be in
effect, the SubNote Debt shall remain subordinated in payment and
priority to the obligations of the Borrower hereunder, as provided in
the Subordinated Note Purchase Agreement;".
(m) Section 7.1 of the Credit Agreement is hereby amended by
deleting the "and" at the end of Section 7.1(k), by replacing the "." at the end
of Section 7.1(l) with "; and", and by adding a new Section 7.1(m) to read as
follows:
10
"(m) Additional Debt incurred by the Borrower on terms
substantially similar to those contained in the Note Purchase Agreement
or on such other terms as shall be satisfactory to the Administrative
Agent and the Banks in an aggregate principal amount not to exceed
US$5,000,000, provided that, all Net Cash Proceeds raised by the
Borrower in connection therewith shall be applied in accordance with
the last paragraph of Section 2.5(a)(i)."
(n) The subclauses following the term "except" contained in
Section 7.2 of the Credit Agreement are hereby amended to read as follows:
"except (a) guaranties by endorsement of negotiable
instruments for deposit or collection or similar transactions in the
ordinary course of business; (b) guaranties of Debt permitted by
Section 7.1; (c) the Guaranty, and the guarantees, in substantially the
form of the Guaranty, executed by the Guarantors in connection with the
Existing Note Purchase Agreement, the Note Purchase Agreement and the
Subordinated Note Purchase Agreement; and (d) guarantees executed by
the Borrower or any Subsidiary in the ordinary course of business in
respect of operating leases and other ordinary course operating
expenses of the Borrower or any of its Subsidiaries."
(o) Section 7.4 of the Credit Agreement is hereby amended by
deleting the word "and" at the end of Section 7.4(d), by replacing the "." at
the end of Section 7.4(e) with "; and" and by adding the following new Section
7.4(f) to read as follows:
"(f) sale-and-lease-back agreements permitted in accordance
with Section 7.7(e)."
(p) Section 7.7 of the Credit Agreement is hereby amended in
its entirety to read as follows:
"Section 7.7. Sale of Assets. Sell, lease, assign, transfer or
otherwise dispose of, or permit any of its Subsidiaries to sell, lease,
assign, transfer or otherwise dispose of, any of its now owned or
hereafter acquired assets (including, without limitation, shares of
stock and indebtedness of such Subsidiaries, receivables, leasehold
interests and software, panel and subpanel data, lists and information
and customer lists); except: (a) for inventory disposed of in the
ordinary course of business; (b) the sale or other disposition of
assets no longer used or useful in the conduct of its business; (c)
that any such Subsidiary may sell, lease, assign, or otherwise transfer
its assets to the Borrower;
11
(d) that the Borrower and any such Subsidiary may license or sublicense
software, knowhow and other intellectual properties to any Person so
long as the Borrower or such Subsidiary receives fair value
consideration in exchange for such license or sublicense; (e) any
sale-and-leaseback agreement entered into by the Borrower or its
Subsidiaries, so long as the aggregate amount of all Attributable Debt
of the Borrower and its Subsidiaries, on a consolidated basis, relating
to all such sale-and- leaseback transactions shall not exceed
$5,000,000 in the aggregate; (f) provided that no Default or Event of
Default would result within a one-year period therefrom as described in
the financial projections delivered under clause (ii) below, the sale,
assignment or other disposition of 100 percent of the assets or capital
stock of a Guarantor, not otherwise permitted hereunder (it being
understood that upon such sale, transfer or other disposition such
Guarantor shall be released from its obligations under the Guaranty) so
long as (i) the EBITDA of such Guarantor does not represent an amount
which is greater than five percent (5%) of the EBITDA of the Borrower
and its Consolidated Subsidiaries for the twelve-month period then
ended, (ii) the Administrative Agent shall have received financial
projections which confirm that the Borrower will be in compliance with
each covenant contained in Article 8, and illustrate that no Default or
Event of Default would result within a one-year period thereafter,
(iii) the Guarantor to be released does not own, after any such sale,
assignment, transfer or other disposition, any material assets (whether
in the form of Cash or Cash Equivalents or otherwise), and (iv) all
such Net Cash Proceeds received by the Borrower (or its Subsidiaries)
from such sale shall be applied in accordance with the last paragraph
of Section 2.5(a)(i); and (g) for other dispositions of assets not
exceeding in the aggregate in any fiscal year $3,000,000, provided,
that all such Net Cash Proceeds described in this clause (g) shall be
applied in accordance with Section 2.5(a)(i).
(q) Section 7.10 of the Credit Agreement is hereby amended to
read as follows:
"Section 7.10. Mergers, Etc. Merge or consolidate with, or
sell, assign, lease or otherwise dispose of (whether in one transaction
or in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to, any Person, or acquire
all or substantially all of the assets or the business of any Person
(or enter into any agreement to do any of the foregoing), or permit any
of its Subsidiaries to do so except that: (a) any Subsidiary may merge
into or transfer assets to the Borrower; (b) subject to the terms of
Section 7.10(d), any Subsidiary may merge into or consolidate with or
transfer
12
assets to any other Subsidiary; (c) the Borrower or any of its
Subsidiaries may effect any Acceptable Acquisition permitted by Section
7.11; (d) any Guarantor may merge into, consolidate with, or sell,
assign, lease, or transfer to another Guarantor or any other Domestic
Subsidiary under this Section 7.10(d) or under Section 7.10(b),
provided that, if the surviving Domestic Subsidiary is not already a
Guarantor, then such Domestic Subsidiary shall have duly executed and
delivered to the Administrative Agent a Guaranty, together with
articles of incorporation, by-laws and resolutions authorizing such
Domestic Subsidiary to enter into the Guaranty, together with any other
certificates, instruments and agreements which the Administrative Agent
may reasonably request in connection with the Guaranty; and (e) the
Borrower may sell, assign or otherwise dispose of substantially all of
the assets or capital stock of a Guarantor as provided in Section
7.7(f), or any Subsidiary (other than a Guarantor) as may be permitted
under Section 7.7(g). "
(r) Section 7.11(a) of the Credit Agreement is hereby amended
in its entirety to read as follows:
"(a) an Acquisition in which the following conditions
are satisfied:
(i) no Default or Event of Default exists or would
result from such Acquisition;
(ii) the company or assets acquired involve
substantially the same or similar line of business as the Borrower and
its Subsidiaries;
(iii) the Borrower demonstrates that, on a
consolidated basis with the acquired assets and/or company, in
accordance with GAAP, it would have been in compliance with the
financial covenants contained in Article 8 on a trailing four quarters
pro forma basis as of the end of the immediately preceding fiscal
quarter;
(iv) in no event shall the aggregate amount expended
by the Borrower and any of its Subsidiaries, whether in the form of
Cash and Cash Equivalents, Debt or equity of any kind whatsoever, for
any Acquisitions permitted hereunder within any one calendar year
exceed US$20,000,000 or its Dollar Equivalent; and
(v) such Acceptable Acquisition occurs after the
StepDown Date."
13
(s) The definition of "Acquisition" contained in Section 7.11
of the Credit Agreement is hereby deleted.
(t) Article 7 is hereby amended by adding a new Section 7.13
to read as follows:
"Section 7.13. No Changes to Noteholders Documents. Amend,
modify, supplement, waive compliance with, or assent to noncompliance
with, any term, provision or condition set forth in (i) (A) Sections 8,
10 or 11, and Schedule B of the Existing Note Purchase Agreement and
the Note Purchase Agreement, or (B) Sections 8, 10, or 11 of the
Subordinated Note Purchase Agreement, or any such comparable provisions
contained in the Noteholders Documents, in each case, without first
providing notice of the same to the Administrative Agent; and (ii)
Section 13 of the Subordinated Note Purchase Agreement without the
prior written consent of the Required Banks."
(u) Article 8 of the Credit Agreement is hereby amended in its
entirety to read as follows:
ARTICLE 8. FINANCIAL COVENANTS.
So long as any of the Notes shall remain unpaid or any Bank shall have
any Commitment under this Agreement:
Section 8.1. Minimum Capital Base. The Borrower shall maintain
at all times, measured at the end of each fiscal quarter, a
Consolidated Capital Base of not less than $100,000,000 plus
(a) 50% of each quarterly Consolidated Net Income gain since
September 30, 1998, plus (b) 100% of Net Proceeds from any
issuance of equity securities by the Borrower since September
30, 1998, plus (c) 100% of the Net Proceeds from any issuance
by the Borrower of Subordinated Debt from and after September
30, 1998, excluding the SubNote Debt as of November 20, 1998.
Section 8.2. Adjusted Leverage Ratio. The Borrower and its
Consolidated Subsidiaries shall maintain at all times an
Adjusted Leverage Ratio, measured quarterly for the twelve
month period then ended (a rolling twelve month calculation
measured as of the end of each successive quarter), (i) of not
greater than 3.75 to 1.0, at any time on or before December
31, 1999, and (ii) of not greater than 3.5 to 1.0 at any time
thereafter.
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Section 8.3. Average Adjusted Leverage Ratio. The Borrower and
its Consolidated Subsidiaries shall not (except as provided in
the Facility Documents), directly or indirectly, create,
incur, assume, guarantee, or otherwise become, directly or
indirectly, liable with respect to, any Subordinated Debt
which is Funded Debt (other than Existing Subordinated Funded
Debt, the Subordinated Notes, Inter-Company Debt and Swaps (as
each term is defined in Schedule B)) after November 20, 1998,
unless, immediately after giving effect thereto and to the
application of the proceeds thereof (and without duplication),
no Default or Event of Default exists, and the Average
Adjusted Leverage Ratio does not exceed 3.50 to 1.0.
Section 8.4. Senior Adjusted Leverage Ratio. The Borrower and
its Consolidated Subsidiaries shall maintain at all times a
Senior Adjusted Leverage Ratio, measured quarterly for the
twelve month period then ended (a rolling twelve month
calculation measured as of the end of each successive
quarter), (i) of not greater than 3.50 to 1.0 before the
Step-Down Date, and (ii) of not greater than 3.25 to 1.0 at
any time thereafter.
Section 8.5. Average Senior Adjusted Leverage Ratio. The
Borrower and its Consolidated Subsidiaries shall not (except
as provided in the Facility Documents), directly or
indirectly, create, incur, assume, guarantee, or otherwise
become directly or indirectly liable with respect to, any
Senior Funded Debt (other than Existing Senior Funded Debt,
the Notes, Inter-Company Debt and Swaps (as each term is
defined in Schedule B)) after November 20, 1998, unless,
immediately after giving effect thereto and to the application
of the proceeds thereof (and without duplication), no Default
or Event of Default exists, and the Average Senior Adjusted
Leverage Ratio does not exceed 3.0 to 1.0.
Section 8.6. Interest Coverage Ratio. The Borrower and its
Consolidated Subsidiaries shall maintain at all times an
Interest Coverage Ratio, measured quarterly for the twelve
month period then ended (a rolling twelve month calculation
measured as of the end of each successive quarter), of not
less than 3.5 to 1.0 at any time.
(v) Sections 9.1(b) and 9.1(c) are each amended in their
entireties to read as follows:
15
"(b) any representation or warranty made or deemed made by the
Borrower in this Agreement or in any other Facility Document
or by any Guarantor in any Facility Document to which it is a
party or which is made by the Borrower or any Guarantor in any
certificate, document, opinion, financial or other statement
furnished at any time under or in connection with any Facility
Document shall prove to have been false or misleading in any
material respect on or as of the date made or deemed made;
(c) the Borrower or any Guarantor shall: (i) fail to perform
or observe any term, covenant or agreement contained in
Section 2.3, subsections (g) through (m) and (o) through (q)
of Section 6.8, or Articles 7 or 8; or (ii) fail to perform or
observe any term, covenant or agreement on its part to be
performed or observed under subsections (a), (b), (d), (e),
(f) or (n) of Section 6.8 and such failure shall continue for
10 consecutive days after notice from the Administrative Agent
to the Borrower; or (iii) fail to perform or observe any term,
covenant or agreement on its part to be performed or observed
(other than the obligations specifically referred to in clause
(i) or (ii) or elsewhere in this Section 9.1 and the
obligation of the Borrower described in Section 6.10) in any
Facility Document and such failure shall continue for 30
consecutive days after notice from the Administrative Agent to
the Borrower or any Guarantor, as the case may be, or from the
Borrower to the Administrative Agent;".
(w) The reference (i) to "$500,000" contained in Section
9.1(d)(i) of the Credit Agreement is hereby replaced with "US$2,000,000"; (ii)
to "$500,000" contained in Section 9.1(f) of the Credit Agreement is hereby
replaced with "US$1,000,000"; and (iii) to "$5,000,000" contained in Section
9.1(h) of the Credit Agreement is hereby replaced with "$6,000,000".
(x) Section 9.1 is hereby amended by deleting the word "or" at
the end of Section 9.1(h) and 9.1(i), by amending and replacing Section 9.1(j)
to read as set forth below, and by adding a new Section 9.1(k) to read as
follows:
"(j) an Event of Default shall have occurred and be continuing
under any of (i) the Existing Note Purchase Agreement, (ii)
the Note Purchase Agreement, or (iii) the Subordinated Note
Purchase Agreement; or
16
(k) any Guaranty shall at any time after its execution and
delivery and for any reason cease to be in full force and
effect (except as provided herein or therein) or shall be
declared null and void, or the validity or enforceability
thereof shall be contested by any Guarantor or any Guarantor
shall deny it has any further liability or obligation
thereunder or shall fail to perform its obligations
thereunder."
(y) Section 11.1 of the Credit Agreement is hereby amended by
deleting the word "or" at the end of Section 11.1(d), by replacing the "," at
the end of Section 11.1(e) with ", or" and by adding the following new Section
11.1(f):
"(f) release any Guaranty or Guarantor under the
Facility Documents other than pursuant to the terms
hereof or thereof,".
(z) The Exhibits and Schedules to the Credit Agreement are
hereby amended by adding to the Credit Agreement a new "Exhibit K" in the form
of Exhibit A hereto, by adding to the Credit Agreement a new "Schedule B" in the
form of Schedule B hereto, and by delivering amendments to the Schedules to the
Credit Agreement as provided in Section 3(d).
SECTION 2. CONSENT TO IBH EXISTING COMMITMENTS DEBT, ETC. Subject to
satisfaction of the conditions precedent set forth in Section 3 hereof, the Co-
Agents and the Banks hereby consent to the Infratest Acquisition, the IBH
Acquisition Debt and the assumption by the Borrower or any of its Subsidiaries
of the Debt of IBH or any of its Subsidiaries (whether now existing or hereafter
incurred) arising under those certain credit or loan agreements (and guarantees
related thereto) listed on Schedule I hereto (the "IBH Existing Commitments
Debt") in a maximum aggregate principal amount not to exceed DM 68,000,000 or
the Dollar Equivalent thereof, plus a credit facility in an aggregate principal
amount of US$10,000,000, provided, that, (a) so long as any of the Facility
Documents shall remain in effect, there shall be no extensions, renewals,
replacements, or refinancings of the IBH Existing Commitments Debt and the
maximum aggregate principal amount available under the IBH Existing Commitments
Debt, shall not increase and (b) the IBH Existing Commitments Debt is and shall
remain unsecured Debt of the Borrower and its Subsidiaries other than in respect
of Liens arising from any deposit agreements relating to bankers' Liens, rights
of set-off or similar rights and remedies as to deposit accounts or other funds
maintained with a creditor depository institution, provided, that such deposit
account is not a dedicated cash collateral account and is not subject to
restrictions against access by the Borrower or any Subsidiary in excess of those
set forth by regulations promulgated by the applicable German statutes or
regulations. In addition, the Banks hereby consent to all other existing
indebtedness (and corresponding Liens) of IBH and its Subsidiaries as described
on Schedule I hereto.
17
SECTION 3. CONDITIONS OF EFFECTIVENESS. This Amendment shall become
effective when, and only when, the Administrative Agent shall have received
counterparts of this Amendment duly executed by the Borrower, the Co-Agents and
the Banks, and all of the following documents in form and substance satisfactory
to the Administrative Agent and the Banks:
(a) A certificate executed by a duly authorized officer of the
Borrower certifying that (i) the statements contained in Section 7.1(j) of the
Credit Agreement, as amended by this Amendment, are true and accurate in all
material respects and (ii) all material documentation evidencing the IBH
Acquisition Debt and the assumption of the IBH Existing Commitments Debt have
been executed by the parties thereto and delivered to the Administrative Agent,
including, but not limited to, complete execution copies of the Stock Purchase
Agreement, the Amendment to the Existing Note Purchase Agreement, the Note
Purchase Agreement and the Subordinated Note Purchase Agreement, together with
all exhibits and schedules thereto, (iii) copies of all of the material
agreements listed on Schedule I relating to the IBH Existing Commitments Debt
have been delivered to the Administrative Agent, and (iv) executed copies of any
opinions of counsel of the Borrower and its Subsidiaries related to the
Infratest Acquisition, and the IBH Acquisition Debt have been delivered to the
Administrative Agent (including the opinion letters delivered pursuant to
Section 4.4 of each of the Note Purchase Agreement and the Subordinated Note
Purchase Agreement.
(b) All executed (as applicable) documents, schedules and
items described in Sections 3(a) (ii), (iii) and (iv) of this Amendment.
(c) The Guaranty (the "Guaranty"), in substantially the form
of Exhibit A attached hereto, shall be duly executed by each Guarantor (as such
term is defined in Section 1.1 of the Credit Agreement, as amended by this
Amendment), together with any other certificates, instruments or agreements
which the Administrative Agent may reasonably request in connection with the
Guaranty.
(d) Amendments to all Schedules and Exhibits to the Credit
Agreement and the other Facility Documents as may be necessary to correctly and
accurately reflect the status of the Borrower and its Subsidiaries upon the
effectiveness of the Infratest Acquisition.
(e) The quarterly consolidated financial statement for the
Borrower and its Subsidiaries for the calendar quarter immediately preceding the
current calendar quarter, in form satisfactory to the Administrative Agent,
together with cash flow and income projections for the next three successive
calendar quarters.
18
(f) Certified copies of (i) the resolutions of the Board of
Directors or Executive Committee of the Borrower approving this Amendment and
the documents executed in connection herewith, and resolutions by the Guarantors
approving the Guaranty, and (ii) all documents evidencing other necessary
corporate action and governmental approvals, if any, with respect to this
Amendment, and the documents executed in connection herewith, including the
Guaranty, including, but not limited to, the articles of incorporation, by-laws
and good standing certificates of each Guarantor.
(g) A certificate of the Secretary or an Assistant Secretary
of the Borrower and each Guarantor certifying the names and true signatures of
the officers of the Borrower and the Guarantors authorized to sign this
Amendment and the Guaranty, respectively, and the other documents to be
delivered hereunder.
(h) A favorable opinion of Xxxx, Weiss, Rifkind, Xxxxxxx &
Xxxxxxxx, counsel for the Borrower and its Subsidiaries and the Guarantors, to
the effect that this Amendment, the Subordinated Note Purchase Agreement, and
the Guaranty have been duly authorized, executed and delivered by the Borrower
and/or the Guarantors and as to such other matters as the Administrative Agent
may reasonably require.
(i) A certificate signed by a duly authorized officer of the
Borrower stating that:
(i) The representations and warranties contained in Section 4
of this Amendment and the other representations and warranties
contained in Article 5 of the Credit Agreement (unless such
representation and warranty is limited to a particular date, in which
case, such representation and warranty shall be true and correct in all
material respects as of such date), as amended, including Section 5.9
of the Credit Agreement, are true and correct in all material respects
on and as of the date of such certificate as though made on and as of
such date,
(ii) The assumption by the Borrower and its Subsidiaries of
the IBH Existing Commitments Debt and the IBH Acquisition Debt will not
violate any corporate articles, by-laws or stockholder agreements of
the Borrower or any of its Subsidiaries, or violate any law, rule,
regulation, order, writ, judgment, injunction, or decree relating to
the Borrower or any of its Subsidiaries or otherwise cause any default
under any loan or credit agreement, indenture, or other document,
instrument, lease or agreement which exists as of the date hereof,
relating to the Borrower or any of its Subsidiaries except, in each
case, when such contravention,
19
violation, breach or default is not reasonably expected to have a
Material Adverse Effect,
(iii) All material documents necessary for the consummation of
the Infratest Acquisition and the assumption by the Borrower or its
Subsidiaries of the IBH Existing Commitments Debt have been fully
executed by all relevant parties thereto, all necessary corporate
authorizations, consents and government approvals required to be
obtained in connection with the Infratest Acquisition and the IBH
Existing Commitments Debt have been obtained or waived, in each case,
except to the extent that failure to do so is not reasonably expected
to have a Material Adverse Effect, and the Infratest Acquisition has
been consummated in all material respects, and
(iv) After giving effect to the terms of this Amendment, no
event has occurred and is continuing which constitutes a Default or an
Event of Default.
(j) Payment to the Administrative Agent of (i) an
administrative fee in an amount agreed to in writing between the Administrative
Agent and the Borrower and (ii) payment of all costs, fees, expenses and charges
incurred by the Administrative Agent in connection with the negotiation,
preparation, execution and delivery of this Amendment.
(k) Payment to the Administrative Agent of the Incentive
Amount, as such term is defined in Section 1(a) of this Amendment.
(l) Payment to the Administrative Agent for the account of the
appropriate Bank of a transaction fee in an amount equal to 0.0015% of the
Commitment of each Bank that currently has a Commitment of US$25,000,000, and in
an amount equal to 0.00125% of the Commitment of each Bank that currently has a
Commitment of US$12,500,000.
SECTION 4. REPRESENTATIONS AND WARRANTIES OF THE BORROWER. The Borrower
represents and warrants for itself and on behalf of the Guarantors as follows:
(a) Borrower is a corporation duly organized, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
and each Guarantor is a Domestic Subsidiary of the Borrower and is a corporation
duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation.
20
(b) The execution, delivery and performance by the Borrower of
this Amendment, by the Guarantors of the Guaranty, and any certificates,
documents, or instruments in connection herewith and with the Guaranty are
within the Borrower's and each Guarantor's corporate powers and authority, have
been duly authorized by all necessary corporate action and do not and will not:
(a) require any consent or approval of its stockholders; (b) contravene its
charter or by-laws; (c) vio late any provision of, or require any filing,
registration, consent or approval under, any law, rule, regulation (including,
without limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to the Borrower
or any Guarantor; (d) result in a breach of or constitute a default or require
any consent under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which the Borrower or any Guarantor is a party
or by which it or its properties may be bound or affected; (e) result in, or
require, the creation or imposition of any Lien upon or with respect to any of
the properties now owned or hereafter acquired by the Borrower or any Guarantor;
or (f) cause the Borrower or any Guarantor to be in default under any such law,
rule, regulation, order, writ, judgment, injunction, decree, determination or
award or any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect.
(c) No authorization, approval or other action by, and no
notice to or filing with, any governmental authority or regulatory body is
required for the due execution, delivery or performance by the Borrower of this
Amendment, the Guarantors of the Guaranty, or any of the documents, instruments
and certificates delivered in connection herewith, which have not already been
obtained except to the extent that failure to do so is not reasonably expected
to cause a Material Adverse Effect.
(d) This Amendment, together with any documents, instruments,
certificates or agreements executed or delivered in connection herewith to which
the Borrower or any of its Subsidiaries is a party, including the Guaranty,
constitute legal, valid and binding obligations of the Borrower and the
Guarantors enforceable against the Borrower and the Guarantors in accordance
with their respective terms, except to the extent that such enforcement may be
limited by general principles of equity and applicable bankruptcy, insolvency
and other similar laws affecting creditors' rights generally.
(e) Except as disclosed in the Credit Agreement, as amended by
this Amendment, there is no pending or (to the best of the Borrower's knowledge)
threatened action or proceeding affecting the Borrower or any of its
Subsidiaries before any court, governmental agency or arbitrator, (i) which may
adversely affect the financial condition or operations of the Borrower and its
Subsidiaries, or (ii) which purport to affect the legality, validity or
enforceability of this Amendment or the
21
Guaranty or any other document, instrument, certificate or agreement executed or
delivered in connection herewith, in each case with respect to clause (i) or
(ii) above, which is reasonably likely to result in a Material Adverse Effect.
(f) After giving effect to the terms of this Amendment, no
event has occurred and is continuing which constitutes a Default or an Event of
Default.
SECTION 5. REFERENCE TO AND EFFECT ON THE FACILITY DOCUMENTS. (a) Upon
the effectiveness of this Amendment, on and after the date hereof each reference
in the Credit Agreement to "this Agreement," "hereunder," "hereof," "herein" or
words of like import, and each reference in any Facility Documents to the Credit
Agreement or any other Facility Document, shall mean and be a reference to the
Credit Agreement or such other Facility Document as amended hereby, and each
reference to the "Facility Documents" shall mean and be a reference to the
Facility Documents, including the Guaranty.
(b) Except as specifically amended herein, the Credit
Agreement and the other Facility Documents shall remain in full force and effect
and are hereby ratified and confirmed.
(c) The execution, delivery and effectiveness of this
Amendment, together with the consent described in Section 2, shall not, except
as expressly provided herein, operate as a waiver of any right, power or remedy
of any Co-Agent or any Bank under any of the Facility Documents, nor constitute
a waiver of any provision of any of the Facility Documents.
(d) The Co-Agents and the Banks are under no obligation to
enter into this Amendment. Except as expressly provided herein, the Co-Agents'
and the Banks' entering into this Amendment shall not be deemed to limit or
hinder any rights of any Co-Agent or Bank under the Credit Agreement, nor shall
it be deemed to create or infer a course of dealing between any such party or
any Bank or the Borrower or any Subsidiary with regard to any provision of the
Credit Agreement.
(e) Except as set forth herein, the consent described in
Section 2 shall have no effect on any other portion of the Credit Agreement, as
amended by this Amendment, all of which shall remain in full force and effect,
including all of the Co-Agents' and the Banks' rights and remedies hereunder and
thereunder, all of which are expressly reserved.
SECTION 6. POST-CLOSING. As soon as available and in any event within
60 days from the date hereof, the Borrower shall cause to be delivered to the
22
Administrative Agent, its counsel, and the Banks, full and completed sets of the
closing binders in connection with the Infratest Acquisition.
SECTION 7. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all costs and expenses of the Administrative Agent and the Banks in
connection with the preparation, execution and delivery of this Amendment and
the other instruments and documents to be delivered hereunder, including,
without limitation, the reasonable fees and out-of-pocket expenses of counsel
for the Administrative Agent with respect thereto and with respect to advising
the Administrative Agent and the Banks as to their rights and responsibilities
hereunder and thereunder. The Borrower further agrees to pay on demand all costs
and expenses, if any (including, without limitation, reasonable counsel fees and
expenses), in connection with the enforcement (whether through negotiations,
legal proceedings or otherwise) of this Amendment and the other instruments and
documents to be delivered hereunder, including, without limitation, reasonable
counsel fees and expenses in connection with the enforcement of rights under
this Section 7. In addition, the Borrower shall pay any and all stamp and other
taxes payable or determined to be payable in connection with the execution and
delivery of this Amendment, and the other instruments and documents to be
delivered hereunder, and agrees to save the Co-Agents and the Banks harmless
from and against any and all liabilities with respect to or resulting from any
delay in paying or omission to pay such taxes.
SECTION 8. EXECUTION IN COUNTERPARTS. This Amendment may be executed in
any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same instrument.
SECTION 9. GOVERNING LAW. This Amendment shall be governed by, and
construed in accordance with, the laws of the State of Connecticut.
23
IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.
THE BORROWER:
NFO WORLDWIDE, INC.
By: /s/ Xxxxxxx X. Xxxxx
------------------------
Xxxxxxx X. Xxxxx
Chief Financial Officer
BANK, CO-AGENT AND ADMINISTRATIVE
AGENT:
FLEET NATIONAL BANK
By: /s/ Xxxxxxxxx X. Xxxxxxx
----------------------------
Xxxxxxxxx X. Xxxxxxx
Vice President
BANK AND CO-AGENT:
THE CHASE MANHATTAN BANK
By: /s/ Xxxx X. Aria
--------------------
Xxxx X. Aria
Vice President
24
BANK:
THE BANK OF NEW YORK
By: /s/ Xxxxx Xxxxxxx
---------------------
Xxxxx Xxxxxxx
Vice President
BANK:
FIRST UNION NATIONAL BANK
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------
Xxxxxxx X. Xxxxxx
Vice President
EXHIBIT A
---------
GUARANTY
GUARANTY dated as of November 20, 1998, made by the undersigned (each a
"Guarantor" and collectively, the "Guarantors"), in favor of the banks (the
"Banks") parties to the Credit Agreement (as defined below) and FLEET NATIONAL
BANK, as Administrative Agent (the "Agent") for the Banks.
PRELIMINARY STATEMENTS:
WHEREAS, NFO Worldwide, Inc. (the "Borrower"), the Banks, The Chase
Manhattan Bank and Fleet National Bank, as the Co-Agents, and the Agent have
entered into that certain Credit Agreement dated as of March 9, 1998, as amended
by Amendment No. 1 (the "Amendment"), dated as of the date hereof (as so
amended, and as the same may be amended, restated or supplemented from time to
time, the "Credit Agreement"; the terms defined therein being used herein as
therein defined unless otherwise defined herein), pursuant to which the Banks
have made available to the Borrower certain credit facilities and other Loans in
an aggregate principal amount not to exceed $75,000,000 (the "Facility");
WHEREAS, the Amendment permits, INTER ALIA, the Borrower to obtain
additional unsecured Funded Debt and Subordinated Debt in order to acquire a new
Subsidiary pursuant to the terms of the documents heretofore delivered to the
Agent and the Banks in connection with the Infratest Acquisition; and
WHEREAS, each Guarantor is a Subsidiary of the Borrower and is
financially interested in its affairs and it is a condition to the Banks
entering into the Amendment that this Guaranty be executed and delivered to the
Agent pursuant to Section 3(b) of the Amendment.
NOW, THEREFORE, in consideration of the foregoing, each Guarantor
agrees as follows:
Section 1. Guaranty of Payment.
The Guarantors absolutely, unconditionally and irrevocably guarantee to
the Agent and the Banks, jointly and severally, the punctual payment of all sums
now owing or which may in the future be owing by the Borrower under or in
respect of the Facility, when the same are due and payable, whether on demand,
at stated maturity, by acceleration or otherwise, and whether for principal,
interest, fees, expenses, indemnification or otherwise (all of the foregoing
sums being the "Liabilities"). The Liabilities include, without limitation,
2
interest accruing after the commencement of a proceeding under bankruptcy,
insolvency or similar laws of any jurisdiction at the rate or rates provided in
the Facility Documents. This Guaranty is a guaranty of payment and not of
collection only. Neither the Agent nor any Bank shall be required to exhaust any
right or remedy or take any action against the Borrower or any other person or
entity or any collateral. Each Guarantor agrees that, as between the Guarantor
and the Agent and the Banks, the Liabilities may be declared to be due and
payable for the purposes of this Guaranty notwithstanding any stay, injunction
or other prohibition which may prevent, delay or vitiate any declaration as
regards the Borrower and that, in the event of a declaration or attempted
declaration, the Liabilities shall immediately become due and payable by the
Guarantors for the purposes of this Guaranty.
Section 2. Guaranty Absolute. Each Guarantor guarantees that the
Liabilities shall be paid strictly in accordance with the terms of the Credit
Agreement, the Notes and the other Facility Documents. The liability of each
Guarantor under this Guaranty is absolute, irrevocable, and unconditional
irrespective of: (a) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Facility Documents or Liabilities, or
any other amendment or waiver of or any consent to departure from any of the
terms of any Facility Document or Liability; (b) any release or amendment or
waiver of, or consent to departure from, any other guaranty or support document,
or any exchange, release or non-perfection of any security interest, for all or
any of the Facility Documents or Liabilities; (c) any present or future law,
regulation or order of any jurisdiction (whether of right or in fact) or of any
agency thereof purporting to reduce, amend, restructure or otherwise affect any
term of any Facility Document or Liability; (d) without being limited by the
foregoing, any lack of validity or enforceability of any Facility Document or
Liability; (e) any other defense whatsoever which might constitute a defense
available to, or discharge of, the Borrower or a guarantor (other than that the
Liabilities have been Fully Satisfied).
Section 3. Guaranty Irrevocable. This Guaranty is a continuing guaranty
and shall remain in full force and effect until the Liabilities have been Fully
Satisfied. For purposes of this Guaranty, "Fully Satisfied" shall mean, as of
any date, that, on or before such date, (a) the principal of and interest
accrued to such date on any Liabilities shall have been paid in full in cash,
(b) all fees, expenses and other amounts then due and payable which constituted
Liabilities shall have been paid in full in cash and (c) the Commitments shall
have expired or irrevocably been terminated. Upon the sale, transfer or other
disposition of a Guarantor permitted under Sections 6.9 and 7.7(f) of the Credit
Agreement, such Guarantor shall be automatically released from its obligations
and shall cease to be a Guarantor hereunder.
Section 4. Reinstatement. Notwithstanding anything contained herein to
the contrary, this Guaranty shall continue to be effective or be reinstated, as
the case may be, if at any time any payment of any of the Liabilities is
rescinded or
3
must otherwise be returned by the Agent or any Bank on the insolvency,
bankruptcy or reorganization of the Borrower or otherwise, all as though such
payment had not been made.
Section 5. Subrogation. The Guarantors shall not exercise any rights
which they may acquire by way of subrogation, by any payment made under this
Guaranty or otherwise, until all the Liabilities have been Fully Satisfied. If
any amount is paid to any Guarantor on account of subrogation rights under this
Guaranty at any time when all the Liabilities have not been Fully Satisfied, the
amount shall be held in trust for the benefit of the Agent and the Banks and
shall be promptly paid to the Agent and the Banks to be credited and applied to
the Liabilities, whether matured or unmatured or absolute or contingent, in
accordance with the terms of the Credit Agreement. If any Guarantor makes
payment to the Agent and the Banks of all or any part of the Liabilities and all
the Liabilities have been Fully Satisfied, the Agent and the Banks shall, at
such Guarantor's request, execute and deliver to such Guarantor appropriate
documents, without recourse and without representation or warranty, nec xxxxxx
to evidence the transfer by subrogation to such Guarantor of any interest in the
Liabilities resulting from such payment.
Section 6. Subordination. Without limiting the Agent's or any Bank's
rights under any other agreement, any liabilities owed by the Borrower to any
Guarantor in connection with any extension of credit or financial accommodation
by such Guarantor to or for the account of the Borrower, including but not
limited to interest accruing at the agreed contract rate after the commencement
of a bankruptcy or similar proceeding, are hereby subordinated to the
Liabilities, and such liabilities of the Borrower to such Guarantor, if the
Agent so requests during the occurrence or continuation of a Default or and
Event of Default, shall be collected, enforced and received by such Guarantor as
trustee for the Agent and the Banks and shall be paid over to the Agent and the
Banks on account of the Liabilities but without reducing or affecting in any
manner the liability of any Guarantor under the other provisions of this
Guaranty.
Section 7. Representations and Warranties. Each Guarantor hereby
represents and warrants that:
(a) Incorporation, Good Standing and Due Qualification. Each
of such Guarantor and its Subsidiaries is duly incorporated, validly existing
and in good standing under the laws of the jurisdiction of its incorporation,
has the corporate power and authority to own its assets and to transact the
business in which it is now engaged or proposed to be engaged, and is duly
qualified as a foreign corporation and in good standing under the laws of each
other jurisdiction in which such qualification is required, except where the
failure to so qualify has not had, and is not reasonably expected to have, a
Material Adverse Effect.
4
(b) Corporate Power and Authority; No Conflicts. The
execution, delivery and performance by such Guarantor of the Facility Documents
to which it is a party are within its power and authority and have been duly
authorized by all necessary corporate action and do not and will not: (a)
require any consent or approval of its stockholders; (b) contravene its charter
or by-laws; (c) violate any provision of, or require any filing, registration,
consent or approval under, any law, rule, regulation (including, without
limitation, Regulation U), order, writ, judgment, injunction, decree,
determination or award presently in effect having applicability to any Guarantor
or any of its Subsidiaries; (d) result in a breach of or constitute a default or
require any consent under any indenture or loan or credit agreement or any other
agreement, lease or instrument to which any Guarantor is a party or by which it
or its properties may be bound or affected; (e) result in, or require, the
creation or imposition of any Lien, upon or with respect to any of the
properties now owned or hereafter acquired by any Guarantor; or (f) cause any
Guarantor or any of its Subsidiaries to be in default under any such law, rule,
regulation, order, writ, judgment, injunction, decree, determination or award or
any such indenture, agreement, lease or instrument, except where such
contravention, violation, breach, default or Lien is not reasonably expected to
have a Material Adverse Effect.
(c) Legally Enforceable Agreements. Each Facility Document to
which such Guarantor is a party is, or when delivered under this Agreement will
be, a legal, valid and binding obligation of such Guarantor enforceable against
such Guarantor in accordance with its terms, except to the extent that such
enforcement may be limited by applicable bankruptcy, insolvency and other
similar laws affecting creditors' rights generally and by equitable principles
relating to availability of equitable remedies.
(d) Litigation. There are no actions, suits or proceedings
pending or, to the knowledge of such Guarantor, threatened, against or affecting
such Guarantor or any of its Subsidiaries before any court, governmental agency
or arbitrator, which, in any one case or in the aggregate, is reasonably
expected to have a Material Adverse Effect or to materially adversely affect the
ability of such Guarantor to perform its obligations under the Facility
Documents to which it is a party.
(e) Solvency.
(i) The present fair saleable value of the assets of
such Guarantor before giving effect to all the transactions contemplated by the
Facility Documents and the funding of all Commitments under the Credit Agreement
exceeds the amount that will be required to be paid on or in respect of the
existing debts and other liabilities (including contingent liabilities) of such
Guarantor as they mature.
5
(ii) The property of each Guarantor does not
constitute unreasonably small capital for such Guarantor to carry out its
business as now conducted and as proposed to be conducted, including the capital
needs of such Guarantor.
(iii) Such Guarantor does not intend to, nor does it
believe that it will, incur debts beyond its ability to pay such debts as they
mature (taking into account the timing and amounts of cash to be received by any
such Guarantor, and of amounts to be payable on or in respect of debt of any
Guarantor).
Section 8. Remedies Generally. The remedies provided in this Guaranty
are cumulative and not exclusive of any remedies provided by law.
Section 9. Setoff. Upon the occurrence and during the continuance of
any Event of Default, each Guarantor agrees that, in addition to (and without
limitation of) any right of setoff, banker's lien or counterclaim the Agent or
any Bank may otherwise have, the Agent and any Bank shall be entitled, at their
option, to offset balances (general or special, time or demand, provisional or
final) held by them for the account of such Guarantor at any of the Agent's or
such Bank's offices, in U.S. dollars or in any other currency, against any
amount payable by any Guarantor under this Guaranty which is not paid when due
following any applicable notice and cure periods (regardless of whether such
balances are then due to such Guarantor), in which case it shall promptly notify
such Guarantor thereof; provided that the Agent's or any Bank's failure to give
such notice shall not affect the validity thereof.
Section 10. Formalities. Each Guarantor waives presentment, notice of
dishonor, protest, notice of acceptance of this Guaranty or incurrence of any
Liability and any other formality with respect to any of the Liabilities or this
Guaranty.
Section 11. Amendments and Waivers. No amendment or waiver of any
provision of this Guaranty, nor consent to any departure by any Guarantor
therefrom, shall be effective unless it is in writing and signed by the Agent
and the Banks, and then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given. No failure on
the part of the Agent or any Bank to exercise, and no delay in exercising, any
right under this Guaranty shall operate as a waiver or preclude any other or
further exercise thereof or the exercise of any other right.
Section 12. Expenses. The Guarantors, jointly and severally, shall
reimburse the Agent and the Banks on demand for all costs, expenses and charges
(including without limitation reasonable fees and charges of external legal
counsel for the Agent and the Banks) incurred by the Agent and the Banks in
connection with the
6
performance or enforcement of this Guaranty. The obligations of the Guarantors
under this Section shall survive the termination of this Guaranty.
Section 13. Assignment. This Guaranty shall be binding on, and shall
inure to the benefit of, each Guarantor, the Agent, the Banks and their
respective successors and assigns; provided that the Guarantors may not assign
or transfer their respective rights or obligations under this Guaranty. Without
limiting the generality of the foregoing: the Agent and any Bank may assign or
otherwise transfer their rights under the Facility Documents to any other person
or entity in accordance with the Credit Agreement, and such assignee or
transferee shall then become vested with all the rights granted to the Agent or
such Bank in this Guaranty or otherwise.
Section 14. Captions. The headings and captions in this Guaranty are
for convenience only and shall not affect the interpretation or construction of
this Guaranty.
Section 15. GOVERNING LAW, ETC. THIS GUARANTY SHALL BE GOVERNED BY THE
LAW OF THE STATE OF CONNECTICUT. EACH GUARANTOR CONSENTS TO THE NON-EXCLUSIVE
JURISDICTION AND VENUE OF THE STATE OR FEDERAL COURTS LOCATED IN THE STATE OF
CONNECTICUT. SERVICE OF PROCESS BY THE AGENT OR ANY BANK IN CONNECTION WITH ANY
SUCH DISPUTE SHALL BE BINDING ON EACH GUARANTOR IF SENT TO SUCH GUARANTOR BY
REGISTERED MAIL AT THE ADDRESS SPECIFIED BELOW OR AS OTHERWISE SPECIFIED BY SUCH
GUARANTOR FROM TIME TO TIME. TO THE EXTENT THAT THE GUARANTORS HAVE OR HEREAFTER
MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL
PROCESS (WHETHER FROM SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT,
ATTACHMENT IN AID OF EXECUTION OF A JUDGMENT, EXECUTION OR OTHERWISE), EACH
GUARANTOR HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN RESPECT OF ITS OBLIGATIONS
UNDER THIS GUARANTY.
EACH GUARANTOR WAIVES ANY RIGHT SUCH GUARANTOR MAY HAVE TO A JURY
TRIAL.
Section 16. COMMERCIAL WAIVER. THE GUARANTORS ACKNOWLEDGE THAT THE
LIABILITIES ARE FOR COMMERCIAL PURPOSES AND WAIVE ANY RIGHT TO NOTICE AND
HEARING UNDER SECTIONS 52-278a THROUGH 52-278n OF THE CONNECTICUT GENERAL
STATUTES AS NOW OR HEREAFTER AMENDED AND AUTHORIZES THE ATTORNEY OF THE AGENT OR
ANY BANK, OR ANY SUCCESSOR THERETO, TO ISSUE A WRIT OF PREJUDGMENT REMEDY
WITHOUT
7
COURT ORDER. FURTHER, EACH GUARANTOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY
LAW, THE BENEFITS OF ALL VALUATION, APPRAISEMENTS, HOMESTEAD, EXEMPTION, STAY,
REDEMPTION AND MORATORIUM LAWS NOW IN FORCE OR WHICH MAY HEREAFTER BECOME LAWS.
EACH GUARANTOR ACKNOWLEDGES THAT IT MAKES THESE WAIVERS AND THE WAIVERS
CONTAINED IN SECTION 15 KNOWINGLY AND VOLUNTARILY AND ONLY AFTER EXTENSIVE
CONSID ERATION OF THE RAMIFICATIONS OF THESE WAIVERS WITH ITS ATTORNEYS.
Section 17. Savings Clause.
(a) It is the intent of each Guarantor, the Agent and the
Banks that each Guarantor's maximum obligations hereunder shall be equal to, but
not in excess of:
(i) in a case or proceeding commenced by or against
any Guarantor under the Bankruptcy Code, the maximum amount which would not
otherwise cause the Liabilities (or any other obligations of such Guarantor to
the Agent or any Bank) to be avoidable or unenforceable against such Guarantor
under (A) Section 548 of the Bankruptcy Code or (B) any state fraudulent
transfer or fraudulent conveyance act or statute applied in such case or
proceeding by virtue of Section 544 of the Bankruptcy Code; or
(ii) in a case or proceeding commenced by or against
any Guarantor under any law, statute or regulation other than the Bankruptcy
Code (including, without limitation, any other bankruptcy, reorganization,
arrangement, moratorium, readjustment of debt, dissolution, liquidation or
similar debtor relief laws), the maximum amount which would not otherwise cause
the Liabilities (or any other obligations of such Guarantor to the Agent or any
Bank) to be avoidable or unenforceable against such Guarantor under such law,
statute or regulation including without limitation, any state fraudulent
transfer or fraudulent conveyance act or statute applied in any such case or
proceeding.
(The substantive laws under which the possible avoidance or unenforceability of
the Liabilities (or any other obligations of any Guarantor to the Agent or any
Bank) shall be determined in any such case or proceeding shall hereinafter be
referred to as the "Avoidance Provisions").
(b) To the end set forth in Section 17(a), but only to the
extent that the Liabilities would otherwise be subject to avoidance under the
Avoidance Provisions if such Guarantor is not deemed to have received valuable
consideration, fair value or reasonably equivalent value for the Liabilities, or
if the Liabilities would
8
render such Guarantor insolvent, or leave such Guarantor with unreasonably small
capital to conduct its business, or cause such Guarantor to have incurred debts
(or to have intended to have incurred debts) beyond its ability to pay such
debts as they mature, in each case as of the time any of the Liabilities are
deemed to have been incurred under the Avoidance Provisions and after giving
effect to contribution as among any Guarantor and other guarantors, the maximum
Liabilities for which such Guarantor shall be liable hereunder shall be reduced
to that amount which, after giving effect thereto, would not cause the
Liabilities (or any other obligations of such Guarantor to the Agent or any
Bank), as so reduced, to be subject to avoidance under the Avoidance Provisions.
This Section 17 is intended solely to preserve the rights of the Agent and the
Banks hereunder to the maximum extent that would not cause the Liabilities of
any Guarantor to be subject to avoidance under the Avoidance Provisions, and
neither the Guarantors nor any other Person shall have any right or claim under
this Section 17 as against the Agent or any Bank that would not otherwise be
available to such Person under the Avoidance Provisions.
Section 18. Judgment Currency.
(a) The obligations of the Guarantors under this Guaranty and
the other Facility Documents to make payments in Dollars or in any Alternative
Currency (the "Obligation Currency") shall not be discharged or satisfied by any
tender or recovery pursuant to any judgment expressed in or converted into any
currency other than the Obligation Currency, except to the extent that such
tender or recovery results in the effective receipt by the Administrative Agent
or a Bank of the full amount of the Obligation Currency expressed to be payable
to them hereunder. If for the purpose of obtaining or enforcing judgment against
any Guarantor in any court or in any jurisdiction, it becomes necessary to
convert into or from any currency other than the Obligation Currency (such other
currency being hereinafter referred to as the "Judgment Currency") an amount due
in the Obligation Currency, the conversion shall be made, at the Alternative
Currency Equivalent or Dollar Equivalent, in the case of any Alternative
Currency or Dollars, and, in the case of other currencies, the rate of exchange
(as quoted by the Administrative Agent or if the Administrative Agent does not
quote a rate of exchange on such currency, by a known dealer in such currency
designated by the Administrative Agent) determined, in each case, as on the
Banking Day immediately preceding the day on which the judgment is given (such
Banking Day being hereinafter referred to as the "Judgment Currency Conversion
Date").
(b) If there is a change in the rate of exchange prevailing
between the Judgment Currency Conversion Date and the date of actual payment of
the amount due, the Guarantors, jointly and severally, covenant and agree to pay
such additional amounts, if any (but in any event not a lesser amount), as may
be necessary to ensure that the amount paid in the Judgment Currency, when
converted at the rate of exchange prevailing on the date of payment, will
produce the amount of the Obligation
9
Currency which could have been purchased with the amount of Judgment Currency
stipulated in the judgment or judicial award at the rate of exchange prevailing
on the Judgment Currency Conversion Date.
(c) For purposes of determining the Alternative Currency
Equivalent or Dollar Equivalent or rate of exchange for this Section, such
amount shall include any premium and costs payable in connection with the
purchase of the Obligation Currency.
10
IN WITNESS WHEREOF, each Guarantor has duly executed and delivered this
Guaranty.
[Name of Guarantor]
[Address for Notice to each Guarantor]
SCHEDULE B
[DEFINITIONS PURSUANT TO NOTE PURCHASE AGREEMENT]
DEFINED TERMS
As used herein, the following terms have the respective meanings set
forth below or set forth in the Section hereof following such term:
"ACQUISITION" means any transaction (including any merger or
consolidation, but not including the formation of new Subsidiaries after the
Closing Date) pursuant to which the Company or any of its Restricted
Subsidiaries (a) acquires equity Securities (or warrants, options or other
rights to acquire such Securities) of any Person, other than the Company or any
Person which is then a Subsidiary, pursuant to a solicitation of tenders
therefor, or in one or more negotiated block, market or other transactions not
involving a tender offer, or a combination of any of the foregoing, or (b) makes
any Person (other than a Subsidiary of the Company) a Restricted Subsidiary, or
causes any such Person to be merged into or consolidated with the Company or any
of its Restricted Subsidiaries, in any case pursuant to a merger, a purchase of
assets or any reorganization providing for the delivery or issuance to the
holders of such Person's then outstanding Securities, in exchange for such
Securities, of cash or Securities of the Company or any of its Restricted
Subsidiaries, or a combination thereof, or (c) purchases all or substantially
all of the business or assets of any Person (other than a Subsidiary of the
Company).
"ACQUISITION AGREEMENT" means the Stock Purchase Agreement dated as of
November 10, 1998 by and among the Company, NFO Europe (Deutschland), GMBH & Co.
KG, a German limited partnership, as buyer, and the stockholders of Infratest,
as sellers.
"AFFILIATE" means at any time, and with respect to any Person,
(a) any other Person that at such time directly or indirectly
through one or more intermediaries Controls, or is Controlled by, or is
under common Control with, such first Person, and
(b) any Person beneficially owning or holding, directly or
indirectly, 10% or more of any class of voting or equity interests of
the Company or any Subsidiary or any corporation of which the Company
and its Subsidiaries beneficially own or hold, in the aggregate,
directly or indirectly, 10% or more of any class of voting or equity
interests.
2
As used in this definition, "CONTROL" means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of a Person, whether through the ownership of voting securities, by
contract or otherwise. Unless the context otherwise clearly requires, any
reference to an "Affiliate" is a reference to an Affiliate of the Company.
"AGREEMENT, THIS" is defined in Section 17.3.
"ASSET DISPOSITION" means any Transfer except :
(a) any
(i) Transfer from a Restricted Subsidiary to the
Company or another Restricted Subsidiary, and
(ii) Transfer from the Company to a Restricted
Subsidiary, so long as immediately before and immediately
after the consummation of any such Transfer and after giving
effect thereto, no Default or Event of Default exists; and
(b) any Transfer made in the ordinary course of business and
involving only property that is either (i) inventory held for sale or
(ii) equipment, fixtures, supplies or materials no longer required in
the operation of the business of the Company or any of the Restricted
Subsidiaries or that is obsolete.
"ATTRIBUTABLE DEBT" means, as to any particular lease relating to a
Sale-and-Leaseback Transaction, the present value of all Long Term Lease
Rentals required to be paid by the Company or any Subsidiary under such lease
during the remaining term thereof (determined in accordance with generally
accepted financial practice using a discount factor equal to the interest rate
implicit in such lease if known or, if not known, of 7% PER ANNUM).
3
"BANGLADESH ACQUISITION" means the acquisition by the Company or one of
its Subsidiaries, for an aggregate consideration not in excess of $225,000, of a
35% interest in the share capital of Xxxxx Limited, a Bangladesh corporation.
"BUSINESS DAY" means (a) for the purposes of Section 8.6 only, any day
other than a Saturday, a Sunday or a day on which commercial banks in New York
City are required or authorized to be closed, and (b) for the purposes of any
other provision of this Agreement, any day other than a Saturday, a Sunday or a
day on which commercial banks in Connecticut, Illinois, Massachusetts, New York
or the state in which you are located are required or authorized to be closed.
"CAPITAL ASSETS" means all property and equipment of the Company and
the Restricted Subsidiaries (after deducting any reserves applicable thereto)
which would be shown as such on a consolidated balance sheet of such Persons
prepared in accordance with GAAP.
"CAPITAL LEASE" means, at any time, a lease with respect to which the
lessee is required concurrently to recognize the acquisition of an asset and the
incurrence of a liability in accordance with GAAP.
"CAPITAL LEASE OBLIGATION" means, with respect to any Person and a
Capital Lease, the amount of the obligation of such Person as the lessee under
such Capital Lease which would, in accordance with GAAP, appear as a liability
on a balance sheet of such Person.
"CAPITAL STOCK" means any class of capital stock, share capital or
similar equity interest of a Person.
"CLOSING" is defined in Section 3.
"CLOSING DATE" is defined in Section 3.
"CODE" means the Internal Revenue Code of 1986, as amended from time to
time, and the rules and regulations promulgated thereunder from time to time.
"COMPANY" is defined in the introductory sentence of this Agreement.
"CONFIDENTIAL INFORMATION" is defined in Section 20.
"CONSOLIDATED CURRENT DEBT" means all Current Debt of the Company and
the Restricted Subsidiaries, determined on a consolidated basis in accordance
with GAAP.
4
"CONSOLIDATED FUNDED DEBT" means the sum of Consolidated Senior Funded
Debt PLUS Consolidated Subordinated Funded Debt.
"CONSOLIDATED NET INCOME" means, with reference to any period, the net
income (or loss) of the Company and the Restricted Subsidiaries for such period
(taken as a cumulative whole), as determined in accordance with GAAP, after
eliminating all offsetting debits and credits between the Company and the
Restricted Subsidiaries and all other items required to be eliminated in the
course of the preparation of consolidated financial statements of the Company
and the Restricted Subsidiaries in accordance with GAAP, PROVIDED that there
shall be excluded:
(a) the income (or loss) of any Person accrued prior to the
date it becomes a Restricted Subsidiary or is merged into or
consolidated with the Company or a Restricted Subsidiary, and the
income (or loss) of any Person, substantially all of the assets of
which have been acquired in any manner, realized by such other Person
prior to the date of acquisition,
(b) the income (or loss) of any Person (other than a
Restricted Subsidiary) in which the Company or any Restricted
Subsidiary has an ownership interest, except to the extent that any
such income has been actually received by the Company or such
Restricted Subsidiary in the form of cash dividends or similar cash
distributions,
(c) the undistributed earnings of any Restricted Subsidiary to
the extent that the declaration or payment of dividends or similar
distributions by such Restricted Subsidiary is not at the time
permitted by the terms of its charter or any agreement, instrument,
judgment, decree, order, statute, rule or governmental regulation
applicable to such Restricted Subsidiary,
(d) any restoration to income of any contingency reserve,
except to the extent that provision for such reserve was made out of
income accrued during such period,
(e) any aggregate net gain, or any aggregate net loss, during
such period arising from the sale, conversion, exchange or other
disposition of Capital Assets,
(f) any gains resulting from any write-up of any assets, or
any loss resulting from any write-down of any assets,
(g) any net gain from the collection of the proceeds of life
insurance policies,
5
(h) any gain arising from the acquisition of any Security, or
the extinguishment, under GAAP, of any Debt, of the Company or any
Restricted Subsidiary,
(i) any net income or gain, or any net loss, during such
period from (i) any change in accounting principles in accordance with
GAAP, (ii) any prior period adjustments resulting from any change in
accounting principles in accordance with GAAP, (iii) any extraordinary
items, or (iv) any discontinued operations or the disposition thereof,
(j) in the case of a successor to the Company by consolidation
or merger or as a transferee of its assets, any earnings of the
successor corporation prior to such consolidation, merger or transfer
of assets, and
(k) any portion of such net income that cannot be freely
converted into United States Dollars.
"CONSOLIDATED NET WORTH" means, at any time,
(a) Consolidated Total Assets MINUS
(b) the total liabilities of the Company and the Restricted
Subsidiaries which would be shown as liabilities on a consolidated
balance sheet of the Company and the Restricted Subsidiaries as of such
time prepared in accordance with GAAP.
"CONSOLIDATED SENIOR FUNDED DEBT" means all Senior Funded Debt of the
Company and the Restricted Subsidiaries, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED SUBORDINATED FUNDED DEBT" means all Subordinated Funded
Debt of the Company and the Restricted Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED TOTAL ASSETS" means the total assets of the Company and
the Restricted Subsidiaries that would appear on a consolidated balance sheet of
such Persons prepared in accordance with GAAP.
"CONSOLIDATED TOTAL CAPITALIZATION" means, at any time, the SUM,
without duplication, of:
(a) Consolidated Funded Debt;
6
(b) the amount of all deferred income tax liabilities of the
Company and the Restricted Subsidiaries, determined on a consolidated
basis in accordance with GAAP;
(c) all amounts properly attributable to minority interests,
if any, in the stock and surplus of Restricted Subsidiaries; and
(d) Consolidated Net Worth.
"CURRENT DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures on demand or within one year from the date of the
creation thereof and is not directly or indirectly renewable or extendible at
the option of the obligor in respect thereof to a date one year or more from
such date, PROVIDED that (a) Debt outstanding under a revolving credit or
similar agreement which obligates the lender or lenders to extend credit over a
period of one year or more and (b) Current Maturities of Funded Debt shall
constitute Funded Debt and not Current Debt, even though such Debt by its terms
matures on demand or within one year from such date.
"CURRENT MATURITIES OF FUNDED DEBT" means, at any time and with respect
to any item of Funded Debt, the portion of such Funded Debt outstanding at such
time which by the terms of such Funded Debt or the terms of any instrument or
agreement relating thereto is due on demand or within one year from such time
(whether by sinking fund, other required prepayment or final payment at
maturity) and is not directly or indirectly renewable, extendible or refundable
at the option of the obligor under an agreement or firm commitment in effect at
such time to a date one year or more from such time.
"DEBT" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including, without limitation, all
liabilities created or arising under any conditional sale or other
title retention agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases; and
(d) any Guaranty of such Person with respect to liabilities of
a type described in clauses (a) to (c), inclusive, hereof.
7
Without limitation of the foregoing, Debt of any Person shall include all
obligations of such Person of the character described in clauses (a) through (c)
to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP. Any Person extending, renewing or refunding any Debt (other than Existing
Debt) shall be deemed to have incurred such Debt at the time of such extension,
renewal or refunding.
"DEBT FACILITY" means any agreement pursuant to which the Company or a
Restricted Subsidiary may incur Debt, as such agreement may be amended,
modified, restated or replaced by another agreement providing for the incurrence
of Debt by any such Person, except for any such amendment, modification,
restatement or replacement that provides for an increase in the amount of Debt
to an amount greater than that which could have been outstanding on the Closing
Date.
"DEFAULT" means an event or condition the occurrence or existence of
which would, with the lapse of time or the giving of notice or both, become an
Event of Default.
"DEFAULT RATE" means, with respect to the Notes of any Series, that
rate of interest that is the greater of (i) 2% PER ANNUM above the Applicable
Rate (as defined in the Notes) or (ii) 2% over the rate of interest publicly
announced from time to time by The Chase Manhattan Bank in New York, New York
(or its successor) as its "base" or "prime" rate.
"DOLLARS" OR "$" means lawful currency of the United States of America.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local, and
foreign statutes, laws, regulations, ordinances, rules, judgments, orders,
decrees, permits, concessions, grants, franchises, licenses, agreements or
governmental restrictions relating to pollution and the protection of the
environment or the release of any materials into the environment, including but
not limited to those related to hazardous substances or wastes, air emissions
and discharges to waste or public systems.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the rules and regulations promulgated thereunder
from time to time in effect.
"ERISA AFFILIATE" means any trade or business (whether or not
incorporated) that is treated as a single employer together with the Company
under section 414 of the Code.
"EVENT OF DEFAULT" is defined in Section 11.
8
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended
from time to time.
"EXCLUDED GUARANTIES" means (i) the Guaranties of the Restricted
Subsidiaries issued on the Closing Date in respect of the Notes, the Existing
Notes, the Subordinated Notes and the Debt under the Fleet/Chase Debt Facility,
(ii) any other Guaranties of Subsidiaries issued thereafter in respect of the
Debt identified in the foregoing clause (i), (iii) Guaranties of any
refinancing, replacement or renewal of such Debt so long as the aggregate
principal amount of such Debt is not in excess of that outstanding or, in the
case of the Fleet/Chase Debt Facility, available to be borrowed, immediately
after giving effect to the sale of the Notes and the Subordinated Notes on the
Closing Date and the holders of such Debt (other than any holders of
Subordinated Funded Debt) are parties to the Sharing Agreement, and (iv) any
Guaranties of Subsidiaries of the Existing Notes, the Subordinated Notes or the
obligations of the Company under the Fleet/Chase Debt Facility if Guaranties of
such Subsidiaries shall also have been issued in respect of the Notes pursuant
to Section 9.7(a).
"EXISTING CURRENT DEBT" means Existing Debt which is Current Debt.
"EXISTING DEBT" means
(a) Debt of the Company or any Restricted Subsidiary
outstanding on the Closing Date and identified on Schedule 5.15 (or
included in the aggregate amount set forth in Section 5.15), and any
renewal, refinancing or replacement thereof so long as there shall be
no increase in the principal amount of such Debt outstanding at the
time of such renewal, refinancing or replacement;
(b) Debt incurred pursuant to a Debt Facility identified in
Schedule 5.15 to which the Company or any Restricted Subsidiary is a
party on the Closing Date (regardless of whether any Debt was
outstanding thereunder on the Closing Date), so long as the aggregate
amount of Debt so incurred at any time is not in excess of the maximum
amount of Debt permitted to be incurred thereunder on the Closing Date
(assuming satisfaction of all funding conditions on such date); and
(c) the Excluded Guaranties.
"EXISTING NOTE PURCHASE AGREEMENT" means the separate Note Purchase
Agreements, dated as of March 9, 1998, between the Company and each of the
purchasers of the Company's 6.83% Senior Notes due March 1, 2008 issued
thereunder (as amended, supplemented or restated from time to time).
9
"EXISTING NOTES" means the Company's 6.83% Senior Notes due March 1,
2008 (as amended as of the date hereof and as amended, supplemented or restated
from time to time).
"EXISTING SENIOR FUNDED DEBT" means Existing Debt which is Senior
Funded Debt.
"EXISTING SUBORDINATED FUNDED DEBT" means Existing Debt which is
Subordinated Funded Debt.
"FAIR MARKET VALUE" means, at any time and with respect to any
property, the sale value of such property that would be realized in an
arm's-length sale at such time between an informed and willing buyer and an
informed and willing seller (neither being under a compulsion to buy or sell).
"FLEET/CHASE DEBT FACILITY" means the Debt Facility evidenced by that
certain Credit Agreement dated as of March 9, 1998 among the Company, Fleet
National Bank and The Chase Manhattan Bank, as co-agents, Fleet National Bank,
as administrative agent, and the other banks party thereto, providing for a
borrowing availability of up to $75 million.
"FUNDED DEBT" means, with respect to any Person, all Debt of such
Person which by its terms or by the terms of any instrument or agreement
relating thereto matures, or which is otherwise payable or unpaid, one year or
more from, or is directly or indirectly renewable or extendible at the option of
the obligor in respect thereof to a date one year or more (including, without
limitation, an option of such obligor under a revolving credit or similar
agreement obligating the lender or lenders to extend credit over a period of one
year or more) from, the date of the creation thereof. The amount of Funded Debt
outstanding under any such revolving credit or similar agreement (including the
Fleet/Chase Debt Facility) on any date shall be deemed to be the average daily
amount outstanding under such facility during the period of 365 consecutive days
ending on and including such date, and not the actual amount outstanding on such
date; PROVIDED, HOWEVER, that, as used in the definitions of "Consolidated
Senior Funded Debt" and "Consolidated Funded Debt," but only as such terms are
used in Section 10.14, the amount of Funded Debt outstanding under any such
revolving credit or similar agreement (including the Fleet/Chase Debt Facility)
on any date shall be the actual amount outstanding on such date.
"GAAP" means generally accepted accounting principles as in effect from
time to time in the United States of America.
10
"GOVERNMENTAL AUTHORITY" means
(a) the government of
(i) the United States of America or any state or
other political subdivision thereof, or
(ii) any jurisdiction in which the Company or any
Subsidiary conducts all or any part of its business, or that
asserts jurisdiction over any properties of the Company or any
Subsidiary, or
(b) any entity exercising executive, legislative, judicial,
regulatory or administrative functions of, or pertaining to, any such
government.
"GUARANTOR" means, at any time, each Person (including, without
limitation, each of the Initial Guarantors) that at such time is a Guarantor
under a Guaranty Agreement.
"GUARANTY" means, with respect to any Person, any obligation (except
the endorsement in the ordinary course of business of negotiable instruments for
deposit or collection) of such Person guaranteeing or in effect guaranteeing any
indebtedness, dividend or other obligation of any other Person in any manner,
whether directly or indirectly, including, without limitation, obligations
incurred through an agreement, contingent or otherwise, by such Person:
(a) to purchase such indebtedness or obligation or any
property constituting security therefor;
(b) to advance or supply funds (i) for the purchase or payment
of such indebtedness or obligation, or (ii) to maintain any working
capital or other balance sheet condition or any income statement
condition of any other Person or otherwise to advance or make available
funds for the purchase or payment of such indebtedness or obligation;
(c) to lease properties or to purchase properties or services
primarily for the purpose of assuring the owner of such indebtedness or
obligation of the ability of any other Person to make payment of the
indebtedness or obligation; or
(d) otherwise to assure the owner of such indebtedness or
obligation against loss in respect thereof.
11
In any computation of the indebtedness or other liabilities of the obligor under
any Guaranty, the indebtedness or other obligations that are the subject of such
Guaranty shall be assumed to be direct obligations of such obligor.
"GUARANTY AGREEMENTS" shall mean each of the Guaranty Agreements
executed by the Initial Guarantors pursuant to Section 4.14, and each of the
other Guaranty Agreements executed and delivered from time to time pursuant to
Section 9.7, in each case as amended or supplemented from time to time.
"HAZARDOUS MATERIAL" means any and all pollutants, toxic or hazardous
wastes or any other substances that might pose a hazard to health or safety, the
removal of which may be required or the generation, manufacture, refining,
production, processing, treatment, storage, handling, transportation, transfer,
use, disposal, release, discharge, spillage, seepage, or filtration of which is
or shall be restricted, prohibited or penalized by any applicable law
(including, without limitation, asbestos, urea formaldehyde foam insulation and
polychlorinated biphenyls).
"HOLDER" means, with respect to any Note, the Person in whose name such
Note is registered in the register maintained by the Company pursuant to Section
13.1.
"IBH DEBT" means Debt of Infratest and its subsidiaries up to the
maximum amount that may be incurred under the credit facilities to which
Infratest is a party as of November 20, 1998.
"INDEBTEDNESS" means, with respect to any Person, without duplication,
(a) its liabilities for borrowed money and its redemption
obligations in respect of mandatorily redeemable Preferred Stock;
(b) its liabilities for the deferred purchase price of
property acquired by such Person (excluding accounts payable arising in
the ordinary course of business but including all liabilities created
or arising under any conditional sale or other title retention
agreement with respect to any such property);
(c) all liabilities appearing on its balance sheet in
accordance with GAAP in respect of Capital Leases;
(d) all liabilities for borrowed money secured by any Lien
with respect to any property owned by such Person (whether or not it
has assumed or otherwise become liable for such liabilities);
(e) all its liabilities in respect of letters of credit or
instruments serving a similar function issued or accepted for its
account by banks and other
12
financial institutions (whether or not representing obligations for
borrowed money);
(f) Swaps of such Person; and
(g) any Guaranty of such Person with respect to liabilities of
a type described in any of clauses (a) through (f) hereof.
Without limitation of the foregoing, Indebtedness of any Person shall include
all obligations of such Person of the character described in clauses (a) through
(g) to the extent such Person remains legally liable in respect thereof
notwithstanding that any such obligation is deemed to be extinguished under
GAAP.
"INFRATEST" means Infratest Xxxxx Aktiengesellschaft Holding, a German
Aktiengesellschaft (stock corporation).
"INFRATEST ACQUISITION" means the purchase and sale of all of the
issued and outstanding shares of common stock of Infratest, as contemplated by
the Acquisition Agreement.
"INITIAL GUARANTORS" means each of Xxxxxxxx/Xxxxxx Associates, Inc.,
NFO Research, Inc., Plog Research Inc., Prognostics Corp., PSI Holding Corp.,
and Xxxx- Xxxxxx-Xxxx, Inc., each a Delaware corporation.
"INSTITUTIONAL INVESTOR" means (a) any original purchaser of a Note,
(b) any holder of a Note holding more than 5% of the aggregate principal amount
of the Notes then outstanding, and (c) any bank, trust company, savings and loan
association or other financial institution, any pension plan, any investment
company, any insurance company, any broker or dealer, or any other similar
financial institution or entity, regardless of legal form.
"INTER-COMPANY DEBT" means Debt of the Company owing to any Wholly-
Owned Restricted Subsidiary or Debt of any Restricted Subsidiary owing to the
Company or one or more Wholly-Owned Restricted Subsidiaries.
"INVESTMENT" means any investment, made in cash or by delivery of
property, by the Company or any of the Restricted Subsidiaries in any Person,
whether by acquisition of stock, Debt or other obligation or Security, or by
loan, Guaranty, advance, capital contribution or otherwise.
"JUNIOR FINANCING CONDITION" means the receipt by the Company of net
proceeds of at least $25,000,000 on or after November 20, 1998 from any
combination of any one or more of (x) sales of the Company's Capital Stock, (y)
sales of the
13
Subordinated Notes, and (z) incurrence of Subordinated Funded Debt by the
Company (i) with terms and conditions satisfactory to the Required Holders (as
evidenced by their written acknowledgement) or (ii) with subordination
provisions identical to those set forth in the Subordinated Note Purchase
Agreement (except for minor language changes which do not have any substantive
effect) and with a maturity no earlier, and a weighted average life to maturity
no shorter, than the maturity and weighted average life to maturity of the
Subordinated Notes).
"LIEN" means, with respect to any Person, any mortgage, lien, pledge,
charge, security interest or other encumbrance, or any interest or title of any
vendor, lessor, lender or other secured party to or of such Person under any
conditional sale or other title retention agreement or Capital Lease, upon or
with respect to any property or asset of such Person (including in the case of
stock, stockholder agreements, voting trust agreements and all similar
arrangements to the extent that such arrangements affect control of the issuer
of such stock or the payment of dividends by such issuer).
"LONG TERM LEASE RENTALS" means, for a lease (other than a Capital
Lease) arising from a Sale-and-Leaseback Transaction having a term (including
terms of renewal or extension at the option of the lessor or the lessee, whether
or not such option has been exercised) expiring more than two (2) years after
the commencement of the initial term thereof, the sum of the minimum amount of
rental and other obligations required to be paid during such period by the
Company or any Subsidiary as lessee, EXCLUDING any amounts required to be paid
by the lessee (whether or not therein designated as rental or additional rental)
(a) which are on account of maintenance and repairs, insurance, taxes,
assessments, water rates and similar charges, or (b) which are based on profits,
revenues or sales realized by the lessee from the leased property or otherwise
based on the performance of the lessee.
"MAKE-WHOLE AMOUNT" is defined in Section 8.6.
"MATERIAL" means material in relation to the business, operations,
affairs, financial condition, assets, properties, or prospects of the Company
and its Subsidiaries taken as a whole.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (a) the
business, operations, affairs, financial condition, assets or properties of the
Company and its Subsidiaries taken as a whole, or (b) the ability of the Company
to perform its obligations under this Agreement and the Notes, or (c) the
validity or enforceability of this Agreement or the Notes.
"MEMORANDUM" is defined in Section 5.3.
14
"MULTIEMPLOYER PLAN" means any Plan that is a "multiemployer plan" (as
such term is defined in section 4001(a)(3) of ERISA).
"NET PROCEEDS AMOUNT" means, with respect to any Transfer of any
property by any Person, an amount equal to the DIFFERENCE of:
(a) the aggregate amount of the consideration (valued at the
Fair Market Value of such consideration at the time of the consummation
of such Transfer) received by such Person in respect of such Transfer,
MINUS
(b) all ordinary and reasonable out-of-pocket costs and
expenses actually incurred by such Person in connection with such
Transfer, and all taxes arising on account of any gains in respect of
such Transfer which are actually payable by such Person.
"NOTES" is defined in Section 1.
"OFFICER'S CERTIFICATE" means a certificate of a Senior Financial
Officer or of any other officer of the Company whose responsibilities extend to
the subject matter of such certificate.
"OTHER AGREEMENTS" is defined in Section 2.
"OTHER PURCHASERS" is defined in Section 2.
"PBGC" means the Pension Benefit Guaranty Corporation referred to and
defined in ERISA or any successor thereto.
"PERSON" means an individual, a partnership, a corporation, a limited
liability company, an association, a trust, an unincorporated organization, or a
government or agency or political subdivision thereof.
"PLAN" means an "employee benefit plan" (as defined in section 3(3) of
ERISA) or other plan that is or, within the preceding five years, has been
established or maintained, or to which contributions are or, within the
preceding five years, have been made or required to be made, by the Company or
any ERISA Affiliate or with respect to which the Company or any ERISA Affiliate
may have any liability which is covered by Title IV of ERISA.
"PREFERRED STOCK" means any class of Capital Stock of a Person that is
preferred over any other class of Capital Stock of such Person as to the payment
of dividends or other equity distributions or the payment of any amount upon
liquidation or dissolution of such Person.
15
"PRO FORMA CONSOLIDATED INTEREST EXPENSE" means, in respect of any
period, all interest in respect of Debt of the Company and the Restricted
Subsidiaries (including imputed interest on Capital Lease Obligations) deducted
in determining Consolidated Net Income for such period, determined as if
(a) all Persons which became or ceased to be Restricted
Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, and
(b) all acquisitions or dispositions of all or substantially
all of the assets of any Person or Restricted Subsidiary which occurred
during such period had occurred on the first day of such period (and
all incurrences or retirements of Debt in connection with any such
acquisition or disposition had occurred on such first day).
For purposes of this definition, in determining the interest that would have
accrued during any period on Debt which bears a floating rate of interest, the
interest rate in effect for all of such period shall be deemed to be the
interest rate that would have been in effect on the first day of such period had
such Debt been outstanding on such day.
"PRO FORMA EBITDA" means, in respect of any period, Consolidated Net
Income for such period PLUS, to the extent deducted in the determination thereof
for such period, each of the following:
(a) Pro Forma Consolidated Interest Expense;
(b) all depreciation and amortization allowances and other
non-cash expenses of the Company and the Restricted Subsidiaries; and
(c) all taxes imposed on or measured by income or excess
profits;
in each case determined as if (i) all Persons which became or ceased to be
Restricted Subsidiaries during such period had become or ceased to be Restricted
Subsidiaries on the first day of such period, (ii) all acquisitions or
dispositions of all or substantially all of the assets of any Person or
Restricted Subsidiary which occurred during such period had occurred on the
first day of such period (and all incurrences or retirements of Debt in
connection with any such acquisition or disposition had occurred on such first
day), and (iii) all planned future reductions in the compensation paid during
such period to the owners of the equity interests in any Person referred to in
the foregoing clauses (i) and (ii) had been in effect on the first day of such
period. For purposes of the immediately preceding clause (iii), a planned future
reduction in the compensation of any such owner shall be deemed to mean the
amount by which the salary and bonus payable to such owner in respect of the
period for which Pro Forma EBITDA is to be
16
determined (the "Reference Period") exceeds the salary and bonus the Company
intends to pay such owner for the equivalent period immediately following the
Reference Period, as evidenced by the written agreement of such owner.
"PROPERTY OR PROPERTIES" means, unless otherwise specifically limited,
real or personal property of any kind, tangible or intangible, xxxxxx or
inchoate.
"PTE" is defined in Section 6.2(a).
"QPAM EXEMPTION" is defined in Section 6.2(d).
"QUALIFIED INSTITUTIONAL BUYER" means any Person who is a "qualified
institutional buyer" within the meaning of such term as set forth in Rule
144A(a)(1) under the Securities Act.
"REQUIRED HOLDERS" means, at any time, the holder or holders of at
least 66- 2/3% in principal amount of the Notes at the time outstanding
(exclusive of Notes then owned by the Company or any of its Affiliates).
"RESPONSIBLE OFFICER" means any Senior Financial Officer and any other
officer of the Company with responsibility for the administration of the
relevant portion of this Agreement.
"RESTRICTED INVESTMENTS" means all Investments except the following:
(a) current assets arising from the sale of goods and services
in the ordinary course of business of the Company and the Restricted
Subsidiaries;
(b) Investments in the Company or one or more Restricted
Subsidiaries in the ordinary course of business;
(c) Investments in any Person which, after giving effect to
such transaction, would be a Restricted Subsidiary;
(d) advances to officers, directors and employees of the
Company or any of the Restricted Subsidiaries for expenses incurred in
the ordinary course of business of the Company or such Restricted
Subsidiary;
(e) Investments in United States Governmental Securities;
(f) Investments in certificates of deposit or banker's
acceptances issued by an Acceptable Bank;
17
(g) Investments in debt obligations of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Xxxxx'x, or an equivalent rating by any other credit rating agency of
recognized national standing;
(h) Investments in preferred stock of issuers organized under
the laws of the United States of America, any state thereof or the
District of Columbia and rated "A" or better by S&P, "A2" or better by
Xxxxx'x, or an equivalent rating by any other credit rating agency of
recognized national standing;
(i) Investments in obligations of any state of the United
States of America, or any governmental subdivision of any such state,
in each case rated "A" or better by S&P, "A2" or better by Xxxxx'x or
an equivalent rating by any other credit rating agency of recognized
national standing;
(j) Investments which are incurred in connection with
transactions permitted by Section 10.10; and
(k) to the extent not included in the foregoing clauses (a) to
(j), inclusive, cash and cash equivalents.
As of any date of determination, each Restricted Investment shall be
valued at the greater of:
(x) the amount at which such Restricted Investment is
shown on the books of the Company or any of the Restricted
Subsidiaries (or zero if such Restricted Investment is not
shown on any such books); and
(y) either
(i) in the case of any Guaranty of the
obligation of any Person, the amount which the
Company or any of the Restricted Subsidiaries has
paid on account of such obligation less any
recoupment by the Company or such Restricted
Subsidiary of any such payments, or
(ii) in the case of any other Restricted
Investment, the excess of (x) the greater of (A) the
amount originally entered on the books of the Company
or any of the Restricted Subsidiaries with respect
thereto and (B) the cost thereof to the Company or
the Restricted Subsidiary over (y) any return of
capital (after income
18
taxes applicable thereto) upon such Restricted
Investment through the sale or other liquidation
thereof or part thereof or otherwise.
As used in this definition of "Restricted Investments":
"ACCEPTABLE BANK" means any bank or trust company (i)
which is organized under the laws of the United States of
America or any State thereof, (ii) which has capital, surplus
and undivided profits aggregating at least $50,000,000, and
(iii) which has outstanding senior unsecured Debt rated "A" or
better by S&P, "A2" or better by Moody's or an equivalent
rating by any other credit rating agency of recognized
national standing.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"S&P" means Standard & Poor's Ratings Group, a
division of XxXxxx-Xxxx, Inc.
"UNITED STATES GOVERNMENTAL SECURITY" means any
direct obligation of, or obligation guaranteed by, the United
States of America, or any agency controlled or supervised by
or acting as an instrumentality of the United States of
America pursuant to authority granted by the Congress of the
United States of America, so long as such obligation or
guarantee shall have the benefit of the full faith and credit
of the United States of America which shall have been pledged
pursuant to authority granted by the Congress of the United
States of America.
"RESTRICTED SUBSIDIARY" means any Subsidiary of the Company other than
an Unrestricted Subsidiary.
"RESTRICTED SUBSIDIARY STOCK" means, with respect to any Person, the
Capital Stock (or any options or warrants to purchase stock or other Securities
exchangeable for or convertible into stock) of any Restricted Subsidiary owned
by such Person.
"SALE-AND-LEASEBACK TRANSACTION" means a transaction or series of
transactions pursuant to which the Company or any Restricted Subsidiary shall
sell or transfer to any Person (other than the Company or a Restricted
Subsidiary) any property, whether now owned or hereafter acquired, and, as part
of the same transaction or series of transactions, the Company or any Restricted
Subsidiary shall rent or lease as lessee (other than pursuant to a Capital
Lease), or similarly acquire the right to possession or use of, such property or
one or more properties which it intends to use for the same purpose or purposes
as such property.
19
"SECURITIES ACT" means the Securities Act of 1933, as amended from time
to time.
"SECURITY" has the meaning set forth in section 2(1) of the Securities
Act.
"SENIOR FINANCIAL OFFICER" means the chief financial officer, principal
accounting officer, treasurer or controller of the Company.
"SENIOR FUNDED DEBT" means (a) any Funded Debt of the Company (other
than Subordinated Funded Debt) and (b) any Funded Debt of any Restricted
Subsidiary.
"SERIES" is defined in Section 1.
"SERIES A NOTES" is defined in Section 1(a).
"SERIES B NOTES" is defined in Section 1(b).
"SHARING AGREEMENT" means the Sharing Agreement, dated as of November
20, 1998, among the holders of the Notes, the Existing Notes, and the banks
party to the Fleet/Chase Debt Facility.
"SOURCE" is defined in Section 6.2.
"SUBORDINATED FUNDED DEBT" means (x) the Subordinated Notes and any
renewal, refinancing or replacement thereof on terms and conditions satisfactory
to the Required Holders (as evidenced by their written acknowledgement) so long
as there shall be no increase in the principal amount thereof outstanding at the
time of such renewal, refinancing or replacement, (y) any unsecured Funded Debt
issued in satisfaction of the Junior Financing Condition, and (z) any unsecured
Funded Debt that is subordinated in right of payment or security to the Debt
evidenced by the Notes on terms and conditions satisfactory to the Required
Holders (as evidenced by their written acknowledgement).
"SUBORDINATED NOTE PURCHASE AGREEMENT" means the Note Purchase
Agreement, dated as of November 20, 1998, among the Company and the purchasers
of the promissory notes issued thereunder (as amended, supplemented or restated
from time to time in accordance with the last paragraph of Section 10.2).
"SUBORDINATED NOTE PURCHASERS" means the purchasers of the Subordinated
Notes.
"SUBORDINATED NOTES" means the promissory notes issued under the
Subordinated Note Purchase Agreement, as such notes may be amended, supplemented
20
or restated from time to time (in accordance with the last paragraph of Section
10.2) other than any amendment that would increase the principal amount thereof
above the principal amount outstanding as of the day of any such amendment.
"SUBSIDIARY" means, as to any Person, any corporation, association or
other business entity in which such Person or one or more of its Subsidiaries or
such Person and one or more of its Subsidiaries owns sufficient equity or voting
interests to enable it or them (as a group) ordinarily, in the absence of
contingencies, to elect a majority of the directors (or Persons performing
similar functions) of such entity, and any partnership or joint venture if more
than a 50% interest in the profits or capital thereof is owned by such Person or
one or more of its Subsidiaries or such Person and one or more of its
Subsidiaries (unless such partnership or joint venture can and does ordinarily
take major business actions without the prior approval of such Person or one or
more of its Subsidiaries). Unless the context otherwise clearly requires, any
reference to a "Subsidiary" is a reference to a Subsidiary of the Company.
"SUCCESSOR CORPORATION" is defined in Section 10.10.
"SWAPS" means, with respect to any Person, payment obligations with
respect to interest rate swaps, currency swaps and similar obligations
obligating such Person to make payments, whether periodically or upon the
happening of a contingency. For the purposes of this Agreement, the amount of
the obligation under any Swap shall be the amount determined in respect thereof
as of the end of the then most recently ended fiscal quarter of such Person,
based on the assumption that such Swap had terminated at the end of such fiscal
quarter, and in making such determination, if any agreement relating to such
Swap provides for the netting of amounts payable by and to such Person
thereunder or if any such agreement provides for the simultaneous payment of
amounts by and to such Person, then in each such case, the amount of such
obligation shall be the net amount so determined.
"TRANSFER" means, with respect to any Person, any transaction in which
such Person sells, conveys, transfers or leases (as lessor) any of its property,
including, without limitation, Restricted Subsidiary Stock.
"UNRESTRICTED SUBSIDIARY" means any Subsidiary of the Company
designated as such by the Company by written notice to the holders of the Notes
given within 5 Business Days of such designation, PROVIDED that, at the time of
such designation,
(a) such Subsidiary does not own any Funded Debt or Capital
Stock of the Company or any Restricted Subsidiary,
(b) no Default or Event of Default would exist, and
21
(c) the Company would be able to incur $1 of Funded Debt
pursuant to both Section 10.1 and Section 10.2;
PROVIDED FURTHER that such notice shall contain a statement to the effect that
all conditions to such designation have been satisfied and shall set forth the
calculations reasonably necessary to show satisfaction of the condition set
forth in the foregoing clause (c). Any Subsidiary of the Company designated as
an Unrestricted Subsidiary may not thereafter be a Restricted Subsidiary.
"WHOLLY-OWNED RESTRICTED SUBSIDIARY" means, at any time, any Restricted
Subsidiary 100% of all of the equity interests (except directors' qualifying
shares) and voting interests of which are owned by any one or more of the
Company and the Company's other Wholly-Owned Restricted Subsidiaries at such
time.
