EXHIBIT 5
CREDIT AGREEMENT
DATED AS OF DECEMBER 2, 1998
BY AND AMONG
FAMILY GOLF CENTERS, INC.
AND
THE CHASE MANHATTAN BANK
AS AGENT AND AS A LENDER
AND
THE LENDERS PARTY HERETO
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS.........................................................................1
SECTION 1.01. Definitions............................................................................1
SECTION 1.02. Terms Generally.......................................................................20
ARTICLE II
LOANS...................................................................................................20
SECTION 2.01. Revolving Credit Loans................................................................20
SECTION 2.02. Revolving Credit Note.................................................................21
SECTION 2.03. Conversion of Revolving Credit Loans to Term Loans....................................22
SECTION 2.04. Term Note.............................................................................22
SECTION 2.05. Letters of Credit.....................................................................22
ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS.......................................................................................26
SECTION 3.01. Interest Rate; Continuation and Conversion of Loans...................................26
SECTION 3.02. Use of Proceeds.......................................................................28
SECTION 3.03. Prepayments...........................................................................28
SECTION 3.04. Fees..................................................................................29
SECTION 3.05. Inability to Determine Interest Rate..................................................30
SECTION 3.06. Illegality............................................................................30
SECTION 3.07. Increased Costs.......................................................................31
SECTION 3.08. Indemnity.............................................................................32
SECTION 3.09. Change of Lending Office..............................................................32
SECTION 3.10. Taxes.................................................................................32
SECTION 3.11. Replacement of Lenders under Certain Circumstances....................................33
SECTION 3.12. Pro Rata Treatment and Payments.......................................................34
SECTION 3.13. Funding and Disbursement of Loans.....................................................35
ARTICLE IV
REPRESENTATIONS AND WARRANTIES..........................................................................35
SECTION 4.01. Organization Powers...................................................................35
SECTION 4.02. Authorization of Borrowing, Enforceable Obligations...................................36
SECTION 4.03. Financial Condition...................................................................36
SECTION 4.04. Taxes.................................................................................37
SECTION 4.05. Title to Properties...................................................................37
SECTION 4.06. Litigation............................................................................37
SECTION 4.07. Agreements............................................................................37
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SECTION 4.08. Compliance with ERISA.................................................................38
SECTION 4.09. Federal Reserve Regulations; Use of Proceeds..........................................38
SECTION 4.10. Approvals.............................................................................38
SECTION 4.11. Subsidiaries..........................................................................39
SECTION 4.12. Hazardous Materials...................................................................39
SECTION 4.13. Investment Company Act................................................................39
SECTION 4.14. Pledge Agreements.....................................................................39
SECTION 4.15. No Default............................................................................39
SECTION 4.16. Material Contracts....................................................................39
SECTION 4.17. Permits and Licenses..................................................................39
SECTION 4.18. Compliance with Law...................................................................39
SECTION 4.19. Y2K...................................................................................40
SECTION 4.20. Disclosure............................................................................40
ARTICLE V
CONDITIONS OF LENDING...................................................................................40
SECTION 5.01. Conditions to Initial Extension of Credit.............................................40
SECTION 5.02. Conditions to all Extensions of Credit................................................43
SECTION 5.03. Conditions to each Acquisition Loan...................................................43
SECTION 5.04. Conditions to each Construction Loan..................................................44
SECTION 5.05. Additional Conditions with respect to the Term Loan...................................44
ARTICLE VI
AFFIRMATIVE COVENANTS...................................................................................45
SECTION 6.01. Existence, Properties, Insurance......................................................45
SECTION 6.02. Payment of Indebtedness and Taxes.....................................................45
SECTION 6.03. Financial Statements, Reports, etc....................................................46
SECTION 6.04. Books and Records; Access to Premises.................................................48
SECTION 6.05. Notice of Adverse Change..............................................................48
SECTION 6.06. Notice of Default.....................................................................48
SECTION 6.07. Notice of Litigation..................................................................48
SECTION 6.08. Notice of Default in Other Agreements.................................................48
SECTION 6.09. Notice of ERISA Event.................................................................48
SECTION 6.10. Notice of Environmental Law Violations................................................49
SECTION 6.11. Notice Regarding Material Contracts...................................................49
SECTION 6.12. Compliance with Applicable Laws.......................................................49
SECTION 6.13. Subsidiaries..........................................................................49
SECTION 6.14. Environmental Laws....................................................................50
ARTICLE VII
NEGATIVE COVENANTS......................................................................................50
SECTION 7.01. Liens.................................................................................51
SECTION 7.02. Indebtedness..........................................................................52
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SECTION 7.03. Guaranties............................................................................54
SECTION 7.04. Sale of Assets........................................................................55
SECTION 7.05. Sales of Receivables..................................................................56
SECTION 7.06. Loans and Investments.................................................................56
SECTION 7.07. Nature of Business; Limitation on Facilities..........................................57
SECTION 7.08. Sale and Leaseback....................................................................57
SECTION 7.09. Federal Reserve Regulations...........................................................58
SECTION 7.10. Accounting Policies and Procedures....................................................58
SECTION 7.11. Hazardous Materials...................................................................58
SECTION 7.12. Limitations on Fundamental Changes....................................................58
SECTION 7.13. Financial Condition Covenants.........................................................58
SECTION 7.14. Subordinated Debt.....................................................................59
SECTION 7.15. Dividends.............................................................................59
SECTION 7.16. Transactions with Affiliates..........................................................60
SECTION 7.17. Impairment of Security Interest.......................................................61
ARTICLE VIII
EVENTS OF DEFAULT.......................................................................................61
SECTION 8.01. Events of Default.....................................................................61
ARTICLE IX
THE AGENT...............................................................................................63
SECTION 9.01. Appointment, Powers and Immunities....................................................63
SECTION 9.02. Reliance by Agent.....................................................................64
SECTION 9.03. Events of Default.....................................................................64
SECTION 9.04. Rights as a Lender....................................................................65
SECTION 9.05. Indemnification.......................................................................65
SECTION 9.06. Non-Reliance on Agent and Other Lenders...............................................65
SECTION 9.07. Failure to Act........................................................................66
SECTION 9.08. Resignation of Agent..................................................................66
SECTION 9.09. Sharing of Collateral and Payments....................................................66
ARTICLE X
MISCELLANEOUS...........................................................................................67
SECTION 10.01. Notices......................................................................67
SECTION 10.02. Effectiveness; Survival......................................................68
SECTION 10.03. Expenses.....................................................................68
SECTION 10.04. Amendments and Waivers.......................................................69
SECTION 10.05. Successors and Assigns; Participations.......................................70
SECTION 10.06. No Waiver; Cumulative Remedies...............................................73
SECTION 10.07. Applicable Law...............................................................73
SECTION 10.08. Submission to Jurisdiction; Jury Waiver......................................73
SECTION 10.09. Severability.................................................................74
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SECTION 10.10. Right of Setoff..............................................................74
SECTION 10.11. Headings.....................................................................74
SECTION 10.12. Construction.................................................................74
SCHEDULES
Schedule I - Subsidiaries
Schedule II - Existing Liens
Schedule III - Existing Indebtedness
Schedule IV - Existing Guarantees
Schedule V - Obligations and Liabilities since September 30, 1998
Schedule VI - Existing Letters of Credit
Schedule VII - Hazardous Materials
Schedule VIII - Material Contracts
EXHIBITS
Exhibit A - Form of Revolving Credit Note
Exhibit B - Form of Term Note
Exhibit C-1 - Form of Company Pledge Agreement
Exhibit C-2 - Form of Subsidiary Pledge Agreement
Exhibit D - Form of Guaranty
Exhibit E - Form of Assignment and Acceptance Agreement
Exhibit F-1 - Form of Opinion of in House Counsel
Exhibit F-2 - Form of Opinion of Outside Counsel
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CREDIT AGREEMENT dated as of December 2, 1998, by and among FAMILY
GOLF CENTERS, INC., a Delaware corporation (the "Company") the LENDERS which
from time to time are parties to this Agreement (individually, a "Lender" and,
collectively, the "Lenders") and THE CHASE MANHATTAN BANK, a New York banking
corporation, as Agent for the Lenders.
RECITALS
The Company has requested the Lenders to extend credit from time to
time and the Lenders are willing to extend such credit to the Company, subject
to the terms and conditions hereinafter set forth.
Accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.01. DEFINITIONS. As used herein, the following words and
terms shall have the following meanings:
"Acquired Debt" shall mean term loan Indebtedness of a Person the
stock or other equity interest of which is acquired pursuant to a Permitted
Acquisition of such Person.
"Acquisition Loan" shall mean a Revolving Credit Loan to finance all
or a portion of the purchase price of a Permitted Acquisition and the closing
costs relating to such Permitted Acquisition in an amount not to exceed 1% of
such purchase price.
"Adjusted Libor Loans" shall mean Loans at such time as they are made
and/or being maintained at a rate of interest based upon Reserve Adjusted
Libor.
"Affiliate" shall mean with respect to a specified Person, another
Person which, directly or indirectly, controls or is controlled by or is under
common control with such specified Person. For the purpose of this definition,
"control" of a Person shall mean the power, direct or indirect, to direct or
cause the direction of the management or policies of such Person whether
through the ownership of voting securities by contract or otherwise; provided
that, in any event, any person who owns directly or indirectly 10% or more of
the securities having ordinary voting power for the election of directors or
other governing body of a corporation or 10% or more of the partnership or
other ownership interest of any Person (other than as a limited partner of such
other Person) will be deemed to control such corporation or other Person.
"Affiliate Transaction" shall have the meaning set forth in Section
7.16.
"Agent" shall mean The Chase Manhattan Bank in its capacity as agent
for the Lenders under this Agreement or its successor Agent permitted pursuant
to Section 9.08.
"Aggregate Letters of Credit Outstandings" shall mean, at a particular
time, the sum of (a) the aggregate maximum stated amount at such time which is
available or available in the future to be drawn under all outstanding Letters
of Credit and (b) the aggregate amount of all payments made by the Agent on
behalf of the Lenders under any Letter of Credit that has not been reimbursed
by the Company at such time.
"Aggregate Third Party Letters of Credit Outstanding" shall mean, at a
particular time, the sum of (a) the aggregate maximum stated amount at such
time which is available or available in the future to be drawn under all
outstanding Third Party Letters of Credit and (b) the aggregate amount of all
payments made by the issuer under any Third Party Letter of Credit that has not
been reimbursed by the Company at such time.
"Aggregate Outstandings" shall mean, at a particular time, the sum of
(a) the Aggregate Letters of Credit Outstandings at such time and (b) the
aggregate outstanding principal amount of all Revolving Credit Loans at such
time.
"Agreement" shall mean this Credit Agreement dated as of December 2,
1998, as it may hereafter be amended, restated, supplemented or otherwise
modified from time to time.
"Alternate Base Rate" shall mean for any day, a rate per annum
(rounded upwards, if necessary, to the next 1/16 of 1%) equal to the greater of
(a) the Prime Rate as in effect on such day, and (b) the Federal Funds
Effective Rate in effect on such day plus 1/2 of 1%. If for any reason the
Agent shall have determined (which determination shall be conclusive absent
manifest error) that it is unable to ascertain the Federal Funds Effective
Rate, for any reason, including the inability or failure of the Agent to obtain
sufficient quotations in accordance with the terms thereof, the Alternate Base
Rate shall be determined without regard to clause (b) of the first sentence of
this definition, as appropriate, until the circumstances giving rise to such
inability no longer exist. Any change in the Alternate Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
on the effective date of such change in the Prime Rate or the Federal Funds
Effective Rate, respectively.
"Alternate Base Rate Loans" shall mean Loans at such times as they are
being made and/or maintained at a rate of interest based on the Alternate Base
Rate.
"Assignment and Acceptance Agreement" shall mean an Assignment and
Acceptance entered into by a Lender and an assignee and accepted by the Agent,
in the form attached hereto as Exhibit E or any other form approved by the
Agent.
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"Assumed Debt" shall mean shall mean term loan Indebtedness of a
Person which is assumed by a Subsidiary of the Company in connection with the
purchase of the assets of such Person pursuant to a Permitted Acquisition.
"Borrowing Date" shall mean, with respect to any Loan, the date on
which such Loan is disbursed to the Company.
"Business Day" shall mean (a) any day not a Saturday, Sunday or legal
holiday, on which banks in New York City are open for business and (b) as it
relates to any payment, determination, funding or notice to be made or given in
connection with any Adjusted Libor Loan, any day on which trading is carried on
by and between banks in Dollar deposits in the London interbank eurodollar
market.
"Capital Expenditures" shall mean any expenditure, by the expenditure
of cash or the incurrence of the Indebtedness, in respect of the purchase or
acquisition of any fixed or capital assets (excluding normal replacements and
maintenance which are properly charged to current operations), including,
without limitation, obligations under Capital Leases.
"Capital Lease" shall mean any lease the obligations of which are
required to be capitalized on the balance sheet of a Person in accordance with
Generally Accepted Accounting Principles.
"Cash Collateral" shall mean a deposit by the Company made in
immediately available funds to a cash collateral account at the Agent and the
taking of all action required to provide the Agent for the ratable benefit of
the Lenders, a first priority perfected security interest in such deposit.
"Change of Control" shall mean (a) the acquisition by any Person
(other than Xxxxxxx Xxxxx), or two or more Persons acting in concert, of
beneficial ownership (within the meaning of Rule 13d-3 of the Securities and
Exchange Commission under the Securities Exchange Act of 1934) of 30% or more
of the outstanding shares of voting stock of the Company, or (b) at any time
Continuing Directors do not constitute a majority of the Board of Directors of
the Company. "Continuing Director" means at any date a member of the Company's
Board of Directors (i) who is a member of such Board on the Closing Date or
(ii) who was nominated or elected by at least two-thirds of the directors who
were Continuing Directors at any time of such nomination or election or whose
election to the Company's Board of Directors was recommended or endorsed by at
least two-thirds of the directors who were Continuing Directors at the time of
such election. Under this definition, if the present Board of Directors of the
Company were to approve a new director or directors and then resign, no Change
of Control would occur even though the present Board of Directors would
thereafter cease to be in office. A "beneficial owner" shall be determined in
accordance with Rule 13d-3 promulgated by the Securities Exchange Commission
under the Securities Exchange Act of 1934, as amended, as in effect on the
Closing Date, except that, for purposes of clause (a), the number of shares of
capital stock of the Company entitling the holders thereof to vote generally in
elections of directors shall be deemed to include, in addition to all
outstanding shares of capital stock of the Company entitling the holders
thereof to vote generally in
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the election of directors and Unissued Shares deemed to be held by the Person
with respect to which the Change of Control determination is being made, all
Unissued Shares deemed to be held by all other Persons. As used herein,
"Unissued Shares" shall mean shares of capital stock of the Company not
outstanding that are subject to options, warrants, rights to purchase or
conversion privileges exercisable within 60 days following the date of
determination of a Change of Control and that, upon issuance, shall entitle the
holders thereof to vote generally in the election of directors.
"Chief Financial Officer" shall mean the Chief Financial Officer of
the Company.
"Closing Date" shall mean December 2, 1998.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time.
"Commercial Letter of Credit" shall mean any sight letter of credit
issued for the account of a Person for the purpose of providing the primary
payment mechanism in connection with the purchase of any materials, goods or
services by such Person in the ordinary course of such Person's business.
"Commitment" shall mean, with respect to each Lender, the obligation
of such Lender to make Loans to the Company and to acquire participations in
Letters of Credit in an aggregate amount not to exceed the amount set forth
opposite such Lender's name on the signature pages hereof under the caption
"Commitment", as such amounts may be adjusted in accordance with the terms of
this Agreement.
"Commitment Proportion" shall mean, with respect to each Lender at the
time of determination, the proportion its Commitment bears to the Total
Commitment.
"Consolidated Debt Service Coverage Ratio" shall mean for any period,
the ratio of (a) Consolidated EBITDA plus, to the extent deducted in
determining Consolidated EBITDA, all operating lease expenses, less (i) all
cash dividends, distributions and withdrawals paid (including amounts reserved
for such purposes) with respect to any capital stock, (ii) all redemptions,
repurchases and retirements of capital stock (including amounts reserved for
such purposes), and (iii) cash tax payments, to (b) the sum of (i) all interest
accrued or paid (if not previously accrued) on any Indebtedness, during the
immediately preceding four fiscal quarters, plus (ii) the scheduled
installments of principal on all Indebtedness with an original maturity of 365
days or more plus (iii) during the Revolving Credit Commitment period, without
duplication, an amount equal to twenty (20%) percent of the aggregate principal
amount of Revolving Credit Loans outstanding, plus (iv) the scheduled operating
lease expenditures during the next succeeding four fiscal quarters. All the
foregoing categories shall be calculated with respect to the Company and its
Subsidiaries and shall be calculated (without duplication) over the four fiscal
quarters next preceding the date of calculation thereof with the exception of
(i) the scheduled installments of principal on all Indebtedness of the Company
and its Subsidiaries with an original maturity of 365 days or more, and (ii)
the scheduled operating lease expenditures referred to in clause (b) (iv)
above, which shall each be calculated based
4
upon the next succeeding four fiscal quarters. Notwithstanding the foregoing,
with respect to the fiscal quarter ended June 30, 1998 and each earlier fiscal
quarter only, the foregoing categories which are calculated over the prior four
fiscal quarters shall not be calculated to include the operations of Eagle
Quest Golf Centers Inc. and its subsidiaries.
"Consolidated EBITDA" shall mean Consolidated Net Income, plus, to the
extent deducted in determining Consolidated Net Income, the sum of (a) all
income taxes to any government or governmental instrumentality expensed on the
Company's or its Subsidiaries' books (whether paid or accrued), (b)
Consolidated Interest Expense, (c) all depreciation and amortization expenses
or charges and (d) with respect to the first, second and third fiscal quarters
of 1998 only, Non-Cash Charges, and less any extraordinary or unusual gains
segregated according to Generally Accepted Accounting Principles. All of the
foregoing categories shall be calculated with respect to the Company and its
Subsidiaries and shall be calculated (without duplication) over the four fiscal
quarters next preceding the date of calculation thereof provided, however, (i)
with respect to the fiscal quarter ended June 30, 1998 and each earlier fiscal
quarter only, the foregoing shall not be calculated to include the operations
of Eagle Quest Golf Centers, Inc. and its Subsidiaries, and (ii) the
calculations of Non-Cash Charges for the second fiscal quarter of 1998 shall
exclude Non-Cash Charges reflected on the income statement of Eagle Quest Golf
Centers, Inc. and its Subsidiaries.
"Consolidated Funded Debt" shall mean all Indebtedness of the Company
and its Subsidiaries for borrowed money having an original maturity of one year
or more, including the current portion thereof, and including, without
limitation, any Subordinated Indebtedness; provided, however, for the purposes
of the calculation of Consolidated Funded Debt pursuant to Section 7.13(c)
there shall be subtracted therefrom the aggregate amount of cash and Eligible
Investments of the Company and its Subsidiaries on the date of determination
thereof.
"Consolidated Interest Coverage Ratio" shall mean for any period, the
ratio of Consolidated EBITDA to Consolidated Interest Expense.
"Consolidated Interest Expense" shall mean the consolidated gross
interest expense of the Company and its Subsidiaries determined in accordance
with Generally Accepted Accounting Principles applied on a consistent basis and
shall be calculated over the four fiscal quarters next preceding the date of
calculation thereof provided, however, with respect to the fiscal quarter ended
June 30, 1998 and each earlier fiscal quarter only, the foregoing shall not be
calculated to include the operations of Eagle Quest Golf Centers, Inc. and its
Subsidiaries.
"Consolidated Net Income" shall mean for any period the net income (or
net loss) of the Company and its Subsidiaries on a consolidated basis for such
period determined in accordance with Generally Accepted Accounting Principles
applied on a consistent basis.
"Consolidated Senior Funded Debt" shall mean (a) all Indebtedness of
the Company and its Subsidiaries for borrowed money having an original maturity
of one year or more, including the current portion thereof, but excluding
Subordinated Indebtedness less (b) the aggregate amount of
5
cash and Eligible Investments of the Company and its Subsidiaries on the date
of determination thereof.
"Consolidated Tangible Net Worth" shall mean (a) total consolidated
assets of the Company and its Subsidiaries determined in accordance with
Generally Accepted Accounting Principles applied on a consistent basis but
excluding the amount of any write-up or revaluation of any assets, except that
there shall be excluded therefrom (i) all obligations due to the Company or a
Subsidiary of the Company from an Affiliate which is not a Consolidated
Subsidiary of the Company and (ii) all intangible assets including, without
limitation, organizational expenses, patents, trademarks, copyrights, goodwill,
covenants not to compete, research and development costs, training costs and
all unamortized debt discount and deferred charges less (b) the total
consolidated liabilities of the Company and its Subsidiaries determined in
accordance with Generally Accepted Accounting Principles applied on a
consistent basis.
"Construction Loan" shall mean a Revolving Credit Loan the proceeds of
which are used to finance a Permitted Construction Project.
"Default" shall mean any condition or event which upon notice, lapse
of time or both would constitute an Event of Default.
"Dollar" and the symbol "$" shall mean lawful money of the United
States of America.
"Domestic Subsidiary" shall mean any subsidiary of the Company which
is organized under the laws of any state or territory of the United States of
America.
"Eagle Quest Investment" shall mean the aggregate investments by the
Company and its Subsidiaries on June 30, 1998 in the stock of those Foreign
Subsidiaries which were acquired by the Company as a result of its acquisition
of Eagle Quest Golf Centers, Inc. on such date.
"EBITDA" shall mean, with respect to any Facility or Related Business,
the portion of Consolidated EBITDA attributable to such Facility or Related
Business.
"Eligible Investments" shall mean (a) direct obligations of the United
States of America or any governmental agency thereof which are fully guaranteed
by the United States of America, provided that such obligations mature within
one year from the date of acquisition thereof; or (b) dollar denominated
certificates of time deposit maturing within one year issued by any bank
organized and existing under the laws of the United Sates or any state thereof
and having aggregate capital and surplus in excess of $1,000,000,000; or (c)
money market mutual funds having assets in excess of $2,500,000,000; or (d)
commercial paper rated not less an P-1 or A-1 or their equivalent by Xxxxx'x
Investor Services, Inc. or Standard & Poor's Ratings Group respectively; or (e)
tax exempt securities of a U.S. issuer rated A or better by Standard and Poor's
Ratings Group or Xxxxx'x Investors Service, Inc. or (f) shares of a mutual fund
having assets in excess of $1,000,000,000 provided such mutual fund invests
solely in direct obligations of the United States
6
of America or any governmental agency thereof which are fully guaranteed by the
United States of America, provided that such obligations mature within one year
from the date of acquisition thereof.
"Environmental Law" shall mean any environmental law, ordinance, rule,
regulation, or policy having the force of law of any Governmental Authority
relating to pollution or protection of the environment or to the use, handling,
transportation, treatment, storage, disposal, release or discharge of Hazardous
Materials, including, without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, as amended (42 U.S.C.
Sections 9601, et seq.), the Hazardous Materials Transportation Act, as amended
(49 U.S.C. Sections 1801, et seq.) the Resource Conservation and Recovery Act,
as amended (42 U.S.C. Sections 6901, et seq.) and the rules and regulations
promulgated pursuant thereto.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time. Section references to ERISA are to ERISA,
as in effect at the date of this Agreement and any subsequent provisions of
ERISA, amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)
of ERISA) which together with the Company or any Affiliate of the Company would
be deemed to be a member of the same "controlled group" within the meaning of
Section 414(b), (c), (m) and (o) of the Code.
"Eurocurrency Reserve Requirement" shall mean a fraction (expressed as
a decimal), the numerator of which is the number one and the denominator of
which is the number one minus the aggregate (without duplication) of the rates
(expressed as a decimal) of reserve requirements in effect on such day
(including, without limitation, basic, supplemental, marginal and emergency
reserves, under any regulations of the Board of Governors of the Federal
Reserve System or any other governmental authority having jurisdiction with
respect thereto) as from time to time in effect, dealing with reserve
requirements prescribed for eurocurrency funding (currently referred to as
"eurocurrency liabilities" in Regulation D) maintained by any Lender.
"Event of Default" shall have the meaning set forth in Article VIII.
"Existing Indebtedness" shall mean, collectively, (i) the aggregate
Indebtedness of the Company to The Chase Manhattan Bank on the Closing Date
under the Credit Agreement dated as of June 30, 1997, by and between the
Company and The Chase Manhattan Bank, and (ii) any and all long term
indebtedness for borrowed money of the Company and its Subsidiaries, including
the current portions thereof, outstanding as of September 30, 1998 (excluding,
however, the Subordinated Notes.
"Executive Officer" shall mean any of the President, the Chief
Executive Officer, the Chief Financial Officer or the Secretary of the Company
or any of its Subsidiaries, as applicable, and their respective successors, if
any, designated by the board of directors.
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"Facilities" shall mean, collectively, Ice Rink Facilities, Golf
Facilities and Family Fun Centers.
"Family Fun Center" shall mean a family entertainment center generally
consisting of one or more sports-related attractions such as a Golf Facility,
an ice-skating rink, a bowling center or batting cages, a variety of family
entertainment activities such as video and virtual reality games, laser tag and
amusement rides and other amenities such as restaurants, sports bars, vending
machines, gift shops, pro shops and meeting rooms and conference facilities.
"Federal Funds Effective Rate" shall mean, for any day, the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal fund brokers, as published on
the next succeeding Business Day by the Federal Reserve Bank of New York, or,
if such rate is not so published for any day which is a Business Day, the
average of the quotations for the day of such transactions received by the
Agent from three Federal fund brokers of recognized standing selected by the
Agent.
"Foreign Subsidiary" shall mean any Subsidiary of the Company other
than a Domestic Subsidiary.
"Generally Accepted Accounting Principles" shall mean those generally
accepted accounting principles in the United States of America, as in effect
from time to time.
"Golf Facility" shall mean a golf driving range or golf course
(including, without limitation, "miniature" golf) consistent with the types of
golf driving ranges or golf courses owned and operated by the Company on the
date of this Agreement.
"Governmental Authority" means any nation or government, any state,
province, city or municipal entity or other political subdivision thereof, and
any governmental, executive, legislative, judicial, administrative or
regulatory agency, department, authority, instrumentality, commission, board or
similar body, whether federal, state, provincial, territorial, local or
foreign.
"Guarantor" shall mean any Subsidiary of the Company which has
executed a Guaranty.
"Guaranty" shall mean the Corporate Guaranty in the form attached
hereto as Exhibit D to be executed and delivered by each Domestic Subsidiary of
the Company on the Closing Date and thereafter by Domestic Subsidiaries of the
Company pursuant to Section 6.13, as the same may hereafter be amended,
restated, supplemented or otherwise modified from time to time.
"Hazardous Materials" shall mean, any explosives, radioactive
materials, or other materials, wastes, substances, or chemicals regulated as
toxic, hazardous or as a pollutant, contaminant or waste under any applicable
Environmental Law.
8
"Hedging Agreement" shall mean any interest rate swap, collar, cap,
floor or forward rate agreement or other agreement regarding the hedging of
interest rate risk exposure executed in connection with hedging the interest
rate exposure of a Person, and any confirming letter executed pursuant to such
agreement, all as amended, supplemented, restated or otherwise modified from
time to time.
"Ice Rink Facility" shall mean an ice rink facility containing one or
more ice rinks providing ice time which is rented to outside teams,
organizations and the general public and containing amenities and services such
as instruction in ice hockey and figure skating, a snack bar, vending machines
and a pro shop and, with respect to SkateNation, Inc. only, a single rope tow
skiing slope.
"Indebtedness" shall mean, without duplication, as to any Person (a)
indebtedness for borrowed money; (b) indebtedness for the deferred purchase
price of property or services; (c) indebtedness evidenced by bonds, debentures,
notes or other similar instruments; (d) obligations and liabilities secured by
a Lien upon property owned by such Person, whether or not owing by such Person
and even though such Person has not assumed or become liable for the payment
thereof; (e) Indebtedness directly or indirectly guaranteed by such Person; (f)
obligations or liabilities created or arising under any conditional sales
contract or other title retention agreement with respect to property used
and/or acquired by such Person; (g) obligations of such Person as lessee under
Capital Leases; (h) net liabilities of such Person under Hedging Agreements and
foreign currency exchange agreements, as calculated on a basis satisfactory to
the Agent and in accordance with accepted practice; (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit; and (j) all obligations of such Person in respect of
bankers' acceptances.
"Interest Payment Date" shall mean (a) as to any Alternate Base Rate
Loans, the last day of each December, March, June and September during the term
hereof; (b) as to any Adjusted Libor Loan with respect to which the Company has
selected an Interest Period of one or three months, the last day of such
Interest Period; (c) as to any Adjusted Libor Loan, with respect to which the
Company has selected an Interest Period of six months, the date which is three
months from the first day of such Interest Period and the last day of such
Interest Period; and (d) as to any Loan, on the date such Loan is paid in full.
"Interest Period" shall mean with respect to any Adjusted Libor Loan:
(a) initially, the period commencing on the date such Adjusted Libor
Loan is made and ending one, three or six months thereafter, as selected by the
Company in its notice of borrowing or in its notice of conversion from an
Alternate Base Rate Loan provided, in each case, in accordance with the terms
of Articles II and III hereof; and
(b) thereafter, each period commencing on the last day of the next
preceding Interest Period applicable to such Adjusted Libor Loan and ending
one, three or six months thereafter, as selected by the Company by irrevocable
written notice to the Agent not later than 11:00 a.m. New York, New York time
three Business Days prior to the last day of the then current Interest Period
9
with respect to such Adjusted Libor Loan; provided, however, that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period pertaining to an Adjusted Libor
Loan would otherwise end on a day which is not a Business Day, the Interest
Period shall be extended to the next succeeding Business Day unless the result
of such extension would be to carry such Interest Period into another calendar
month in which event such Interest Period shall end on the immediately
preceding Business Day;
(ii) if the Company shall fail to give notice as provided in
clause (b) above, the Company shall be deemed to have requested conversion of
the affected Adjusted Libor Loan to an Alternate Base Rate Loan on the last day
of the then current Interest Period with respect thereto;
(iii) any Interest Period that begins on the last Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month;
(iv) no more than six (6) Interest Periods with respect to
the Loans may exist at any one time; and
(v) the Company shall select Interest Periods so as not to
require a payment or prepayment of any Adjusted Libor Loan during an Interest
Period for such Adjusted Libor Loan.
"LC Disbursement" means a payment made by the Agent pursuant to a
Standby Letter of Credit.
"LC Exposure" means, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Standby Letters of Credit at such time, plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by
or on behalf of the Company at such time.
"LC Margin" shall mean the percentage set forth below under the
heading "LC Margin" opposite the applicable ratio.
Consolidated Funded Debt
to Consolidated EBITDA LC Margin
---------------------- ---------
Equal to or less than 3.00:1.00 1.00%
Greater than 3.00:1.00 but equal to or 1.25%
less than 4.00:1.00
10
Greater than 4.00:1.00 1.50%
Notwithstanding the foregoing, during the period commencing the Closing Date
and ending on December 31, 1998 the LC Margin shall be 1.00%. The LC Margin
will be set or reset on the date which is five Business Days following the date
of receipt by the Agent of the financial statements referred to in Section
6.03(a) and Section 6.03(b) together with a certificate of the Chief Financial
Officer of the Company certifying the ratio of Consolidated Funded Debt to
Consolidated EBITDA and setting forth the calculation thereof in detail;
provided, however, (a) the LC Margin will first be reset on January 1, 1999
provided the financial statements for the fiscal quarter ending September 30,
1998 and the certificate of the Chief Financial Officer of the Company
identified above are delivered to the Agent not less than five (5) Business
Days prior to January 1, 1999; and (b) if any such financial statement and
certificate are not received by the Agent within the time period required
pursuant to Section 6.03(a) or Section 6.03(b), as the case may be, the LC
Margin will be set or reset based on a ratio of Consolidated Funded Debt to
Consolidated EBITDA of greater than 4.00:1:00 and subject to increase as
provided in Section 3.01(e) from the date such financial statement and
certificate were due until the date which is five Business Days following the
receipt by the Agent of such financial statements and certificate, and
provided, further, that the Lenders shall not in any way be deemed to have
waived any Default or Event of Default, including without limitation, a Default
or Event of Default resulting from the failure of the Company to comply with
Section 7.13 of this Agreement, or any rights or remedies hereunder or under
any other Loan Document in connection with the foregoing proviso. During the
occurrence and continuance of a Default or Event of Default, no downward
adjustments and only upward adjustments, shall be made to the LC Margin.
"Lenders" shall have the meaning set forth in the recitals herein.
"Lending Office" shall mean for each Lender, the office specified
under such Lender's name on the signature pages hereof with respect to each
Type of Loan, or such other office as such Lender may designate in writing from
time to time to the Company and the Agent with respect to such Type of Loan.
"Letter of Credit" shall mean any Commercial Letter of Credit or
Standby Letter of Credit issued by the Agent for the account of the Company
pursuant to the terms of this Agreement or deemed a Letter of Credit hereunder
pursuant to Section 2.05(e) of this Agreement.
"LIBO Margin" shall mean (a) with respect to an Adjusted Libor Loan
which is a Revolving Credit Loan, the percentage set forth below under the
heading "Revolving Credit Loan LIBO Margin" opposite the applicable ratio and
(b) with respect to an Adjusted Libor Loan which is a Term Loan, the percentage
set forth below under the heading "Term Loan LIBO Margin" opposite the
applicable ratio.
11
Revolving Credit
Loan Term Loan
Consolidated Funded Debt LIBO Margin LIBO Margin
to Consolidated EBITDA (360 day basis) (360 day basis)
---------------------- --------------- ---------------
Equal to or less than 2.00:1.00 1.00% 1.25%
Greater than 2.00:1.00 but 1.25% 1.50%
equal to or less than 2.50:1.00
Greater than 2.50:1.00 but 1.50% 1.75%
equal to or less than 3.00:1.00
Greater than 3.00:1.00 but 1.75% 2.00%
equal to or less than 4.00:1.00
Greater than 4.00:1.00 2.00% 2.25%
Notwithstanding the foregoing, during the period commencing the Closing Date
and ending on December 31, 1998, the LIBO Margin with respect to the Revolving
Credit Loans shall be 1.00%. The LIBO Margin will be set or reset with respect
to each Loan on the date which is five Business Days following the date of
receipt by the Agent of the financial statements referred to in Section 6.03(a)
and Section 6.03(b) together with a certificate of the Chief Financial Officer
of the Company certifying the ratio of Consolidated Funded Debt to Consolidated
EBITDA and setting forth the calculation thereof in detail; provided, however,
(a) the LIBO Margin will first be reset on January 1, 1999, provided the
financial statements for the fiscal quarter ending September 30, 1998, and the
certificate of the Chief Financial Officer of the Company identified above are
delivered to the Agent not less than five (5) Business Days prior to January 1,
1999; and (b) if any such financial statement and certificate are not received
by the Agent within the time period required pursuant to Section 6.03(a) or
Section 6.03(b), as the case may be, the LIBO Margin will be set or reset,
unless the rate of interest specified in Section 3.01(e) is in effect, based on
a ratio of Consolidated Funded Debt to Consolidated EBITDA of greater than
4.00:1.00 from the date such financial statement and certificate were due until
the date which is five Business Days following the receipt by the Agent of such
financial statements and certificate, and provided, further, that the Lenders
shall not in any way be deemed to have waived any Default or Event of Default,
including without limitation, an Event of Default resulting from the failure of
the Company to comply with Section 7.13 of this Agreement, or any rights or
remedies hereunder or under any other Loan Document in connection with the
foregoing proviso. During the occurrence and continuance of a Default or Event
of Default, no downward adjustment, and only upward adjustments, shall be made
to the LIBO Margin.
"Liens" shall mean any lien (statutory or otherwise) security
interest, mortgage, deed of trust, pledge, charge, conditional sale, title
retention agreement, Capital Lease or other encumbrance or similar right of
others, or any agreement to give any of the foregoing.
12
"Loans" shall mean, collectively, the Revolving Credit Loans and the
Term Loan.
"Loan Documents" shall mean, collectively, this Agreement, the Notes,
the Security Documents, the Guaranties, and each other agreement executed in
connection with the transactions contemplated hereby or thereby, as each of the
same may hereafter be amended, restated, supplemented or otherwise modified
from time to time.
"Material Adverse Effect" shall mean a material adverse effect upon
(a) the business, operations, property, prospects or condition, financial or
otherwise, of the Company or the Company and its Subsidiaries taken as a whole,
or (b) the ability of the Company to perform in any material respect its
obligations under any Loan Document to which it is a party.
"Material Contract" shall mean each contract, instrument or agreement
to which the Company or any of its Subsidiaries is a party which is material to
the business, operations or condition (financial or otherwise), performance,
prospects, or properties of the Company or of the Company and its Subsidiaries
taken as a whole.
"Mortgage Lien" shall mean any mortgage, deed of trust, assignment of
leases and rents, or similar agreement or any other lien securing Indebtedness,
in each case, which encumbers real property of the Company or its Subsidiaries.
"Net Cash Proceeds" means, with respect to any sale, lease, transfer
or other disposition of any property or asset, received by or paid to or for
the account of any the Company or any of its Subsidiaries, as the case may be,
the aggregate amount of cash received from time to time (whether as initial
consideration or through payment or disposition of deferred consideration) by
or on behalf of the Company or any of its Subsidiaries for its own account in
connection with any such transaction, after deducting therefrom only:
(a) reasonably and customary brokerage commissions,
underwriting fees and discounts, legal fees, finder's fees, filing and
registration fees with Security Exchange Commission (or any similar
Governmental Authority or any national or international securities exchange)
and other similar fees and commissions;
(b) the amount of taxes payable in connection with or as a
result of such transaction;
(c) in the case of any sale, lease, transfer or other
disposition of any property or asset, the outstanding principal amount of, the
premium or penalty, if any, on, and any accrued and unpaid interest on, any
Indebtedness (other than the Indebtedness under or in respect of the Loan
Documents) that is secured by a Lien on the property and assets subject to such
sale, lease, transfer or other disposition and is required to be repaid under
the terms thereof as a result of such sale, lease, transfer or other
disposition; and
13
(d) in the case of any sale, lease, transfer or other
disposition of any property or asset, the amount required to be reserved, in
accordance with Generally Accepted Accounting Principles as in effect on the
date on which the Net Cash Proceeds from such sale, lease transfer or other
disposition are determined, and so reserved, against liabilities under
indemnification obligations, liabilities related to environmental matters or
other similar contingent liabilities associated with the property and assets
subject to such sale, lease, transfer or other disposition that are required to
be so provided for under the terms of the documentation for such sale, lease,
transfer or other disposition;
in each case to the extent, but only to the extent, that the amounts so
deducted are properly attributable to such transaction or to the property or
asset that is the subject thereof and are actually paid, at the time of receipt
of such cash, to a Person that is not the Company or any of its Subsidiaries or
any of their respective Affiliates, or, so long as such Persons is not
otherwise indemnified therefor, are reserved for in accordance with Generally
Accepted Accounting Principles at the time of receipt of such cash based upon
such Persons' reasonable estimate of such taxes or contingent liabilities, as
the case may be; provided however, that if, at the time such taxes or such
contingent liabilities are actually paid or otherwise satisfied, the amount of
the reserve therefor exceeds the amount paid or otherwise satisfied, then the
Company shall reduce the Total Commitment, and shall prepay the outstanding
Loans in an amount equal to the amount of such excess reserve.
"Non-Cash Charges" shall mean, collectively, (a) those non-cash
charges incurred in the Company's first fiscal quarter of 1998, which result
from the application of AICPA Statement of Position 98-5 "Reporting on Cost of
Start-up Activities" issued by the American Institute of Certified Public
Accountants, which non-cash charges are, in the aggregate, $3,100,000, (b)
those non-cash charges incurred in the Company's second fiscal quarter of 1998,
which result from the acquisition of Eagle Quest Golf Centers, Inc. pursuant to
the Merger Agreement dated as of April 2, 1998 by and among the Company, Family
Golf Acquisition, Inc. and Eagle Quest Golf Centers, Inc. and the payment of
Indebtedness of Eagle Quest Golf Centers, Inc. or its Subsidiaries, which
non-cash charges are, in the aggregate $1,905,000, and (c) those non-cash
charges incurred in the Company's third fiscal quarter of 1998 which result
from the acquisition and payments referred to in the preceding clause (b),
which non-cash charges are, in the aggregate, $3,800,000.
"Notes" shall mean, collectively, the Revolving Credit Notes and the
Term Notes.
"Obligations" shall mean all obligations, liabilities and indebtedness
of the Company to the Lenders and the Agent, whether now existing or hereafter
created, absolute or contingent, direct or indirect, due or not, whether
created directly or acquired by assignment or otherwise, arising under or
relating to this Agreement, the Notes or any other Loan Document including,
without limitation, all obligations, liabilities and indebtedness of the
Company with respect to the principal of and interest on the Loans,
reimbursement of Letters of Credit, and all fees, costs, expenses and indemnity
obligations of the Company hereunder or under any other Loan Document. The
Obligations shall
14
constitute "Designated Senior Indebtedness" as that term is defined in the
Subordinated Note Indenture.
"Participant" shall have the meaning set forth in Section 10.05.
"Payment Office" shall mean the Agent's office located at 000 Xxxxx
Xxxxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Acquisition" shall mean any acquisition by the Company or
any Subsidiary of the Company, formed specifically to consummate a Permitted
Acquisition, of at least 70% of the voting capital stock, membership interest,
partnership interest or other similar ownership interests of a Person which is
engaged primarily in the ownership or operation of a Facility or Related
Business or the purchase of all or substantially all of the assets used by such
Person in connection with a Facility or a Related Business provided, in each
case, (a) such acquisition is not "hostile" (i.e., has not been opposed by the
board of directors or other governing body of the Person which is the subject
of the acquisition), (b) no Default or Event of Default shall have occurred and
be continuing at the time of the acquisition or would occur after giving effect
to the acquisition; provided, however, with respect to compliance with the
covenants set forth in Section 7.13 such compliance, with respect to the effect
of the acquisition, is based on the reasonably anticipated effect of the
acquisition from the date of the acquisition and thereafter; provided, further,
the foregoing proviso shall not be deemed to constitute a waiver of any Event
of Default resulting from the failure of the Company and its Subsidiaries to be
in compliance with any covenant in Section 7.13 whether prior to or after
giving effect to the acquisition or a waiver of any rights or remedies of the
Agent and the Lenders with respect to such failure.
"Permitted Construction Project" shall mean any acquisition of real
property or a leasehold interest or other right to occupy real property and to
operate or manage a Facility, and the construction of a Facility thereon by a
Subsidiary of the Company (but such term shall not include improvements to an
existing Facility, whether now owned or hereafter acquired) provided such
acquisition and construction complies with the terms and conditions of Sections
5.04(a), 5.04(c) and 5.04(d) (regardless of whether the Company has requested
the Lenders to finance such acquisition or construction with the proceeds of a
Construction Loan); provided, further, no Default or Event of Default shall
have occurred and be continuing at the time of the acquisition or construction
or would occur after giving affect to the acquisition or construction.
"Permitted Liens" shall mean the Liens specified in clauses (a)
through (j) of Section 7.01.
"Person" shall mean any natural person, corporation, limited liability
company, limited liability partnership, business trust, joint venture,
association, company, partnership or Governmental Authority.
15
"Plan" shall mean any multi-employer or single-employer plan defined
in Section 4001 of ERISA, which is maintained, or at any time during the five
calendar years preceding the date of this Agreement was maintained for
employees of the Company, any Subsidiary of the Company or an ERISA Affiliate.
"Pledge Agreement" shall mean, with respect to the Company, the Pledge
Agreement, substantially in the form attached hereto as Exhibit C 1, and, with
respect to each Domestic Subsidiary, the Subsidiary Pledge Agreement,
substantially in the form attached hereto as Exhibit C 2 to be executed and
delivered on the Closing Date by the Company and each Subsidiary of the
Company, respectively, pursuant to Section 5.01 and, thereafter, by any
Subsidiary of the Company who may be required to execute the same pursuant to
Section 6.13, as each of the same may hereafter be amended, restated,
supplemented or otherwise modified from time to time.
"Proceeds" shall have the meaning set forth in Section 3.03.
"Prime Rate" shall mean the rate per annum announced by the Agent from
time to time as its prime rate in effect at its principal office, each change
in the Prime Rate shall be effective on the date such change is announced to
become effective.
"Purchasing Lender" shall have the meaning set forth in Section
10.05(c).
"Regulation D" shall mean Regulation D of the Board of Governors of
the Federal Reserve System as the same may be amended or supplemented from time
to time.
"Related Business" shall mean the ownership, operation, or management
of any business (other than a Facility) located in the United States of
America, which is engaged primarily in the provision of services or sale of
goods used primarily in (i) the operation and/or maintenance of a golf course
or golf driving range, or in golf play, including, without limitation, golf
instruction and the manufacturing or distribution of golf equipment and parts
and products related to golfing or (ii) the operation and/or maintenance of an
ice rink or in ice skating, including, without limitation, skating instruction
and the sale and rental of ice skates and parts and products related to ice
skating.
"Relevant Facilities" shall have the meaning set forth in Section 7.04.
"Reportable Event" shall mean an event described in Section 4043(b) of
ERISA with respect to a Plan as to which the 30 day notice requirement has not
been waived by the PBGC.
"Required Lenders" shall mean (a) at any time prior to the Revolving
Credit Conversion Date, Lenders owed at least 66% of the Aggregate Outstandings
or, if there are no Aggregate Outstandings, Lenders having at least 66% of the
Total Commitment, and (b) at any time on or after the Revolving Credit
Conversion Date, Lenders owed at least 66% of the aggregate unpaid principal
amount of the Term Loan.
16
"Reserve Adjusted Libor" shall mean with respect to the Interest
Period pertaining to an Adjusted Libor Loan, the rate per annum equal to the
product (rounded upwards to the next higher 1/16 of one percent) of (a) the
annual rate of interest at which Dollar deposits of an amount comparable to the
amount of the portion of the Adjusted Libor Loan allocable to the Agent and for
a period equal to the Interest Period applicable thereto are offered to the
London office of the Agent in immediately available funds in the London
interbank market for Eurodollars by leading banks in the eurodollar market at
approximately 11:00 A.M. (London time) on the second Business Day prior to the
commencement of such Interest Period, multiplied by (b) the Eurocurrency
Reserve Requirement.
"Revolving Credit Commitment Period" shall mean the period from and
including the Closing Date to, but not including, the Revolving Credit
Commitment Termination Date or such earlier date as the Commitment to extend
Revolving Credit Loans shall terminate as provided herein.
"Revolving Credit Commitment Termination Date" shall mean the earlier
of (a) the second anniversary of the Closing Date, and (b) the Revolving Credit
Conversion Date.
"Revolving Credit Conversion Date" shall mean the earlier of (a) the
date on which the Term Loan is requested by the Company to be made by the
Lenders to the Company, and (b) the second anniversary of the Closing Date
provided in each case of clauses (a) and (b), the conditions set forth in
Section 5.05 have been satisfied.
"Revolving Credit Loans" shall have the meaning set forth in Section
2.01(a).
"Revolving Credit Notes" shall have the meaning set forth in Section
2.02.
"Security Documents" shall mean the Pledge Agreements and each other
collateral security document delivered to the Agent hereunder.
"Solvent" shall mean with respect to any Person as of the date of
determination thereof that (a) the amount of the "present fair saleable value"
of the assets of such Person will, as of such date, exceed the amount of all
"liabilities of such Person, contingent or otherwise," as of such date, as such
quoted terms are determined in accordance with applicable federal and state
laws governing determinations of the insolvency of debtors, (b) the present
fair saleable value of the assets of such Person will, as of such date, be
greater than the amount that will be required on its debts as such debts become
absolute and matured, (c) such Person will not have as of such date, an
unreasonably small amount of capital with which to conduct its business, and
(d) such Person will be able to pay its debts as they mature.
"Standby Letter of Credit" shall mean any letter of credit issued to
support an obligation of a Person and which may be drawn on only upon the
failure of such Person to perform such obligation or other contingency.
17
"Subordinated Debt or Subordinated Indebtedness" shall mean the
Subordinated Notes and all other debt which is subordinated in right of payment
to the prior indefeasible payment in full of the obligations of the Company
and/or of its Affiliates to the Lenders hereunder and under any other Loan
Document on terms satisfactory to and approved in writing by the Required
Lenders (but in no event shall the maturity date of such debt be a date prior
to the Term Loan Maturity Date.
"Subordinated Notes" shall mean the Company's Convertible Subordinated
Notes in the aggregate principal amount of $115,000,000, due October 15, 2004,
issued pursuant to the Subordinated Note Indenture.
"Subordinated Note Indenture" shall mean the Subordinated Note
Indenture dated October 16, 1997, between the Company and the trustee named
therein providing for the issuance of the Subordinated Notes.
"Subsidiaries" shall mean with respect to any Person any corporation,
association or other business entity more than 50% of the voting stock or other
ownership interest (including without limitation, membership interests in a
limited liability company) of which is at the time owned or controlled,
directly or indirectly, by such Person or one or more of its Subsidiaries or a
combination thereof.
"Taxes" shall have the meaning set forth in Section 3.10.
"Term Loan" shall have the meaning set forth in Section 2.03.
"Term Loan Maturity Date" shall mean the last Business Day of the
sixteenth consecutive calendar quarter from and including the calendar quarter
in which the Revolving Credit Conversion Date occurs.
"Term Note" shall have the meaning set forth in Section 2.04.
"Third Party Acquisition Debt" shall mean Indebtedness evidenced by
one or more promissory notes executed and delivered by a Subsidiary of the
Company to the seller of the assets or stock or other equity interest of a
Person acquired by such Subsidiary pursuant to a Permitted Acquisition, which
Indebtedness constitutes all or a portion of the purchase price of such assets
or stock or other equity interest.
"Third Party Construction Lender" shall mean a lender which has funded
a Permitted Construction Project other than the Lenders funding a Construction
Loan pursuant to this Agreement for such Permitted Construction Project.
"Third Party Construction Loan" shall mean the loan of a Third-Party
Construction Lender the proceeds of which are used to finance a Permitted
Construction Project.
18
"Third Party Letters of Credit" shall mean any Standby Letter of
Credit issued by a Person (other than the Agent pursuant to the terms of this
Agreement) for the account of the Company and which is issued for purposes in
connection with and in the ordinary course of business of the Company and
consistent with the historical purposes of Standby Letters of Credit issued by
The Chase Manhattan Bank for the account of the Company.
"Total Commitment" shall mean, at any time, the aggregate of the
Commitments in effect at such time which, initially, shall be $100,000,000.
"Type" shall mean as to any Loan its status as an Alternate Base Rate
Loan or an Adjusted Libor Loan.
"Unfunded Current Liability" of any Plan shall mean the amount, if
any, by which the present value of the accrued benefits under the Plan as of
the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, determined in accordance with Section 412 of the
Code.
"Unused Fee Rate" shall mean the percentage set forth below opposite
the applicable ratio.
Consolidated Funded Debt Unused Fee Rate
to Consolidated EBITDA (360 day basis)
---------------------- ---------------
Equal to or less than 2.00:1.00 .25%
Greater than 2.00:1.00 but .30%
equal to or less than 2.50:1.00
Greater than 2.50:1.00 but .35
equal to or less than 3.00:1.00
Notwithstanding the foregoing, during the period
commencing the Closing Date and ending on December 31, 1998, the Unused Fee
Rate shall be .25%. The Unused Fee Rate will be set or reset on the date which
is five Business Days following the date of receipt by the Agent of the
financial statements referred to in Section 6.03(a) and Section 6.03(b),
together with a certificate of the Chief Financial Officer of the Company
certifying the ratio of Consolidated Funded Debt to Consolidated EBITDA and
setting forth the calculation thereof in detail; provided, however, (a) the
Unused Fee Rate will first be reset on January 1, 1999 provided the financial
statements for the fiscal quarter ending September 30, 1998, and the
certificate of the Chief Financial Officer of the Company identified above are
delivered to the Agent not less than five (5) Business Days prior to January 1,
1999; and (b) that if any such financial statement and certificate are not
received by the Agent within the time period required pursuant to Section
6.03(a) or Section 6.03(b), as the case may be, the Unused Fee Rate will be set
or reset, based on a ratio of Consolidated Funded Debt to
19
Consolidated EBITDA of greater than 4.00:1.00 from the date such financial
statement and certificate were due until the date which is five Business Days
following the receipt by the Agent of such financial statements and
certificate, and provided, further, that the Lenders shall not in any way be
deemed to have waived any Default or Event of Default, including without
limitation, an Event of Default resulting from the failure of the Company to
comply with Section 7.13 of this Agreement, or any rights or remedies hereunder
or under any other Loan Document in connection with the foregoing proviso.
During the occurrence and continuance of a Default or Event of Default, no
downward adjustment, and only upward adjustments, shall be made to the Unused
Fee Rate.
SECTION 1.02. TERMS GENERALLY. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require, pronouns stated in the masculine, feminine or neuter
gender shall include the masculine, feminine and the neuter. Except as
otherwise herein specifically provided, each accounting term used herein shall
have the meaning given to it under Generally Accepted Accounting Principles.
The term "including" shall not be limited or exclusive, unless specifically
indicated to the contrary. The word "will" shall be construed to have the same
meaning in effect as the word "shall". The words "herein", "hereof" and
"hereunder" and other words of similar import refer to this Agreement as a
whole, including the exhibits and schedules thereto, all of which are by this
reference incorporated into this Agreement.
ARTICLE II
LOANS
SECTION 2.01. REVOLVING CREDIT LOANS. (a) Subject to the terms and
conditions, and relying upon the representations and warranties, set forth
herein, each Lender severally agrees to make loans (individually a "Revolving
Credit Loan" and, collectively, the "Revolving Credit Loans") to the Company
from time to time during the Revolving Credit Commitment Period up to but not
exceeding at any one time outstanding the amount of its Commitment; provided,
however, that no Revolving Credit Loan shall be made if, after giving effect to
such Revolving Credit Loan, the Aggregate Outstandings at the time of such
Revolving Credit Loan would exceed the Total Commitment in effect at such time.
During the Revolving Credit Commitment Period, the Company may from time to
time borrow, repay and reborrow hereunder on or after the date hereof and prior
to the Revolving Credit Commitment Termination Date, subject to the terms,
provisions and limitations set forth herein. The Revolving Credit Loans may be
(i) Adjusted Libor Loans, (ii) Alternate Base Rate Loans or (iii) a combination
thereof.
(b) The Company shall give the Agent irrevocable written notice (or
telephonic notice promptly confirmed in writing) not later than 11:00 a.m., New
York, New York time, three Business Days prior to the date of each proposed
Adjusted Libor Loan under this Section 2.01 or prior to 11:00 a.m. New York,
New York time on the date of each proposed Alternate Base Rate Loan under this
Section 2.01. Such notice shall be irrevocable and shall specify (i) the amount
and Type of the proposed borrowing, (ii) the proposed use of the loan proceeds,
(iii) the initial Interest Period if an Adjusted Libor Loan, and (iv) the
proposed Borrowing Date. Upon receipt of such notice from the
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Company, the Agent shall promptly notify each Lender thereof. Except for
borrowings which utilize the full remaining amount of the Total Commitment,
each borrowing of an Alternate Base Rate Loan shall be in an amount not less
than $500,000 or, if greater, whole multiples of $100,000 in excess thereof.
Each borrowing of an Adjusted Libor Loan shall be an amount not less than
$5,000,000 or whole multiples of $100,000 in excess thereof. Funding of all
Loans shall be made in accordance with Section 3.13 of this Agreement.
(c) The Company shall have the right, upon not less than three
Business Days' prior written notice to the Agent, to terminate the Total
Commitment or from time to time to permanently reduce the amount of the Total
Commitment; provided, however, that no such termination or reduction shall be
permitted if, after giving effect thereto and to any prepayments of the
Revolving Credit Loans made on the effective date thereof, the Aggregate
Outstandings would exceed the Total Commitment as then reduced; provided,
further, that any such termination or reduction of Adjusted Libor Loans shall
be made only on the last day of the Interest Period with respect thereto or on
the date of payment in full of all amounts owing pursuant to Section 3.08 as a
result of such termination or reduction. Any such reduction shall be in the
amount of $5,000,000 or whole multiples of $5,000,000 in excess thereof, and
shall reduce permanently the amount of the Total Commitment then in effect.
(d) The several agreement of the Lenders to make Revolving Credit
Loans pursuant to this Section 2.01 shall automatically terminate on the
Revolving Credit Commitment Termination Date. Upon such termination, the
Company shall immediately repay in full the principal amount of the Revolving
Credit Loans then outstanding, together with all accrued interest thereon and
all other amounts due and payable hereunder.
(e) The aggregate principal amount of all Construction Loans
outstanding at any time shall not exceed $30,000,000.
SECTION 2.02. REVOLVING CREDIT NOTE. The Revolving Credit Loans made
by each Lender shall be evidenced by a promissory note of the Company
(individually a "Revolving Credit Note" and, collectively, the "Revolving
Credit Notes"), substantially in the form attached hereto as Exhibit A, each
appropriately completed, duly executed and delivered on behalf of the Company
and payable to the order of such Lender in a principal amount equal to the
Commitment of such Lender. Each Revolving Credit Note shall (a) be dated the
Closing Date, (b) be stated to mature on the Revolving Credit Commitment
Termination Date, and (c) bear interest from the date thereof until paid in
full on the unpaid principal amount thereof from time to time outstanding as
provided in Section 3.01. Each Lender is authorized to record the date, Type
and amount of each Revolving Credit Loan and the date and amount of each
payment or prepayment of principal of each Revolving Credit Loan in such
Lender's records or on the grid schedule annexed to the Revolving Credit Note;
provided, however, that the failure of a Lender to set forth each such
Revolving Credit Loan, payment and other information shall not in any manner
affect the obligation of the Company to repay each Revolving Credit Loan made
by such Lender in accordance with the terms of its Revolving Credit Note and
this Agreement. The Revolving Credit Note, the grid schedule and the books and
21
records of each Lender shall constitute presumptive evidence of the information
so recorded absent manifest error.
SECTION 2.03. CONVERSION OF REVOLVING CREDIT LOANS TO TERM LOANS. (a)
Subject to the terms and conditions hereof, each Lender severally agrees to
make a term loan (individually, a "Term Loan" and, collectively, the "Term
Loans") to the Company on the Revolving Credit Conversion Date in an amount
equal to its Commitment Proportion of the aggregate principal amount of the
Revolving Credit Loans then outstanding. The Company shall give the Agent
irrevocable written notice (or telephonic notice promptly confirmed in writing)
not later than 11:00 a.m. New York, New York time three Business Days prior to
the Revolving Credit Conversion Date specifying (i) the amount to be borrowed,
which shall not exceed the Total Commitment less the Aggregate Letters of
Credit Outstanding, (ii) the Type or Types of such Term Loans and the related
amounts for each and (iii) if such Term Loan is an Adjusted Libor Loan, the
initial Interest Period selected for such Term Loan. Upon receipt of such
notice from the Company, the Agent shall promptly notify each Lender thereof.
The Term Loans may, at the election of the Company, be (i) Adjusted Libor
Loans, (ii) Alternate Base Rate Loans or (iii) a combination thereof.
SECTION 2.04. TERM NOTE. The Term Loan made by each Lender shall be
evidenced by a promissory note of the Company, substantially in the form of
Exhibit B, with appropriate insertions (individually a "Term Note" and,
collectively, the "Term Notes") payable to the order of such Lender and
representing the obligation of the Company to pay the unpaid principal amount
of the Term Loan of such Lender with interest thereon as prescribed in Section
3.01. Each Lender is authorized to record the Type of its Term Loan and the
date and amount of each payment or prepayment of principal thereof in such
Lender's records or on the grid schedule annexed to the Term Note; provided,
however, that the failure of a Lender to set forth each payment and other
information shall not in any manner affect the obligation of the Company to
repay the Term Loan made by such Lender in accordance with the terms of its
Term Note and this Agreement. The Term Note, the grid schedule and the books
and records of each Lender shall constitute presumptive evidence of the
information so recorded absent manifest error. Each Term Note shall (a) be
dated the Revolving Credit Conversion Date, (b) be stated to mature on the Term
Loan Maturity Date and (c) be payable as to principal in sixteen consecutive
equal quarterly installments commencing on the last Business Day of the
calendar quarter in which the Revolving Credit Conversion Date occurs. The
amount of such payments received by each Lender on each of the initial fifteen
installment dates shall be in the amount of each Lender's Commitment Proportion
of the original principal amount the Term Loan and the last installment
received by each Lender shall be in the amount of each Lender's Commitment
Proportion of the remaining principal amount outstanding on the Term Loan
Maturity Date. Each Lender's Term Note shall bear interest from the date
thereof until paid in full on the unpaid principal amount thereof from time to
time outstanding at the applicable interest rate per annum determined as
provided in, and payable as specified in, Section 3.01.
SECTION 2.05. LETTERS OF CREDIT. (a) Generally. Subject to the terms
and conditions set forth in this Agreement, upon the written request of the
Company in accordance herewith, the Agent shall issue Letters of Credit at any
time during the Revolving Credit Commitment Period with
22
pro rata participation by all of the Lenders in accordance with their
respective Commitment Proportions. Notwithstanding the foregoing, at no time
shall the sum of Aggregate Letters of Credit Outstanding exceed an amount equal
to (x) $15,000,000, less (y) the Aggregate Third Party Letters of Credit
Outstanding, and no Letter of Credit shall be issued if, after giving effect to
the same, the Aggregate Outstandings would exceed the Total Commitment. Each
request for issuance of a Letter of Credit shall be in writing and shall be
received by the Agent by no later than 12:00 noon, New York, New York time, on
the day which is at least two Business Days prior to the proposed date of
issuance. Such issuance shall occur by no later than 5:00 p.m. on the proposed
date of issuance (assuming proper prior notice as aforesaid). Subject to the
terms and conditions contained herein, the type of Letter of Credit (i.e.,
Commercial Letter of Credit or Standby Letter of Credit), the expiry date, and
the amount and beneficiary of the Letters of Credit will be as designated by
the Company. The Agent shall promptly notify the Lenders of the amounts of all
Letters of Credit issued hereunder and of any extension, reduction, termination
or amendment of any Letter of Credit. Each Letter of Credit issued by the Agent
hereunder shall identify: (i) the dates of issuance and expiry of such Letter
of Credit, (ii) the amount of such Letter of Credit (which shall be a sum
certain), (iii) the beneficiary of such Letter of Credit, and (iv) the drafts
and other documents necessary to be presented to the Agent upon drawing
thereunder. Subject to the next succeeding sentence, no Letter of Credit issued
hereunder shall expire later than the date which is, in the reasonable judgment
of the Agent, reasonable and customary for transactions of the type for which
the Letter of Credit is requested. In no event shall any Letter of Credit
expire after the Business Day which is immediately prior to the Revolving
Credit Commitment Termination Date. The Company agrees to execute and deliver
to the Agent such further documents and instruments in connection with any
Letter of Credit issued hereunder (including without limitation, applications
therefor) as the Agent in accordance with its customary practices may request.
(b) Drawings Under Letters of Credit. The Company hereby absolutely
and unconditionally promises to pay the Agent not later than 3:00 p.m. (New
York, New York time) the amount of each drawing under a Letter of Credit if the
Company receives notice of such drawing prior to 10:00 a.m., New York, New York
time, on the date of such drawing, or if such notice has not been received by
the Company prior to such time on such date, then not later than 12:00 noon,
New York, New York time, on the Business Day immediately following the day that
the Company receives such notice; provided, however, if any drawing was in an
amount not less than $500,000, the Company may, subject to the conditions to
borrowing set forth herein, request in accordance with Section 2.01 that such
payment be financed with an Alternate Base Rate Loan in an equivalent amount,
and, to the extent so financed, the Company's obligation to make such payment
shall be discharged and replaced by such an Alternate Base Rate Loan. Such
request shall be made by the Company on the date of receipt of notice from the
Agent of a drawing under a Letter of Credit. The Agent shall notify each Lender
of such request in accordance with Section 2.01. If the Company fails to make
such payment when due, the Agent shall notify each Lender of the amount of the
drawing under the applicable Letter of Credit. Each Lender agrees that on the
first Business Day after receipt of such notice, it will immediately make
available by no later than 12:00 noon New York, New York time, to the Agent at
its office located at the Payment Office in immediately available funds, its
Commitment Proportion of such drawing, provided (i) each Lender's obligation
23
shall be reduced by its Commitment Proportion of any reimbursement by the
Company in respect of any such drawing pursuant to this Section 2.05 and (ii)
no Lender shall be required to make payments to the Agent with respect to a
drawing which the Company reimbursed with the proceeds of a Revolving Credit
Loan, as contemplated above, if such Lender fully funded its Commitment
Proportion of such Revolving Credit Loan in accordance with Section 3.12. Any
payment made by a Lender pursuant to this Section 2.05(b) to reimburse the
Agent for any drawing under a Letter of Credit (other than an Alternate Base
Rate Loan as contemplated above) shall not constitute a Revolving Credit Loan
and shall not relieve the Company of its obligation to reimburse the Agent for
such drawing. Each drawing under a Letter of Credit which is not paid on the
date such drawing is made shall accrue interest, for each day from and
including the date of such drawing to but excluding the date that the Company
reimburses the Agent in full for such drawing, at the rate per annum then
applicable to Revolving Credit Loans which are Alternate Base Rate Loans;
provided, however, that if the Company fails to reimburse such drawing when due
pursuant to this clause (b), then the Company shall pay to the Agent interest
on the amount of such drawing at the rate per annum set forth in Section
3.01(f). Interest accruing pursuant to the preceding sentence shall be for the
account of the Agent, except that interest accrued on and after the date of
payment by any Lender pursuant to this Section 2.05(b) to reimburse the Agent
shall be for the account of such Lender to the extent of such payment.
(c) Letter of Credit Obligations Absolute. (i) The obligation of the
Company to reimburse the Agent as provided hereunder in respect of drawings
under Letters of Credit shall rank pari passu with the obligation of the
Company to repay the Revolving Credit Loans hereunder, and shall be absolute
and unconditional under any and all circumstances. Without limiting the
generality of the foregoing, the obligation of the Company to reimburse the
Agent in respect of drawings under Letters of Credit shall not be subject to
any defense based on the non-application or misapplication by the beneficiary
of the proceeds of any such drawing or the legality, validity, regularity or
enforceability of the Letters of Credit or any related document or any dispute
between or among the Company, the beneficiary of any Letter of Credit or any
financial institution or other party to which any Letter of Credit may be
transferred. The Agent may accept or pay any draft presented to it under any
Letter of Credit regardless of when drawn or made and whether or not
negotiated, if such draft, accompanying certificate or documents and any
transmittal advice are presented or negotiated on or before the expiry date of
such Letter of Credit or any renewal or extension thereof then in effect, and
conforms to the terms and conditions of such Letter of Credit. Furthermore,
neither the Agent nor any of its correspondents nor any Lender shall be
responsible, as to any document presented under a Letter of Credit which
appears to be regular on its face, and appears on its face to conform to the
terms of the Letter of Credit, for the validity or sufficiency of any signature
or endorsement, for delay in giving any notice or failure of any instrument to
bear adequate reference to the Letter of Credit, or for failure of any Person
to note the amount of any draft on the reverse of the Letter of Credit.
(ii) Any action, inaction or omission on the part of the Agent or any
of its correspondents under or in connection with any Letter of Credit or the
related instruments, documents or property, if in good faith and in conformity
with such laws, regulations or customs as are applicable, shall be
24
binding upon the Company and shall not place the Agent or any of its
correspondents under any liability to the Company in the absence of (x) gross
negligence or willful misconduct by the Agent or its correspondents or (y) the
failure by the Agent to pay under a Letter of Credit after presentation of a
draft and documents strictly complying with such Letter of Credit unless the
Agent is prohibited from making such payment pursuant to a court order. The
Agent's rights, powers, privileges and immunities specified in or arising under
this Agreement are in addition to any heretofore or at any time hereafter
otherwise created or arising, whether by statute or rule of law or contract.
All Letters of Credit issued hereunder will, except to the extent otherwise
expressly provided hereunder, be governed by the Uniform Customs and Practice
for Documentary Credits (1993 Revision), International Chamber of Commerce,
Publication No. 500, and any subsequent revisions thereof.
(d) Obligations of Lenders in Respect of Letters of Credit. Each
Lender acknowledges that each Letter of Credit issued by the Agent pursuant to
this Agreement is issued by the Agent on behalf of and with the ratable
participation of all of the Lenders (i.e., in accordance with their respective
Commitment Proportions), and each Lender agrees to make the payments required
by subsection (b) above and agrees to be responsible for its pro rata share of
all liabilities incurred by the Agent in respect of each Letter of Credit
issued, established, opened or extended by the Agent hereunder for the account
of the Company, including, without limitation, any liabilities arising out of
any steamship indemnity issued by the Agent with respect to goods which are the
subject of a Letter of Credit and the steamship indemnity issued by Agent on
August 28, 1998, at the request of the Company, in connection with goods
subject to a letter of credit issued by the Agent.. Each Lender agrees with the
Agent and the other Lenders that its obligation to make the payments required
by subsection (b) above shall not be affected in any way by any circumstances
(other than the gross negligence or willful misconduct of the Agent) occurring
before or after the making of any payment by the Agent pursuant to any Letter
of Credit including, without limitation: (i) any modification or amendment of,
or any consent, waiver, release or forbearance with respect to, any of the
terms of this Agreement or any other instrument or document referred to herein;
(ii) the existence of any Default or Event of Default; or (iii) any change of
any kind whatsoever in the financial position or credit worthiness of the
Company.
(e) Existing Letters of Credit. The Company and the Lenders agree that
from and after the Closing Date, subject to the satisfaction of the conditions
precedent to the initial Revolving Credit Loans hereunder and the issuance of
the initial Letter of Credit hereunder as set forth in Article V, the letters
of credit issued by The Chase Manhattan Bank for the account of the Company
prior to the date hereof and listed and described on Schedule VI attached
hereto shall be Letters of Credit for all purposes of this Agreement (other
than with respect to opening or transaction fees and the payment commissions
made or accrued prior to the date hereof, which fees and commissions shall be
for the sole account of The Chase Manhattan Bank), including, without
limitation, for purposes of Section 3.04(b), and the Lenders hereby affirm
their pro rata participation, in accordance with their respective Commitment
Proportions, in such letters of credit.
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ARTICLE III
PROVISIONS RELATING TO ALL EXTENSIONS OF CREDIT;
FEES AND PAYMENTS
SECTION 3.01. INTEREST RATE; CONTINUATION AND CONVERSION OF LOANS.
(a) Each Alternate Base Rate Loan which is a Revolving Credit
Loan shall bear interest for the period from the date thereof on the unpaid
principal amount thereof at a fluctuating rate per annum equal to the Alternate
Base Rate plus a margin of .25% per annum.
(b) Each Adjusted Libor Loan which is a Revolving Credit Loan
shall bear interest for the Interest Period applicable thereto on the unpaid
principal amount thereof at a rate per annum equal to the Reserve Adjusted
Libor determined for each Interest Period thereof in accordance with the terms
hereof plus the applicable LIBO Margin.
(c) Each Alternate Base Rate Loan which is a Term Loan shall
bear interest for the period from the date thereof on the unpaid principal
amount thereof at a fluctuating rate per annum equal to the Alternate Base Rate
plus a margin of .75% per annum.
(d) Each Adjusted Libor Loan which is a Term Loan shall bear
interest for the Interest Period applicable thereto on the unpaid principal
amount thereof at a rate per annum equal to the Reserve Adjusted Libor
determined for each Interest Period thereof in accordance with the terms hereof
plus the applicable LIBO Margin.
(e) Upon the occurrence and during the continuance of an
Event of Default arising from any event set forth in Section 8.01(a) (i) the
outstanding principal amount of the Loans (excluding any defaulted payment of
principal accruing interest in accordance with clause (f) below), shall, at the
option of the Required Lenders, bear interest payable on demand at a rate of
interest 2% per annum in excess of the Alternate Base Rate and (ii) the LC
Margin shall, at the option of the Required Lenders, increase to a rate 2% in
excess of the rate otherwise then in effect.
(f) If the Company shall default in the payment of the
principal or of interest on any portion of any Loan or any other amount
becoming due hereunder, whether with respect to reimbursement of drawings under
Letters of Credit, interest, fees, expenses or otherwise, the Company shall on
demand from time to time pay interest on such defaulted amount accruing from
the date of such default (without reference to any period of grace) up to and
including the date of actual payment (after as well as before judgment) at a
rate of 2% per annum in excess of the Alternate Base Rate.
(g) The Company may elect from time to time to convert
outstanding Loans from Adjusted Libor Loans to Alternate Base Rate Loans by
giving the Agent at least three Business
26
Day's prior irrevocable written notice of such election, provided that any such
conversion of Adjusted Libor Loans shall only be made on the last day of an
Interest Period with respect thereto or upon the date of payment in full of any
amounts owing pursuant to Section 3.08 as a result of such conversion. Upon
receipt of such notice, the Agent shall promptly notify each Lender thereof.
The Company may elect from time to time to convert outstanding Loans from
Alternate Base Rate Loans to Adjusted Libor Loans by giving the Agent
irrevocable written notice of such election not later than 11:00 a.m. New York,
New York time, three Business Days prior to the date of the proposed
conversion. Upon receipt of such notice the Agent shall promptly notify each
Lender thereof. All or any part of outstanding Alternate Base Rate Loans may be
converted as provided herein, provided that each conversion shall be in the
principal amount of $5,000,000 or whole multiples of $100,000 in excess
thereof, and further provided that no Default or Event of Default shall have
occurred and be continuing. Any conversion to or from Adjusted Libor Loans
hereunder shall be in such amounts and be made pursuant to such elections so
that, after giving effect thereto, the aggregate principal amount of all
Adjusted Libor Loans having the same Interest Period shall not be less than
$5,000,000.
(h) Any Adjusted Libor Loan in a minimum principal amount of
$5,000,000 may be continued as such upon the expiration of an Interest Period
with respect thereto by compliance by the Company with the notice provisions
contained in the definition of Interest Period; provided, that no Adjusted
Libor Loan may be continued as such when any Default or Event of Default has
occurred and is continuing, but shall be automatically converted to an
Alternate Base Rate Loan on the last day of the Interest Period in effect when
the Agent is notified, or otherwise has actual knowledge, of such Default or
Event of Default.
(i) If the Company shall fail to select the duration of any
Interest Period for any Adjusted Libor Loan in accordance with the definition
of "Interest Period" set forth in Section 1.01, the Company shall be deemed to
have selected an Interest Period of one month.
(j) No Loan may be converted to or continued as an Adjusted
Libor Loan with an Interest Period that extends beyond (i) the Revolving Credit
Commitment Termination Date, with respect to Revolving Credit Loans, or (ii)
the Term Loan Maturity Date with respect to the Term Loan.
(k) Anything in this Agreement or in any Note to the contrary
notwithstanding, the obligation of the Company to make payments of interest
shall be subject to the limitation that payments of interest shall not be
required to be paid to a Lender to the extent that the charging or receipt
thereof would not be permissible under the law or laws applicable to such
Lender limiting the rates of interest that may be charged or collected by such
Lender. In each such event payments of interest required to be paid to such
Lender shall be calculated at the highest rate permitted by applicable law
until such time as the rates of interest required hereunder may lawfully be
charged and collected by such Lender. If the provisions of this Agreement or
any Note would at any time otherwise require payment by the Company to any
Lender of any amount of interest in excess of the maximum amount then permitted
by applicable law, the interest payments to such Lender shall be
27
reduced to the extent necessary so that such Lender shall not receive interest
in excess of such maximum amount.
(l) Interest on each Loan shall be payable in arrears on each
Interest Payment Date and shall be calculated on a year of 360 days and shall
be payable for the actual days elapsed. Any rate of interest on the Loans or
other Obligations which is computed on the basis of the Alternate Base Rate
shall change when and as the Alternate Base Rate changes in accordance with the
definition thereof. Each determination by the Agent of an interest rate or fee
hereunder shall, absent manifest error, be conclusive and binding for all
purposes.
SECTION 3.02. USE OF PROCEEDS. The initial Revolving Credit Loan shall
be used to pay in full the indebtedness referred to in clause (i) of the
definition of "Existing Indebtedness" set forth in Section 1.01 on the Closing
Date together with the fees incurred by the Company in connection with the
consummation of the transactions contemplated by this Agreement. Thereafter,
the proceeds of the Revolving Credit Loans shall be used solely to (a) finance
the working capital needs of Company and its Subsidiaries in the ordinary
course of business, (b) refinance in full or in part Acquired Debt or Assumed
Debt of any Subsidiary, (c) finance Permitted Acquisitions, (d) finance
Permitted Construction Projects, and (e) finance capital improvements to its
Facilities. The proceeds of the Term Loan will be used solely to refinance the
outstanding Revolving Credit Loans on the Revolving Credit Conversion Date in
accordance with Section 2.03. Commercial Letters of Credit issued by the Agent
hereunder shall be for the account of the Company and shall be issued for the
purpose of providing the primary payment mechanism in connection with the
purchase of any materials, goods or services by the Company in the ordinary
course of its business. Standby Letters of Credit issued by the Agent hereunder
shall be for the account of the Company and shall be issued for purposes in
connection with and in the ordinary course of business of the Company and
consistent with the historical purposes of Standby Letters of Credit issued by
The Chase Manhattan Bank for the account of the Company.
SECTION 3.03. PREPAYMENTS.
(a) In the event of any sale of the stock or assets of a
Subsidiary of the Company pursuant to Section 7.04 of this Agreement, the
Company shall apply within one Business Day of the closing of such sale the Net
Cash Proceeds therefrom as follows: (x) prior to the Revolving Credit
Conversion Date, to pay the outstanding Revolving Credit Loans then outstanding
which payment shall permanently reduce the Total Commitment by an amount equal
to the aggregate principal amount of Revolving Credit Loans repaid, and in the
event the amount of the Proceeds exceeds the outstanding principal amount of
the Revolving Credit Loans outstanding on the date of any mandatory repayment
required hereunder, then the Total Commitment shall be reduced by an amount
equal to such excess Proceeds, and (y) on or after the Revolving Credit
Conversion Date, to prepay the Term Loan. If after making a mandatory
prepayment pursuant to this Section 3.03(a), the Aggregate Letters of Credit
Outstanding exceeds the Total Commitment, the Company shall, on the closing
date of such sale, provide to the Agent Cash Collateral for the ratable benefit
of the Lenders in an amount equal to such excess.
28
(b) The Company may on the last day of an Interest Period if
the Loans to be repaid are Adjusted Libor Loans, or at any time and from time
to time if the Loans to be repaid are Alternate Base Rate Loans, repay the then
outstanding Loans, in whole or in part, without premium or penalty, except as
provided in Section 3.08, upon written notice to the Agent (or telephonic
notice promptly confirmed in writing) not later than 11:00 a.m. New York, New
York time, three Business Days before the date of prepayment with respect to
prepayments of Adjusted Libor Loans, or 11:00 a.m. New York, New York time one
Business Day before the date of prepayment with respect to Alternate Base Rate
Loans. Each notice shall be irrevocable and shall specify the date and amount
of repayment and whether such repayment is of Adjusted Libor Loans or Alternate
Base Rate Loans or a combination thereof, and if a combination thereof, the
amount of repayment allocable to each. Upon receipt of such notice, the Agent
shall promptly notify each Lender thereof. If such notice is given, the Company
shall make such repayment, and the payment amount specified in such notice
shall be due and payable, on the date specified therein. Each partial
prepayment pursuant to this Section 3.03 shall be in a principal amount of
$2,500,000 or whole multiples of $100,000 in excess thereof.
(c) Each prepayment of principal of a Loan pursuant to this
Section 3.03 shall be accompanied by accrued interest to the date prepaid on
the amount prepaid. All partial prepayments of the Term Loan, shall be applied
to the remaining installments of principal thereof in inverse order of
maturity. Prepayments of the Term Loan may not be reborrowed. Partial
prepayments of any Loan shall be applied first to outstanding Alternate Base
Rate Loans and then to Adjusted Libor Loans having the shortest remaining
Interest Periods.
SECTION 3.04. FEES.
(a) The Company agrees to pay to the Agent for the account
of, and pro rata distribution to, each Lender a commitment fee on the average
daily unused portion of the Total Commitment from the date of this Agreement
until the Revolving Credit Commitment Termination Date at a rate per annum
equal to the Unused Fee Rate, based on a year of 360 days, payable in arrears
on the last day of December, March, June and September of each year commencing
December 31, 1998, on the Revolving Credit Commitment Termination Date and on
the date the Total Commitment is permanently reduced in whole or in part.
(b) The Company shall pay to the Agent for the account of
each Lender a participation fee with respect to each Lender's participation in
Standby Letters of Credit, which shall accrue at a rate per annum equal to the
LC Margin on the average daily amount of such LC Exposure (excluding any
portion thereof attributable to unreimbursed LC Disbursements) during the
period from and including the Closing Date to but excluding the later of the
date on which such Lender's Commitment to extend Revolving Credit Loans
terminates and the date on which such Lender ceases to have any LC Exposure.
The Company shall further pay to the Agent for the account of each Lender a
commission with respect to its participation in Commercial Letters of Credit
equal to .25% of the amount drawn under such Commercial Letters of Credit which
commission shall be paid on the date of drawing of such Commercial Letter of
Credit; provided, however, upon the occurrence
29
and during the continuance of an Event of Default the commission shall, at the
option of the Required Lenders, increase to 2.25%. The Company shall pay to the
Agent the Agent's standard fees with respect to the issuance, amendment,
renewal or extension of any Letter of Credit or processing of drawings
thereunder. Participation fees with respect to Standby Letters of Credit shall
be payable in arrears on the last Business Day of December, March, June and
September of each year, commencing December 31, 1998; provided that all such
fees shall be payable on the date on which the Total Commitment terminates and
any such fees accruing after the date on which the Total Commitment terminates
shall be payable on demand. Any other fees payable to the Agent pursuant to
this Section 3.04 shall be payable on demand. All participation fees with
respect to Standby Letters of Credit shall be computed on the basis of a year
of 360 days and shall be payable for the actual number of days elapsed.
(c) The Company agrees to pay the Agent for the Agent's own
account, such agency, syndication and other fees as separately agreed between
the Agent and the Company.
SECTION 3.05. INABILITY TO DETERMINE INTEREST RATE. In the event that
the Agent shall have determined (which determination shall be conclusive and
binding upon the Company) that, by reason of circumstances affecting the London
interbank market, adequate and reasonable means do not exist for ascertaining
the Reserve Adjusted Libor applicable pursuant to Sections 3.01(b) and 3.01(d)
for any requested Interest Period with respect to (a) the making of an Adjusted
Libor Loan, (b) an Adjusted Libor Loan that will result from the requested
conversion of an Alternate Base Rate Loan into an Adjusted Libor Loan, or (c)
the continuation of an Adjusted Libor Loan beyond the expiration of the then
current Interest Period with respect thereto, the Agent shall forthwith give
notice by telephone of such determination, promptly confirmed in writing, to
the Company and each Lender of such determination. Until the Agent notifies the
Company that the circumstances giving rise to the suspension described herein
no longer exist, the Company shall not have the right to request an Adjusted
Libor Loan or to convert an Alternate Base Rate Loan to an Adjusted Libor Loan.
SECTION 3.06. ILLEGALITY. Notwithstanding any other provisions herein,
if any introduction of or change in any law, regulation, treaty or directive or
in the interpretation or application thereof shall make it unlawful for any
Lender to make or maintain Adjusted Libor Loans as contemplated by this
Agreement, such Lender shall forthwith give notice by telephone of such
circumstances, promptly confirmed in writing, to the Agent, which notice the
Agent shall promptly transmit to the Company and the other Lenders and (a) the
commitment of such Lender to make and to allow conversion to or continuations
of Adjusted Libor Loans shall forthwith be cancelled for the duration of such
illegality and (b) the Loans then outstanding as Adjusted Libor Loans, if any,
shall be converted automatically to Alternate Base Rate Loans on the next
succeeding last day of each Interest Period applicable to such Adjusted Libor
Loans or within such earlier period as may be required by law. The Company
shall pay to such Lender, upon demand, any additional amounts required to be
paid pursuant to Section 3.08 hereof.
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SECTION 3.07. INCREASED COSTS. (a) In the event that any introduction
of or change in, on or after the date hereof, any applicable law, regulation,
treaty, order, directive or in the interpretation or application thereof
(including without limitation, any request, guideline or policy, whether or not
having the force of law of, or from any central bank or other governmental
authority, agency or instrumentality and including, without limitation,
Regulation D), by any authority charged with the administration or
interpretation thereof shall occur, which:
(i) shall subject any Lender to any tax of any kind
whatsoever with respect to this Agreement, any Note, any Loan, or any Letter of
Credit or change the basis of taxation of payments to such Lender of principal,
interest, fees or any other amount payable hereunder (other than any tax that
is measured with respect to the overall net income of such Lender or Lending
Office of such Lender and that is imposed by the United States of America, or
any political subdivision or taxing authority thereof or therein, or by any
jurisdiction in which such Lender's Lending Office is located, or by any
jurisdiction in which such Lender is organized, has its principal office or is
managed and controlled); or
(ii) shall impose, modify or hold applicable any reserve,
special deposit, compulsory loan or similar requirement (whether or not having
the force of law) against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended by, or
any other acquisition of funds by, any office of any Lender; or
(iii) shall impose on any Lender any other condition, or
change therein;
and the result of any of the foregoing is to increase the cost to such Lender
of making, renewing or maintaining advances or extensions of credit hereunder
or to reduce any amount receivable hereunder, in each case by an amount which
such Lender deems material, then, in any such case, the Company shall pay such
Lender such additional amount or amounts as such Lender shall have reasonably
determined will compensate such Lender for such increased costs or reduction.
(b) If any Lender shall have determined that the adoption of
any applicable law, rule or regulation regarding capital adequacy, or any
change therein, or any change in the interpretation or administration thereof
by any governmental authority, central bank or comparable agency charged with
the interpretation or administration thereof, or compliance by any Lender (or
any lending office of any Lender) or any Lender's holding company, with any
request or directive regarding capital adequacy (whether or not having the
force of the law) of any such authority, central bank or comparable agency, has
or would have the effect of reducing the rate of return on such Lender's
capital or on the capital of such Lender's holding company as a consequence of
its obligations hereunder to a level below that which such Lender could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's policies and the policies of such Lender's holding company with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, the Company shall pay to such Lender, the additional
amount or amounts as such Lender shall have determined will compensate such
Lender or such
31
Lender's holding company for such reduction. Such Lender's determination of
such amounts shall be conclusive and binding on the Company absent manifest
error.
(c) A certificate of a Lender setting forth the amount or
amounts payable pursuant to Section 3.07(a) and 3.07(b) above shall be
conclusive absent manifest error. The Company shall pay such Lender the amount
shown as due on any such certificate within 10 days after receipt thereof.
(d) In the event any Lender shall be entitled to compensation
pursuant to Section 3.07(a) or Section 3.07(b), it shall promptly notify the
Agent and the Company of the event by reason of which it has become so
entitled; provided, however, no failure on the part of any Lender to demand
compensation under clause (a) or clause (b) above on one occasion shall
constitute a waiver of its right to demand compensation on any other occasion.
SECTION 3.08. INDEMNITY. The Company agrees to indemnify each Lender
and to hold each Lender harmless from any loss, cost or expense which such
Lender may sustain or incur, including, without limitation, interest or fees
payable by such Lender to lenders of funds obtained by it in order to maintain
Adjusted Libor Loans hereunder, as a consequence of (a) default by the Company
in payment of the principal amount of or interest on any Adjusted Libor Loan,
(b) default by the Company to accept or make a borrowing of an Adjusted Libor
Loan or a conversion or continuation of an Adjusted Libor Loan after the
Company has requested such borrowing, conversion or continuation, (c) default
by the Company in making any prepayment of any Adjusted Libor Loan after the
Company gives a notice in accordance with Section 3.03 of this Agreement and/or
(d) the making of any payment or prepayment (whether mandatory or optional) of
an Adjusted Libor Loan or the making of any conversion of an Adjusted Libor
Loan to an Alternate Base Rate Loan on a day which is not the last day of the
applicable Interest Period with respect thereto. A certificate of a Lender
setting forth such amounts shall be conclusive absent manifest error. The
Company shall pay such Lender the amount shown as due on any certificate within
five days after receipt thereof.
SECTION 3.09. CHANGE OF LENDING OFFICE. Each Lender agrees to use
reasonable efforts to designate an alternate Lending Office with respect to its
Adjusted Libor Loans affected by the events or circumstances described in
Section 3.05, Section 3.06 or Section 3.07 to avoid or minimize the Company's
liability thereunder; provided, however, that such efforts shall not cause the
imposition on such Lender of any additional cost or legal, regulatory or
administrative burdens deemed by such Lender, in its sole discretion, to be
material.
SECTION 3.10. TAXES. (a) Except as set forth in clause (c) below or as
required by law, all payments made by the Company under this Agreement shall be
made free and clear of, and without reduction for or on account of, any present
or future taxes, levies, imposts, duties, charges, fees, deductions or
withholdings, now or hereafter imposed, levied, collected, withheld or assessed
by any Governmental Authority, excluding income and franchise taxes imposed on
the Agent, or a Lender by (i) the United States of America or any political
subdivision or taxing authority thereof
32
or therein, (ii) the jurisdiction under the laws of which the Agent, or such
Lender is organized or in which it has its principal office or is managed and
controlled or any political subdivision or taxing authority thereof or therein,
or (iii) any jurisdiction in which such Lender's Lending Office is located or
any political subdivision or taxing authority thereof or therein (such
non-excluded taxes being called "Taxes"). If any Taxes are required to be
withheld from any amounts payable to the Agent, or any Lender hereunder, or
under the Notes, the amount so payable to the Agent or such Lender shall be
increased to the extent necessary to yield to the Agent or such Lender (after
payment of all Taxes and free and clear of all liability in respect of such
Taxes) interest or any such other amounts payable hereunder at the rates or in
the amounts specified in this Agreement and the Notes. Whenever any Taxes are
payable by the Company, as promptly as possible thereafter, the Company shall
send to the Agent for its own account or for the account of such Lender, as the
case may be, a certified copy of an original official receipt showing payment
thereof. If the Company fails to pay Taxes when due to the appropriate taxing
authority or fails to remit to the Agent the required receipts or other
required documentary evidence, the Company shall indemnify the Agent and the
Lenders for any incremental taxes, interest or penalties that may become
payable by the Agent or any Lender as a result of any such failure together
with any expenses payable by the Agent or such Lender in connection therewith.
(b) Prior to the first Interest Payment Date, each Lender
that is not organized under the laws of the United States or a state thereof
agrees that it will deliver to the Agent (i) two duly completed copies of
United States Internal Revenue Service Form 1001 or 4224 or successor
applicable form, as the case may be, certifying in each case that such Lender
is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, and (ii) an Internal
Revenue Service Form W-8 or W-9 or successor applicable form, as the case may
be, to establish an exemption from United States back-up withholding tax. Each
Lender which delivers to the Company and the Agent a Form 1001 or 4224 and Form
W-8 or W-9 pursuant to the preceding sentence further undertakes to deliver to
Agent two further copies of the said statement and Form 1001 or 4224 and Form
W-8 or W-9, or successor applicable forms, or other manner of certification, as
the case may be, on or before the date that any such letter or form expires or
becomes obsolete or after the occurrence of any event requiring a change in the
most recent letter and form previously delivered by it to the Agent, and such
extensions or renewals thereof as may reasonably be requested by the Agent,
certifying in the case of a Form 1001 or 4224 that such Lender is entitled to
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes.
(c) The Company shall not be required to pay any increased
amount on account of Taxes pursuant to this Section 3.10 to any Lender or to
the Agent to the extent such Taxes would not have been payable if the Lender
had furnished a form which it was required to furnish in accordance with clause
(b) of this Section 3.10, and such Taxes shall be borne solely by such Lender.
SECTION 3.11. REPLACEMENT OF LENDERS UNDER CERTAIN CIRCUMSTANCES. The
Company shall be permitted to replace any Lender which (a) requests
reimbursement for amounts owing or otherwise delivers a notice pursuant to
Section 3.07 or 3.10, (b) defaults in its obligation
33
to fund any Loan hereunder, or (c) refuses to approve any amendment or waiver
of or consent to departure from, any of the terms or conditions of this
Agreement or any of the other Loan Documents; provided, that the Company may
not demand the replacement of one or more Lenders pursuant to clause (c)
holding, in the aggregate, 10% or more of the Total Commitments, in each case,
upon at least 30 days' notice to such Lender and the Agent, with a replacement
financial institution; provided that (a) such replacement does not conflict
with any law, rule or regulation, or order or decree of any Governmental
Authority, (b) no Default or Event of Default shall have occurred and be
continuing at the time of such replacement, (c) the replacement financial
institution shall purchase, at par, all Loans and other amounts owing to such
replaced Lender on or prior to the date of replacement, (d) the Company shall
be liable to such replaced Lender under Section 3.08 if any Adjusted Libor Loan
owing to such replaced Lender shall be purchased other than on the last day of
the Interest Period relating thereto, (e) the replacement financial
institution, if not already a Lender, shall be reasonably satisfactory to the
Agent, (f) the replaced Lender shall be obligated to make such replacement in
accordance with the provisions of Section 10.05 (provided that the Company
shall be obligated to pay the registration and processing fee referred to
therein), (g) until such time as such replacement shall be consummated, the
Company shall pay all additional amounts (if any) required pursuant to Section
3.07 or 3.10, as the case may be, and (h) any such replacement shall not be
deemed to be a waiver of any rights which the Company, the Agent or any other
Lender shall have against the replaced Lender.
SECTION 3.12. PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by
the Company from the Lenders, each conversion of a Loan pursuant to Section
3.01(g) or continuation of a Loan pursuant to Section 3.01(h), each payment by
the Company on account of any fee (other than with respect to fees described in
Section 3.04(c) and the underwriting fee referred to in Section 5.01(h)) and
any reduction of the Commitments of the Lenders hereunder shall be made pro
rata according to the respective relevant Commitment Proportions of the
Lenders. Each payment (including each prepayment) by the Company on account of
principal of and interest on each Loan shall be made pro rata according to the
respective outstanding principal amounts of such Loans held by each Lender. All
payments (including prepayments) to be made by the Company on account of
principal, interest, fees and reimbursement obligations shall be made without
set-off or counterclaim and shall be made to the Agent, for the account of the
Lenders (except as specified in Sections 2.05(b) and 3.04(c) and the
underwriting fee referred to in Section 5.01(h)), at the Payment Office of the
Agent in Dollars in immediately available funds. The Agent may, in its sole
discretion, directly charge interest payments due in respect of the Loans and
reimbursement obligations with respect to Letters of Credit to the Company's
accounts at the Payment Office or other office of the Agent. The Agent shall
distribute such payments to the Lenders promptly upon receipt in like funds by
wire transfer of such Lender's portion of such payment to such Lender for the
account of its Lending Office. Except as otherwise provided in the definition
of "Interest Period", if any payment hereunder becomes due and payable on a day
other than a Business Day, such payment shall be extended to the next
succeeding Business Day, and, with respect to payments of principal, interest
thereon shall be payable at the then applicable rate during such extension.
34
SECTION 3.13. FUNDING AND DISBURSEMENT OF LOANS. (a) Each Lender shall
make each Loan to be made by it hereunder available to the Agent at the Payment
Office for the account of such office and the Agent by 1:00 p.m. New York, New
York time on the Borrowing Date in Dollars in immediately available funds.
Unless any applicable condition specified in Article V has not been satisfied,
the amount so received by Agent will be made available to the Company at the
Payment Office by crediting the account of the Company with such amount and in
like funds as received by the Agent; provided, however, that if the proceeds of
any Loan or any portion thereof are to be used to prepay outstanding Loans,
then the Agent shall apply such proceeds for such purpose to extent necessary
and credit the balance, if any, to the Company's account.
(b) Unless the Agent shall have been notified in writing by any Lender
prior to a proposed Borrowing Date that such Lender will not make the amount
which would constitute its Commitment Proportion of the borrowing on such
Borrowing Date available to the Agent, the Agent may assume that such Lender
has made such amount available to the Agent on such Borrowing Date, and the
Agent may, in reliance upon such assumption, make available to the Company a
corresponding amount. If such amount is not made available to the Agent until a
date after such Borrowing Date, such Lender shall pay to the Agent on demand
interest on such Lender's Commitment Proportion of such borrowing at a rate
equal to the greater of (i) the daily average Federal Funds Rate and (ii) a
rate determined by the Agent in accordance with banking industry rules on
interbank compensation during such period, from and including such Borrowing
Date to the date on which such Lender's Commitment Proportion of such borrowing
shall have become immediately available to the Agent. A certificate of the
Agent submitted to any Lender with respect to any amounts due pursuant to this
Section 3.13(b) shall be conclusive absent manifest error. Nothing herein shall
be deemed to relieve any Lender from its obligations to fulfill its commitment
hereunder or to prejudice any right which the Company may have against any
Lender as a result of any default by such Lender hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans herein provided for, the Company represents and warrants to the
Agent and each Lender that:
SECTION 4.01. ORGANIZATION POWERS. The Company (a) is a corporation
duly organized, and validly existing under the laws of the State of Delaware,
(b) has the corporate power and authority to own its properties and to carry on
its business as now being conducted, (c) is duly qualified to do business in
every jurisdiction wherein the conduct of its business or the ownership of its
properties are such as to require such qualification, and (d) has the corporate
power to execute, deliver and perform each of the Loan Documents to which it is
a party, including, without limitation, the power to obtain extensions of
credit hereunder and to execute and deliver the Notes. Each Subsidiary of the
Company is a corporation, limited liability company or limited partnership (as
indicated on Schedule I hereto) duly organized or formed, as applicable,
validly existing and in good
35
standing under the laws of the state of its incorporation or formation, (b) has
the corporate, limited partnership or limited liability company power and
authority to own or lease its properties and to carry on its business as now
being conducted, (c) is duly qualified to do business in every jurisdiction
wherein the conduct of its business or the ownership of its properties are such
as to require such qualification, and (d) has the corporate or limited
liability company power, as applicable, to execute, deliver and perform each of
the Loan Documents to which it is a party.
SECTION 4.02. AUTHORIZATION OF BORROWING, ENFORCEABLE OBLIGATIONS. The
execution, delivery and performance by the Company of this Agreement, and the
other Loan Documents to which it is a party, the borrowings by the Company
hereunder, and the execution, delivery and performance of each of its
Subsidiaries of the Loan Documents to which such Subsidiary is a party, (a)
have been duly authorized by all requisite corporate action, (b) will not
violate or require any consent under (i) any provision of law applicable to the
Company or any Subsidiary of the Company, any rule or regulation of any
Governmental Authority, or the Certificate of Incorporation or By-laws of the
Company or the Certificate of Incorporation, By-Laws, or other organizational
documents, as applicable, of any Subsidiary of the Company or (ii) any order of
any court or other Governmental Authority binding on the Company or any
Subsidiary of the Company or any indenture, agreement or other instrument to
which the Company or any Subsidiary of the Company is a party, or by which the
Company or any Subsidiary of the Company or any of its property is bound, and
(c) will not be in conflict with, result in a breach of or constitute (with due
notice and/or lapse of time) a default under, any such indenture, agreement or
other instrument, or result in the creation or imposition of any lien, charge
or encumbrance of any nature whatsoever upon any of the property or assets of
the Company or any Subsidiary of the Company other than as contemplated by this
Agreement or the other Loan Documents. This Agreement and each other Loan
Document to which the Company or any of its Subsidiaries is a party,
constitutes a legal, valid and binding obligation of the Company and each such
Subsidiary of the Company as the case may be, enforceable against the Company
and each such Subsidiary of the Company, as the case may be, in accordance with
its terms subject, as to enforcement, to bankruptcy, moratorium, insolvency and
similar laws affecting creditors generally and to equitable principles of
general application.
SECTION 4.03. FINANCIAL CONDITION. (a) The Company has heretofore
furnished to each Lender (i) the audited consolidated balance sheet of the
Company and its Subsidiaries and the related consolidated statement of income,
retained earnings and cash flow of the Company and its Subsidiaries, audited by
Xxxxxxx X. Xxxxxx & Company, LLC, independent certified public accountants for
the fiscal year ended December 31, 1997, and (ii) the unaudited consolidated
balance sheet of the Company and its Subsidiaries and the related consolidated
statements of income, retained earnings and cash flow of the Company and its
Subsidiaries for the nine month period ended September 30, 1998. Such financial
statements were prepared in conformity with Generally Accepted Accounting
Principles and fairly present the consolidated financial position and
consolidated results of operations of the Company and its Subsidiaries as of
the date of such financial statements and for the periods to which they relate
and, since September 30, 1998, no Material Adverse Effect has occurred. The
Company shall deliver to the Agent, with a copy for each Lender a certificate
of the Chief Financial Officer of the Company to that effect on the Closing
Date.
36
Other than obligations and liabilities arising in the ordinary course of
business since September 30, 1998, there are no obligations or liabilities
contingent or otherwise, of the Company or any of its Subsidiaries which are
not reflected on such statements other than (i) obligations of the Company and
its Subsidiaries incurred in the ordinary course of business (which shall be
deemed to exclude acquisitions by the Company or any Subsidiary of the business
or assets (including, without limitation stock) of any Person and shall further
be deemed to exclude Indebtedness described in Section 7.02(h)), (ii)
obligations and liabilities identified on Schedule V hereto, and (iii) other
obligations and liabilities which do not exceed $50,000 in the aggregate.
(b) The Company, individually, and together with its
consolidated Subsidiaries, is Solvent and immediately after giving effect to
each Loan contemplated by this Agreement, and the execution of each Loan
Document, will be Solvent.
SECTION 4.04. TAXES. All assessed deficiencies resulting from Internal
Revenue Service examinations of the federal income tax returns of the Company
or any of its Subsidiaries have been discharged or reserved against in
accordance with Generally Accepted Accounting Principles. The Company and each
of its Subsidiaries has filed or caused to be filed all federal, state and
local tax returns which are required to be filed, and has paid or has caused to
be paid all taxes as shown on said returns or on any assessment received by
them, to the extent that such taxes have become due, except (a) any such taxes
that are immaterial in amount and reserved against in accordance with Generally
Accepted Accounting Principles and (b) taxes which are being contested in good
faith and which are reserved against in accordance with Generally Accepted
Accounting Principles.
SECTION 4.05. TITLE TO PROPERTIES. The Company and each of its
Subsidiaries has good title to their respective properties and assets reflected
on the financial statements referred to in Section 4.03 hereof, except for such
properties and assets as have been disposed of since the date of such financial
statements as no longer used or useful in the conduct of their respective
businesses or as have been disposed of in the ordinary course of business, and
all such properties and assets are free and clear of mortgages, pledges, liens,
charges and other encumbrances, other than Permitted Liens.
SECTION 4.06. LITIGATION. (a) There are no actions, suits or
proceedings (whether or not purportedly on behalf of the Company or any of its
Subsidiaries) pending or, to the knowledge of the Company, threatened against
or affecting the Company or any of its Subsidiaries at law or in equity or
before or by any Governmental Authority, which involve any of the transactions
contemplated herein or which, if adversely determined against the Company or
such Subsidiary, could result in a Material Adverse Effect; and (b) neither the
Company nor any of its Subsidiaries is in default with respect to any judgment,
writ, injunction, decree, rule or regulation of any Governmental Authority
which could have a Material Adverse Effect.
SECTION 4.07. AGREEMENTS. Neither the Company nor any of its
Subsidiaries is a party to any agreement or instrument or subject to any
charter or other corporate restriction or any
37
judgment, order, writ, injunction, decree or regulation which could reasonably
be expected to have a Material Adverse Effect. Neither the Company nor any of
its Subsidiaries is in default in the performance, observance or fulfillment of
any of the obligations, covenants or conditions contained in any agreement or
instrument to which it is a party, which default could reasonably be expected
to have a Material Adverse Effect.
SECTION 4.08. COMPLIANCE WITH ERISA. Each Plan is in compliance with
ERISA; no Plan is insolvent or in reorganization, no Plan has an Unfunded
Current Liability, and no Plan has an accumulated or waived funding deficiency
or permitted decreases in its funding standard account within the meaning of
Section 412 of the Code; neither the Company nor any ERISA Affiliate nor any
Subsidiary of the Company has incurred any material liability to or on account
of a Plan pursuant to Section 515, 4062, 4063, 4064, 4201 or 4204 of ERISA or
expects to incur any liability under any of the foregoing sections on account
of the termination of participation in or contributions to any such Plan, no
proceedings have been instituted to terminate any Plan, no condition exists
which presents a material risk to the Company or any of its Subsidiaries or of
an ERISA Affiliate incurring a liability to or on account of a Plan pursuant to
the foregoing provisions of ERISA and the Code; no lien imposed under the Code
or ERISA on the assets of the Company or any Subsidiary of the Company exists
or is likely to arise on account of any Plan; and the Company, and each of its
Subsidiaries may terminate contributions to any other employee benefit plans
maintained by them without incurring any material liability to any person
interested therein.
SECTION 4.09. FEDERAL RESERVE REGULATIONS; USE OF PROCEEDS. (a)
Neither the Company nor any of its Subsidiaries is engaged principally in, nor
has as one of its important activities, the business of extending credit for
the purpose of purchasing or carrying any "margin stock" (within the meaning of
Regulation U of the Board of Governors of the Federal Reserve System of the
United States, as amended from time to time).
(b) No part of the proceeds of any Loan will be used, whether directly
or indirectly, and whether immediately, incidentally or ultimately, (i) to
purchase or to carry margin stock or to extend credit to others for the purpose
of purchasing or carrying margin stock, or to refund indebtedness originally
incurred for such purposes, or (ii) for any purpose which violates or is
inconsistent with the provisions of the Regulations T, U, or X of the Board of
Governors of The Federal Reserve System.
(c) The proceeds of each Loan shall be used solely for the purposes
permitted under Section 3.02.
SECTION 4.10. APPROVALS. No registration with or consent or approval
of, or other action by, any Governmental Authority or any other Person is
required in connection with the execution, delivery and performance of this
Agreement by the Company or any of its Subsidiaries, or with the execution and
delivery of other Loan Documents to which it is a party or, with respect to the
Company, the borrowings hereunder.
38
SECTION 4.11. SUBSIDIARIES. Attached hereto as Schedule I is a correct
and complete list of each of the Company's Subsidiaries as of the Closing Date
showing as to each Subsidiary, its name, the jurisdiction of its incorporation,
its shareholders or other owners of an interest in each Subsidiary and the
number of outstanding shares or other ownership interest owned by each
shareholder or other owner of an interest. The Subsidiaries asterisked on
Schedule I are those Subsidiaries which are Foreign Subsidiaries.
SECTION 4.12. HAZARDOUS MATERIALS. Except as set forth on Schedule
VII, the Company and each of its Subsidiaries are each in compliance with all
Environmental Laws and neither the Company nor any of its Subsidiaries of the
Company has used, nor to the knowledge of the Company and its Subsidiaries has
any prior owner or prior or current tenant or subtenant used, Hazardous
Materials on, any property now owned or occupied, or previously owned or
occupied, by the Company or any of its Subsidiaries in any manner which
violates any Environmental Law.
SECTION 4.13. INVESTMENT COMPANY ACT. Neither the Company nor any of
its Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
SECTION 4.14. PLEDGE AGREEMENTS. Each Pledge Agreement executed by the
Company and each Domestic Subsidiary of the Company shall constitute a valid
and continuing lien on and security interest in the collateral referred to in
such Pledge Agreement in favor of the Agent, for the ratable benefit of the
Lenders, which shall be prior to all other Liens, claims and rights of all
other Persons.
SECTION 4.15. NO DEFAULT. No Default or Event of Default has occurred
and is continuing.
SECTION 4.16. MATERIAL CONTRACTS. As of the Closing Date, all Material
Contracts are disclosed on Schedule VIII hereto. Each such Material Contract
(a) is in full force and effect and is binding upon and enforceable against the
Company and its Subsidiaries, in each case, to the extent they are a party
thereto, and, to the Company's knowledge, all other parties thereto in
accordance with its terms, and (b) there exists no default, under any Material
Contract by the Company or any Subsidiary of the Company or, to the Company's
knowledge, by any other party thereto which has not been fully cured or waived.
SECTION 4.17. PERMITS AND LICENSES. The Company and each of its
Subsidiaries each has all permits, licenses, certifications, authorizations and
approvals required for it lawfully to own and operate their respective
businesses except those the failure of which to have could not, individually or
in the aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.18. COMPLIANCE WITH LAW. The Company and each of its
Subsidiaries are each in compliance, with all laws, rules, regulations, orders
and decrees which are applicable to
39
the Company or any of its Subsidiaries, or to any of their respective
properties which the failure to comply with could, individually or in the
aggregate, reasonably be expected to have a Material Adverse Effect.
SECTION 4.19. Y2K. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the Company's or any of its
Subsidiaries' computer systems and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the Company's
or any of its Subsidiaries' systems interface), in each case, to the extent the
failure to perform such reprogramming could reasonably be expected to have a
Material Adverse Effect, and the testing of all such systems and equipment, as
so reprogrammed, will be completed by June 30, 1999. The cost to the Company
and each of its Subsidiaries of such reprogramming and testing and of the
reasonably foreseeable consequences of year 2000 to the Company and each of its
Subsidiaries (including, without limitation, reprogramming errors and the
failure of others' systems or equipment) will not result in a Default or Event
of Default or have a Material Adverse Effect.
SECTION 4.20. DISCLOSURE. Neither this Agreement, any other Loan
Document, or any other document, certificate or written statement furnished to
the Agent or any Lender by or on behalf of the Company or any of its
Subsidiaries for use in connection with the transactions contemplated by this
Agreement contains any untrue statement of material fact or omits to state a
material fact necessary in order to make the statements contained herein or
therein not misleading in light of the circumstances in which they were made.
ARTICLE V
CONDITIONS OF LENDING
SECTION 5.01. CONDITIONS TO INITIAL EXTENSION OF CREDIT. The
obligation of each Lender to make its initial Loan hereunder, and the
obligation of the Agent to issue the initial Letter of Credit, are subject to
the following conditions precedent:
(a) REVOLVING CREDIT NOTES. On or prior to the Closing Date, the Agent
shall have received for the account of each Lender a Revolving Credit Note duly
executed by the Company.
(b) GUARANTIES. On or prior to the Closing Date, the Agent shall have
received, with a counterpart for each Lender, a Guaranty duly executed by each
Domestic Subsidiary of the Company.
(c) PLEDGE AGREEMENTS. On or prior to the Closing Date, the Agent
shall have received the Pledge Agreements duly executed by the Company and each
Domestic Subsidiary of the Company, as applicable, with respect to the
outstanding capital stock of each Subsidiary of the Company, together with the
stock certificates evidencing the shares pledged thereunder and stock powers
duly executed in blank by the Company or Subsidiary of the Company, as
appropriate.
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(d) OPINIONS OF COUNSEL. On or prior to the Closing Date, the Agent
and each Lender shall have received a written opinion of (i) counsel for the
Company and its Subsidiaries dated the Closing Date and addressed to the Agent
and the Lenders, substantially in the form of Exhibit F-1 attached hereto and
(ii) general in-house counsel to the Company and its Subsidiaries and from such
other special local counsel as the Agent may require, each in form and
substance satisfactory to the Agent and its counsel dated the Closing Date and
addressed to the Agent and the Lenders substantially in the form of Exhibit F-2
attached hereto (which local opinions should cover such matters incident to the
transactions contemplated hereby as the Agent may require (including without
limitation, the enforceability of the Pledge Agreement.))
(e) SUPPORTING DOCUMENTS. On or prior to the Closing Date, the Agent
shall have received, with a copy for each Lender, (i) a certificate of good
standing for the Company and each of its Subsidiaries from the secretary of the
states of their organizational jurisdiction dated as of a recent date; (ii)
certified copies of the Certificate of Incorporation and By-laws of the Company
and, if not previously delivered to the Agent prior to the date hereof, the
Certificate of Incorporation and By-Laws or other organizational documents, as
applicable of each of its Subsidiaries; (iii) a certificate of the Secretary or
an Assistant Secretary of the Company and each of its Subsidiaries dated the
Closing Date and certifying: (x) that neither the Certificates of Incorporation
nor the By-laws of the Company nor of any Subsidiary of the Company has been
amended since the date of their certification (or if there has been any such
amendment, attaching a certified copy thereof); (y) that attached thereto is a
true and complete copy of resolutions adopted by the Board of Directors of the
Company and by the board of directors or other governing body or Persons of
each of its Subsidiaries authorizing the execution, delivery and performance of
each Loan Document to which it is a party and, with respect to the Company, the
borrowings hereunder; and (z) the incumbency and specimen signature of each
officer of the Company and of each officer or other authorized Person of each
of its Subsidiaries executing each Loan Document to which the Company or
Subsidiary of the Company is a party and any certificates or instruments
furnished pursuant hereto or thereto, and a certification by another officer of
the Company and each of its Subsidiaries as to the incumbency and signature of
the Secretary or Assistant Secretary of the Company and each of its
Subsidiaries; and (iv) such other documents as the Agent may reasonably
request.
(f) OFFICER'S CERTIFICATE. On the Closing Date, the Agent shall have
received a certificate dated the Closing Date, executed by an Executive Office
confirming compliance with the conditions set forth and clauses (a) and (b) of
Section 5.02.
(g) INSURANCE. On or prior to the Closing Date, the Agent shall have
received a certificate or certificates of insurance from an independent
insurance broker or brokers confirming the insurance required to be maintained
pursuant to Section 6.01 hereof.
(h) ASSETS FREE FROM LIENS. Prior to the Closing Date, the Agent shall
have received UCC-1 financing statement, tax and judgment lien searches
evidencing that the Company's and each of its Subsidiaries' accounts
receivable, inventory, equipment and all other assets of the Company and each
of its Subsidiaries are free and clear of all Liens except Permitted Liens.
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(i) FEES AND EXPENSES. On or prior to the Closing Date, the Agent
shall have received (i) the underwriting fee payable by the Company to the
Agent pursuant to a letter agreement dated August 10, 1998 between the Company
and the Agent and each Lender shall have received its portion of such fee as
agreed in writing between the Agent and each Lender, and (ii) for itself all
fees payable pursuant to Section 3.04(c) and reimbursement of expenses in
accordance with Section 10.03.
(j) NO LITIGATION. There shall exist no action, suit, investigation,
litigation or proceeding affecting the Company or any of its Subsidiaries
pending or threatened before any court, governmental agency or arbiter that
could reasonably be expected to have, individually or in the aggregate, a
Material Adverse Effect.
(k) CONSENTS AND APPROVALS. All governmental and third party consents
and approvals necessary in connection with the transactions contemplated by
this agreement and the other Loan Documents shall have been obtained (without
the imposition of any conditions that are not acceptable to the Required
Lenders) and shall remain in effect, and no law or regulation shall be
applicable in the reasonable judgment of the Required Lenders that imposes
materially adverse conditions upon the transactions contemplated hereby.
(l) NO MATERIAL ADVERSE CHANGES. There shall not have occurred any
material adverse change in the business, operations, performance, properties,
prospects or condition, financial or otherwise, of the Company or the Company
and its Subsidiaries, taken as a whole since September 30, 1998.
(m) EXISTING INDEBTEDNESS. The Agent shall have received concurrently
with the extension of the first Revolving Credit Loan evidence that the
indebtedness described in clause (i) of the definition of Existing Indebtedness
set forth in Section 1.01 has been paid in full and all liens, guarantees and
other security provided in connection with the Existing Indebtedness have been
terminated, which evidence shall include, without limitation, UCC-3 statements
of termination.
(n) FINANCIAL STATEMENTS. Satisfactory review by the Required Lenders
of (i) the audited consolidated financial statements of the Company and its
Subsidiaries for the fiscal year ended December 31, 1997, and (ii) the
unaudited consolidated financial statements for the Company and its
Subsidiaries for the interim nine months ended September 30, 1998.
(o) OTHER INFORMATION, DOCUMENTATION. The Agent shall receive such
other and further information and documentation as it may require, including,
but not limited to, any information or documentation relating to compliance by
the Company and each of its Subsidiaries with the requirements of all
Environmental Laws.
(p) COMPLETION OF PROCEEDINGS. All corporate and other proceedings,
and all documents, instruments and other legal matters in connection with the
transactions contemplated by
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the Loan Documents shall be reasonably satisfactory in form and substance to
the Agent and its counsel.
SECTION 5.02. CONDITIONS TO ALL EXTENSIONS OF CREDIT. The obligation
of each Lender to make each Loan hereunder and the obligation of the Agent to
issue, amend, renew or extend any Letter of Credit, including, without
limitation, the initial Loan and initial Letter of Credit, is subject to the
conditions precedent set forth in Section 5.01 and the following conditions
precedent:
(a) REPRESENTATIONS AND WARRANTIES. The representations and warranties
by the Company and each of its Subsidiaries pursuant to this Agreement and the
Loan Documents to which each is a party shall be true and correct in all
material respects on and as of the Borrowing Date or the date of issuance,
amendment, renewal or extension of such Letter of Credit, as applicable, with
the same effect as though such representations and warranties had been made on
and as of such date unless such representation is as of a specific date, in
which case, as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred and
be continuing on the Borrowing Date or on the date of issuance, amendment,
renewal or extension of a Letter of Credit or will result after giving effect
to the Loan requested or the requested issuance, amendment, renewal or
extension of a Letter of Credit.
(c) AVAILABILITY. After giving effect to the requested Revolving
Credit Loan or Letter of Credit, the Aggregate Outstandings shall not exceed
the Total Commitment then in effect. After giving effect to any issuance,
amendment, renewal or extension of any Letter of Credit, the sum of the
Aggregate Letters of Credit Outstanding and the Aggregate Third Party Letters
of Credit Outstanding shall not exceed $15,000,000.
(d) ADDITIONAL DOCUMENTATION. With respect to the issuance, amendment,
renewal or extension of any Letter of Credit, the Agent shall have received the
documents and instruments requested by the Agent in accordance with the last
sentence of Section 2.05(a).
Each borrowing hereunder and each issuance, amendment, renewal or extension of
a Letter of Credit shall constitute a representation and warranty of the
Company that the statements contained in clauses (a), (b), and (c) of Section
5.02 are true and correct on and as of the Borrowing Date or as of the date of
issuance, amendment, renewal or extension of a Letter of Credit, as applicable,
as though such representations and warranties had been made on and as of such
date.
SECTION 5.03. CONDITIONS TO EACH ACQUISITION LOAN. The obligation of
each Lender to make each Acquisition Loan is subject to the conditions
precedent set forth in Sections 5.01 and 5.02 and the following condition
precedent:
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(a) PERMITTED ACQUISITION. The Agent shall have received a certificate
executed by an Executive Officer of the Company certifying that the proposed
acquisition constitutes a Permitted Acquisition.
SECTION 5.04. CONDITIONS TO EACH CONSTRUCTION LOAN. The obligation of
each Lender to make each Construction Loan hereunder is subject to the
conditions precedent set forth in Section 5.01 and 5.02 and the following
conditions precedent:
(a) CONSTRUCTION BUDGET; OTHER ITEMS. If requested by the Agent, the
Agent shall have received for its satisfactory review (i) a budget relating to
the construction of the proposed Facility, (ii) a copy of the real estate
purchase agreement or, in the event of a lease of real property, a copy of the
related lease, and (iii) a timeline for the construction of the proposed
Facility.
(b) LIMITATIONS. The aggregate principal amount of Construction Loans
for a particular Facility shall not exceed the sum of (i) the purchase price
for the real estate upon which such Facility is to be constructed plus (ii) the
construction budget for such Facility. The aggregate outstanding principal
amount of all Construction Loans, after giving effect to the requested
Construction Loan, shall not exceed $30,000,000 at any time.
(c) PLEDGE AGREEMENT AND GUARANTY. The Agent shall have received in
accordance with Section 6.13 hereof, a duly executed Pledge Agreement and, to
the extent applicable, stock certificates evidencing the pledged shares and
related stock powers duly endorsed in blank, and, to the extent required
pursuant to Section 6.13 hereof, a Guaranty duly executed by the applicable
Subsidiary of the Company.
(d) NO DEFAULT. No Default or Event of Default shall have occurred or
will occur immediately after giving effect to the proposed Construction Loan,
including, without limitation, any Default arising from a breach of any
covenant set forth in Section 7.01 with respect to Liens or Section 7.02 with
respect to Indebtedness.
(e) CERTIFICATE. The Agent shall have received a certificate executed
by an Executive Officer of the Company certifying that the proposed
construction project constitutes a Permitted Construction Project.
SECTION 5.05. ADDITIONAL CONDITIONS WITH RESPECT TO THE TERM LOAN. The
obligation of each Lender to make the Term Loan hereunder is subject to the
conditions precedent set forth in Section 5.01 and 5.02 and the following
condition precedent:
(a) TERM NOTES. On or prior to the Revolving Credit Conversion Date,
the Agent shall have received for the account of each Lender a Term Note duly
executed by the Company.
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ARTICLE VI
AFFIRMATIVE COVENANTS
The Company covenants and agrees with the Lenders that so long as the
Commitments remain in effect, or any of the principal of or interest on the
Notes or any other Obligations hereunder shall be unpaid it will, and will
cause each of its Subsidiaries to:
SECTION 6.01. EXISTENCE, PROPERTIES, INSURANCE. Do or cause to be done
all things necessary to preserve and keep in full force and effect its
corporate partnership or limited liability, existence as applicable, rights and
franchises and comply in all material respects with all laws applicable to it;
at all times maintain, preserve and protect all franchises and trade names and
preserve all of its property used or useful in the conduct of its business and
keep the same in good repair, working order and condition and from time to time
make, or cause to be made, all needful and proper repairs, renewals,
replacements, betterments and improvements thereto so that the business carried
on in connection therewith may be properly and advantageously conducted in the
ordinary course at all times; at all times maintain insurance covering its
assets and its businesses with financially sound and reputable insurance
companies or associations in such amounts and against such risks (including,
without limitation, hazard, business interruption, public liability and product
liability) as are usually carried by companies engaged in the same or similar
business. Each such policy of insurance shall provide for at least thirty (30)
day's prior written notice to the Agent of any modification or cancellation of
such policies. The Company shall provide to the Agent promptly upon receipt
thereof evidence of the annual renewal of each such policy.
SECTION 6.02. PAYMENT OF INDEBTEDNESS AND TAXES. (a) Pay all
indebtedness and obligations, now existing or hereafter arising, as and when
due and payable and (b) pay and discharge or cause to be paid and discharged
promptly all taxes, assessments and government charges or levies imposed upon
it or upon its income and profits, or upon any of its property, real, personal
or mixed, or upon any part thereof, before the same shall become in default, as
well as all lawful claims for labor, materials and supplies or otherwise which,
if unpaid, might become a lien or charge upon such properties or any part
thereof; provided, however, that neither the Company nor any Subsidiary of the
Company shall be required to pay and discharge or cause to be paid and
discharged any such tax, assessment, charge, levy or claim so long as the
validity thereof shall be contested in good faith by appropriate proceedings,
and the Company or such Subsidiary, as the case may be, shall have set aside on
its books adequate reserves determined in accordance with Generally Accepted
Accounting Principles with respect to any such tax, assessment, charge, levy or
claim so contested and; further, provided that, subject to the foregoing
proviso, the Company and each of its Subsidiaries will pay or cause to be paid
all such taxes, assessments, charges, levies or claims upon the commencement of
proceedings to foreclose any lien which has attached as security therefor.
45
SECTION 6.03. FINANCIAL STATEMENTS, REPORTS, ETC. Furnish to each
Lender (other than the statements referred to in Sections 6.03(e), 6.03(g),
6.03(h), 6.03(i) and 6.03(j) which shall be furnished solely to the Agent):
(a) as soon as available, but in any event within 105 days
after the end of each fiscal year of the Company, a copy of (i) the audited
comparative consolidated balance sheet of the Company and its Subsidiaries as
of the end of such year and the related audited comparative consolidated
statements of income, retained earnings and cash flow for such year, such
financial statements to be prepared in accordance with Generally Accepted
Accounting Principles consistently applied and accompanied by a report thereon
of Xxxxxxx X. Xxxxxx & Company, LLC or other independent certified public
accountants of recognized standing selected by the Company and satisfactory to
the Required Lenders (the "Auditor"), which report shall be unqualified;
(b) as soon as available, but in any event not later than 60
days after the end of each of the first three quarterly periods of each fiscal
year of the Company, a copy of the unaudited interim comparative consolidated
balance sheet of the Company and its Subsidiaries as of the end of each such
quarter and the related unaudited interim comparative consolidated statements
of income, retained earnings and cash flow for such quarter and the portion of
the fiscal year through such date; all such financial statements to be prepared
in accordance with Generally Accepted Accounting Principles, consistently
applied (except for the absence of footnotes thereto);
(c) a certificate prepared and signed by the Auditor with
each delivery required by clause (a) and a certificate prepared and signed by
the Chief Financial Officer with each delivery required by clauses (a) and (b),
certifying that the financial statements delivered pursuant to such clauses
were prepared in accordance with Generally Accepted Accounting Principles
consistently applied, and further certifying as to whether or not, as of the
close of such preceding period and at all times during such preceding period,
the Company and its Subsidiaries were in compliance with all the provisions in
this Agreement, showing computation of financial covenants and quantitative
negative covenants, and if the Auditor or Chief Financial Officer, as the case
may be, shall have obtained knowledge of any default in such compliance or
notice of such default, it shall disclose in such certificate such default or
defaults or notice thereof and the nature thereof, whether or not the same
shall constitute an Event of Default hereunder;
(d) simultaneously with the delivery of the financial
statements referenced to in clause (a) above, a copy of the management letter,
if any, prepared by the Auditor;
(e) as soon as available, but in any event not later than 105
days after the end of each fiscal year of the Company the sales figure and the
EBITDA amount of each Facility and each Related Business as of the end of such
fiscal year;
(f) within five (5) days after filing thereof, copies of all
regular and periodic financial information, proxy materials and other
information and reports which the Company or any of its Subsidiaries shall file
with the Securities and Exchange Commission;
46
(g) with respect to each Permitted Acquisition, (i) promptly
upon request of the Agent, (x), to the extent not delivered pursuant to clause
(f) above, a copy of each acquisition agreement executed during the preceding
calendar month, together with all schedules and exhibits thereto and all
material documents and instruments delivered thereunder, and (y) a copy of each
lease of real property, if any, included in the Permitted Acquisition together
with a copy of the consent of the lessor therein, if required in connection
with the Permitted Acquisition; and (ii), within thirty (30) days of the end of
each calendar month, a Chief Financial Officer's Certificate to the extent
required pursuant to Section 7.02(h).
(h) promptly, after the Agent's request therefor, copies of
lien searches conducted in connection with, and copies of drafts of the
acquisition agreement with respect to, a Permitted Acquisition together with
such other information or documents as the Agent may reasonably request with
respect to any proposed or consummated Permitted Acquisition;
(i) within thirty (30) days of the end of each calendar
month, in the event of the sale of stock or assets pursuant to Section 7.04, a
certificate of an Executive Officer of the Company setting forth a description
of the stock or assets sold and the purchase price therefore and manner of
payment thereof (e.g., securities, notes or cash) together with a certification
that the conditions set forth in Sections 7.04(a)(x) and 7.04(a)(y) or Section
7.04(b) (i) through (x), as applicable, and the other conditions set forth in
Section 7.04 were satisfied in connection with such disposition of assets;
(j) in the event of incurrence of Indebtedness pursuant to
Section 7.02(h)(iv) or of any Indebtedness permitted pursuant to Section
7.02(i), (i) within one (1) day prior to the incurrence of such Indebtedness, a
certificate of an Executive Officer of the Company (identifying the creditor,
the amount of the Indebtedness and the security given to secure such
Indebtedness) and certifying that all requirements set forth in Section 7.02(h)
or Section 7.02(i), as applicable, are satisfied and (ii) promptly upon request
of the Agent, a copy of the agreement or instrument evidencing Indebtedness
permitted pursuant to Section 7.02(i) together with copies of the security
documents executed in connection therewith and promptly upon request of the
Agent a copy of the same with respect to Indebtedness permitted pursuant to
Section 7.02(h); and further promptly upon request of the Agent provide to the
Agent a copy of any amendments or modifications to any such instrument,
agreement or document;
(k) promptly after submission to any government or regulatory
agency, all documents and information furnished to such government or
regulatory agency other than such documents and information prepared in the
normal course of business and which would not result in any adverse action to
be taken by such agency; and
(l) promptly, from time to time, such other information
regarding the operations, business affairs and condition, financial or
otherwise, of the Company or any of its Subsidiaries as any Lender may request.
47
SECTION 6.04. BOOKS AND RECORDS; ACCESS TO PREMISES. Keep adequate
records and proper books of record and account in which complete entries will
be made in a manner to enable the preparation of financial statements in
accordance with Generally Accepted Accounting Principles, and which shall
reflect all financial transactions of the Company and each of its Subsidiaries.
At any time, and from time to time, permit any Lender or any agents or
representatives thereof, in coordination with the Agent, to examine and request
copies of and abstracts from the books and records of such information which
such Lender deems is necessary or desirable (including, without limitation, the
financial records of the Company and its Subsidiaries) and to visit the
properties of the Company or any of its Subsidiaries and to discuss the
affairs, finances and accounts of the Company or any of its Subsidiaries with
any of their respective officers or directors or the Company's independent
accountants.
SECTION 6.05. NOTICE OF ADVERSE CHANGE. Promptly notify each Lender in
writing of (a) any change in the business or the operations of the Company or
its Subsidiaries which could reasonably be expected to have a Material Adverse
Effect, and (b) any information which indicates that any financial statements
which are the subject of any representation contained in this Agreement, or
which are furnished to the Agent or the Lenders pursuant to this Agreement,
fail, in any material respect, to present fairly the financial condition and
results of operations purported to be presented therein, disclosing the nature
thereof.
SECTION 6.06. NOTICE OF DEFAULT. Promptly notify each Lender of any
Default or Event of Default which shall have occurred, which notice shall
include a written statement as to such occurrence, specifying the nature
thereof and the action (if any) which is proposed to be taken with respect
thereto.
SECTION 6.07. NOTICE OF LITIGATION. Promptly notify each Lender of any
action, suit or proceeding at law or in equity or by or before any governmental
instrumentality or other agency which, if adversely determined against the
Company or any Subsidiary of the Company on the basis of the allegations and
information set forth in the complaint or other notice of such action, suit or
proceeding, or in the amendments thereof, if any, could reasonably be expected
to have a Material Adverse Effect.
SECTION 6.08. NOTICE OF DEFAULT IN OTHER AGREEMENTS. Promptly notify
each Lender of any default in the performance, observance or fulfillment of any
of the obligations, covenants or conditions contained in any agreement or
instrument to which the Company or any Subsidiary of the Company is a party
which default could reasonably be excepted to have a Material Adverse Effect.
SECTION 6.09. NOTICE OF ERISA EVENT. Promptly deliver to each Lender a
certificate of the Chief Financial Officer of the Company setting forth details
as to such occurrence and such action, if any, which the Company, such
Subsidiary of the Company or such ERISA Affiliate is required or proposes to
take, together with any notices required or proposed to be given to or filed
with or by the Company, such Subsidiary of the Company, ERISA Affiliate, the
PBGC, a Plan participant or the Plan administrator, with respect thereto: that
a Reportable Event has occurred, that
48
an accumulated funding deficiency has been incurred or an application may be or
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code with
respect to a Plan, that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA, that a Plan has an
Unfunded Current Liability giving rise to a lien under ERISA, that proceedings
may be or have been instituted to terminate a Plan, that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan, or that the Company, any Subsidiary of the Company or
any ERISA Affiliate will or may incur any liability (including any contingent
or secondary liability) to or on account of the termination of or withdrawal
from a Plan under Section 4062, 4063, 4064, 4201 or 4204 of ERISA. The Company
will deliver to each Lender a complete copy of the annual report (Form 5500) of
each Plan required to be filed with the Internal Revenue Service. In addition
to any certificates or notices delivered to each Lender pursuant to the first
sentence hereof, copies of annual reports and any other notices received by the
Company or any Subsidiary of the Company required to be delivered to each
Lender hereunder shall be delivered to each Lender no later than ten days after
the later of the date such report or notice has been filed with the Internal
Revenue Service or the PBGC, given to Plan participants or received by the
Company or a Subsidiary of the Company.
SECTION 6.10. NOTICE OF ENVIRONMENTAL LAW VIOLATIONS. Promptly notify
each Lender of the receipt of any notice of an action, suit, and proceeding
before any court or governmental department, commission, board, bureau, agency
or instrumentality, domestic or foreign, affecting the Company or any
Subsidiary of the Company relating to any alleged violation of any
Environmental Law which could reasonably be expected to have a Material Adverse
Effect.
SECTION 6.11. NOTICE REGARDING MATERIAL CONTRACTS. Promptly notify
each Lender of (a) any termination, material amendment, material supplement or
other material modification of any Material Contract and (b) the occurrence of
a default by any party to any Material Contract of which the Company is aware.
SECTION 6.12. COMPLIANCE WITH APPLICABLE LAWS. Comply with the
requirements of all applicable laws, rules, regulations and orders of any
Governmental Authority, the breach of which could reasonably be expected to
have a Material Adverse Effect, including, without limitation, the rules and
regulations of the Board of Governors of the Federal Reserve System and the
Federal Deposit Insurance Corporation.
SECTION 6.13. SUBSIDIARIES. Give the Agent prompt written notice of
the creation, establishment or acquisition, in any manner, of any Subsidiary of
the Company not existing on the Closing Date. The Company or its Subsidiary, as
appropriate, shall execute a Pledge Agreement with respect to (i) all of the
shares of capital stock or other ownership interest of each such Subsidiary
which is a Domestic Subsidiary and (ii) 65% of the outstanding shares of
capital stock or other ownership interest of each such Subsidiary which is a
Foreign Subsidiary, (in each case, together with certificates and powers with
respect to such interests duly endorsed in blank, and in the event of
uncertificated interests, UCC-1 financing statements identifying such interest
and
49
executed by the holder of such interest) and shall cause each Domestic
Subsidiary to execute a Guaranty in favor of each Lender within thirty days of
the creation, establishment or acquisition of such Subsidiary and in connection
therewith shall provide to each Lender the supporting documents identified in
clauses (i), (ii), and (iii) of Section 5.01(e) in each case with respect to
such Subsidiary; provided, however, the Company shall not be required to
deliver a certificate of good standing with respect to any Subsidiary formed
less than ninety days from the date such certificate would otherwise be
required to be delivered pursuant to this Section 6.13. Within ten days of the
end of each calendar quarter, the Company shall deliver to the Agent, with a
copy for each Lender, a favorable written opinion of counsel to, addressed to
the Agent and each Lender, of (i) counsel (which may include in-house counsel)
to each Domestic Subsidiary created, established, or acquired during the
preceding calendar quarter in the form attached hereto as Exhibit F with
respect to each such Domestic Subsidiary and with respect to the documents
required to be executed by each Domestic Subsidiary pursuant to this Section
6.13 but, excluding the matters in paragraph 7 of Exhibit F and (ii) local
counsel to each Foreign Subsidiary, which opinion shall be consistent in
substance and as to the matters opined as the local counsel opinions delivered
pursuant to Section 5.01(d) on the Closing Date.
SECTION 6.14. ENVIRONMENTAL LAWS.
Comply with and use of its best efforts to ensure compliance by all
tenants and subtenants of their respective properties with the requirements of
all Environmental Laws, provide to the Lenders all documentation in connection
with such compliance that the Lenders may reasonably request, and defend,
indemnify, and hold harmless the Agent and each Lender and their respective
employees, agents, officers, and directors, from and against any claims,
demands, penalties, fines, liabilities, settlements, damages, costs, or
expenses of whatever kind or nature, known or unknown, contingent or otherwise,
arising out of, or in any way related to, (a) the presence, disposal, or
release, of any Hazardous Materials on any property at any time owned or
occupied by the Company or any Subsidiary of the Company; (b) any personal
injury (including wrongful death) or property damage (real or personal) arising
out of or related to such Hazardous Materials; (c) any lawsuit brought or
threatened, settlement reached, or government order relating to such Hazardous
Materials, and/or (d) any violation of applicable Environmental Laws,
including, without limitation, reasonable attorney and consultant fees,
investigation and laboratory fees, court costs, and litigation expenses.
ARTICLE VII
NEGATIVE COVENANTS
The Company covenants and agrees with the Lenders that so long as the
Commitments remain in effect or any of the principal of or interest on any Note
or any other Obligations hereunder shall be unpaid, it will not, and will not
cause or permit any Subsidiary of the Company, directly or indirectly, to:
50
SECTION 7.01. LIENS. Incur, create, assume or suffer to exist any Lien
on any of their respective assets now or hereafter owned, other than:
(a) Liens existing on the date hereof as set forth on
Schedule II attached hereto but not any renewals or extensions thereof unless
no Default or Event of Default shall have occurred and be continuing or would
occur after giving effect to such renewal or extension;
(b) Liens for taxes, assessments or other governmental
charges or levies not yet delinquent or which are being contested in good faith
by appropriate proceedings, provided, however, that adequate reserves with
respect thereto are maintained on the books of the Company or its Subsidiaries
in accordance with Generally Accepted Accounting Principles;
(c) carriers', warehousemans', mechanics', suppliers' or
other like Liens arising in the ordinary course of business and not overdue for
a period of more than 30 days or which are being contested in good faith by
appropriate proceedings in a manner which will not jeopardize or diminish the
interest of the Agent in any of the collateral subject to the Pledge
Agreements;
(d) Liens incurred or deposits to secure the performance of
tenders, bids, trade contracts (other than for borrowed money), leases,
statutory obligations, surety, performance and appeal bonds, and other
obligations of similar nature incurred in the ordinary course of business,
including liens on work-in-progress, inventory and unfinished goods securing
progress payments received under contracts with third parties;
(e) any attachment, judgment or similar Lien arising in
connection with any court or governmental proceeding provided that the
execution or other enforcement of such Lien is effectively stayed;
(f) easements, rights of way, restrictions and other similar
charges or encumbrances which in the aggregate do not interfere in any material
respect with the occupation, use and enjoyment by the Company or any of its
Subsidiaries of the property or assets encumbered thereby in the normal course
of their respective business or materially impair the value of the property
subject thereto;
(g) deposits under workmen's compensation, unemployment
insurance and social security laws;
(h) liens granted to the Lenders or the Agent, for the
ratable benefit of the Lenders, under this Agreement or any other Loan
Document;
(i) purchase money liens for fixed or capital assets (other
than real property), including obligations with respect to Capital Leases;
provided in each case (i) no Default or Event of Default shall have occurred or
be continuing or shall occur after giving effect to such lien, (ii) such
purchase money lien does not exceed 80% of the purchase price of, and encumbers
only, the
51
property acquired, and (iii) such purchase money Lien does not secure any
Indebtedness other than in respect of the purchase price of the asset acquired;
and
(j) Liens securing (i) Acquired Debt, (ii) Assumed Debt,
(iii) Third Party Acquisition Debt (iv) Indebtedness incurred by a Subsidiary
of the Company to finance or refinance a Construction Loan or Third Party
Construction Loan and, in each case, to the extent permitted pursuant to
Section 7.02(h), (v) Indebtedness permitted pursuant to Section 7.02(i),
provided, in each case of clauses (i) through (v) (x) no Default or Event of
Default shall have occurred and be continuing or shall occur after giving
effect to the grant of the proposed Liens, (y) the Liens attach solely to the
assets of the Subsidiary which is the obligor with respect to such
Indebtedness, except with respect to (i) the finance or refinancing of any
Construction Loan or Third Party Construction Loan and (ii) Indebtedness
permitted pursuant to Section 7.02(i), the Liens shall consist solely of a
mortgage lien on the real property, improvements and fixtures which are the
subject of such Indebtedness; and (z) such Lien does not secure any
Indebtedness other than the Acquired Debt, the Assumed Debt, the Third Party
Acquisition Debt, the Indebtedness incurred by a Subsidiary of the Company to
finance or refinance a Construction Loan or Third Party Construction Loan, or
the Indebtedness permitted pursuant to Section 7.02(i) as applicable, and;
further provided, such Liens are not renewed or extended unless no Default or
Event of Default shall have occurred and be continuing, or shall occur after
giving effect to such renewal or extension.
SECTION 7.02. INDEBTEDNESS. Incur, create, assume or suffer to exist
or otherwise become liable in respect of any Indebtedness, other than:
(a) Indebtedness incurred prior to the date hereof as
described in Schedule "III" attached hereto but not including any renewals or
extensions thereof unless (i) the principal amount of such renewed or extended
Indebtedness is not greater than the principal amount of the Indebtedness
outstanding immediately prior to such renewal or extension (ii) the collateral
securing such renewed or extended Indebtedness is not different by type or
amount (other than variations in the value of a type of collateral subject to a
floating lien) than the collateral securing the Indebtedness immediately prior
to such renewal or extension, (iii) the scheduled payments of principal
pursuant to the terms of the renewed or extended Indebtedness do not exceed the
scheduled payments of principal which would have been required to be paid
during any consecutive twelve month period subsequent to such renewal or
extension in the absence of such renewal or extension during the term of this
Agreement, and (iv) no Default or Event of Default shall have occurred and be
continuing or would occur after giving effect to such renewal or extension;
(b) Indebtedness to the Lenders under this Agreement, the
Notes or any other Loan Document;
(c) Indebtedness for trade payables incurred in the ordinary
course of business; provided such payables shall be paid or discharged when due
or in conformity with customary trade terms;
52
(d) Indebtedness consisting of guarantees permitted pursuant
to Section 7.03;
(e) Subordinated Indebtedness; provided, however, that no
Default or Event of Default shall have occurred and be continuing or would
occur after giving effect to the incurrence of such Subordinated Indebtedness;
(f) Indebtedness secured by purchase money Liens as permitted
under Section 7.01(i);
(g) Indebtedness of the Company to any Guarantor and
Indebtedness of any Guarantor to the Company or any other Guarantor;
(h) (i) Assumed Debt, (ii) Acquired Debt, (iii) Third Party
Acquisition Debt, and (iv) Indebtedness incurred to finance or refinance a
Construction Loan or Third Party Construction Loan, provided, in each case of
clauses (i), (ii), (iii) and (iv), that (x) no Default or Event of Default
shall have occurred and be continuing or would occur after giving effect to the
incurrence of such Indebtedness (y) the Agent shall have received (i) if
requested by the Agent, pursuant to Section 6.03, a copy of all agreements and
instruments which relate to or evidence such Indebtedness and which agreements
and instruments shall not restrict the ability of the Company or any of its
Subsidiaries to grant Liens on any of its assets to any third parties,
including the Agent or the Lenders, or to perform any of their respective
obligations under any Loan Document (with respect to Liens only, other than the
Subsidiary acquiring the assets of a Person pursuant to a Permitted Acquisition
or the Person whose shares of capital stock or other equity interests are
acquired pursuant to Permitted Acquisition), and (ii) prior to the incurrence
of Indebtedness permitted pursuant to this Section 7.02(h)(iv) and, with
respect to Indebtedness permitted to this Section 7.02(h)(i), (ii) and (iii),
within thirty (30) days of the date of the Agent's request therefor, a
certificate prepared and signed by the Chief Financial Officer of the Company
certifying that the Company and each of its Subsidiaries is in compliance with
the covenants contained in the Loan Documents (including, without limitation,
the financial covenants calculated as of the most recent fiscal quarter then
ended on a pro forma basis to include such Indebtedness) after giving effect to
the incurrence of such Indebtedness and the consummation of the related
transaction and identifying the creditor, the principal amount of such
Indebtedness and the collateral if any securing such Indebtedness, and (z)
there shall not be permitted any renewals or extensions of any such
Indebtedness, unless (I) no Default or Event of Default shall have occurred and
be continuing, or shall occur after giving effect to such renewal or extension,
(II) the principal amount of such renewed or extended Indebtedness is not
greater than the principal amount of the Indebtedness outstanding immediately
prior to such renewal or extension, (III) the collateral securing such renewed
or extended Indebtedness is not different by type or amount (other than
variations in the value of a type of collateral subject to a floating lien)
than the collateral securing the Indebtedness immediately prior to such renewal
or extension, and (IV) the scheduled payments of principal pursuant to the
terms of the renewed or extended Indebtedness do not exceed the scheduled
payments of principal which would have been required to be paid during any
consecutive twelve month period subsequent to such renewal or extension in the
absence of such renewal or extension;
53
(i) Indebtedness to banks or other financial institutions
secured by a Mortgage Lien on real property of the Company or the Subsidiary of
the Company which incurred the Indebtedness provided (i) the aggregate
principal amount of all Indebtedness which is secured by a Mortgage Lien shall
not exceed an amount equal to (x) $75,000,000 (calculated exclusive of mortgage
indebtedness of SkateNation, Inc. in the current principal amount of
approximately $11,500,000 but inclusive of all indebtedness secured by a
Mortgage Lien, including, without limitation, such Indebtedness described on
Schedule III attached hereto) less (y) the aggregate sales price of all real
property sold and leased back by the Company or its Subsidiaries as permitted
pursuant to Section 7.08, (ii) the consolidated gross real property and
improvements of the Company determined in accordance with Generally Accepted
Accounting Principles (but prior to any depreciation) unencumbered by any
Mortgage Lien shall not be less than $200,000,000 as of the date of incurrence
of such Indebtedness, and (iii) no Default or Event of Default shall have
occurred and be continuing or would occur after giving effect to the incurrence
of such Indebtedness;
(j) Indebtedness owing from any Foreign Subsidiary to the
Company or any Guarantor; provided, however, the aggregate amount of all such
Indebtedness together with (i) the aggregate obligations guaranteed pursuant to
guaranties permitted pursuant to Section 7.03(d) and (ii) the aggregate loans
to and investments in the stock or other equity interest of Foreign
Subsidiaries permitted pursuant to Sections 7.06(a)(ii) and 7.06(a)(iii)
(calculated exclusive of the Eagle Quest Investment) shall not exceed
$30,000,000 in the aggregate at any one time outstanding;
(k) Indebtedness under Hedging Agreements with any Lender
provided such Hedging Agreements are entered into in the ordinary course of
business of the Company and are deemed appropriate by the Agent; and
(l) Reimbursement obligations with respect to Third Party
Letters of Credit; provided (i) the sum of the Aggregate Letters of Credit
Outstanding and Aggregate Third Party Letters of Credit Outstanding shall not
exceed $15,000,000 at any time and (ii) each Third Party Letter of Credit is
issued on or after the Revolving Credit Termination Date or is issued prior to
such date solely as a result of a requirement by the beneficiary of such Third
Party Letter of Credit that the expiration date thereof be a date later than
the Revolving Credit Termination Date.
SECTION 7.03. GUARANTIES. Guarantee, endorse, become surety for, or
otherwise in any way become or be responsible for the Indebtedness or
obligations of any Person, whether by agreement to maintain working capital or
equity capital or otherwise maintain the net worth or solvency of any Person or
by agreement to purchase the Indebtedness of any other Person, or agreement for
the furnishing of funds, directly or indirectly, through the purchase of goods,
supplies or services for the purpose of discharging the Indebtedness of any
other Person or otherwise, or enter into or be a party to any contract for the
purchase of merchandise, materials, supplies or other property if such contract
provides that payment for such merchandise, materials, supplies or other
property shall be made regardless of whether delivery of such merchandise,
supplies or other property is ever made or tendered except:
54
(a) guaranties executed prior to the date hereof as described on
Schedule IV attached hereto including any renewals or
extension thereof; provided (i) the contingent obligation
thereunder after giving effect to such extension or renewal
is not greater than such contingent obligation immediately
prior to such extension or renewal and (ii) no Default or
Event of Default shall have occurred and be continuing or
would occur after giving effect to such renewal or extension;
(b) endorsements of negotiable instruments for collection or
deposit in the ordinary course of business;
(c) guaranties by the Company of any Indebtedness permitted
pursuant to Section 7.02 of any Guarantor or the guarantees
by any Subsidiary of the Company of any such Indebtedness of
the Company or of any Guarantor; and
(d) guaranties by the Company or by any Subsidiary of the Company
of any Indebtedness of any Foreign Subsidiary permitted
pursuant to Section 7.02; provided, however, the aggregate
obligations guaranteed pursuant to such guaranties, together
with (i) the aggregate outstanding Indebtedness permitted
pursuant to clause 7.02(j) and (ii) the aggregate loans to
and investments in the stock or other equity interest of
Foreign Subsidiaries permitted pursuant to Sections
7.06(a)(ii) and 7.06(a)(iii) (calculated exclusive of the
Eagle Quest Investment) shall not exceed $30,000,000 in the
aggregate at any one time outstanding.
SECTION 7.04. SALE OF ASSETS. Sell, lease, transfer or otherwise
dispose of their respective properties and assets, whether or not pursuant to
an order of a federal agency or commission, except for the sale of obsolete
capital assets disposed of in the ordinary course of business. Notwithstanding
the foregoing, the Company shall be permitted, (a) to sell, for cash, (i) the
assets of the Xxxxxx Golf Club and (ii) the assets of the Golf Facility located
in Utica, New York (collectively, the "Relevant Facilities"); provided that in
each case of clauses (i) and (ii) (x) no Default or Event of Default shall have
occurred and be continuing or would occur after giving effect to sale, (y) all
Indebtedness of the Company or its Subsidiaries with respect to a Relevant
Facility (including without limitation, Indebtedness secured by a lien or
mortgage on the assets of the Relevant Facility) shall either be repaid in full
or assumed by the respective purchasers thereof on or prior to the closing date
of such sale except Indebtedness owing to the Company or any Subsidiary of the
Company which shall be paid in full on or prior to the closing date of such
sale, and (z) any guaranties executed by the Company or any Subsidiary of the
Company with respect to the owner of the Relevant Facility to be sold shall be
terminated on or prior to the closing date of such sale; and (b) to sell all of
the stock or all or substantially all of the assets of a Subsidiary without the
prior written consent of the Required Lenders provided that each of the
following conditions are met: (i) in the event of the sale of the assets of
such Subsidiary, all Indebtedness of such Subsidiary shall either be repaid in
full or assumed by the respective purchasers thereof, in each case, on or prior
to the closing date of such sale except Indebtedness owing to the Company or
any Subsidiary of the Company which shall be paid in full on or prior to the
closing date of such sale,
55
(ii) any guaranties executed by the Company or any Subsidiary of the Company
with respect to Indebtedness of the Subsidiary to be sold shall be terminated
on or prior to the closing date of such sale, (iii) the aggregate assets of
such Subsidiary do not represent greater than 10% of the consolidated assets of
the Company and its Subsidiaries as of the most recent fiscal quarter then
ended, (iv) the portion of Consolidated EBITDA attributable to such Subsidiary
does not represent greater than 10% of the Consolidated EBITDA as measured over
the preceding 12 month period, (v) no Default or Event of Default shall have
occurred and be continuing or shall occur after giving effect to the proposed
sale, (vi) no more than eight (8) such sale transactions shall have occurred
during the prior 12 month period, (vii) the Net Cash Proceeds of the sale are
applied to prepayment of the Loans in accordance with Section 3.03(a), (viii)
the aggregate assets of all Subsidiaries sold during the immediately preceding
12 month period (calculated after giving effect to the proposed sale) do not
represent greater than ten percent (10%) of the consolidated assets of the
Company and its Subsidiaries as reflected on the then most recent audited
consolidated financial statements of the Company and its Subsidiaries, (ix) the
portion of Consolidated EBITDA attributable to all Subsidiaries sold during the
immediately preceding consecutive 12 month period (calculated after giving
effect to the proposed sale) does not represent greater than ten percent (10%)
of the Consolidated EBITDA of the Company and its Subsidiaries as reflected on
the then most recent audited consolidated financial statements of the Company
and its Subsidiaries, and (x) in the event of the sale of assets of the
Subsidiary, the purchaser assumes the liabilities of the Subsidiary, other
than, if requested by such purchaser, liabilities arising out of tort or
violation of applicable law or breach of any agreement or instrument to which
such Subsidiary is a party prior to the closing date of such sale. In the event
the purchaser of the assets or stock of any Subsidiary in accordance with this
Section 7.04 delivers to the seller promissory notes or securities in
consideration or partial consideration of the purchase price for such sale, on
or prior to the closing date of such sale the Company or the Subsidiary, as the
case may be, shall deliver to the Agent all such promissory notes and/or
securities and shall take all action required to provide the Agent for the
ratable benefit of the Lenders, a first priority perfected security interest
therein to secure the Obligations or, if applicable, the obligations of such
Seller under its Guaranty. Concurrent with the closing of the sale of a
Subsidiary complying with the terms of this Section 7.04, the Agent shall
deliver to the Company (i) the certificates evidencing the stock or other
equity interests of such Subsidiary delivered to the Agent pursuant to the
Pledge Agreement, (ii) the stock powers received by the Agent with respect to
such certificates, (iii) termination statements on form UCC-3 in the event the
Agent received a UCC-1 financing statement with respect to any uncertificated
interest, and (iv) a letter terminating the obligations of such Subsidiary
under the Guaranty executed by such Subsidiary.
SECTION 7.05. SALES OF RECEIVABLES. Sell, transfer, discount or
otherwise dispose of notes, accounts receivable or other obligations owing to
the Company or any of its Subsidiaries, with or without recourse, except for
collection in the ordinary course of business.
SECTION 7.06. LOANS AND INVESTMENTS. Make or commit to make any
advance, loan, extension of credit, or capital contributions to, or purchase or
hold beneficially any stock or other securities, or evidence of Indebtedness
of, purchase or acquire all or a substantial part of the assets of, make or
permit to exist any interest whatsoever in, any other Person other than (a) the
ownership
56
of stock of any Subsidiary (i) existing as of the Closing Date or (ii) formed
by the Company or a Subsidiary of the Company solely to (x) establish a
Facility pursuant to a Permitted Construction Project or (y) acquire assets or
stock or other ownership interest of an entity pursuant to a Permitted
Acquisition; or (iii) resulting from the acquisition of stock or other
ownership interest in connection with a Permitted Acquisition; provided,
however, that the aggregate amount of all investments by the Company and its
Subsidiaries in the stock of Foreign Subsidiaries pursuant to the preceding
clauses (ii) and (iii) (calculated exclusive of the Eagle Quest Investment)
together with the aggregate loans and advances permitted pursuant to section
7.02(j) and the aggregate obligations guaranteed pursuant to guaranties
permitted pursuant to 7.03(d) shall not exceed $30,000,000 in the aggregate for
all such transactions, (b) investments constituting Eligible Investments, (c)
loans constituting Indebtedness permitted pursuant to Sections 7.02(g) and
7.02(j); or (d) investments which constitute a portion of the assets of a
Person the stock or other equity interest of which, or the assets of which, are
acquired pursuant to a Permitted Acquisition provided no such investment shall
require the Company or any Subsidiary of the Company to make additional
investments; or (e) promissory notes or securities received in consideration or
partial consideration of the sale of a Subsidiary of the Company or the assets
of a Subsidiary of the Company to a third Person in compliance with the terms
and conditions of Section 7.04, (f) loans and advances, on an arm's length
basis, to any Person, owning, operating, or managing a Facility or Related
Business or any affiliate thereof, in an aggregate amount not to exceed
$2,500,000 for all such loans and advances by the Company and its Subsidiaries,
or (g) loans and advances to officers and employees of the Company and its
Subsidiaries in an aggregate amount not to exceed $500,000.
SECTION 7.07. NATURE OF BUSINESS; LIMITATION ON FACILITIES. Change or
alter, in any material respect, the nature of its business from the owning and
operating of Facilities and Related Businesses; provided, however, there shall
be no more than 15 golf facilities, ice rink facilities and family fun centers
(including, without limitation, Golf Facilities, Ice Rink Facilities and Family
Fun Centers) under construction (exclusive of capital improvements or other
improvements to existing Facilities) at any one time and no more than 35 golf
facilities, ice rink facilities and family fun centers (including, without
limitation, Golf Facilities, Ice Rink Facilities and Family Fun Centers) may be
built or under construction during any consecutive 12 month period.
SECTION 7.08. SALE AND LEASEBACK. Enter into any arrangement, directly
or indirectly, with any Person whereby it shall sell or transfer any property,
whether real or personal, used or useful in its business, whether now owned or
hereafter acquired, of its or any of its Subsidiaries, if at the time of such
sale or disposition it intends to lease or otherwise acquire the right to use
or possess (except by purchase) such property or like property for a
substantially similar purpose; provided, however, the Company and its
Subsidiaries may enter into a sale and leaseback with respect to their
respective real property; provided, however, the aggregate purchase price of
all such sales consummated on or after the date of this Agreement shall not
exceed $15,000,000.
57
SECTION 7.09. FEDERAL RESERVE REGULATIONS. Permit any Loan or the
proceeds of any Loan to be used for any purpose which violates or is
inconsistent with the provisions of Regulations T, U or X of the Board of
Governors of the Federal Reserve System.
SECTION 7.10. ACCOUNTING POLICIES AND PROCEDURES. Permit any change in
the accounting policies and procedures of the Company or any of its
Subsidiaries, including a change in fiscal year, provided, however, that any
policy or procedure required to be changed by the FASB (or other board or
committee of the FASB), in order to comply with Generally Accepted Accounting
Principles, or required to be changed pursuant to applicable regulations of the
Securities Exchange Commission, may be so changed.
SECTION 7.11. HAZARDOUS MATERIALS. Cause or permit any of its
properties or assets to be used to generate, manufacture, refine, transport,
treat, store, handle, dispose, transfer, produce or process Hazardous
Materials, except in compliance with all applicable federal, state and local
laws or regulations, nor cause or permit, as a result of any intentional or
negligent act or omission on the part of the Company, any of its Subsidiaries
or any tenant or subtenant, a release of Hazardous Materials onto such property
or asset or onto any other property.
SECTION 7.12. LIMITATIONS ON FUNDAMENTAL CHANGES. Except for Permitted
Acquisitions and except as permitted by Section 7.04 above, 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 or hereafter acquired) to any Person, or acquire all or
substantially all of the assets (including, without limitation, capital stock)
or the business of any Person or liquidate, wind up or dissolve or suffer any
liquidation or dissolution.
SECTION 7.13. FINANCIAL CONDITION COVENANTS.
(a) Consolidated Tangible Net Worth. Permit at any time Consolidated
Tangible Net Worth to be less than (i) $230,000,000 during the period
commencing the Closing Date and ending December 30, 1998, and (ii) subject to
the proviso set forth below, during each three month period thereafter
commencing the last day of each fiscal quarter and ending the day next
preceding the last day of the next succeeding fiscal quarter (initially,
December 31, 1998 through March 30, 1999), the sum of (i) 50% of Consolidated
Net Income (not less than zero) for the immediately preceding fiscal quarter
(initially, the fiscal quarter ending December 31, 1998), (ii) the actual
Consolidated Tangible Net Worth as of the end of the immediately preceding
fiscal quarter (initially September 30, 1998) and (iii) the proceeds from any
sale or placement of equity in the Company after June 8, 1998; provided,
however, effective upon the date that the Consolidated Tangible Net Worth
equals or exceeds $250,000,000 the Company at all times thereafter shall not
permit Consolidated Tangible Net Worth to be less than $250,000,000.
(b) Consolidated Interest Coverage Ratio. Permit at any time the
Consolidated Interest Coverage Ratio to be less than the ratio set forth below
opposite the applicable period.
58
PERIOD RATIO
------ -----
Closing Date through December 30, 1998 3.50:1.00
December 31, 1998 thereafter 4.00:1.00
(c) Consolidated Funded Debt to Consolidated EBITDA. Permit at any
time the ratio of Consolidated Funded Debt to Consolidated EBITDA to exceed the
ratio set forth below opposite the applicable period.
PERIOD RATIO
------ -----
Closing Date through December 30, 1999 5.00:1.00
December 31, 1999 thereafter 4.00:1.00
(d) Consolidated Debt Service Coverage Ratio. Permit at any time the
Consolidated Debt Service Coverage Ratio to be less than the ratio set forth
below opposite the applicable period.
PERIOD RATIO
------ -----
Closing Date through December 30, 1998 1.00:1.00
December 31, 1998 thereafter 1.25:1.00
(e) Consolidated Senior Funded Debt to Consolidated EBITDA. Permit at
any time the ratio of Consolidated Senior Funded Debt to Consolidated EBITDA to
exceed 3.00:1.00.
(f) Maximum Consolidated Capital Expenditures. The aggregate amount of
consolidated Capital Expenditures of the Company and its Subsidiaries financed
with indebtedness for borrowed money (excluding indebtedness for borrowed money
evidenced by any Loan) shall not exceed $50,000,000 during any fiscal year of
the Company.
SECTION 7.14. SUBORDINATED DEBT. Directly or indirectly prepay,
defease, purchase, redeem, or otherwise acquire any Subordinated Debt, without
the prior written consent of the Required Lenders.
SECTION 7.15. DIVIDENDS. Except as permitted by the next succeeding
sentence, declare any dividend on, or make any payment on account of, or set
apart assets for a sinking or other analogous fund for the purchase,
redemption, defeasance, retirement or other acquisition of, any shares of any
class of stock of the Company or any of its Subsidiaries, whether now or
hereafter
59
outstanding, or make any other distribution in respect thereof, either directly
or indirectly, whether in cash, securities or property or in obligations of the
Company or any of its Subsidiaries or in any combination thereof, or permit any
Affiliate to make any payment on account of, or purchase or otherwise acquire,
any shares of any class of the stock of the Company or any of its Subsidiaries
from any Person. Notwithstanding the foregoing, (i) any Subsidiary of the
Company may pay dividends or make distributions ratably to its shareholders in
cash or securities; (ii) the Company may pay cash dividends to its shareholders
provided that no Default or Event of Default shall have occurred and be
continuing before or after giving effect to such dividend or distribution;
(iii) the Company may declare stock dividends and stock splits in favor of its
shareholders and (iv) the Company may redeem, repurchase or retire any shares
of any class of its capital stock for cash or securities provided that no
Default or Event of Default shall have occurred and be continuing before or
after giving effect to such redemption, repurchase or retirement.
SECTION 7.16. TRANSACTIONS WITH AFFILIATES. (a) Except as otherwise
set forth herein, neither the Company nor any of its Subsidiaries shall make
any loan, advance, guarantee or capital contribution to, or for the benefit of,
or sell, lease, transfer or dispose of any properties or assets to, or for the
benefit of, or purchase or lease any property or assets from, or enter into or
amend any contract, agreement or understanding with, or for the benefit of, an
Affiliate (each such transaction or series of related transactions that are
part of a common plan, an "Affiliate Transaction"), except in good faith and on
terms that are no less favorable to the Company or the relevant Subsidiary than
those that would have been obtained in a comparable transaction on an arm's
length basis from an unrelated Person.
(b) The Company shall not, and shall not permit any Subsidiary to,
engage in any Affiliate Transaction involving aggregate payments or other
transfers by the Company and its Subsidiaries in excess of $2,000,000
(including cash and non-cash payments and benefits valued at their fair market
value by the Board of Directors in good faith), unless the Company delivers to
the Agent; (i) a resolution of the Board of Directors stating that the Board of
Directors (including a majority of the disinterested directors, if any) has, in
good faith, determined that such Affiliate Transaction complies with the
provisions of this Agreement (which resolution shall also be required for all
Affiliate Transactions involving aggregate payments or other transfers by the
Company and its Subsidiaries which are less than $2,000,000 so long as they are
in excess of $500,000); and (ii) (x) with respect to any Affiliate Transaction
involving the incurrence of Indebtedness, a written opinion of a nationally
recognized investment banking or accounting firm experienced in the review of
similar types of transactions, (y) with respect to any Affiliate Transaction
involving the transfer of real property, fixed assets or equipment, either
directly or by a transfer of 50% or more of the capital stock of a Subsidiary
which holds any such real property, fixed assets or equipment, a written
appraisal from a nationally recognized appraiser experienced in the review of
similar types of transactions or (z) with respect to any Affiliate Transaction
not otherwise described in (x) or (y) above, or in lieu of the opinions and
appraisals referred to in (x) and (y) above, a written certification from a
nationally recognized professional or firm experienced in evaluating similar
types of transactions, in each case, stating that the terms of such transaction
are fair to the Company or such Subsidiary, as the case may be, from a
financial point of view.
60
SECTION 7.17. IMPAIRMENT OF SECURITY INTEREST. Take or omit to take
any action which could reasonably be expected to have the result of impairing
the security interest in any property subject to a security interest in favor
of the Agent or other Lenders.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.01. EVENTS OF DEFAULT. In the case of the happening of any
of the following events (each an "Event of Default"):
(a) failure to pay the principal of or interest on any Loan,
any reimbursement obligations with respect to a drawing under any Letter of
Credit, or any fees under this Agreement as and when due and payable, and with
respect to interest payments and fee payments only, such failure shall continue
unremedied for a period of five (5) days;
(b) default shall be made in the due observance or
performance of (i) any covenants or agreement set forth in Sections 6.01, 6.02,
6.08, 6.11, 6.12, 6.13 or 6.14 if such default shall continue unremedied for a
period of 30 days or (ii) any other covenant, condition or agreement of the
Company or any Subsidiary of the Company to be performed pursuant to this
Agreement, the Notes or any other Loan Document;
(c) any representation or warranty made in this Agreement or
any other Loan Document shall prove to be false or misleading in any material
respect when made or given or when deemed made or given;
(d) any report, certificate, financial statement or other
instrument furnished in connection with this Agreement or any other Loan
Document or the borrowings hereunder, shall prove to be false or misleading in
any material respect when made or given;
(e) default in the performance or compliance in respect of
any agreement or condition relating to any Indebtedness of the Company or any
of its Subsidiaries in excess of $500,000 individually or in the aggregate,
(other than the Notes), if the effect of such default is to accelerate the
maturity of such Indebtedness or to permit the holder or obligee thereof (or a
trustee on behalf of such holder or obligee) to cause such Indebtedness to
become due prior to the stated maturity thereof, or, except as otherwise
permitted by Section 7.02(c), any such Indebtedness shall not be paid when due;
(f) the Company or any of its Subsidiaries shall (i)
voluntarily commence any proceeding or file any petition seeking relief under
Title 11 of the United States Code or any other federal or state bankruptcy,
insolvency or similar law, (ii) consent to the institution of, or fail to
controvert in a timely and appropriate manner, any such proceeding or the
filing of any such petition, (iii) apply for or consent to the employment of a
receiver, trustee, custodian, sequestrator or similar
61
official for the Company or any of its Subsidiaries or for a substantial part
of its property; (iv) file an answer admitting the material allegations of a
petition filed against it in such proceeding, (v) make a general assignment for
the benefit of creditors, (vii) become unable or admit in writing its inability
or fail generally to pay its debts as they become due or (vii) take corporate
action for the purpose of effecting any of the foregoing;
(g) an involuntary proceeding shall be commenced or an
involuntary petition shall be filed in a court of competent jurisdiction
seeking (i) relief in respect of the Company or any of its Subsidiaries or of a
substantial part of their respective property, under Title 11 of the United
States Code or any other federal or state bankruptcy insolvency or similar law,
(ii) the appointment of a receiver, trustee, custodian, sequestrator or similar
official for the Company or any of its Subsidiaries or for a substantial part
of their property, or (iii) the winding-up or liquidation of the Company or any
of its Subsidiaries and such proceeding or petition shall continue undismissed
for 60 days or an order or decree approving or ordering any of the foregoing
shall continue unstayed and in effect for 60 days;
(h) One or more orders, judgments or decrees for the payment
of money in excess of $500,000 in the aggregate shall be rendered against the
Company or any of its Subsidiaries and the same shall not have been paid in
accordance with such judgment, order or decree and either (i) an enforcement
proceeding shall have been commenced by any creditor upon such judgment, order
or decree, or (ii) there shall have been a period of sixty (60) days during
which a stay of enforcement of such judgment, order or decree, by reason of
pending appeal or otherwise, was not in effect;
(i) any Plan shall fail to maintain the minimum funding
standard required for any Plan year or part thereof or a waiver of such
standard or extension of any amortization period is sought or granted under
Section 412 of the Code, any Plan is, shall have been terminated or the subject
of termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a Reportable Event shall have occurred with respect to a Plan or the
Company, any Subsidiary of the Company, or any ERISA Affiliate shall have
incurred a liability to or on account of a Plan under Section 515, 4062, 4063,
4063, 4201 or 4204 of ERISA, and there shall result from any such event or
events the imposition of a lien upon the assets of the Company or any of its
Subsidiaries, the granting of a security interest, or a liability to the PBGC
or a Plan or a trustee appointed under ERISA or a penalty under Section 4971 of
the Code;
(j) any material term or provision of any Loan Document shall
for any reason cease to be in full force and effect in accordance with its
terms or the Company or any of its Subsidiaries shall so assert in writing;
(k) a Change in Control shall have occurred;
(l) any of the Liens purported to be granted pursuant to any
Security Document shall cease for any reason to be legal, valid and enforceable
liens on the collateral purported to be covered thereby or shall cease to have
the priority purported to be created thereby;
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(m) the Company shall designate any Indebtedness other than
Indebtedness to the Lenders pursuant to this Agreement and the other Loan
Documents as "Designated Senior Indebtedness" (as that term is defined in the
Subordinated Note Indenture), without the prior written consent of the Required
Lenders; or
(n) an Event of Default (as that term is defined in the
Subordinated Note Indenture) shall have occurred and be continuing;
then, at any time thereafter during the continuance of any such event, the
Agent may, with the consent of the Required Lenders, and, upon the request of
the Required Lenders, shall, by written or telephonic notice to the Company,
take either or both of the following actions, at the same or different times,
(a) terminate the Commitments and (b) declare (i) the Notes, both as to
principal and interest, (ii) an amount equal to the maximum amount that may be
drawn under all Letters of Credit then outstanding (whether or not any
beneficiary under any Letter of Credit shall have presented or be entitled to
present the drafts and other documents required to draw under such Letter of
Credit), and (iii) all other Obligations, to be forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived, anything contained herein or in the Notes to the
contrary notwithstanding; provided, however, that if an event specified in
Section 8.01(f) or (g) shall have occurred, the Commitments shall automatically
terminate and interest, principal and amounts referred to in the preceding
clauses (i), (ii), and (iii) shall be immediately due and payable without
presentment, demand, protest, or other notice of any kind, all of which are
expressly waived, anything contained herein or in the Notes to the contrary
notwithstanding. With respect to all Letters of Credit that shall not have
matured or presentment for honor shall not have occurred, the Company shall
provide the Agent with Cash Collateral in an amount equal to the aggregate
undrawn amount of the Letters of Credit. Such Cash Collateral shall be applied
by the Agent to reimburse it for drawings under Letters of Credit for which it
has not been reimbursed and, to the extent not so applied, shall be held for
the satisfaction of the reimbursement obligations of the Company at such time
or, if the maturity of the Loans has been accelerated, be applied to satisfy
other Obligations.
ARTICLE IX
THE AGENT
SECTION 9.01. APPOINTMENT, POWERS AND IMMUNITIES.
Each Lender hereby irrevocably appoints and authorizes the Agent to
act as its agent hereunder, under the Security Documents and the other Loan
Documents with such powers as are specifically delegated to the Agent by the
terms of this Agreement, the Security Documents and the other Loan Documents
together with such other powers as are reasonably incidental thereto. The Agent
shall have no duties or responsibilities except those expressly set forth in
this Agreement, the Security Documents and the other Loan Documents and shall
not be a trustee for any Lender, nor is the Agent acting in a fiduciary
capacity of any kind under this Agreement, the Security Documents
63
or the other Loan Documents or in respect thereof or in respect of any Lender.
The Agent shall not be responsible to the Lenders for any recitals, statements,
representations or warranties contained in this Agreement, the Security
Documents, or the other Loan Documents, in any certificate or other document
referred to or provided for in, or received by any of them under, this
Agreement, the Security Documents or the other Loan Documents, or for the
value, validity, effectiveness, genuineness, enforceability or sufficiency of
this Agreement, the Security Documents or the other Loan Documents or any other
document referred to or provided for herein or therein or for the
collectibility of the Loans or for the validity, effectiveness or value of any
interest or security covered by the Security Documents or for the value of any
collateral or for the validity or effectiveness of any assignment, mortgage,
pledge, security agreement, financing statement, document or instrument, or for
the filing, recording, re-filing, continuing or re-recording of any thereof or
for any failure by the Company, or any of its Subsidiaries to perform any of
its obligations hereunder or under the other Loan Documents. The Agent may take
all actions by itself and/or it may employ agents and attorneys-in-fact, and
shall not be responsible, except as to money or the securities received by it
or its authorized agents, for the negligence or misconduct of itself or its
employees or of any such agents or attorneys-in-fact, if such agents or
attorneys-in-fact are selected by it with reasonable care. Neither the Agent
nor any of its directors, officers, employees or agents shall be liable or
responsible for any action taken or omitted to be taken by it or them
hereunder, under the Security Documents or the other Loan Documents or in
connection herewith or therewith, except for its or their own gross negligence
or willful misconduct.
SECTION 9.02. RELIANCE BY AGENT.
The Agent shall be entitled to rely upon any certification, notice or
other communication (including any thereof by telephone, telex, telegram or
cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for by this Agreement, the
Security Documents or the other Loan Documents, the Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder, under the
Security Documents or the other Loan Documents in accordance with instructions
signed by the Required Lenders, or such other number of Lenders as is specified
in Section 10.04 hereof, and such instructions of the Required Lenders or other
number of Lenders as aforesaid and any action taken or failure to act pursuant
thereto shall be binding on all of the Lenders.
SECTION 9.03. EVENTS OF DEFAULT.
The Agent shall not be deemed to have knowledge of the occurrence of a
Default (other than the non-payment of principal of or interest on Loans to the
extent the same is required to be paid to the Agent for the account of the
Lenders) unless the Agent has received notice from a Lender or the Company
specifying such Default and stating that such notice is a "Notice of Default".
In the event that the Agent receives such a notice of the occurrence of a
Default, the Agent shall give prompt notice thereof to the Lenders. The Agent
shall (subject to Section 9.07 hereof) take such action with
64
respect to such Default as shall be directed by the Required Lenders, except as
otherwise provided in Section 10.04 hereof; provided that unless and until the
Agent shall have received such directions, the Agent may take such action, or
refrain from taking such action, with respect to such Default or an Event of
Default as it shall deem advisable in the best interest of the Lenders.
SECTION 9.04. RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, the Agent in
its capacity as a Lender hereunder shall have the same rights and powers
hereunder as any other Lender and may exercise the same as though it were not
acting as the Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Agent in its individual capacity. The
Agent and its Affiliates may (without having to account therefor to any Lender)
accept deposits from, lend money to and generally engage in any kind of
banking, trust or other business with the Company or its Affiliates, as if it
were not acting as the Agent, and the Agent may accept fees and other
consideration from the Company or its Affiliates, for services in connection
with this Agreement, the Security Documents or any of the other Loan Documents
or otherwise without having to account for the same to the Lenders.
SECTION 9.05. INDEMNIFICATION.
The Lenders shall indemnify the Agent (to the extent not reimbursed by
the Company under Section 10.03 hereof), ratably in accordance with the
aggregate principal amount of the Loans made by the Lenders (or, if no Loans
are at the time outstanding, ratably in accordance with their respective
Commitments), for any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Agent in any way relating to or arising out of this Agreement, the
Security Documents or any of the other Loan Documents or any other documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby and thereby (including, without limitation, the costs and
expenses which the Company is obligated to pay under Section 10.03 hereof or
under the applicable provisions of any other Loan Document) or the enforcement
of any of the terms hereof or of the Security Documents, or of any other Loan
Document, provided that no Lender shall be liable for any of the foregoing to
the extent they arise from the gross negligence or willful misconduct of the
Agent.
SECTION 9.06. NON-RELIANCE ON AGENT AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agent or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Company and
decision to enter into this Agreement and that it will, independently and
without reliance upon the Agent or any other Lender, and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own analysis and decisions in taking or not taking action under this
Agreement, the Security Documents or the other Loan Documents. The Agent shall
not be required to keep itself informed as to the
65
performance or observance by the Company of this Agreement, the Security
Documents or the other Loan Documents or any other document referred to or
provided for herein or therein or to inspect the properties or books of the
Company. Except for notices, reports and other documents and information
expressly required to be furnished to the Lenders by the Agent hereunder or
under the Security Documents, or the other Loan Documents, the Agent shall not
have any duty or ability to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company, which may come into the possession of the Agent or any of its
Affiliates.
SECTION 9.07. FAILURE TO ACT.
Except for action expressly required of the Agent hereunder, or under
the Security Documents, the Agent shall in all cases be fully justified in
failing or refusing to act hereunder or thereunder unless it shall be
indemnified to its satisfaction by the Lenders against any and all liability
and expense which may be incurred by it by reason of taking or continuing to
take any such action.
SECTION 9.08. RESIGNATION OF AGENT.
Subject to the appointment and acceptance of a successor Agent as
provided in this Section 9.08, the Agent may resign at any time by notifying
the Lenders and the Company. Upon any such resignation, the Required Lenders
shall have the right, in consultation with the Company, to appoint a successor.
If no successor shall have been so appointed by the Required Lenders and shall
have accepted such appointment within 30 days after the resigning Agent gives
notice of its resignation, then the resigning Agent may, on behalf of the
Lenders, appoint a successor Agent which shall be a bank with an office in New
York, New York, or an Affiliate of any such bank. Upon the acceptance of its
appointment as Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent, and the resigning Agent shall be discharged from its duties
and obligations hereunder. The fees payable by the Company to a successor Agent
shall be the same as those payable to its predecessor unless otherwise agreed
between the Company and such successor. After the Agent's resignation
hereunder, the provisions of this Article and Section --10.03 shall continue in
effect for the benefit of such resigning Agent in respect of any actions taken
or omitted to be taken by it while it was acting as Agent.
SECTION 9.09. SHARING OF COLLATERAL AND PAYMENTS.
In the event that at any time any Lender shall obtain payment in
respect of a Note or interest thereon, or a participation in any Letter of
Credit, or receive any collateral in respect thereof, whether voluntarily or
involuntarily, through the exercise of a right of banker's lien, set-off or
counterclaim against the Company or otherwise, in a greater proportion than the
proportion received by any other Lender in respect of the corresponding Note
held by it or interest thereon, or its participation in any Letter of Credit,
then the Lender so receiving such greater proportionate payment shall purchase
for cash from the other Lender or Lenders such portion of each such other
Lender's or Lenders' Loan
66
or participation in any Letter of Credit, or shall provide such other Lenders
with the benefits of any such collateral, or the proceeds thereof, as shall be
necessary to cause such Lender receiving the proportionate over-payment to
share the excess payment or benefits of such collateral or proceeds ratably
with each of the Lenders each of which shall have a lien on its ratable portion
of the amount described hereinafter obtained from the Company; provided,
however, that if all or any portion of such excess payment or benefits is
thereafter recovered from the Lender which received the proportionate
over-payment, such purchase shall be rescinded, and the purchase price and
benefits returned, to the extent of such recovery, but without interest. The
Company agrees, to the extent it may do so under applicable law, that each
Lender so purchasing a portion of another Lender's Loan or participation in any
Letter of Credit may exercise all rights of payment (including, without
limitation, rights of set-off) with respect to such portion as fully as if such
Lender were the direct holder of such portion.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. NOTICES. All notices, requests and demands to or upon
the respective parties hereto to be effective shall be in writing, (including
telecopy) and unless otherwise expressly provided herein, shall be conclusively
deemed to have been received by a party hereto and to be effective on the day
on which delivered by hand to such party or one Business Day after being sent
by overnight mail to the address set forth below, or, in the case of telecopy
notice, when acknowledged as received, or if sent by registered or certified
mail, three (3) Business Days after the day on which mailed in the United
States, addressed to such party at such address:
(a) if to the Agent, at
The Chase Manhattan Bank
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Relationship Officer
Family Golf Centers, Inc.
Telecopy: (000) 000-0000
(b) if to the Company, at
Family Golf Centers, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx Xxxxx
Chief Executive Officer
Telecopy: (000) 000-0000
67
with a copy to:
Xxxxxxx X. Xxxx, Esq.
Squadron, Ellenoff, Plesent & Xxxxxxxxx LLP
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Xxxxxx X. Xxxxxxx, Esq.
Family Golf Centers, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
Xx. Xxxxxxx Key
Family Golf Centers, Inc.
000 Xxxxxxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Telecopy: (000) 000-0000
(c) if to any Lender, to its address set forth in the
signature page of this Agreement and to the person
so designated
- and -
(d) as to each such party at such other address as such
party shall have designated to the other in a
written notice complying as to delivery with the
provisions of this Section 10.01.
SECTION 10.02. EFFECTIVENESS; SURVIVAL. This Agreement shall become
effective on the date on which all parties hereto shall have signed a
counterpart copy hereof and shall have delivered the same to the Agent. All
representations and warranties made herein and in the other Loan Documents and
in the certificates delivered pursuant hereto or thereto shall survive the
making by the Lenders of the Loans and the issuance by the Agent of Letters of
Credit, in each case, as herein contemplated and the execution and delivery to
the Lenders of the Notes evidencing the Loans and shall continue in full force
and effect so long as the Obligations hereunder are outstanding and unpaid and
the Commitments are in effect. The obligations of the Company pursuant to
Section 3.07, Section 3.08, Section 3.10 and Section 10.03 shall survive
termination of this Agreement and payment of the Obligations.
SECTION 10.03. EXPENSES. The Company agrees (a) to indemnify, defend
and hold harmless the Agent, each Lender and their respective officers,
directors, employees, and affiliates
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(each, an "indemnified person") from and against any and all losses, claims,
damages, liabilities or judgments to which any such indemnified person may be
subject and arising out of or in connection with the Loan Documents, the
financings contemplated hereby, the use of any proceeds of such financings or
any related transaction or any claim, litigation, investigation or proceeding
relating to any of the foregoing, whether or not any of such indemnified
persons is a party thereto, and to reimburse each of such indemnified persons
upon demand for any reasonable, legal or other expenses incurred in connection
with the investigation or defending any of the foregoing; provided that the
foregoing indemnity will not, as to any indemnified person, apply to losses,
claims, damages, liabilities, judgments or related expenses to the extent
arising from the wilful misconduct or gross negligence of such indemnified
person, (b) to pay or reimburse the Agent for all its reasonable out-of-pocket
costs and expenses incurred in connection with the preparation and execution of
and any amendment, supplement or modification to this Agreement, the Notes, any
other Loan Documents, and any other documents prepared in connection herewith
or therewith, and the consummation of the transactions contemplated hereby and
thereby, including without limitation, the reasonable fees and disbursements of
Xxxxxxx Xxxxx, P.C., subject, with respect to the preparation, negotiation, and
execution of this Agreement and the other Loan Documents, to the limitations
set forth in the letter dated August 10, 1998 from The Chase Manhattan Bank to
the Company, and (c) to pay or reimburse each Lender and the Agent for all
their costs and expenses incurred in connection with the enforcement and
preservation of any rights under this Agreement, the Notes the other Loan
Documents, and any other documents prepared in connection herewith or
therewith, including, without limitation, the reasonable fees and disbursements
of counsel (including, without limitation, in-house counsel) to the Agent and
to the several Lenders, including all such out-of-pocket expenses incurred (i)
during any work-out, restructuring or negotiations in respect of the
Obligations and (ii) in connection with the execution of any amendment,
supplement or modification to this Agreement and other documents prepared in
connection therewith during any work-out, restructuring or negotiations with
respect to the Obligations, the Notes, or any other Loan Documents.
SECTION 10.04. AMENDMENTS AND WAIVERS. With the written consent of the
Required Lenders, the Agent and the Company may, from time to time, enter into
written amendments, supplements or modifications hereto for the purpose of
adding any provisions to this Agreement or the Notes or any of the other Loan
Documents or changing in any manner the rights of the Lenders or of the Company
hereunder or thereunder, and with the written consent of the Required Lenders
the Agent on behalf of the Lenders may execute and deliver to the Company a
written instrument waiving, on such terms and conditions as the Agent may
specify in such instrument, any of the requirements of this Agreement or the
Notes or any of the other Loan Documents or any Event of Default; provided,
however, that no such waiver and no such amendment, or supplement or
modification shall (a) extend the maturity of any Note or change the
amortization schedule of any Term Note, or any installment thereof, (b) reduce
the rate or extend the time of payment of interest on any Note or any fees
payable to the Lenders hereunder, (c) reduce the principal amount of any Note
or the amount of any reimbursement due in respect of any Letter of Credit, (d)
increase the amount of any Lender's Commitment, (e) amend, modify or waive any
provision of this Section 10.04, (g) reduce the percentage specified in the
definition of Required Lenders, (h) consent to the
69
assignment or transfer by the Company or any Subsidiary of the Company of any
of its rights or obligations under this Agreement, (i) except as expressly
permitted pursuant to this Agreement or any other Loan Document release any
significant collateral security granted to the Agent under the Security
Documents or (j) except as permitted pursuant to Section 7.04, release any
Guarantor from its Guaranty, in each case specified in clauses (a) through (j)
above without the written consent of all the Lenders; and provided, further,
that no such waiver and no such amendment, supplement or modification shall
amend, modify, supplement or waive any provision of Section IX without the
written consent of the then Agent. Any such waiver and any such amendment,
supplement or modification shall apply equally to each of the Lenders and shall
be binding upon the Company, the Lenders, the Agent and all future holders of
the Notes.
SECTION 10.05. SUCCESSORS AND ASSIGNS; PARTICIPATIONS.
(a) This Agreement shall be binding upon and inure to the benefit of
the Company, the Lenders, the Agent, all future holders of the Notes and their
respective successors and assigns, except that the Company may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of each Lender.
(b) Any Lender may, in the ordinary course of its commercial banking
business and in accordance with applicable law, at any time sell to one or more
banks or other financial institutions ("Participants") participating interests
in any Loan owing to such Lender, any Note held by such Lender, any Commitment
of such Lender or any other interest of such Lender hereunder. In the event of
any such sale by a Lender of participating interests to a Participant, such
Lender's obligations under this Agreement to the other parties under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Note for all purposes under this Agreement, and the Company and the Agent shall
continue to deal solely and directly with such Lender in connection with such
Lender's rights and obligations under this Agreement. The Company agrees that
each Participant shall be entitled to the benefits of Sections 3.07, 3.08 and
3.10 with respect to its participation in the Commitments and in the Loans
outstanding from time to time; provided, however, that no Participant shall be
entitled to receive any greater amount pursuant to such sections than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred. No Participant shall have the right to consent
to any amendment to, or waiver of, any provision of this Agreement, except the
transferor Lender may provide in its agreement with the Participant that such
Lender will not, without the consent of the Participant, agree to any amendment
or waiver described in clause (a) through clause (j) of Section 10.04.
(c) Subject to the last sentence of this paragraph (c) any Lender may,
in the ordinary course of its commercial banking business and in accordance
with applicable law, at any time sell to any Lender or any domestic banking
affiliate thereof, and, with the consent of the Agent and, so long as no
Default or Event of Default shall have occurred and be continuing, the Company
(which in each case shall not be unreasonably withheld) to one or more
additional banks or financial
70
institutions ("Purchasing Lenders") all or any part of its rights and
obligations under this Agreement and the Notes pursuant to an Assignment and
Acceptance Agreement, executed by such Purchasing Lender, such transferor
Lender and the Agent (and, in the case of an Assignment and Acceptance
Agreement relating to a Purchasing Lender that is not then a Lender or a
domestic banking affiliate thereof, also executed by the Company), and
delivered to the Agent for its acceptance. Upon such execution, delivery and
acceptance from and after the effective date specified in such Assignment and
Acceptance Agreement, (i) the Purchasing Lender thereunder shall be a party
hereto and, to the extent provided in such Assignment and Acceptance Agreement,
have the rights and obligations of a Lender hereunder with Commitments as set
forth therein and (ii) the transferor Lender thereunder shall, to the extent
provided in such Assignment and Acceptance Agreement, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance Agreement covering all or the remaining portion of a transferor
Lender's rights and obligations under this Agreement, such transferor Lender
shall cease to be a party hereto). Such Assignment and Acceptance Agreement
shall be deemed to amend this Agreement to the extent, and only to the extent,
necessary to reflect the addition of such Purchasing Lender and the resulting
adjustment of Commitment Proportions arising from the purchase by such
Purchasing Lender of all or a portion of the rights and obligations of such
transferor Lender under or in respect of this Agreement and the Notes. On or
prior to the effective date specified in such Assignment and Acceptance
Agreement, the Company, at its own expense, shall execute and deliver to the
Agent, in exchange for the surrendered Note, a new Note to the order of such
Purchasing Lender in an amount equal to the Commitment assumed by it pursuant
to such Assignment and Acceptance Agreement and, if the transferor Lender has
retained any Commitment hereunder, a new Note to the order of the transferor
Lender in an amount equal to such Commitment retained by it hereunder. Such new
Notes shall be in a principal amount equal to the principal amount of such
surrendered Note, shall be dated the date of the Note they replace and shall
otherwise be in the form of the Note replaced thereby. The Note surrendered by
the transferor Lender shall be returned by the Agent to the Company marked
"cancelled". Anything in this Section 10.05 to the contrary notwithstanding,
(i) no transfer to a Purchasing Lender shall be made pursuant to this paragraph
(c) if such transfer by any one transferor Lender to any one Purchasing Lender
(other than a Purchasing Lender which is a Lender hereunder prior to such
transfer) (x) is in respect of less than $5,000,000 of the Commitments of such
transferor Lender or (y) if less than all of the Commitment of such transferor
Lender is transferred, after giving effect to such transfer the amount held by
any Transferor Lender would be less than $2,500,000 and (ii) The Chase
Manhattan Bank shall not make a transfer to a Purchasing Lender pursuant to
this paragraph (c) if after giving effect to such transfer the Commitment of
The Chase Manhattan Bank would be less than an amount equal to the lesser of
(i) 35% of the Total Commitment or (ii) $35,000,000; provided, however, The
Chase Manhattan Bank shall not be subject to the foregoing restriction in the
event of a transfer to a Purchasing Lender (i) after the occurrence of an Event
of Default or (ii) to the extent it is required by any law, rule, regulation,
order or decree of any federal, state or other governmental authority or agency
to reduce its Commitment.
(d) The Agent shall maintain at its address referred to in Section
10.01 a copy of each Assignment and Acceptance Agreement delivered to it and a
register (the "Register") for the recordation of the names and addresses of the
Lenders and the commitments of, and principal
71
amount of the Loans owing to, each Lender from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error and the Company,
the Agent and the Lenders may treat each Person whose name is recorded in the
Register as the owner of the Loan recorded therein for all purposes of this
Agreement. The Register shall be available for inspection by the Company or any
Lender at any reasonable time and from time to time upon reasonable prior
notice.
(e) Upon its receipt of an Assignment and Acceptance Agreement
executed by a transferor Lender and a Purchasing Lender (and, in the case of a
Purchasing Lender that is not then a Lender or an Affiliate thereof, by the
Company) together with payment by the Purchasing Lender to the Agent of a
registration and processing fee of $3,500 if the Purchasing Lender is not a
Lender prior to the execution of an Assignment and Acceptance Agreement and
$2,500 if the Purchasing Lender is a Lender prior to the execution of an
Assignment and Acceptance Agreement, the Agent shall (i) accept such Assignment
and Acceptance Agreement, (ii) record the information contained therein in the
Register, and (iii) give prompt notice of such acceptance and recordation to
the Lenders and the Company.
(f) The Company authorizes each Lender to disclose to any Participant
or Purchasing Lender (each, a "Transferee") and any prospective Transferee any
and all financial information in such Lender's possession concerning the
Company and its Affiliates which has been delivered to such Lender by or on
behalf of the Company pursuant to this Agreement or which has been delivered to
such Lender by the Company in connection with such Lender's credit evaluation
of the Company and its Subsidiaries prior to entering into this Agreement.
(g) If, pursuant to this Section 10.05, any interest in this
Agreement, a participation agreement, or any Note is transferred to any
transferee which is organized under the laws of any jurisdiction other than the
United States or any State thereof, the transferor Lender shall cause such
Transferee, concurrently with the effectiveness of such transfer, (i) to
represent to the transferor Lender (for the benefit of the transferor Lender,
the Agent and the Company) that under applicable law and treaties no taxes will
be required to be withheld by the Agent, the Company, or the transferor Lender
with respect to any payments to be made to such Transferee in respect of the
Loans, (ii) to furnish to the Agent, the transferor Lender and the Company
either U.S. Internal Revenue Service Form 4224 or U.S. Internal Revenue Service
Form 1001 (wherein such Transferee claims entitlement to complete exemption
from U.S. federal withholding tax on all interest payments hereunder) and (iii)
to agree (for the benefit of the Agent, the transferor Lender and the Company)
to provide the Agent, the transferor Lender and the Company, a new Form 4224 or
Form 1001 upon the expiration or obsolescence of any previously delivered form
and comparable statements in accordance with applicable U.S. laws and
regulations and amendments duly executed and completed by such Transferee, and
to comply from time to time with all applicable U.S. laws and regulations with
regard to such withholding tax exemption.
(h) Any Lender may at any time pledge or assign or grant a security
interest in all or any part of its rights under this Agreement and its Notes to
a Federal Reserve Bank, provided that no
72
such assignment shall release the transferor Lender from its Commitment or its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party to this Agreement.
SECTION 10.06. NO WAIVER; CUMULATIVE REMEDIES. Neither any failure nor
any delay on the part of any Lender or the Agent in exercising any right, power
or privilege hereunder or under any Note or any other Loan Document shall
operate as a waiver thereof, nor shall a single or partial exercise thereof
preclude any other or further exercise of any other right, power or privilege.
The rights, remedies, powers and privileges herein provided or provided in the
other Loan Documents are cumulative and not exclusive of any rights, remedies
powers and privileges provided by law.
SECTION 10.07. APPLICABLE LAW. THIS AGREEMENT AND THE NOTES SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK,
WITHOUT REGARD TO PRINCIPLES OF CONFLICTS OR CHOICE OF LAW.
SECTION 10.08. SUBMISSION TO JURISDICTION; JURY WAIVER. THE COMPANY
HEREBY IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE UNITED STATES DISTRICT
COURT OF THE EASTERN DISTRICT OF NEW YORK AND ANY COURT IN THE STATE OF NEW
YORK, COUNTY OF NASSAU OR COUNTY OF SUFFOLK IN ANY ACTION, SUIT OR PROCEEDING
BROUGHT AGAINST IT AND RELATED TO OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT OR ANY OF THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY,
AND TO THE EXTENT PERMITTED BY APPLICABLE LAW, THE COMPANY HEREBY WAIVES AND
AGREES NOT TO ASSERT BY WAY OF MOTION, AS A DEFENSE OR OTHERWISE, IN ANY SUCH
SUIT, ACTION OR PROCEEDING ANY CLAIM THAT IT IS NOT PERSONALLY SUBJECT TO THE
JURISDICTION OF SUCH COURTS, THAT THE SUIT, ACTION OR PROCEEDING IS BROUGHT IN
AN INCONVENIENT FORUM, THAT THE VENUE OF THE SUIT, ACTION OR PROCEEDING IS
IMPROPER, OR THAT THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT REFERRED TO HEREIN OR THEREIN OR THE SUBJECT MATTER
THEREOF MAY NOT BE LITIGATED IN OR BY SUCH COURTS. TO THE EXTENT PERMITTED BY
APPLICABLE LAW, THE COMPANY AGREES NOT TO (I) SEEK AND HEREBY WAIVES THE RIGHT
TO ANY REVIEW OF THE JUDGMENT OF ANY SUCH COURT BY ANY COURT OF ANY OTHER
NATION OR JURISDICTION WHICH MAY BE CALLED UPON TO GRANT AN ENFORCEMENT OF SUCH
JUDGMENT AND (II) ASSERT ANY COUNTERCLAIM IN ANY SUCH SUIT, ACTION OR
PROCEEDING. THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY
CERTIFIED OR REGISTERED MAIL TO THE ADDRESS FOR NOTICES SET FORTH IN THIS
AGREEMENT OR ANY METHOD AUTHORIZED BY THE LAWS OF NEW YORK. EACH PARTY HERETO
WAIVES ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT
73
OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR ANY
OTHER LOAN DOCUMENT.
SECTION 10.09. SEVERABILITY. In case any one or more of the provisions
contained in this Agreement, any Note or in any other Loan Document should be
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby.
SECTION 10.10. RIGHT OF SETOFF. If an Event of Default shall have
occurred and be continuing, the Agent, each Lender and each Affiliate of each
Lender are each hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by the Agent, any Lender or any Affiliate
of any Lender to or for the credit or the account of the Company against any
and all the Obligations of the Company now and hereafter existing under this
Agreement and the Notes held by such Lender, irrespective of whether or not
such Lender shall have made any demand under this Agreement or any Note and
although such obligations may be unmatured. The rights of the Agent, each
Lender and each Affiliate of each Lender under this Section 10.10 are in
addition to other rights and remedies (including, without limitation, other
rights of setoff) which they may have.
SECTION 10.11. HEADINGS. Section headings used herein are for
convenience of reference only and are not to affect the construction of or be
taken into consideration in interpreting this Agreement.
SECTION 10.12. CONSTRUCTION. This Agreement is the result of
negotiations between, and has been reviewed by each of the Company, the Agent,
the Lenders and their respective counsel. Accordingly, this Agreement shall be
deemed to be the product of each party hereto, and no ambiguity shall be
construed in favor of or against either the Company, the Agent, or any Lender.
SECTION 10.13. COUNTERPARTS. This Agreement may be executed in two or
more counterparts, each of which shall constitute an original, but all of
which, taken together, shall constitute one and the same instrument.
74
IN WITNESS WHEREOF, the Company, the Agent and the Lenders have caused
this Agreement to be duly executed by their duly authorized officers, as of the
day and year first above written.
FAMILY GOLF CENTERS, INC.
By:_______________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Vice President
75
COMMITMENT: $45,000,000 THE CHASE MANHATTAN BANK
AS AGENT AND AS A LENDER
By:____________________________________________
Name: Xxxxxx Xxxxx
Title: Vice President
Lending Office for Alternate
Base Rate Loans:
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Family Golf Centers, Inc.
Relationship Manager
Telecopy: (000) 000-0000
Lending Office for Adjusted
Libor Loans:
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Family Golf Centers, Inc.
Relationship Manager
Telecopy: (000) 000-0000
Address for Notices:
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxx, Xxx Xxxx 00000
Attention: Family Golf Centers, Inc.
Relationship Manager
Telecopy: (000) 000-0000
76
COMMITMENT: $20,000,000 CIBC INC.
-----------
By:_______________________________________
Name:
Title:
Lending Office for Alternate
Base Rate Loans:
2727 Paces Ferry Road
Bldg. 2, Ste. 1200
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office for Adjusted
Libor Loans:
2727 Paces Ferry Road
Bldg. 2, Ste. 1200
Xxxxxxx, XX 00000
Attention: Xxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
000 Xxxxx Xxxxxx, Xxx. 0000
Xxx Xxxxxxx, XX 00000
Attention: Xx. Xxxx X. Xxxxxx
Telecopy: (000) 000-0000
77
COMMITMENT: $20,000,000 NATIONSBANK, N.A.
-----------
By:_______________________________________
Name:
Title:
Lending Office for Alternate
Base Rate Loans:
NATIONSBANK, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Lending Office for Adjusted
Libor Loans:
NATIONSBANK, N.A.
000 Xxxxx Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Address for Notices:
Sports Finance Group
NationsBank, N.A.
000 Xxxxx Xxxxx Xxxxxx
XX0-000-00-00
Xxxxxxxxx, XX 00000
Attention: Xx. Xxxxxx X. Xxxxxxx
Telecopy: (000) 000-0000
78
COMMITMENT: $10,000,000 THE DIME SAVINGS BANK
----------- OF NEW YORK FSB
By:_____________________________________________
Name: Xxxx X. Xxxxx
Title: Vice President
Lending Office for Alternate
Base Rate Loans:
The Dime Savings Bank of New York FSB
1180 Avenue of the Americas - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx XxXxxx, AVP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Lending Office for Adjusted
Libor Loans:
The Dime Savings Bank of New York FSB
1180 Avenue of the Americas - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx XxXxxx, AVP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
Address for Notices:
The Dime Savings Bank of New York FSB
000 Xxxx Xxxxxxx Xxxx
Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attention: Mr. Xxxx Xxxxx, VP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
79
With a Copy to:
The Dime Savings Bank of New York FSB
1180 Avenue of the Americas - 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxxxx XxXxxx, AVP
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
80
COMMITMENT: $5,000,000 THE MERCHANTS BANK OF NEW YORK
----------
By:_______________________________________
Name:
Title:
Lending Office for Alternate
Base Rate Loans:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxxx Xxxxx
Tel. (000) 000-0000
Telecopy: (000) 000-0000
Lending Office for Adjusted
Libor Loans:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxxx Xxxxx
Tel. (000) 000-0000
Telecopy: (000) 000-0000
Address for Notices:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Mr. Xxxxxx Xxxxx
Tel. (000) 000-0000
Telecopy: (000) 000-0000
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