EXHIBIT 10.1
SENIOR SUBORDINATED CREDIT AGREEMENT
dated as of
December 7, 1999
among
BIG FLOWER PRESS HOLDINGS, INC.,
as Borrower,
BIG FLOWER HOLDINGS, INC.,
only with respect to
certain sections herein,
THE SUBSIDIARY GUARANTORS named herein,
THE LENDERS named herein
and
BANKERS TRUST COMPANY,
THE CHASE MANHATTAN BANK
and
NATIONSBRIDGE, L.L.C.,
as Agents
TABLE OF CONTENTS
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SECTION 1 DEFINITIONS.................................................. 1
1.1 Certain Defined Terms........................................ 1
1.2 Accounting Terms............................................. 44
1.3 Other Definitional Provisions;
Anniversaries.............................................. 44
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND
LOANS; NOTES............................................... 44
2.1 Bridge Loan and Bridge Note.................................. 44
2.2 Term Loan and Term Note...................................... 46
2.3 Interest on the Loans........................................ 47
2.4 Fees ........................................................ 49
2.5 Prepayments and Payments..................................... 49
2.6 Use of Proceeds.............................................. 54
SECTION 3 CONDITIONS................................................... 55
3.1 Conditions to Bridge Loan.................................... 55
3.2 Conditions to Term Loan...................................... 61
SECTION 4 REPRESENTATIONS AND WARRANTIES............................... 62
4.1 Company Status............................................... 63
4.2 Company Power and Authority.................................. 63
4.3 No Violation................................................. 63
4.4 Governmental Approvals....................................... 64
4.5 Financial Statements; Financial
Condition; Undisclosed Liabilities;
Projections; etc.......... ................................ 64
4.6 Litigation................................................... 67
4.7 True and Complete Disclosure................................. 67
4.8 Tax Returns and Payments..................................... 67
4.9 Compliance with ERISA........................................ 68
4.10 Representations and Warranties in
Documents.................................................. 70
4.11 Properties................................................... 70
4.12 Capitalization............................................... 70
4.13 Subsidiaries................................................. 70
4.14 Compliance with Statutes, etc................................ 71
4.15 Investment Company Act....................................... 71
4.16 Public Utility Holding Company Act........................... 71
4.17 Environmental Matters........................................ 71
4.18 Labor Relations.............................................. 72
4.19 Patents, Licenses, Franchises and
Formulas................... ............................... 73
4.20 Indebtedness................................................. 73
4.21 Transactions................................................. 73
4.22 Insurance.................................................... 74
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4.23 Year 2000 Representation..................................... 74
4.24 No Default................................................... 74
4.25 Compliance with Contracts, Etc............................... 75
4.26 Use of Proceeds; Margin Stock, Etc........................... 75
4.27 Survival of Representations and
Warranties................... ............................. 75
4.28 Guarantees................................................... 75
4.29 Senior Subordinated Indenture; Etc........................... 76
SECTION 5 AFFIRMATIVE COVENANTS........................................ 77
5.1 Financial Statements and Other Reports....................... 77
5.2 Books, Records and Inspections............................... 82
5.3 Maintenance of Property; Insurance........................... 83
5.4 Corporate Franchises......................................... 83
5.5 Compliance with Statutes, etc................................ 83
5.6 Compliance with Environmental Laws........................... 84
5.7 ERISA ....................................................... 85
5.8 Performance of Obligations................................... 86
5.9 Payment of Taxes............................................. 86
5.10 Ownership of Subsidiaries.................................... 87
5.11 Year 2000 Compliance......................................... 87
5.12 Take-Out Financing........................................... 87
5.13 Exchange of Term Notes....................................... 89
5.14 Payments in U.S. Dollars..................................... 90
5.15 Register .................................................... 90
5.16 Mezzanine Subordinated Debt, etc............................. 91
SECTION 6 NEGATIVE COVENANTS........................................... 91
6.1 Indebtedness................................................. 91
6.2 Liens ....................................................... 95
6.3 Restricted Payments.......................................... 96
6.4 Investments; Joint Ventures.................................. 99
6.5 Senior Subordinated Indebtedness............................. 100
6.6 Restriction on Fundamental Changes........................... 101
6.7 Limitation on Dividend and Other Payment
Restrictions Affecting Restricted
Subsidiaries....... ....................................... 103
6.8 Transactions with Shareholders and
Affiliates................ ................................ 105
6.9 Subsidiary Stock............................................. 106
6.10 Business Activities.......................................... 107
6.11 Amendments or Waivers of Certain
Documents................... 107
6.12 Refinancing of the Loans in Part............................. 107
6.13 Asset Sales.................................................. 107
6.14 Additional Guarantees........................................ 108
SECTION 7 EVENTS OF DEFAULT............................................ 108
7.1 Failure To Make Payments When Due............................ 108
7.2 Default in Other Agreements.................................. 109
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7.3 Breach of Certain Covenants.................................. 109
7.4 Other Defaults Under Agreement or Loan
Documents............. .................................... 109
7.5 Involuntary Bankruptcy; Appointment of
Custodian, Etc........ .................................... 110
7.6 Voluntary Bankruptcy; Appointment of
Custodian, Etc.......... .................................. 110
7.7 Judgments and Attachments.................................... 110
7.8 Guarantee.................................................... 111
7.9 Foreclosure.................................................. 111
7.10 Change of Control on or Prior to the
Conversion Date......... .................................. 111
SECTION 8 SUBORDINATION................................................ 112
8.1 Securities Subordinated to Senior
Indebtedness............... ............................... 112
8.2 Suspension of Payment When Senior
Indebtedness Is in Default. ............................... 113
8.3 Obligations Subordinated to Prior Payment
of All Senior Indebtedness on
Dissolution, Liquidation or
Reorganization of Company.................................. 115
8.4 Payments May Be Paid Prior to Dissolution.................... 117
8.5 Lenders To Be Subrogated to Rights of
Holders of Senior Indebtedness............................. 117
8.6 Obligations of the Company Unconditional..................... 118
8.7 Reliance on Judicial Order or Certificate
of Liquidating Agent....................................... 118
8.8 Subordination Rights Not Impaired by Acts
or Omissions of the Company or Holders
of Senior Indebtedness .................................... 118
8.9 Lenders Authorize Agents To Effectuate
Subordination of Obligations............................... 119
8.10 Amendments or Modifications to Section 8..................... 120
SECTION 9 THE AGENTS................................................... 120
9.1 Appointment.................................................. 120
9.2 Delegation of Duties......................................... 121
9.3 Exculpatory Provisions....................................... 121
9.4 Reliance by Agents........................................... 122
9.5 Notice of Default............................................ 122
9.6 Non-Reliance on Agents and Other Lenders..................... 123
9.7 Indemnification.............................................. 123
9.8 Agents in Their Individual Capacity.......................... 124
9.9 Resignation of an Agent; Successor Agent..................... 124
SECTION 10 GUARANTEE.................................................... 125
10.1 Unconditional Guarantee...................................... 125
10.2 Subordination of Guarantee................................... 126
10.3 Severability................................................. 126
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10.4 Release of a Subsidiary Guarantor............................ 126
10.5 Limitation of Subsidiary Guarantor's
Liability............... .................................. 127
10.6 Subsidiary Guarantors May Consolidate,
etc., on Certain Terms .................................... 127
10.7 Contribution................................................. 128
10.8 Waiver of Subrogation........................................ 129
10.9 Evidence of Guarantee........................................ 130
10.10 Waiver of Stay, Extension or Usury Laws...................... 130
SECTION 11 SUBORDINATION OF GUARANTEE OBLIGATIONS....................... 130
11.1 Guarantee Obligations Subordinated to
Subsidiary Guarantor Senior Indebtedness................... 130
11.2 Suspension of Guarantee Obligations When
Subsidiary Guarantor Senior Indebtedness
Is in Default ............................................. 131
11.3 Guarantee Obligations Subordinated to
Prior Payment of All Subsidiary
Guarantor Senior Indebtedness on
Dissolution, Liquidation or
Reorganization of Such Subsidiary
Guarantor....................... .......................... 132
11.4 Payments May Be Paid Prior to Dissolution.................... 134
11.5 Lenders To Be Subrogated to Rights of
Holders of Subsidiary Guarantor Senior
Indebtedness..... ......................................... 134
11.6 Guarantee Obligations of the Subsidiary
Guarantors Unconditional................................... 135
11.7 Reliance on Judicial Order or Certificate
of Liquidating Agent....................................... 135
11.8 Subordination Rights Not Impaired by Acts
or Omissions of the Subsidiary
Guarantors or Holders of Subsidiary
Guarantor Senior Indebtedness.............................. 136
11.9 Lenders Authorize Agents To Effectuate
Subordination of Guarantee Obligations..................... 137
11.10 This Section 11 Not To Prevent Events of
Default.................................................... 137
11.11 Amendments or Modifications to Section 11.................... 138
SECTION 12 MISCELLANEOUS................................................ 138
12.1 Representation of the Lenders................................ 138
12.2 Participations in and Assignments of
Loans and Notes............................................ 138
12.3 Expenses .................................................... 141
12.4 Indemnity.................................................... 142
12.5 Setoff ...................................................... 143
12.6 Amendments and Waivers....................................... 143
12.7 Independence of Covenants.................................... 144
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12.8 Entirety .................................................... 145
12.9 Notices ..................................................... 145
12.10 Survival of Warranties and Certain
Agreements................................................. 145
12.11 Failure or Indulgence Not Waiver;
Remedies Cumulative........................................ 146
12.12 Severability................................................. 146
12.13 Headings .................................................... 146
12.14 Applicable Law............................................... 146
12.15 Successors and Assigns; Subsequent
Holders of Notes........................................... 146
12.16 Counterparts; Effectiveness.................................. 147
12.17 Consent to Jurisdiction; Venue; Waiver of
Jury Trial................................................. 147
12.18 Payments Pro Rata............................................ 148
12.19 Taxes ....................................................... 149
12.20 Waiver of Stay, Extension or Usury Laws...................... 150
12.21 Requirements of Law.......................................... 151
12.22 Confidentiality.............................................. 151
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SCHEDULES
A EXISTING LIENS
B ERISA
C SUBSIDIARIES
D INTELLECTUAL PROPERTY
E EXISTING INDEBTEDNESS
F INSURANCE
G SUBSIDIARY GUARANTORS
EXHIBITS
I FORM OF BRIDGE NOTE
II FORM OF TERM NOTE
III FORM OF COMPLIANCE CERTIFICATE
IV-A FORM OF NOTICE OF BORROWING
IV-B FORM OF NOTICE OF CONVERSION
V FORM OF REGISTRATION RIGHTS AGREEMENT
VI FORM OF OPINION OF XXXXXXXX & XXXXXXXX
- COUNSEL FOR BIG FLOWER,
THE COMPANY AND THE SUBSIDIARY GUARANTORS
VII FORM OF OPINION OF XXXXX X. XXXXXX, ESQ. - VICE
PRESIDENT AND ASSOCIATE GENERAL COUNSEL FOR
BIG FLOWER, THE COMPANY AND THE SUBSIDIARY
GUARANTORS
VIII FORM OF OPINION OF XXXXXX XXXXXX & XXXXXXX - COUNSEL
FOR THE LENDERS
IX FORM OF NOTATION OF GUARANTEE
X FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
XI RECAPITALIZATION AGREEMENT
XII FORM OF SECTION 12.2E CERTIFICATE
XIII FORM OF WARRANT
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This
Senior Subordinated Credit Agreement is dated as of December 7,
1999, and entered into by and among Big Flower Press Holdings, Inc., a Delaware
corporation (the "Company"), Big Flower Holdings, Inc., a Delaware corporation
("Big Flower"), the Subsidiary Guarantors named on the signature pages hereto,
the Lenders named on the signature pages hereto (the "Lenders") and Bankers
Trust Company ("BTCo"), The Chase Manhattan Bank ("Chase") and NationsBridge,
L.L.C. ("Nations) as Agents for the Lenders (in such capacity, the "Agents").
RECITALS
WHEREAS, the Company desires that the Lenders extend a senior
subordinated credit facility to the Company in connection with the
Recapitalization (as defined herein);
NOW, THEREFORE, in consideration of the premises and the agreements,
provisions and covenants herein contained, the parties hereby agree as follows:
SECTION 1 DEFINITIONS
1.1 CERTAIN DEFINED TERMS
The following terms used in this Agreement shall have the following
meanings:
"Acceleration Notice" shall have the meaning ascribed to such term in
Section 7.
"Adjusted Net Assets" shall have the meaning provided in Section 10.7.
"Affiliate," as applied to any Person, means any other Person directly
or indirectly controlling, controlled by, or under common control with, that
Person. For the purposes of this definition, "control" (including with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means the possession, directly or
indirectly, of the power to direct or cause the direction of the management and
policies of that Person, whether through the ownership of voting securities or
by contract or otherwise; PROVIDED that none of BTCo, Chase, Nations or any of
their respective Affiliates shall be treated as an Affiliate of the Company or
of any Subsidiary of the Company.
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"Affiliate Transaction" has the meaning ascribed to such term in
Section 6.8(a).
"Agents" has the meaning ascribed to such term in the introduction to
this Agreement.
"Agreement" means this
Senior Subordinated Credit Agreement dated as
of December 7, 1999, as it may be amended, supplemented or otherwise modified
from time to time in accordance with the terms hereof.
"Xxxxx Permitted Holders" shall mean and include (i) R. Xxxxxxxx
Xxxxx, his estate, spouse, heirs, ancestors, lineal descendants, legatees, legal
representatives or the trustee of any bona fide trust of which one or more of
the foregoing are the sole beneficiaries or grantors thereof and (ii) any entity
controlled, directly or indirectly, by any of the Persons referred to in the
preceding clause (i), whether through the ownership of voting securities, by
contract or otherwise.
"Applicable Rate" means for each Monthly Period, the greater of the
Treasury Rate or the LIBOR Rate then in effect.
"Applicable Spread" means 7.0% per annum for the period from and
including the Closing Date and to but excluding the 90th day following the
Closing Date and for each subsequent 90-day period the Applicable Spread in
effect for the immediately preceding 90-day period plus 0.5%.
"A/R Facility" means the Receivables Purchase Agreement dated as of
March 19, 1996, as amended, among Big Flower, certain subsidiaries of Big Flower
and BFP Receivables Corporation.
"A/R Facility Documents" shall mean each of the documents relating to
the A/R Facility.
"Asset Sale" means any direct or indirect sale, issuance, conveyance,
lease (other than operating leases entered into in the ordinary course of
business), assignment, transfer or other disposition for value (including,
without limitation, pursuant to any amalgamation, merger or consolidation or
pursuant to any Sale and Leaseback Transaction) by the Company or by any of its
Restricted Subsidiaries to any Person other than the Company or any of its
Restricted Subsidiaries (any such transaction, a "disposition") of (i) any of
the stock of any of the Company's Restricted Subsidiaries, (ii) substantially
all of
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the assets of any division or line of business of the Company or of any of its
Restricted Subsidiaries, or (iii) any other assets of the Company or of any of
its Restricted Subsidiaries other than in the ordinary course of business;
EXCLUDING (a) any disposition of Cash Equivalents or inventory in the ordinary
course of business or the lease or sublease of any real or personal property in
the ordinary course of business, (b) any disposition in any single transaction
or related series of transactions the aggregate value of which is equal to
$500,000 or less, (c) any disposition of assets or property in the ordinary
course of business to the extent such property or assets are obsolete, worn out
or no longer useful in the Company's or any Restricted Subsidiary's business,
(d) the surrender or waiver of contract rights or the settlement, release or
surrender of contract, tort or other claims of any kind, (e) the sale of
accounts receivable pursuant to the A/R Facility, (f) the grant in the ordinary
course of business of any non-exclusive license of patents, trademarks,
registrations therefor and other similar intellectual property, (g) any
dividend, distribution, investment or payment made pursuant to Sections 6.3 and
6.4, (h) the Columbine Sale, (i) the Private Internet Sale, (j) any disposition
in any single transaction or related series of transactions, the aggregate value
of which is equal to $5.0 million or less in the ordinary course of the
Company's business consistent with past practices; provided that the total value
of the dispositions permitted pursuant to this clause (j) shall not exceed $15.0
million in the aggregate, and (k) any sale, lease, conveyance, disposition or
other transfer of substantially all of the assets of the Company as permitted by
Section 6.6(b).
"Bankruptcy Law" means Title 11 of the United States Code entitled
"Bankruptcy," as now and hereafter in effect, or any successor statute or any
other United States federal, state or local law or the law of any other
jurisdiction relating to bankruptcy, insolvency, winding up, liquidation,
reorganization or relief of debtors, whether in effect on the date hereof or
hereafter.
"Bankruptcy Order" means any court order made in a proceeding pursuant
to or within the meaning of any Bankruptcy Law, containing an adjudication of
bankruptcy or insolvency, or providing for liquidation, winding up, dissolution
or reorganization, or appointing a custodian of a debtor or of all or any
substantial part of a debtor's property, or providing for the staying,
arrangement, adjustment or composition of indebtedness or other relief of a
debtor.
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"BF Trust" shall mean Big Flower Trust I, a statutory business trust
formed under the laws of Delaware.
"BFH Merger Corp." means BFH Merger Corp., a Delaware corporation.
"Big Flower" means Big Flower Holdings, Inc., a Delaware corporation.
"Big Flower BFT Common Securities Guaranty" shall mean the Guaranty
Agreement, dated as of October 20, 1997, executed and delivered by Big Flower in
favor of the holders of the common securities of BF Trust, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Big Flower Press Notes" shall mean the Company's 8 7/8% Senior
Subordinated Notes due 2007 and the Company's 8 5/8% Senior Subordinated Notes
due 2008.
"Big Flower QUIPS Guaranty" shall mean the Guaranty Agreement, dated
as of October 20, 1997, between Big Flower and The Bank of
New York, as trustee
thereunder, executed and delivered by Big Flower in favor of the holders of the
Convertible QUIPS, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
"Board of Directors" means, with respect to any Person, the Board of
Directors of such Person or any duly authorized committee of that Board.
"Bridge Loan" means, collectively, the loans made by the Lenders
pursuant to Section 2.1A.
"Bridge Loan Commitment" means the commitment of the Lenders to make
the Bridge Loan as set forth in Section 2.1A.
"Bridge Notes" has the meaning ascribed to such term in Section 2.1D.
"Business Day" means any day excluding Saturday, Sunday and any day
which is a legal holiday under the laws of
New York,
New York or is a day on
which banking institutions therein located are authorized or required by law or
other governmental action to close.
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"Capital Stock" means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock, including,
without limitation, each class of Common Stock and Preferred Stock of such
Person and (ii) with respect to any Person that is not a corporation, any and
all partnership or other equity interests of such Person.
"Capitalized Lease Obligation" means obligations under a lease that is
required to be capitalized for financial reporting purposes in accordance with
GAAP, and the amount of Indebtedness represented by such obligations shall be
the capitalized amount of such obligations determined in accordance with GAAP.
"Cash Equivalents" means (i) marketable direct obligations issued or
unconditionally guaranteed or insured by the United States Government or issued
by any agency or instrumentality thereof and backed by the full faith and credit
of the United States, in each case maturing within one year from the date of
acquisition thereof; (ii) marketable direct obligations issued by any state of
the United States of America or any political subdivision of any such state or
any public instrumentality thereof maturing within one year from the date of
acquisition thereof and, at the time of acquisition, having the highest rating
obtainable from either Standard & Poor's Ratings Group ("S&P") or Xxxxx'x
Investors Service, Inc. ("Moody's"); (iii) commercial paper maturing no more
than one year from the date of creation thereof and, at the time of acquisition,
rated at least A-1 by S&P or at least P-1 by Moody's; (iv) time deposits,
certificates of deposit or bankers' acceptances maturing within one year from
the date of acquisition thereof issued by any commercial bank organized under
the laws of the United States of America or any state thereof or the District of
Columbia that (a) is "adequately capitalized" (as defined in the regulations of
its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in
such regulations) of not less than $100,000,000; (v) repurchase agreements with
respect to, and which are fully secured by a perfected security interest in,
obligations of a type described in clause (i) or clause (ii) above and are with
any commercial bank described in clause (iv) above; (vi) shares of any money
market mutual fund that has substantially all of its assets invested
continuously in the types of investments referred to in clauses (i) and (v)
above; and (vii) demand deposit accounts maintained in the ordinary course of
business; provided that for purposes of
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Sections 8 and 11, the term "Cash Equivalents" shall not include the cash
equivalents referred to in clause (v) above.
"Cash Proceeds" means, with respect to any Asset Sale, cash payments
(including any cash received by way of deferred payment pursuant to, or
monetization of, a note receivable or otherwise (other than the portion of such
deferred payment constituting interest, which shall be deemed not to constitute
Cash Proceeds) but only as and when so received) received from such Asset Sale.
"Change of Control" means the occurrence of one or more of the
following events: (i) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all of
the assets of the Company to any Person or group of related Persons for purposes
of Section 13(d) of the Exchange Act (a "Group"), together with any Affiliates
thereof (other than the Permitted Holders); (ii) the approval by the holders of
Capital Stock of the Company of any plan or proposal for the liquidation or
dissolution of the Company; (iii) any Person or Group (other than the Permitted
Holders) shall become the owner, directly or indirectly, beneficially or of
record, of shares representing more than 25% of the Voting Stock of Big Flower,
unless at such time the Equity Investors and/or the Xxxxx Permitted Holders
beneficially own, in the aggregate, not less than a majority of the Voting Stock
of Big Flower, on a fully diluted basis; (iv) prior to the Conversion Date any
Equity Investor or the Xxxxx Permitted Holders shall cease to own 90% of the
outstanding Capital Stock of Big Flower owned by such Person on the Closing Date
and after the Conversion Date any Equity Investor or the Xxxxx Permitted Holders
shall cease to own 51% of the outstanding Capital Stock of Big Flower owned by
such Person on the Closing Date; (v) the replacement of a majority of the Board
of Directors of the Company over a two-year period from the directors who
constituted the Board of Directors of the Company at the beginning of such
period, and such replacement shall not have been approved by a vote of at least
a majority of the Board of Directors of the Company then still in office who
either were members of such Board of Directors at the beginning of such period
or whose election as a member of such Board of Directors was previously so
approved; or (vi) the occurrence of any "Change of Control" as defined in each
of the Senior Subordinated Indenture or the indenture pursuant to which any
Demand Take-Out Notes are issued or in the Senior Credit Facility.
"Change of Control Date" has the meaning ascribed to such term in
Section 2.5A(iv).
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"Change of Control Offer" has the meaning ascribed to such term in
Section 2.5A(iv).
"Closing Date" means December 7, 1999.
"Columbine" means Columbine JDS Systems, a Delaware corporation.
"Columbine Dividend" means a dividend of at least $134.9 million in
connection with the Columbine Sale.
"Columbine Sale" means the sale by Big Flower of all of the capital
stock of Columbine for at least $30.0 million in cash.
"Columbine/XL Ventures Disposition" means the Columbine Sale and the
Private Internet Sale, collectively.
"Commission" means the Securities and Exchange Commission.
"Commitment Letter" means, collectively, (i) the letter agreement
dated October 22, 1999, between BFH Merger Corp., Bankers Trust Corporation,
Chase and Nations and (ii) the "Fee Letter" dated October 22, 1999, between BFH
Merger Corp., Bankers Trust Corporation, Chase and Nations, pursuant to which
Bankers Trust Corporation, Chase and Nations committed to provide the Loans to
the Company, subject to the terms and conditions thereof, and the Company
committed to pay Bankers Trust Corporation, Chase and Nations certain fees and
to satisfy certain other obligations to Bankers Trust Corporation, Chase and
Nations in respect of such commitments.
"Common Stock" of any Person means any and all shares, interests or
other participations in, and other equivalents (however designated and whether
voting or non-voting) of, such Person's common stock, whether outstanding on the
Closing Date or issued after the Closing Date, and includes, without limitation,
all series and classes of such common stock.
"Company" has the meaning ascribed to such term in the introduction to
this Agreement.
"Compliance Certificate" means a certificate substantially in the form
of EXHIBIT III delivered to the Agents by the Company pursuant to Section
5.1(f).
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"Consolidated Net Income" means, with respect to any Person, for any
period, the aggregate of the net income (or loss) of such Person and its
Restricted Subsidiaries for such period, on a consolidated basis, determined in
accordance with GAAP; PROVIDED that (a) the net income of any other Person in
which such Person or any of its Restricted Subsidiaries has an interest (which
interest does not cause the net income of such other Person to be consolidated
with the net income of such Person and its Subsidiaries in accordance with GAAP)
shall be included only to the extent of the amount of dividends or distributions
actually paid to such Person or such Restricted Subsidiary by such other Person
during such period; (b) the net income of any Restricted Subsidiary of such
Person that is subject to any Payment Restriction shall be excluded to the
extent such Payment Restriction would prevent the payment of an amount that
otherwise could have been paid to such Person or to a Restricted Subsidiary of
such Person not subject to any Payment Restriction; and (c) there shall be
excluded (i) the net income (or loss) of any other Person acquired in a pooling
of interests transaction for any period prior to the date of such acquisition,
(ii) all gains and losses realized on any Asset Sale, net of related tax costs
or tax benefits, as the case may be, (without regard to the $500,000 threshold
set forth in the definition of Asset Sale), (iii) all gains and losses realized
on the purchase or other acquisition by such Person or any of its Restricted
Subsidiaries of any Securities of such Person or any of its Restricted
Subsidiaries, (iv) all extraordinary gains or losses, (v) (A) all non-cash
charges (PROVIDED that any cash payments actually made with respect to the
liabilities for which such charges were created shall be deducted from
Consolidated Net Income in the period when made) and (B) all deferred financing
costs written off in connection with the early extinguishment of any
Indebtedness, in each case, incurred by the Company or any of its Subsidiaries
in connection with the Transactions, (vi) any non-recurring and non-operational
charges or gains, and (vii) restructuring and related charges in connection with
the closing of the Company's Salisbury facility after the Closing Date and on or
prior to December 31, 2000 in an aggregate amount not to exceed $5.0 million.
"Contested Claim" means any Tax, Indebtedness or other claim or
liability (i) the validity or amount of which is being diligently contested in
good faith, (ii) for which adequate reserve, or other appropriate provision, if
any, as required in conformity with GAAP shall have been made, and (iii) with
respect to which any right to execute upon or sell any assets of the Company or
of any of its Subsidiaries has not
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matured or has been and continues to be effectively enjoined, superseded or
stayed.
"Contractual Obligation", as applied to any Person, means any
provision of any Security issued by that Person or of any indenture, mortgage,
deed of trust, contract, undertaking, agreement or other instrument to which
that Person is a party or by which it or any of its properties is bound or to
which it or any of its properties is subject.
"Conversion Date" means the one year anniversary of the Closing Date
or such later date to which the Conversion Date may be deferred pursuant to
Section 3.2D.
"Convertible QUIPS" shall mean BF Trust's Convertible Quarterly Income
Preferred Securities, liquidation preference of $50 per security, which
preferred securities are exchangeable, in certain circumstances, for a portion
(equal to the aggregate liquidation preference of the Convertible QUIPS so
exchanged) of the Convertible Subordinated Debentures held by BF Trust.
"Convertible QUIPS Documents" shall mean and include (i) the
Convertible QUIPS, (ii) the Big Flower QUIPS Guaranty, (iii) the Big Flower BFT
Common Securities Guaranty and (iv) the Trust Agreement.
"Convertible Subordinated Debenture Indenture" shall mean the
indenture entered into between Big Flower, BF Trust and The Bank of
New York, as
trustee thereunder, as the same may be amended, modified or supplemented from
time to time in accordance with the terms hereof and thereof.
"Convertible Subordinated Debentures" shall mean Big Flower's 6%
Convertible Subordinated Debentures due October 15, 2027, issued to BF Trust,
which Convertible Subordinated Debentures are convertible into a right to
receive Post-Closing Convertible QUIPS Conversion Payments pursuant to a
Permitted Conversion.
"Covered Taxes" has the meaning ascribed to it in Section 12.19.
"Currency Agreement" means any foreign exchange contract, currency
swap agreement, futures contract, option contract, synthetic cap or other
similar agreement or arrangement designed to protect Company or any of its
Subsidiaries against fluctuations in currency values.
-10-
"Custodian" means any receiver, interim receiver, receiver and
manager, trustee, assignee, liquidator, sequestrator or similar official charged
with maintaining possession or control over property for one or more creditors,
whether under any Bankruptcy Law or otherwise.
"Demand Take-Out Notes" means (x) senior subordinated notes of the
Company issued under an indenture and/or (y) senior subordinated notes of Big
Flower issued under an indenture (provided that any senior subordinated notes
issued by Big Flower will only be subordinated to the guarantee of Big Flower
under the Senior Credit Facility), in each case (i) with such terms, conditions
and covenants as are customary for similar high-yield financings and as are
reasonably satisfactory in all respects to the Agents, the Company and/or Big
Flower and, to the extent required under the Senior Credit Facility, the
Required Lenders under, and as defined in, the Senior Credit Facility and (ii)
the proceeds of which shall be used to repay the Bridge Notes in whole or in
part, which Demand Take-Out Notes shall be guaranteed by each entity that
guarantees the Bridge Loan.
"Designated Senior Indebtedness" means (1) any Indebtedness under or
in respect of the Senior Credit Facility and (2) any other Indebtedness
outstanding after the Conversion Date constituting Senior Indebtedness which, at
the time of determination, has an aggregate principal amount of at least $25.0
million and is specifically designated in the instrument evidencing such Senior
Indebtedness as "Designated Senior Indebtedness" by the Company.
"Disqualified Capital Stock" means any Capital Stock which, by its
terms (or by the terms of any security into which it is convertible or for which
it is exchangeable), or upon the happening of any event (other than an event
which would constitute a Change of Control), (i) matures or is mandatorily
redeemable, pursuant to a sinking fund obligation or otherwise, or is redeemable
at the sole option of the holder thereof (except upon the occurrence of a Change
of Control), in whole or in part, on or prior to the final maturity date of the
Notes, or (ii) is convertible into or exchangeable for (whether at the option of
the issuer or the holder thereof) (a) debt securities or (b) any Capital Stock
referred to in (i) above, in each case at any time prior to the final maturity
of the Notes; PROVIDED that only the portion of Capital Stock which so matures
or is mandatorily redeemable, is so convertible or exchangeable or is so
redeemable at the option of the holder thereof prior to such
-11-
final maturity date shall be deemed to be Disqualified Capital Stock.
"Documents" means the Loan Documents, the Recapitalization Agreement,
the Senior Credit Facility, the Equity Financing Documents, the A/R Facility
Documents and the Mezzanine Financing Documents.
"Dollars" or the sign "$" means the lawful money of the United States
of America.
"EBITDA" means, with respect to any Person, for any period, the
Consolidated Net Income of such Person for such period, plus, in each case to
the extent deducted in computing Consolidated Net Income of such Person for such
period (without duplication), (i) provisions for income taxes or similar charges
recognized by such Person and its consolidated Restricted Subsidiaries accrued
during such period, (ii) depreciation and amortization expense of such Person
and its consolidated Restricted Subsidiaries accrued during such period (but
only to the extent not included in Fixed Charges) and other non-cash charges,
(iii) Fixed Charges of such Person and its consolidated Restricted Subsidiaries
for such period, (iv) the amount of any restructuring reserve or charge recorded
during such period in accordance with GAAP, including any such reserve or charge
related to the Transactions, (v) fees paid pursuant to Section 2.4 hereof, (vi)
parachute payments to management of Big Flower and its Subsidiaries after the
Closing Date and on or prior to December 31, 2000 in an aggregate amount not to
exceed $7,500,000, (vii) any management fees permitted pursuant to Section
6.8(b)(vi) and (viii) amounts paid as a spread payment in connection with a
cashless exercise of options by a director or employee of Big Flower or any of
its Subsidiaries (i.e., a payment equal to the spread of the then fair market
value of Big Flower's Common Stock which may be purchased with such options over
the aggregate exercise price of such options), less, without duplication, (x)
non-cash items increasing Consolidated Net Income of such Person for such period
in each case determined in accordance with GAAP and (y) the amount of all cash
payments made by such Person or its Restricted Subsidiaries during such period
to the extent that such cash payment has been provided for in a restructuring
reserve or charge referred to in clause (iii) above (and was not otherwise
deducted in the computation of Consolidated Net Income of such Person for such
period).
"ECP" shall mean Evercore Capital Partners L.P., a Delaware limited
partnership.
-12-
"ECP Affiliates" shall mean any Affiliate of ECP.
"ECP Investors" shall mean ECP, Evercore Capital Partners (NQ) L.P.
and EBF Group L.L.C., or any limited or general partner, stockholder, officer or
employee of such ECP Investor.
"Eligible Assignee" means (A) (i) a commercial bank organized under
the laws of the United States of America or any state thereof; (ii) a savings
and loan association or savings bank organized under the laws of the United
States or any state thereof; (iii) a commercial bank organized under the laws of
any other country or a political subdivision thereof; PROVIDED that (x) such
bank is acting through a branch or agency located in the United States or (y)
such bank is organized under the laws of a country that is a member of the
Organization for Economic Cooperation and Development or a political subdivision
of such country; and (iv) any other entity which is an "accredited investor" (as
defined in Regulation D under the Securities Act) which extends credit or buys
loans as one of its businesses including, but not limited to, insurance
companies, mutual funds and lease financing companies, in each case (under
clauses (i) through (iv) above) that is reasonably acceptable to the Agents; and
(B) any Lender and any Affiliate of any Lender.
"Employment Agreements" has the meaning ascribed to such term in
Section 3.1R(3).
"Environmental Claim" means any accusation, allegation, notice of
violation, claim, demand, abatement order or other order or direction
(conditional or otherwise) by any governmental authority or any Person for any
response or corrective action, any damage, including, without limitation,
personal injury (including sickness, disease or death), tangible or intangible
property damage, contribution, indemnity, indirect or consequential damages,
damage to the environment, nuisance, pollution, contamination or other adverse
effects on the environment, or for fines, penalties or restrictions, in each
case arising under any Environmental Law, including without limitation, relating
to, resulting from or in connection with Hazardous Materials and relating to the
Company, any of its Subsidiaries or any of their respective properties or
predecessors in interest.
"Environmental Laws" means the common law and all statutes,
ordinances, orders, rules, regulations, plans, policies or decrees and the like
relating to (i) environmental matters, including, without limitation, those
relating to fines,
-13-
injunctions, penalties, damages, contribution, cost recovery compensation,
losses or injuries resulting from the Release or threatened Release of Hazardous
Materials, (ii) the generation, use, storage, transportation or disposal of
Hazardous Materials, or (iii) occupational safety and health, industrial
hygiene, land use or the protection of human, plant or animal health or welfare,
including, without limitation, the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. Section 9601 ET SEQ.), the Hazardous
Materials Transportation Act (49 U.S.C. Section 1801 ET SEQ.), the Resource
Conservation and Recovery Act (42 U.S.C. Section 6901 ET SEQ.), the Federal
Water Pollution Control Act (33 U.S.C. Section 1251 ET SEQ.), the Clean Air Act
(42 U.S.C. Section 7401 ET SEQ.), the Toxic Substances Control Act (15 U.S.C.
Section 2601 ET SEQ.), the Federal Insecticide, Fungicide and Rodenticide Act (7
U.S.C. Section 136 ET SEQ.), the Occupational Safety and Health Act (29 U.S.C.
Section 651 ET SEQ.) and the Emergency Planning and Community Right-to-Know Act
(42 U.S.C. Section 11001 ET SEQ.), each as amended or supplemented, and any
analogous future or present statutes and regulations promulgated pursuant
thereto, each as in effect as of the date of determination.
"Environmental Lien" means a Lien in favor of a Tribunal or other
Person (i) for any liability under an Environmental Law or (ii) for damages
arising from or costs incurred by such Tribunal or other Person in response to a
release or threatened release of hazardous or toxic waste, substance or
constituent into the environment.
"Equity Financing" shall mean an equity contribution to Big Flower of
not less than $394,247,700 in aggregate proceeds made by the Equity Investors
($86,144,846 of which may be in the form of rollover equity).
"Equity Financing Documents" shall mean each of the documents related
to the consummation of the Equity Financing.
"Equity Investors" means THL, THL Investors, ECP, ECP Investors and
their respective Affiliates, taken as a whole.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any successor statute.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9)of
ERISA) which together with the Company or any Subsidiary of the Company would be
deemed to be a "single employer" within the meaning of Section 414(b), (c) or
(solely
-14-
for purposes of Section 412 of the Internal Revenue Code) (m) of the Internal
Revenue Code.
"Event of Default" means each of the events set forth in Section 7.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
from time to time, and any successor statute.
"Exchange Notes" has the meaning ascribed to it in Section 5.13(ii).
"Exchange Request" has the meaning ascribed to it in Section 5.13.
"fair market value" means, with respect to any asset or property, the
price which could be negotiated in an arm's-length, free market transaction, for
cash, between a willing seller and a willing and able buyer, neither of whom is
under undue pressure or compulsion to complete the transaction. Fair market
value shall be determined by the Board of Directors of the Company acting in
good faith and shall, in the case of any assets or property the fair market
value of which exceeds $1,500,000, be evidenced by a Board Resolution of the
Board of Directors of the Company delivered to the Agents.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of
New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Agents from three Federal Funds brokers of
recognized standing selected by the Agents.
"Fixed Charge Coverage Ratio" means, with respect to any Person, the
ratio of (1) EBITDA of such Person during the four full fiscal quarters (the
"Four Quarter Period") ending on or prior to the date of the transaction giving
rise to the need to calculate the Fixed Charge Coverage Ratio (the "Transaction
Date") to (2) the aggregate Fixed Charges of such Person for the Four Quarter
Period. In addition to and without limitation of the foregoing, for purposes of
this definition, "EBITDA" and "Fixed Charges" shall be calculated after giving
effect on a PRO FORMA basis for the period of such calculation to (i) the
-15-
incurrence or repayment of any Indebtedness of such Person or any of its
Restricted Subsidiaries (and the application of the proceeds thereof) giving
rise to the need to make such calculation and any incurrence or repayment of
other Indebtedness (and the application of the proceeds thereof), other than the
incurrence or repayment of Indebtedness in the ordinary course of business for
working capital purposes pursuant to working capital facilities, at any time
subsequent to the first day of the Four Quarter Period and on or prior to the
Transaction Date (the "Reference Period"), as if such incurrence or repayment,
as the case may be (and the application of the proceeds thereof), occurred on
the first day of the Four Quarter Period, (ii) any Investment, during the
Reference Period, in any other Person that, as a result of such Investment,
becomes a Restricted Subsidiary of such Person, (iii) the acquisition, during
the Reference Period (by merger, consolidation or purchase of stock or assets),
of any business or assets, and (iv) any sales or other dispositions of assets
(other than sales of inventory in the ordinary course of business) occurring
during the Reference Period, in each case as if such incurrence, repayment,
Investment, acquisition or asset sale had occurred on the first day of the
Reference Period; PROVIDED that whenever PRO FORMA effect is given to an
acquisition, PRO FORMA expense and cost reductions shall be calculated on a
basis consistent with Article 11 of Regulation S-X of the Securities Act and,
furthermore, (A) Fixed Charges attributable to any Indebtedness computed on a
PRO FORMA basis and bearing a floating interest rate shall be computed as if the
rate in effect on the Transaction Date had been the applicable rate in effect
for the period, unless such Person or any of its Restricted Subsidiaries is a
party to an Interest Rate Agreement which will remain in effect for the
twelve-month period after the Transaction Date and which has the effect of
fixing the interest rate on the date of computation, in which case such rate
(whether higher or lower) shall be used, and (B) there shall be excluded from
Fixed Charges any portion of such Fixed Charges related to any amount of
Indebtedness that was outstanding during or subsequent to the Reference Period
but is not outstanding on the Transaction Date, except for Fixed Charges
actually incurred with respect to Indebtedness borrowed (as adjusted pursuant to
clause (A)) under a revolving credit or similar arrangement to the extent the
commitment thereunder remains in effect on the Transaction Date. If such Person
or any of its Subsidiaries directly or indirectly guarantees any Indebtedness of
a third Person, the Fixed Charge Coverage Ratio shall, without duplication, give
effect to the incurrence of such Indebtedness as if such Person or Subsidiary
had directly incurred such guaranteed Indebtedness.
-16-
"Fixed Charges" means, with respect to any Person, for any period, the
aggregate amount of (i) interest, whether expensed or capitalized, paid or
accrued during such period (except to the extent accrued in a prior period) in
respect of all Indebtedness of such Person and its Restricted Subsidiaries
(including (a) original issue discount on any Indebtedness, but excluding
amortization of debt issuance costs, and (b) the interest portion of all
deferred payment obligations, calculated in accordance with the effective
interest method, in each case to the extent attributable to such period, but
excluding amortization of debt issuance costs) and (ii) dividend requirements on
Preferred Stock of such Person and its Restricted Subsidiaries (whether in cash
or otherwise (except dividends payable in shares of Qualified Capital Stock and
dividends paid on Preferred Stock of Unrestricted Subsidiaries)) paid or
scheduled to be paid in cash during such period and excluding items eliminated
in consolidation. For purposes of this definition, (a) interest on a Capitalized
Lease Obligation shall be deemed to accrue at an interest rate reasonably
determined by the Board of Directors of such Person (as evidenced by a
resolution of the Board of Directors) to be the rate of interest implicit in
such Capitalized Lease Obligation in accordance with GAAP, (b) interest on
Indebtedness that is determined on a fluctuating basis shall be deemed to have
accrued at a fixed rate per annum equal to the rate of interest of such
Indebtedness in effect on the date Fixed Charges are being calculated and (c)
Fixed Charges shall be increased or reduced by the net cost (including
amortization of discount) or benefit associated with Interest Rate Agreements
attributable to such period. For purposes of clause (ii) above, dividend
requirements shall be increased to an amount representing the pretax earnings
that would be required to cover such dividend requirements; accordingly, the
increased amount shall be equal to a fraction, the numerator of which is the
amount of such dividend requirements and the denominator of which is one (1)
minus the applicable actual combined federal, state, local and foreign income
tax rate of such Person and its Restricted Subsidiaries (expressed as a
decimal), on a consolidated basis, for the fiscal year immediately preceding the
date of the transaction giving rise to the need to calculate Fixed Charges.
"Fixed Rate" has the meaning ascribed to it in Section 2.3(A)(ii).
"Fixed Rate Loans" means Loans described in Section 2.3A(ii).
-17-
"Floating Rate Loans" means Loans described in Section 2.3A(i).
"Foreign Pension Plan" means any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by the Company or any one or
more of its Subsidiaries primarily for the benefit of employees of the Company
or any of its Subsidiaries residing outside the United States of America, which
plan, fund or other similar program provides, or results in, retirement income,
a deferral of income in contemplation of retirement or payments to be made upon
termination of employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Company that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof, the United States Virgin Islands or Puerto Rico.
"Funding Subsidiary Guarantor" has the meaning ascribed to it in
Section 10.7.
"GAAP" means those generally accepted accounting principles and
practices in the United States which are recognized as such by the Financial
Accounting Standards Board and which are consistently applied for all periods
after the date hereof so as to properly reflect the financial conditions, and
the results of operations and changes in financial position, of the Company and
its Subsidiaries, except that any accounting principle or practice required to
be changed in order to continue as a generally accepted accounting principle or
practice may be so changed.
"Grace Period" shall have the meaning ascribed to it in Section 3.2D.
"Guarantee Obligations" shall mean, as to any Subsidiary Guarantor,
all obligations of every nature of such Subsidiary Guarantor from time to time
owing to the Lenders and the Agents under the Loan Documents to which it is a
party (including its Guarantee), whether for principal, reimbursements,
interest, premium, fees, penalties, expenses, indemnities, damages or otherwise.
"Guarantees" means, collectively, the guarantees delivered to the
Lenders by the Subsidiary Guarantors pursuant to
-18-
Section 10 which are evidenced by notations of guarantee substantially in the
form of EXHIBIT IX.
"Hazardous Materials" means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable and
require abatement, transformers or other equipment that contain dielectric fluid
containing polychlorinated biphenyls, and radon gas; (b) any chemicals,
materials or substances included as "hazardous substances," "hazardous waste,"
"hazardous materials," "extremely hazardous substances," "restricted hazardous
waste," "toxic substances," "toxic pollutants," "contaminants" or "pollutants,"
or words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, to the extent exposure is prohibited,
limited or regulated under Environmental Laws.
"Incur" means, with respect to any Indebtedness or other obligation of
any Person, to create, issue, incur (by conversion, exchange or otherwise),
assume, guarantee or otherwise become liable in respect of such Indebtedness or
other obligation or the recording, as required pursuant to GAAP or otherwise, of
any such Indebtedness or other obligation on the balance sheet of such Person
(and "Incurrence," "Incurred," "Incurrable" and "Incurring" shall have meanings
correlative to the foregoing); PROVIDED that any amendment, modification or
waiver of any document pursuant to which Indebtedness was previously Incurred
shall only be deemed to be an Incurrence of Indebtedness if and to the extent
such amendment, modification or waiver (i) increases the principal thereof or
interest rate or premium payable thereon or (ii) changes to an earlier date the
stated maturity thereof or the date of any scheduled or required principal
payment thereon or the time or circumstances under which such Indebtedness shall
be redeemed; PROVIDED, further, that any Indebtedness of a Person existing at
the time such Person becomes a Restricted Subsidiary of the Company (whether by
merger, consolidation, acquisition or otherwise) shall be deemed to be Incurred
by such Restricted Subsidiary at the time it becomes a Restricted Subsidiary of
the Company.
"Indebtedness" means, with respect to any Person, without duplication
(i) all indebtedness, obligations and liabilities of such Person for borrowed
money (including, without limitation, all Senior Indebtedness Obligations), (ii)
that portion of obligations with respect to Capitalized Lease Obligations that
is properly classified as a liability on a balance sheet of such Person in
conformity with GAAP, (iii) notes payable and drafts accepted representing
extensions of credit,
-19-
whether or not representing obligations for borrowed money, of such Person, (iv)
any indebtedness, obligation or liability of such Person owed for all or any
part of the deferred purchase price of property or services (excluding any such
obligations incurred under ERISA), which purchase price is (a) due more than six
months (or a longer period of up to one year, if such terms are available from
suppliers in the ordinary course of business) from the date of incurrence of the
obligation in respect thereof or (b) evidenced by a note or similar written
instrument, (v) all indebtedness, obligations and liabilities secured by any
Lien on any property or asset owned or held by that Person regardless of whether
the indebtedness secured thereby shall have been assumed by that Person or is
nonrecourse to the credit of that Person, (vi) guarantees of such Person in
respect of Indebtedness of other Persons, (vii) guarantees and other contingent
obligations in respect of Indebtedness referred to in clauses (i) through (v)
above and (viii) all Disqualified Capital Stock issued by such Person with the
amount of Indebtedness represented by such Disqualified Capital Stock being
equal to the greater of its voluntary or involuntary liquidation preference and
its maximum fixed repurchase price, but excluding accrued dividends, if any. For
purposes hereof, the "maximum fixed repurchase price" of any Disqualified
Capital Stock which does not have a fixed repurchase price shall be calculated
in accordance with the terms of such Disqualified Capital Stock as if such
Disqualified Capital Stock were purchased on any date on which Indebtedness
shall be required to be determined pursuant to this Agreement, and if such price
is based upon, or measured by, the fair market value of such Disqualified
Capital Stock, such fair market value to be determined reasonably and in good
faith by the board of directors of the issuer of such Disqualified Capital
Stock. Notwithstanding the foregoing, "Indebtedness" shall not include trade
payables and accrued liabilities Incurred in the ordinary course of business for
the purchase of goods or services which are not secured by a Lien other than a
Permitted Encumbrance.
"Indemnified Liabilities" has the meaning ascribed to such term in
Section 12.4.
"Indemnitees" has the meaning ascribed to such term in Section 12.4.
"Independent Financial Advisor" means a firm (i) which does not, and
whose directors, officers and employees or Affiliates do not, have a direct or
indirect financial interest in the Company and (ii) which, in the judgment of
the
-20-
Board of Directors of the Company, is otherwise independent and qualified to
perform the task for which it is to be engaged.
"Initial Convertible QUIPS Conversion Payments" means conversion
payments required to be made to holders of Convertible QUIPS who have elected to
convert their Convertible QUIPS on the Closing Date into a right to receive cash
pursuant to the relevant Recapitalization documents and Convertible QUIPS
Documents.
"Initial Request Date" shall have the meaning ascribed to it in
Section 5.12A.
"Intercompany Indebtedness" means any Indebtedness of the Company or
any Subsidiary Guarantor or Wholly-Owned Restricted Subsidiary of the Company
that is not a Subsidiary Guarantor which, in the case of the Company, is owing
to any Subsidiary Guarantor or Wholly-Owned Restricted Subsidiary of the Company
that is not a Subsidiary Guarantor and which, in the case of any such
Subsidiary, is owing to the Company or any Subsidiary Guarantor or Wholly-Owned
Restricted Subsidiary of the Company that is not a Subsidiary Guarantor;
PROVIDED that if as of any date any Person other than the Company or a
Subsidiary Guarantor or Wholly-Owned Restricted Subsidiary of the Company that
is not a Subsidiary Guarantor or any lender under the Senior Credit Facility (or
any collateral agent thereunder acting on its behalf) owns or holds such
Indebtedness, or holds any Lien in respect thereof (other than a Lien in favor
of the Lenders or any collateral agent under the Senior Credit Facility), such
Indebtedness shall no longer be Intercompany Indebtedness permitted to be
Incurred pursuant to Section 6.1(v).
"Interest Rate Agreement" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
agreement or arrangement designed to protect Company or any of its Subsidiaries
against fluctuations in interest rates.
"Interest Rate Determination Date" means, with respect to any Monthly
Period, the second Business Day on which banks in
New York and London are open
prior to the first Business Day of such Monthly Period.
"Internal Revenue Code" or "Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor code or statute.
-21-
"Investment" means (i) any direct or indirect purchase or other
acquisition of, or of a beneficial interest in, any Securities of any other
Person by a Person (the "Acquiring Person"), in each case, other than as a
result of the issuance of Capital Stock of such Acquiring Person or the delivery
of Capital Stock of such Acquiring Person's direct or indirect parent or (ii)
any direct or indirect loan, advance (other than advances to employees for
moving, entertainment and travel expenses, drawing accounts, advances to
customers and similar expenditures in the ordinary course of business),
extension of credit or capital contribution to any other Person, including all
indebtedness and accounts receivable from that other Person that are not current
assets or did not arise from sales to that other Person in the ordinary course
of business. The amount of any Investment shall be the original cost of such
Investment plus the cost of all additional Investments by the Company or any of
its Restricted Subsidiaries, without any adjustments for increases or decreases
in value, or write-ups, write-downs or write-offs with respect to such
Investment, reduced by the payment of dividends or distributions (including tax
sharing payments) in connection with such Investment to the extent such
distribution constitutes a return on capital in accordance with GAAP; PROVIDED,
HOWEVER, that in the case of an Investment in an Unrestricted Subsidiary, the
Company may elect to include such cash payments (in whole or in part) in
Consolidated Net Income and not as a reduction in the carrying value of the
Investment in such Unrestricted Subsidiary (whether or not in accordance with
GAAP), such election to be made prior to the making of a Restricted Payment
based upon such dividend or distribution.
"Joint Venture" means a joint venture, partnership or other similar
arrangement, whether in corporate, partnership or other legal form; PROVIDED
that, as to any such arrangement in corporate form, such corporation shall not,
as to any Person of which such corporation is a Subsidiary, be considered to be
a Joint Venture to which such Person is a party.
"Laws" means all applicable statutes, laws, ordinances, regulations,
rules, orders, judgments, writs, injunctions or decrees of any state,
commonwealth, nation, territory, possession or province, or Tribunal, and "Law"
means each of the foregoing.
"Lenders" has the meaning ascribed to that term in the introduction to
this Agreement and shall include any assignee of any Loan, Note or Loan
Commitment to the extent of such assignment.
-22-
"LIBOR Rate" means the rate determined on the basis of the offered
rates for deposits in U.S. Dollars in the London interbank market for a period
of three months which is published by the British Bankers' Association and
currently appears on Telerate page 3750 as of 11:00 a.m., London time, on the
Interest Rate Determination Date for such Monthly Period for a term comparable
to such Monthly Period; PROVIDED that if, for any reason, such a rate is not
published by the British Bankers' Association, the LIBOR Rate shall be equal to
a rate per annum equal to the average rate (rounded upwards, if necessary, to
the nearest 1/100 of 1%) at which the Agents determine that U.S. Dollars in an
amount comparable to the amount of the applicable Loans are being offered to
prime banks at approximately 11:00 a.m., London time, on the Interest Rate
Determination Date for such Monthly Period for a term comparable to such Monthly
Period for settlement in immediately available funds by leading banks in the
London interbank market selected by the Agents divided (and rounded upward to
the next whole multiple of 1/16 of 1%) by (ii) a percentage equal to 100% minus
the then stated maximum rate of all reserve requirements (including without
limitation any marginal, emergency, supplemental, special or other reserves)
applicable to any member bank of the Federal Reserve System in respect of
Eurocurrency liabilities as defined in Regulation D (or any successor category
of liabilities under Regulation D).
"Lien" means any lien, mortgage, pledge, assignment, security
interest, charge or encumbrance of any kind (including any conditional sale or
other title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest) and any option, trust or other
preferential arrangement having the practical effect of any of the foregoing.
"Litigation" means any action, suit, proceeding, claim, lawsuit and/or
investigation conducted or threatened by or before any Tribunal.
"Loan Commitment" means the Bridge Loan Commitment and the Term Loan
Commitment.
"Loan Documents" means this Agreement, the Bridge Notes, the Term
Notes, the Guarantees, the Senior Subordinated Indenture, the Exchange Notes and
the Registration Rights Agreement.
"Loans" means the Bridge Loan and the Term Loan as each may be
outstanding.
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"Management Agreements" has the meaning ascribed to such term in
Section 3.1R(2).
"Management Participants" shall mean (i) R. Xxxxxxxx Xxxxx and (ii)
other members of senior management of Big Flower and its Subsidiaries acceptable
to the Agents.
"Margin Stock" has the meaning assigned to that term in Regulation U
of the Board of Governors of the Federal Reserve System as in effect from time
to time.
"Material Adverse Change" means a material adverse change in the
business, results of operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole.
"Material Adverse Effect" means a material adverse effect on the
business, results of operations, properties, assets, condition (financial or
otherwise) or prospects of the Company and its Subsidiaries, taken as a whole.
"Material Subsidiary" means, with respect to any accounting period,
any Restricted Subsidiary of the Company (i) whose revenues constitute greater
than 10% of the aggregate dollar value of the revenues of Company and its
Restricted Subsidiaries, taken as a whole, for such accounting period or (ii)
the fair market value of whose assets at any time during such accounting period
is greater than 10% of the fair market value of all of the assets of Company and
its Restricted Subsidiaries taken as a whole at such time.
"Maturity Date" has the meaning ascribed to such term in Section 2.2D.
"Merger" means the merger of BFH Merger Corp. with and into Big
Flower.
"Mezzanine Financing" means $100,000,000, subject to increase by the
amount of any pay-in-kind interest issued in accordance with the Mezzanine
Financing Documents, from the issuance of subordinated debt (with attached
warrants) of Big Flower to the THL Investors or one or more of their Affiliates,
which debt shall bear interest at a rate of 12% per annum (which interest at a
rate of 10% per annum shall be payable in cash and which interest at a rate of
2% per annum shall be payable in kind).
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"Mezzanine Financing Documents" shall mean each of the documents
related to the consummation of the Mezzanine Financing.
"Monthly Period" shall mean the period commencing on the first
calendar day of each month, if such day is a Business Day, or the first Business
Day succeeding the first calendar day of each month and ending on the day next
preceding the first Business Day of the following Monthly Period; PROVIDED that
the first Monthly Period shall commence on the Closing Date.
"Multiemployer Plan" means a Pension Plan which is a "multiemployer
plan" as defined in Section 4001(a)(3) of ERISA.
"Net Cash Proceeds" means, with respect to any Asset Sale, Cash
Proceeds of such Asset Sale net of bona fide direct costs of sale including, but
not limited to, (i) the cash expenses of such Asset Sale (including, without
limitation, the payment of principal, premium, if any, and interest on
Indebtedness required to be paid as a result of such Asset Sale and legal,
accounting and investment banking fees and sales commission(s)), (ii) taxes paid
or payable as a result thereof, (iii) any portion of cash proceeds which the
Company determines in good faith should be reserved for post-closing
adjustments, it being understood and agreed that on the day that all such
post-closing adjustments have been determined, the amount (if any) by which the
reserved amount in respect of such Asset Sale exceeds the actual post-closing
adjustments payable by the Company or any of its Subsidiaries shall constitute
Net Cash Proceeds on such date, and (iv) any relocation expenses and pension,
severance and shutdown costs incurred as a result thereof.
"Non-payment Default" shall have the meaning ascribed to such term in
Section 8.2(b)
"Notes" means, collectively, the Bridge Notes and the Term Notes.
"Notice of Borrowing" means a notice substantially in the form of
EXHIBIT IV-A with respect to a proposed borrowing.
"Notice of Conversion" means a notice substantially in the form of
EXHIBIT IV-B with respect to a proposed conversion.
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"Obligations" means all obligations of every nature of the Company
from time to time owed to the Lenders and the Agents under the Loan Documents,
whether for principal, reimbursements, interest, fees, penalties, expenses,
indemnities, damages or otherwise, and whether primary, secondary, direct,
indirect, contingent, fixed or otherwise (including obligations of performance).
"Offer Payment Date" has the meaning ascribed to such term in Section
2.5A(iv).
"Officer" means the Chairman of the Board, the President, any Vice
President, the Chief Financial Officer, the Controller, the Treasurer, the
Secretary or Assistant Secretary.
"Officers' Certificate" means, as applied to any corporation, a
certificate executed on behalf of such corporation by an Officer.
"Other Taxes" has the meaning ascribed to such term in Section 12.19.
"Pari Passu Indebtedness" means, with respect to the Company or any
Subsidiary Guarantor, Indebtedness of such Person which ranks junior in right of
payment to all Senior Indebtedness or Subsidiary Guarantor Senior Indebtedness,
as the case may be, PARI PASSU in right of payment to the Loans or the Guarantee
of such Subsidiary Guarantor, as the case may be, and senior in right of payment
to all Subordinated Indebtedness.
"Payment Blockage Notice" has the meaning ascribed to such term in
Section 8.2(b).
"Payment Blockage Period" has the meaning ascribed to such term in
Section 8.2(b).
"Payment Default" shall have the meaning ascribed to such term in
Section 8.2(a).
"Payment Office" shall mean the office of the Agents c/o BTCo located
at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000 or such other office as the
Agents may designate (with the consent of the Company, which consent shall not
unreasonably be withheld) to the Company and the Lenders from time to time.
"Payment Restriction" has the meaning ascribed to such term in
Section 6.7.
-26-
"PBGC" means the Pension Benefit Guaranty Corporation, and any
successor to all or any of the Pension Benefit Guaranty Corporation's functions
under ERISA.
"Pension Plan" means an employee pension benefit plan as defined in
Section 3(2) of ERISA which is subject to the provisions of Title IV of ERISA
and which is maintained for employees of the Company, any Subsidiary of the
Company or any member of the Controlled Group.
"Permitted Affiliate Transactions" shall have the meaning ascribed to
it in Section 6.8(b).
"Permitted Conversion" shall mean the conversion into the right to
receive Post-Closing Convertible QUIPS Conversion Payments of Convertible
Subordinated Debentures received by any holder of Convertible QUIPS in exchange
for such holder's Convertible QUIPS in accordance with the terms of the
Convertible Subordinated Debenture Indenture, the Convertible QUIPS Documents
and the relevant Recapitalization documents.
"Permitted Encumbrances" means (i) Liens granted to secure the Senior
Credit Facility and to secure obligations under any Interest Rate Agreement and
any Currency Agreement permitted under this Agreement; (ii) Liens existing on
the Closing Date set forth on SCHEDULE A to the extent and in the manner such
Liens are in effect on the Closing Date and any extensions, renewals or
replacements thereof; (iii) Liens for taxes, assessments, governmental charges
or claims not yet due or which are being contested in good faith by appropriate
proceedings promptly instituted and diligently conducted and if a reserve or
other appropriate provision, if any, as shall be required in conformity with
GAAP shall have been made therefor; (iv) statutory Liens of landlords and banks
and rights of offset, and Liens of carriers, warehousemen, suppliers, workmen,
repairmen, mechanics and materialmen and other Liens imposed by law incurred in
the ordinary course of business for sums not yet delinquent for a period of more
that 60 days or being contested in good faith, if such reserve or other
appropriate provision, if any, as shall be required by GAAP shall have been made
therefor; (v) Liens incurred or deposits made in the ordinary course of business
in connection with workers' compensation, unemployment insurance and other types
of social security, or to secure the performance of tenders, statutory
obligations, surety and appeal bonds, bids, leases, government contracts, trade
contracts, utility payments, performance and return-of-money bonds and other
similar obligations (exclusive of obligations for the payment of borrowed
money); (vi) any attachment
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or judgment Lien not constituting an Event of Default; (vii) leases or subleases
granted to others not interfering in any material respect with the ordinary
conduct of the business of the Company and its Subsidiaries, taken as a whole;
(viii) easements, rights-of-way, zoning and other restrictions, minor defects,
encroachments or irregularities in title and other similar charges or
encumbrances not interfering in any material respect with the ordinary conduct
of the business of the Company and its Subsidiaries, taken as a whole; (ix)
Liens in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;
(x) any zoning or similar law or right reserved to or vested in any governmental
office or agency to control or regulate the use of any real property; (xi) Liens
upon specific items of inventory or other goods and proceeds of any Person
securing such Person's obligations in respect of bankers' acceptances issued or
created for the account of such Person to facilitate the purchase, shipment or
storage of such inventory or other goods in the ordinary course of business;
(xii) Liens securing reimbursement obligations with respect to letters of credit
which encumber documents and other property relating to such letters of credit
and the products and proceeds thereof; (xiii) Liens to secure Permitted
Refinancing Indebtedness to the extent the Indebtedness Refinanced was secured
and such Liens do not extend to any property other than the property which was
subject to the Lien under the Indebtedness being Refinanced; (xiv) Liens to
secure Senior Indebtedness and Liens to secure Subsidiary Guarantor Senior
Indebtedness; (xv) Liens securing amounts under the A/R Facility; (xvi) Liens
securing purchase money indebtedness permitted to be incurred under this
Agreement; (xvii) Liens arising out of consignment or similar arrangements for
the sale of goods entered into by the Company or any of its Restricted
Subsidiaries in the ordinary course of business of the Company and its
Restricted Subsidiaries; (xviii) Liens arising from filing Uniform Commercial
Code financing statements regarding leases; (xix) Liens securing Indebtedness of
a Restricted Subsidiary of the Company that is not a Subsidiary Guarantor and
that is permitted to be incurred pursuant to Section 6.1; (xx) Liens on assets
of Restricted Subsidiaries securing letters of credit issued in the ordinary
course of business of such Restricted Subsidiaries; (xxi) the Lien granted to
the trustee under the Senior Subordinated Indenture or any other indenture that
Refinances the Loans and any substantially equivalent Lien granted to any
trustee or similar institution under any indenture for Indebtedness permitted by
the terms of the Senior Subordinated Indenture; and (xxii) Liens securing
Intercompany Indebtedness.
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"Permitted Holders" shall mean and include (i) THL, THL Affiliates and
THL Investors, (ii) ECP, ECP Affiliates and ECP Investors, (iii) the Xxxxx
Permitted Holders and (iv) the other Management Participants.
"Permitted Indebtedness" shall have the meaning ascribed to it in
Section 6.1.
"Permitted Investments" means (a) Investments in cash and Cash
Equivalents; (b) Investments by the Company or by any Subsidiary of the Company
in any Person that is or will become immediately after such Investment a
Subsidiary Guarantor or Wholly-Owned Restricted Subsidiary of the Company that
is not a Subsidiary Guarantor, PROVIDED that such Investment is permitted by
Section 6.6(a)(iv) or 6.6(b); PROVIDED that such Subsidiary Guarantor or
Wholly-Owned Restricted Subsidiary that is not a Subsidiary Guarantor has not
Incurred (and will not Incur as a result of or in connection with such
transaction) any Indebtedness (other than Indebtedness permitted to be Incurred
by such Restricted Subsidiary under Section 6.1); PROVIDED, FURTHER, that (x)
such Investment shall be a Permitted Investment only for so long as any such
Subsidiary in which the Investment has been made meets the conditions set forth
above and (y) no Investment in any such Person, Subsidiary Guarantor or
Wholly-Owned Restricted Subsidiary that is not a Subsidiary Guarantor (including
any transaction pursuant to which any Person becomes a Restricted Subsidiary of
the Company) will be a Permitted Investment if and for so long as such
Restricted Subsidiary is or would be subject to any Payment Restriction that is
not permitted pursuant to Section 6.7; (c) any Investments in the Company by any
Restricted Subsidiary of the Company; PROVIDED that any Indebtedness of the
Company for payment in respect of such Investment is unsecured and subordinated
in right of payment, pursuant to a written agreement, to the Company's
Obligations at least to the same extent and in the same manner as the Loans are
subordinated to the Senior Credit Facility; (d) Investments made by the Company
or by its Restricted Subsidiaries out of the Net Cash Proceeds of an Asset Sale
made in compliance with Section 2.5A(ii)(a); (e) Intercompany Indebtedness; (f)
accounts receivable created or acquired in the ordinary course of business; (g)
obligations or shares of Capital Stock received in connection with any good
faith settlement or bankruptcy proceeding involving a claim relating to a
Permitted Investment; (h) Currency Agreements and Interest Rate Agreements and
other similar agreements designed to hedge against fluctuations in foreign
exchange rates and interest rates entered into in the ordinary course of
business in connection with the operation of the Company's or its Restricted
Subsidiaries' businesses;
-29-
(i) agreements designed to hedge against fluctuations in the cost of raw
materials entered into in the ordinary course of business in connection with the
operation of the Company's and the Subsidiaries' business ("Raw Material Hedge
Agreements"); and (j) Investments that are in Persons (including Unrestricted
Subsidiaries) who derive substantial revenues from operations similar or
ancillary to the business of the Company or its Restricted Subsidiaries as
conducted at the time of such Investment and that have the purpose of furthering
the operations of the Company and its Restricted Subsidiaries; PROVIDED that
Investments of the type described in this clause (j) shall not exceed $10.0
million at any one time outstanding.
"Permitted Refinancing Indebtedness" means (A) any Refinancing by the
Company of Indebtedness of the Company or of its Subsidiaries (other than
Indebtedness Incurred or outstanding pursuant to clauses (ii), (iv), (v), (vii),
(viii), (ix), (xi) and (xii) through (xvi) of Section 6.1, which Indebtedness
shall remain subject to the maximum aggregate amounts outstanding as set forth
therein) and (B) any Indebtedness incurred pursuant to a Refinancing by any
Subsidiary of the Company of Indebtedness Incurred by such Subsidiary (other
than Indebtedness Incurred or outstanding pursuant to clauses (ii), (iv), (v),
(vii), (viii), (ix), (xi) and (xii) through (xvi) of Section 6.1, which
Indebtedness shall remain subject to the maximum aggregate amounts outstanding
as set forth therein); PROVIDED that in the case of each of (A) and (B), (i) the
principal amount of such Permitted Refinancing Indebtedness shall not exceed the
outstanding principal amount of Indebtedness (including unused commitments) so
extended, refinanced, renewed, replaced, substituted or refunded PLUS any
amounts incurred to pay premiums and fees in connection therewith, (ii) the
Permitted Refinancing Indebtedness shall have a Weighted Average Life to
Maturity equal to or greater than the Weighted Average Life to Maturity of the
Indebtedness being extended, refinanced, renewed, replaced, substituted or
refunded and (iii) to the extent such Refinancing Indebtedness refinances
Indebtedness subordinated to the Loans, such Permitted Refinancing Indebtedness
is subordinated to the Loans at least to the same extent as the Indebtedness
being extended, refinanced, renewed, replaced, substituted or refunded.
"Person" means and includes natural persons, corporations, limited
liability companies, limited partnerships, general partnerships, joint stock
companies, joint ventures, associations, companies, trusts, banks, trust
companies, land trusts, business trusts or other organizations, whether or not
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legal entities, and governments and agencies and political subdivisions thereof.
"Plan" shall mean (i) any single-employer plan, as defined in Section
4001(a)(15) of ERISA, which is maintained or contributed to by (or to which
there is an obligation to contribute to by) the Company or a Subsidiary of the
Company or an ERISA Affiliate and that is subject to Title IV of ERISA, and (ii)
each such plan for the five year period immediately following the latest date on
which the Company, a Subsidiary of the Company or any ERISA Affiliate
maintained, contributed to or had an obligation to contribute to such plan if,
for purposes of this clause (ii), the Company, any Subsidiary of the Company or
any ERISA Affiliate could currently incur any liability under such plan.
"Post-Closing Convertible QUIPS Conversion Payments" shall mean the
cash payment payable to any holder of Convertible QUIPS in connection with a
Permitted Conversion representing the merger consideration to which such holder
would have been entitled had such holder exchanged such Convertible QUIPS for
Common Stock of Big Flower at the time of the consummation of the
Recapitalization.
"Potential Event of Default" means a condition or event which, after
notice or lapse of time or both, would constitute an Event of Default if that
condition or event were not cured or removed within any applicable grace or cure
period.
"Preferred Stock" of any Person means any Capital Stock of such Person
that has preferential rights (as compared to any other Capital Stock of such
Person) with respect to dividends or redemptions or upon liquidation.
"Private Internet Sale" means the sale by Big Flower of certain
private Internet investments for a total of approximately $21.4 million.
"PRO FORMA" means, with respect to any calculation made or required to
be made pursuant to the terms of this Agreement, a calculation in accordance
with Article 11 of Regulation S-X under the Securities Act as interpreted by the
Company's chief financial officer or Board of Directors in consultation with its
independent certified public accountants.
"Pro Forma Balance Sheet" has the meaning ascribed to such term in
Section 4.5(a).
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"Projections" means the detailed projected consolidated financial
statements of Big Flower and its Subsidiaries after giving effect to the
Transactions, as set forth in the Confidential Memorandum dated November 1999,
for the period from the Closing Date to December 31, 2008.
"Public Internet Investments" shall have the meaning ascribed to such
term in the Senior Credit Facility as in effect on the date hereof.
"Qualified Capital Stock" means any Capital Stock that is not
Disqualified Capital Stock.
"Raw Material Hedge Agreements" shall have the meaning ascribed to
such term in the definition of "Permitted Investments."
"Real Property Assets" means interests in land, buildings,
improvements, and fixtures attached thereto or used in the operation thereof, in
each case owned or leased (as lessee) by the Company or its Subsidiaries.
"Recapitalization" means the recapitalization of Big Flower through
the merger of BFH Merger Corp., a Delaware corporation formed by the Equity
Investors, with and into Big Flower.
"Recapitalization Agreement" means the Amended and Restated Agreement
and Plan of Merger, dated as of October 11, 1999, between Big Flower and BFH
Merger Corp., pursuant to which BFH Merger Corp. will be merged with and into
Big Flower. The Recapitalization Agreement is attached hereto as EXHIBIT XI.
"Receivables Subsidiary" shall mean a Wholly-Owned Subsidiary of
Treasure Chest which engages in no activities other than in connection with the
financing of accounts receivable and which is designated (as provided below) as
the Receivables Subsidiary (a) no portion of the Indebtedness or any other
obligations (contingent or otherwise) of which (i) is guaranteed by Big Flower
or any other Subsidiary of Big Flower (excluding guarantees of obligations
(other than the principal of, and interest on, Indebtedness) pursuant to
Standard Securitization Undertakings), (ii) is recourse to or obligates Big
Flower or any other Subsidiary of Big Flower in any way other than pursuant to
Standard Securitization Undertakings or (iii) subjects any property or asset of
Big Flower or any other Subsidiary of Big Flower, directly or indirectly,
contingently or
-32-
otherwise, to the satisfaction thereof, other than pursuant to Standard
Securitization Undertakings, (b) with which neither Big Flower nor any of its
Subsidiaries has any contract, agreement, arrangement or understanding (other
than pursuant to the A/R Facility Documents (including with respect to fees
payable in the ordinary course of business in connection with the servicing of
accounts receivable and related assets)) on terms less favorable to Big Flower
or such Subsidiary than those that might be obtained at the time from persons
that are not Affiliates of Big Flower, and (c) to which neither Big Flower nor
any other Subsidiary of Big Flower has any obligation to maintain or preserve
such entity's financial condition or cause such entity to achieve certain levels
of operating results. Any such designation shall be evidenced to the Agents by
filing with the Agents an officer's certificate of Big Flower certifying that,
to the best of such officer's knowledge and belief after consultation with
counsel, such designation complied with the foregoing conditions.
"Reference Date" shall have the meaning ascribed to such term in
Section 6.3(c).
"Refinance" means, in respect of any security or Indebtedness, to
refinance, extend, renew, refund or defease, or to issue a security or
Indebtedness in exchange or replacement for, such security or Indebtedness in
whole or in part. "Refinanced" and "Refinancing" shall have correlative
meanings.
"Register" has the meaning ascribed to such term in Section 5.15.
"Registration Rights Agreement" means a registration rights agreement
substantially in the form of EXHIBIT V (with such changes therein as the Agents
and the Company shall approve).
"Registration Rights and Stockholders Agreement" means a registration
rights and stockholders agreement to be entered into by Big Flower, the Equity
Investors and the Agents, which agreement will have certain registration rights
and stockholders rights as are customary for such common equity issuance and as
are reasonably satisfactory in all respects to Big Flower, the Equity Investors
and the Agents.
"Related Business" means any capital expenditure or Investment in
properties and assets that replace the properties and assets that were the
subject of an Asset Sale or in properties
-33-
and assets that will be used in the business of the Company and its Subsidiaries
as existing on the Closing Date or in businesses reasonably related thereto.
"Release" means any release, spill, emission, leaking, pumping,
pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping,
leaching or migration of Hazardous Materials into the indoor or outdoor
environment (including, without limitation, the abandonment or disposal of any
barrels, containers or other closed receptacles containing any Hazardous
Materials), or into or out of any Facility, including the movement of any
Hazardous Material through the air, soil, surface water, groundwater or
property.
"Reportable Event" has the meaning set forth in Section 4043 of ERISA,
but excluding any event for which the 30-day notice requirement has been waived
by applicable regulations of the PBGC.
"Representative" means the trustee, agent or representative in respect
of any Designated Senior Indebtedness; PROVIDED that if, and for so long as, any
Designated Senior Indebtedness lacks such a representative, then the
Representative for such Designated Senior Indebtedness shall at all times
constitute the holders of a majority in outstanding principal amount of such
Designated Senior Indebtedness in respect of any Designated Senior Indebtedness.
"Request" shall have the meaning ascribed to it in Section 5.12A.
"Required Lenders" means the Agents together with Lenders holding in
the aggregate more than 50% of the outstanding principal amount of Notes.
"Restricted Payment" has the meaning ascribed to such term in
Section 6.3.
"Restricted Subsidiary" means any Subsidiary of the Company which at
the time of determination is not an Unrestricted Subsidiary. The Board of
Directors of the Company may designate any Unrestricted Subsidiary to be a
Restricted Subsidiary only if, immediately after giving effect to such
designation, the Company could incur at least $1.00 of additional Indebtedness
pursuant to clause (xxi) of Section 6.1 regardless of whether clause (xxi) of
Section 6.1 is otherwise operative.
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"Returns" has the meaning ascribed to such term in Section 4.8.
"RGP" shall mean RGP Limited Partnership, a limited partnership
organized and existing under the laws of the State of Nevada.
"Sale and Leaseback Transaction" means with respect to any Person an
arrangement with any bank, insurance company or other lender or investor or to
which such lender or investor is a party providing for the leasing by such
Person of any property or asset of such Person which has been or is being sold
or transferred by such Person to such lender or investor or to any Person to
whom funds have been or are to be advanced by such lender or investor on the
security of such property or asset.
"Securities" means any stock, shares, partnership interests, voting
trust certificates, certificates of interest or participation in any profit
sharing agreement or arrangement, bonds, debentures, options, warrants, notes,
or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities" or any certificates of interest, shares or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire, any of the foregoing.
"Securities Act" means the Securities Act of 1933, as amended.
"Senior Credit Facility" means the Credit Agreement dated as of
December 7, 1999, between the Company, certain of its subsidiaries, the lenders
party thereto in their capacities as lenders thereunder and Chase Securities,
Inc. and Deutsche Bank Securities Inc., as Joint Lead Arrangers and Joint Book
Managers, The Chase Manhattan Bank, as Administrative Agent, Bankers Trust
Company, as Syndication Agent, Bank of America, N.A., as Documentation Agent,
and various co-agents, together with the related documents thereto (including,
without limitation, any guarantee agreements and security documents), in each
case as such agreements may be amended (including any amendment and restatement
thereof), supplemented or otherwise modified from time to time, including any
agreement extending the maturity of, refinancing, replacing or otherwise
restructuring (including increasing the amount of available borrowings
thereunder or adding Restricted Subsidiaries of the Company as additional
borrowers or guarantors thereunder) all or any portion
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of the Indebtedness under such agreement or any successor or replacement
agreement and whether by the same or any other agent, lender or group of
lenders.
"Senior Indebtedness" means the principal of, premium, if any, and
interest (including any interest accruing subsequent to the filing of a petition
of bankruptcy at the rate provided for in the documentation with respect
thereto, whether or not such interest is an allowed claim under applicable law)
on any Indebtedness of the Company, whether outstanding on the Closing Date or
thereafter created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Loans. Without limiting the generality
of the foregoing, "Senior Indebtedness" shall also include (x) the principal of,
premium, if any, interest (including any interest accruing subsequent to the
filing of a petition of bankruptcy at the rate provided for in the documentation
with respect thereto, whether or not such interest is an allowed claim under
applicable law) on, and all other amounts owing in respect of all monetary
obligations of every nature of the Company under, or with respect to, the Senior
Credit Facility and the A/R Facility, including, without limitation, obligations
to pay principal and interest, reimbursement obligations under letters of
credit, fees, expenses and indemnities (and guarantees thereof), and (y) all
obligations under Interest Rate Agreements and Currency Agreements (and any
guarantees thereof) in each case whether outstanding on the Closing Date or
thereafter incurred. Notwithstanding the foregoing, "Senior Indebtedness" of any
Person shall not include (a) Indebtedness evidenced by the Loans, the Exchange
Notes, the Demand Take-Out Notes or the Take-Out Securities, (b) Indebtedness
that is expressly subordinate or junior in right of payment to any Indebtedness
of such Person, (c) Indebtedness which, when incurred and without respect to any
election under Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without
recourse to such Person, (d) Indebtedness which is represented by Disqualified
Capital Stock, (e) obligations for goods, materials or services or obligations
consisting of trade payables, (f) Indebtedness of or amounts owed by such Person
to or guaranteed on behalf of any shareholder of Big Flower, director, officer
or employee or for services rendered to such Person or any Subsidiary thereof,
(g) any liability for federal, state, local or other taxes owed or owing by such
Person, (h) Indebtedness of such Person to a Subsidiary of such Person and (i)
that portion of any Indebtedness which is incurred by such Person in violation
of
-36-
Section 6.1 (but, as to any such obligation, no such violation shall be deemed
to exist for purposes of this clause (i) if the holder(s) of such obligation or
their representative shall have received an Officers' Certificate of the Company
to the effect that the incurrence of such Indebtedness does not (or, in the case
of revolving credit indebtedness, that the incurrence of the entire committed
amount thereof at the date on which the initial borrowing thereunder is made
would not) violate such provisions of this Agreement).
"Senior Indebtedness Obligations" means all obligations of the Company
for principal, premium, interest, penalties, fees, indemnifications,
reimbursements, damages and other liabilities payable under the documentation
governing any Senior Indebtedness, and all guarantees by the Company of any of
the foregoing.
"Senior Subordinated Indenture" means an indenture between the Company
and a trustee substantially in the form of the Agents' customary high yield
indenture (which shall include guarantees of the Exchange Notes by Subsidiary
Guarantors substantially identical to the guarantees contained in Section 10),
modified as appropriate for the Exchange Notes and having principal negative
covenants substantially identical to Section 6, principal events of default
substantially identical to Section 7 and subordination provisions substantially
identical to Sections 8 and 11 (with such changes as the Agents and the Company
shall approve, and, at such time, if any, as notes issued thereunder are sold in
a public offering, with other appropriate changes to reflect such public
offering), as the same may at any time be amended, modified and supplemented and
in effect.
"Shareholders' Agreements" has the meaning ascribed to such term in
Section 3.1R(1).
"Solvent Entity" has the meaning ascribed to such term in
Section 4.5(c).
"Standard Securitization Undertakings" means representations,
warranties, covenants and indemnities entered into by Big Flower or any
Subsidiary thereof in connection with the A/R Facility which are reasonably
customary in an accounts receivable transaction (including, without limitation,
all such representations, warranties, covenants and indemnities included in the
A/R Facility Documents, as in effect on the Closing Date).
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"Subordinated Indebtedness" means Indebtedness of the Company or any
Subsidiary Guarantor which is expressly subordinated in right of payment to the
Notes or the Guarantee of such Subsidiary Guarantor, as the case may be.
"Subsidiary" means, with respect to any Person, any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of stock or other equity interest entitled (without regard to
the occurrence of any contingency) to vote in the election of directors,
managers or trustees thereto is at the time owned, directly or indirectly, by
that Person. Notwithstanding the foregoing (and except for purposes of Sections
4.14 through 4.17, inclusive, and the definition of "Unrestricted Subsidiary"
contained herein), an Unrestricted Subsidiary shall be deemed not to be a
Subsidiary of the Company or any of its other Subsidiaries for purposes of this
Agreement. Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries of
Big Flower or the Company, as the case may be.
"Subsidiary Guarantor Senior Indebtedness" means, with respect to any
Subsidiary Guarantor, the principal of, premium, if any, and interest (including
any interest accruing subsequent to the filing of a petition of bankruptcy at
the rate provided for in the documentation with respect thereto, whether or not
such interest is an allowed claim under applicable law) on any Indebtedness of
such Subsidiary Guarantor, whether outstanding on the Closing Date or thereafter
created, incurred or assumed, unless, in the case of any particular
Indebtedness, the instrument creating or evidencing the same or pursuant to
which the same is outstanding expressly provides that such Indebtedness shall
not be senior in right of payment to the Guarantee of such Subsidiary Guarantor.
Without limiting the generality of the foregoing, "Subsidiary Guarantor Senior
Indebtedness" shall also include (x) the principal of, premium, if any, interest
(including any interest accruing subsequent to the filing of a petition of
bankruptcy at the rate provided for in the documentation with respect thereto,
whether or not such interest is an allowed claim under applicable law) on, and
all other amounts owing in respect of all monetary obligations (including
guarantees thereof) of every nature of such Subsidiary Guarantor under, or with
respect to, the Senior Credit Facility and the A/R Facility, including, without
limitation, obligations to pay principal and interest, reimbursement obligations
under letters of credit, fees, expenses and indemnities (and guarantees
thereof), and (y) all obligations under Interest Rate Agreements and Currency
Agreements (and any
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guarantees thereof), in each case whether outstanding on the Closing Date or
thereafter incurred. Notwithstanding the foregoing, "Subsidiary Guarantor Senior
Indebtedness" shall not include (a) Indebtedness evidenced by the Guarantee of
such Subsidiary Guarantor, (b) Indebtedness that is expressly subordinate or
junior in right of payment to any Indebtedness of such Subsidiary Guarantor, (c)
Indebtedness which, when incurred and without respect to any election under
Section 1111(b) of Xxxxx 00, Xxxxxx Xxxxxx Code, is without recourse to such
Subsidiary Guarantor, (d) Indebtedness which is represented by Disqualified
Capital Stock, (e) obligations for goods, materials or services or obligations
consisting of trade payables, (f) Indebtedness of or amounts owed by such
Subsidiary Guarantor to or guaranteed on behalf of any shareholder of Big
Flower, director, officer or employee or for services rendered to such
Subsidiary Guarantor or any Subsidiary thereof, (g) any liability for federal,
state, local or other taxes owed or owing by such Subsidiary Guarantor, (h)
Indebtedness of such Subsidiary Guarantor representing a guarantee of
Subordinated Indebtedness or Pari Passu Indebtedness of the Company or any other
Subsidiary Guarantor, (i) Indebtedness of such Subsidiary Guarantor to a
Subsidiary of the Company and (j) that portion of any Indebtedness which is
incurred by such Subsidiary Guarantor in violation of Section 6.1 (but, as to
any such obligation, no such violation shall be deemed to exist for purposes of
this clause (j) if the holder(s) of such obligation or their representative
shall have received an Officers' Certificate of the Company to the effect that
the incurrence of such Indebtedness does not (or, in the case of revolving
credit indebtedness, that the incurrence of the entire committed amount thereof
at the date on which the initial borrowing thereunder is made would not) violate
such provisions of this Agreement).
"Subsidiary Guarantor Senior Indebtedness Obligations" means all
obligations of any Subsidiary Guarantor for principal, premium, interest,
penalties, fees, indemnifications, reimbursements, damages and other liabilities
payable under the documentation governing any Subsidiary Guarantor Senior
Indebtedness, and all guarantees by such Subsidiary Guarantor of any of the
foregoing.
"Subsidiary Guarantors" means each of the present Wholly-Owned
Restricted Subsidiaries of the Company listed on SCHEDULE G hereto and each of
the future Wholly-Owned Restricted Subsidiaries of the Company other than
Foreign Subsidiaries, any Receivables Subsidiary, RGP and Treasure Chest of
Nevada; in each case to the extent (and for so long as) any
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such Wholly-Owned Restricted Subsidiary is a guarantor or a borrower under the
Senior Credit Facility.
"Successor" shall have the meaning ascribed to such term in Section
6.6(b).
"Syndication" has the meaning ascribed to such term in Section 12.2A.
"Take-Out Banks" has the meaning ascribed to such term in Section
3.1M.
"Take-Out Securities" means (i) any Securities of Big Flower, the
Company and/or the Subsidiary Guarantors the proceeds of which are used to repay
the Notes in full and (ii) any Securities of the Company issued in accordance
with Section 6.12 the proceeds of which are used to Refinance the Notes in part,
including, without limitation, the Demand Take-Out Notes.
"Taxes" means all taxes, assessments, fees, levies, imposts, duties,
penalties, deductions, liabilities, withholdings or other charges of any nature
whatsoever, including interest penalties, from time to time or at any time
imposed by any Law or any Tribunal.
"Tax Sharing Agreement" means any tax sharing or tax allocation
agreements entered into by Big Flower or any of its Subsidiaries.
"Tender Offer" means the Company's Offer to Purchase and Consent
Solicitation Statement dated October 25, 1999, as amended, with respect to the
Big Flower Press Notes.
"Term Loan" shall have the meaning ascribed to such term in Section
2.2A.
"Term Loan Commitment" has the meaning ascribed to such term in
Section 2.2A.
"Term Notes" has the meaning ascribed to such term in Section 2.2E.
"THL" shall mean Xxxxxx X. Xxx Partners, L.P., a Delaware limited
partnership.
"THL Affiliates" shall mean any Affiliate of THL, PROVIDED that for
purposes of the definition of "Change of Control,"
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the term THL Affiliate shall not include any portfolio company of either THL or
any Affiliate of THL.
"THL Investor" shall mean and include Xxxxxx X. Xxx Equity Fund, IV,
L.P., Xxxxxx X. Xxx Foreign Fund, IV, L.P., Xxxxxx X. Xxx Equity Fund IV, L.P.,
1997 Xxxxxx X. Xxx Nominee Trust and Xxxxxx X. Xxx Charitable Investment, L.P.,
or any limited or general partner, stockholder, officer, employee or consultant
of such THL Investor, or any officer, employee or consultant of THL; PROVIDED
that for the purposes of making calculations under the definition of "Change of
Control," the aggregate amount of equity of Big Flower attributable to
consultants of THL and consultants of THL Investors may not exceed $3,000,000.
"Transaction Costs" means the fees, costs and expenses payable by the
Company pursuant hereto and other fees, costs and expenses payable by the
Company or a Subsidiary of the Company in connection with the Transactions.
"Transaction Date" has the meaning ascribed to such term in the
definition of "Fixed Charge Coverage Ratio."
"Transactions" shall mean, collectively, (i) the Equity Financing,
(ii) the incurrence of the loans drawn down on the Closing Date under the Senior
Credit Facility, (iii) the incurrence of the Bridge Loans hereunder on the
Closing Date, (iv) the Recapitalization, (v) the Columbine/XL Ventures
Disposition, (vi) the Mezzanine Financing, (vii) any other transaction on the
Closing Date contemplated in relation to the foregoing and (viii) the payment of
fees and expenses in connection with the foregoing.
"Transferee" has the meaning ascribed to such term in Section 12.19.
"Treasure Chest" shall mean Treasury Chest Advertising Company, Inc.,
a Delaware corporation and a Wholly-Owned Subsidiary of the Company.
"Treasure Chest of Nevada" shall mean Treasure Chest Advertising
Company of Nevada, Inc., a corporation organized and existing under the laws of
the State of Nevada.
"Treasury Rate" means, for any period, a rate per annum (computed on
the basis of a year of 360 days and the actual number of days elapsed) equal to
the rate determined by the Agents to be the yield expressed as a rate in the
secondary
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market on United States Treasury securities of substantially the same principal
amount as the Loans and having a term to maturity equal to 10 years (such
determination to be based upon quotes obtained by the Agents from established
dealers in such market).
"Tribunal" means any government, any arbitration panel, any court or
any governmental department, commission, board, bureau, agency, authority or
instrumentality of the United States or any state, province, commonwealth,
nation, territory or possession, whether now or hereafter constituted and/or
existing.
"Trust Agreement" shall mean the Amended and Restated Trust Agreement,
dated as of October 14, 1997, among Big Flower, The Bank of
New York, as
property trustee thereunder, The Bank of
New York (Delaware), as Delaware
trustee, and various administrative trustees thereunder, as the same may be
amended, modified or supplemented from time to time in accordance with the terms
hereof and thereof.
"Unfunded Current Liability" of any Plan means the amount, if any, by
which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year each exceeds the fair market
value of the assets allocable thereto, determined in accordance with Statement
of Financial Accounting Standards No. 87, based upon the actuarial assumptions
used by the Plan's actuary in the most recent annual valuation of the Plan.
"Unrestricted Subsidiary" means (i) any Subsidiary of the Company
which at the time of determination is an Unrestricted Subsidiary (as designated
by the Board of Directors, as provided below) and (ii) any Subsidiary of an
Unrestricted Subsidiary. The Board of Directors may designate any Restricted
Subsidiary of the Company (including any newly acquired or newly formed
Subsidiary) to be an Unrestricted Subsidiary, unless such Restricted Subsidiary
owns any Capital Stock of, or owns, or holds any Lien on, any property of, any
other Restricted Subsidiary of the Company which is not a Subsidiary of the
Restricted Subsidiary to be so designated; PROVIDED that (a) the Company
certifies that such designation complies with Section 6.3 and (b) each
Subsidiary to be so designated and each of its Subsidiaries has not at the time
of designation, and does not thereafter, create, incur, issue, assume, guarantee
or otherwise become directly or indirectly liable with respect to any
Indebtedness pursuant to which the lender has recourse to any of the assets of
the Company or any
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of its Restricted Subsidiaries. The Board of Directors may designate any
Unrestricted Subsidiary to be a Restricted Subsidiary only if, immediately after
giving effect to such designation, the Company could incur at least $1.00 of
additional Indebtedness pursuant to clause (xxi) of Section 6.1 regardless of
whether clause (xxi) of Section 6.1 is otherwise operative.
"U.S. Legal Tender" means such coin or currency of the United States
of America as at the time of payment shall be legal tender for the payment of
public and private debts.
"Voting Stock" means, with respect to any Person, securities of any
class or classes of Capital Stock in such Person entitling the holders thereof
(whether at all times or only so long as no senior class of stock has voting
power by reason of any contingency) to vote in the election of members of the
board of directors or other governing body of such Person.
"Warrant Agreement" shall have the meaning ascribed to such term in
Section 5.12B.
"Weighted Average Life to Maturity" means, when applied to any
Indebtedness at any date, the number of years obtained by dividing (a) the then
outstanding aggregate principal amount of such Indebtedness into (b) the total
of the products obtained by multiplying (i) the amount of each then remaining
installment, sinking fund, serial maturity or other required payment of
principal, including payment at final maturity, in respect thereof, by (ii) the
number of years (calculated to the nearest one-twelfth) that will elapse between
such date and the making of such payment.
"Weighted Average Yield" shall mean the yield which is calculated by
adding the following two percentages:
(i) the percentage which results by multiplying (a) the aggregate
principal amount of Demand Take-Out Notes issued by the Company
divided by the aggregate principal amount of Demand Take-Out Notes
issued by the Company and Big Flower, together, by (b) the interest
rate on the Demand Take-Out Notes issued by the Company; and
(ii) the percentage which results by multiplying (a) the aggregate
principal amount of Demand Take-Out Notes issued by Big Flower divided
by the aggregate principal amount of Demand Take-Out Notes issued by
the Company and Big Flower, together, by (b) the interest
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rate on the Demand Take-Out Notes issued by Big Flower.
"Wholly-Owned Restricted Subsidiary" means a Wholly-Owned Subsidiary
which is a Restricted Subsidiary.
"Wholly-Owned Subsidiary" means, with respect to any Person, any
corporation, association or other business entity of which 100% of the total
voting power of shares of stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by that Person or one or more of the other Wholly-Owned
Subsidiaries of that Person or a combination thereof.
"Year 2000 Compliant" means for all dates and times, including,
without limitation, dates and times before, on and after December 31, 1999, when
used on a stand-alone system or in combination with other software or systems of
the Company and its Subsidiaries, other than any errors or malfunctions which
are the result of any incorrect date and time information incorporated into
calculations from systems external to the Company and its Subsidiaries:
(i) the application system consistently functions and receives and
processes dates and times correctly without abnormal results;
(ii) no date related calculations are incorrect (including, without
limitation, age calculations, duration calculations and scheduling
calculations) as a result of the advent of the year 2000;
(iii) all manipulations and comparisons of date-related data produce
correct and consistent results for all valid date values within the scope
of the application;
(iv) there is no century ambiguity;
(v) all reports and displays are sorted correctly; and
(vi) leap years are accounted for and correctly identified
(including, without limitation, that the year 2000 is recognized as a leap
year).
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1.2 ACCOUNTING TERMS
For the purposes of this Agreement, all accounting terms not otherwise
defined herein shall have the meanings assigned to them in conformity with GAAP.
1.3 OTHER DEFINITIONAL PROVISIONS; ANNIVERSARIES
Any of the terms defined in Section 1.1 may, unless the context
otherwise requires, be used in the singular or the plural depending on the
reference.
SECTION 2 AMOUNT AND TERMS OF LOAN COMMITMENT AND LOANS; NOTES
2.1 BRIDGE LOAN AND BRIDGE NOTE
A. BRIDGE LOAN COMMITMENT. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Company herein set forth, the Lenders hereby agree to lend to the Company on the
Closing Date $450,000,000 (less the amount of Big Flower Press Notes in excess
of $500,000 aggregate principal amount not repurchased pursuant to the Tender
Offer), in the aggregate (the "Bridge Loan"), each such Lender committing to
lend the amount set forth next to such Lender's name on the signature pages
hereto. The Lenders' commitments to make the Bridge Loan to the Company pursuant
to this Section 2.1A are herein called individually, the "Bridge Loan
Commitment" and collectively, the "Bridge Loan Commitments."
B. NOTICE OF BORROWING. When the Company desires to borrow under
this Section 2.1, it shall deliver to the Agents a Notice of Borrowing no later
than 3:00 P.M. (
New York time), at least one Business Day in advance of the
Closing Date or such later date as shall be agreed to by the Agents. The Notice
of Borrowing shall specify the applicable date of borrowing (which shall be a
Business Day). Upon receipt of such Notice of Borrowing, the Agents shall
promptly notify each Lender of its share of the Bridge Loan and the other
matters covered by the Notice of Borrowing.
C. DISBURSEMENT OF FUNDS. (a) No later than 11:00 A.M. on the
Closing Date, each Lender will make available its PRO rata share of the Bridge
Loan requested to be made on such date in the manner provided below. All amounts
shall be made available to the Agents in U.S. Legal Tender and immediately
available funds at the Payment Office and the Agents immediately
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will make available to the Company by depositing to its account at the Payment
Office the aggregate of the amounts so made available in the type of funds
received. Unless the Agents shall have been notified by any Lender prior to the
Closing Date that such Lender does not intend to make available to the Agents
its portion of the Bridge Loan to be made on such date, the Agents may assume
that such Lender has made such amount available to the Agents on such date, and
the Agents, in reliance upon such assumption, may (in their sole discretion and
without any obligation to do so) make available to the Company a corresponding
amount. If such corresponding amount is not in fact made available to the Agents
by such Lender and the Agents have made available same to the Company, the
Agents shall be entitled to recover such corresponding amount from such Lender.
If such Lender does not pay such corresponding amount forthwith upon the Agents'
demand therefor, the Agents shall promptly notify the Company, and the Company
shall immediately pay such corresponding amount to the Agents. The Agents shall
also be entitled to recover from such Lender or the Company, as the case may be,
interest on such corresponding amount in respect of each day from the date such
corresponding amount was made available by the Agents to the Company to the date
such corresponding amount is recovered by the Agents, at a rate per annum equal
to (x) if paid by such Lender, the overnight Federal Funds Rate or (y) if paid
by the Company, the then applicable rate of interest on the Loans.
(b) Nothing herein shall be deemed to relieve any Lender from its
obligation to fulfill its Bridge Loan Commitment hereunder or to prejudice any
rights which the Company may have against any Lender as a result of any default
by such Lender hereunder.
D. BRIDGE NOTES. The Company shall execute and deliver to each
Lender on the Closing Date a Bridge Note dated the Closing Date substantially in
the form of EXHIBIT I to evidence such Lender's portion of the Bridge Loan
Commitment and with appropriate insertions (the "Bridge Notes").
E. SCHEDULED PAYMENT OF BRIDGE LOAN. Subject to Section 2.2, the
Company shall pay in full the outstanding amount of the Bridge Loan and all
other Obligations owing hereunder no later than the Conversion Date.
F. TERMINATION OF BRIDGE LOAN COMMITMENT. The Bridge Loan
Commitment hereunder shall terminate on the earlier of (i) the termination of
the Recapitalization Agreement in accordance with the terms thereof or (ii)
December 31, 1999 if no
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portion of the Bridge Loan has been funded (other than as a result of the
failure of the Lenders to fulfill their obligations hereunder) on or before such
date.
G. PRO RATA BORROWINGS. The Bridge Loan made under this Agreement
shall be made by the Lenders PRO RATA on the basis of their respective Bridge
Loan Commitments. It is understood that no Lender shall be responsible for any
default by any other Lender of its obligation to make its portion of the Bridge
Loan hereunder and that each Lender shall be obligated to make its portion of
the Bridge Loan hereunder, regardless of the failure of any other Lender to
fulfill its commitments hereunder.
2.2 TERM LOAN AND TERM NOTE
A. TERM LOAN COMMITMENT. Subject to the terms and conditions of
this Agreement and in reliance upon the representations and warranties of the
Company herein set forth, the Lenders hereby agree, on the Conversion Date, upon
the request of the Company, to convert the then outstanding principal amount of
the Bridge Notes into a term loan (the "Term Loan"), such Term Loan to be in the
aggregate principal amount of the then outstanding principal amount of the
Bridge Notes. The Lenders' commitments under this Section 2.2A are herein called
collectively, the "Term Loan Commitment."
B. NOTICE OF CONVERSION/BORROWING. If the Company has not repaid
the Bridge Loan in full on or prior to the Conversion Date, then the Company
shall convert the then outstanding principal amount of the Bridge Notes into a
Term Loan under this Section 2.2. The Company shall deliver to the Lenders a
Notice of Conversion no later than 11:00 A.M. (
New York time), at least two
Business Days in advance of the Conversion Date. The Notice of Conversion shall
specify the principal amount of the Bridge Notes outstanding on the Conversion
Date to be converted into a Term Loan.
C. MAKING OF TERM LOAN. Upon satisfaction or waiver of the
conditions precedent specified in Section 3.2, each Lender shall extend to the
Company the Term Loan to be issued on the Conversion Date by such Lender by
canceling on its records a corresponding principal amount of the Bridge Notes
held by such Lender.
D. MATURITY OF TERM LOAN. The Term Loan shall mature and the
Company shall pay in full the outstanding principal
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amount thereof and accrued interest thereon on the tenth anniversary of the
Closing Date (the "Maturity Date").
E. TERM NOTES. The Company, as borrower, shall execute and
deliver to each Lender on the Conversion Date a Term Note dated the Conversion
Date substantially in the form of EXHIBIT II to evidence the Term Loan made on
such date, in the principal amount of the Bridge Notes held by such Lender on
such date and with other appropriate insertions (collectively the "Term Notes").
2.3 INTEREST ON THE LOANS
A. RATE OF INTEREST. The Loans shall bear interest on the unpaid
principal amount thereof from the date made through maturity (whether by
prepayment, acceleration or otherwise) at a rate determined as set forth below.
(i) FLOATING RATE LOANS. Subject to Sections 2.3A(ii) and (iii),
the Loans shall bear interest for each Monthly Period at a rate per annum equal
to the Applicable Rate for such period plus the Applicable Spread.
(ii) FIXED RATE LOANS. Subject to Section 2.3A(iii), at any time on
and after the Conversion Date, at the request of any Lender, all or any portion
of the Term Loan owing to such Lender shall bear interest at a fixed rate per
annum equal to the rate of interest borne by the Term Loans at the time of such
request (such rate of interest equal to the Applicable Rate plus the Applicable
Spread (the "Fixed Rate")), effective as of the first interest payment date with
respect to such Term Loan after such notice so long as the 30 Business Days'
notice set forth below is given; PROVIDED that no such conversion shall be
permitted in respect of amounts to be voluntarily prepaid following receipt of a
notice of prepayment pursuant to Section 2.5A. In order to request the
conversion of a Floating Rate Loan to a Fixed Rate Loan, the Lender shall notify
the Agents in writing of its intention to do so at least 30 Business Days prior
to an interest payment date indicating the amount of the Term Loan for which it
is requesting conversion to a Fixed Rate Loan, which shall be not less than
$5,000,000 and increments of $10,000 in excess thereof, and the Agents shall so
notify the Company at least 30 Business Days prior to such next succeeding
interest payment date. Upon the conversion of a portion of a Floating Rate Loan
to a Fixed Rate Loan an appropriate notation will be made on the Term Note and,
on and after the first interest payment date following the receipt by the
Company of a notice hereunder, such portion of the Term
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Loan which is converted to a Fixed Rate Loan shall bear interest at the Fixed
Rate until repaid.
(iii) Notwithstanding clause (i) or (ii) of this Section 2.3A or any
other provision herein, in no event, other than that set forth below in Section
2.3C, will the interest rate on any Loan exceed 13.00% per annum, with respect
to the period from the Closing Date through and including June 1, 2000, and
13.5% per annum thereafter.
B. INTEREST PAYMENTS. Interest shall be payable (i) with respect
to the Bridge Loan, in arrears on January 1, 2000, April 1, 2000, July 1, 2000,
October 1, 2000, and upon any prepayment of the Bridge Loan (to the extent
accrued on the amount being prepaid) and at maturity of the Bridge Loan in
respect of any amounts paid on such date and not converted to Term Loans and
(ii) with respect to the Term Loan, (A) in arrears on each January 1, April 1,
July 1, and October 1 of each year, in the case of Floating Rate Loans, and (B)
in arrears on each June 1 and December 1 of each year, in the case of Fixed Rate
Loans, in each case commencing on the first of such dates to follow the
Conversion Date, upon any prepayment of the Term Loan (to the extent accrued on
the amount being prepaid) and at maturity of the Term Loan.
C. POST-MATURITY INTEREST. Any principal payments on the Loans
not paid when due and, to the extent permitted by applicable law, any interest
payment on the Loans not paid when due, in each case whether at stated maturity,
by notice of prepayment, by acceleration or otherwise, shall thereafter bear
interest payable upon demand at a rate which is 2.00% per annum in excess of the
rate of interest otherwise payable under this Agreement for the Loans.
D. COMPUTATION OF INTEREST. Interest on the Loans shall be
computed on the basis of a 365-day year and, with respect to any amount of the
Loans which are Floating Rate Loans, the actual number of days elapsed in the
period during which it accrues or, with respect to any amount of the Loans which
are Fixed Rate Loans, twelve 30-day months. In computing interest on the Loans,
the date of the making of the Loans shall be included and the date of payment
shall be excluded; PROVIDED that if a Loan is repaid on the same day on which it
is made, one day's interest shall be paid on that Loan.
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2.4 FEES
The Company agrees to pay to Bankers Trust Corporation, Chase and
Nations all fees and other obligations in accordance with, and at the times
specified by, the Commitment Letter.
2.5 PREPAYMENTS AND PAYMENTS
A. PREPAYMENTS
(i) VOLUNTARY PREPAYMENTS. The Company may, upon not less than
three Business Days' prior written or telephonic notice confirmed in
writing to the Agents at any time and from time to time, prepay the Loans
made to the Company in whole or in part in an aggregate minimum amount;
PROVIDED that unless Loans are to be prepaid in full, such voluntary
prepayments (i) shall not result in the aggregate amount of the Loans
outstanding being less than $150,000,000 or (ii) shall not be made at a
time when the aggregate amount of the Loans outstanding is less than
$150,000,000; PROVIDED, FURTHER, that at such time as all or part of the
Term Loan bears interest at the Fixed Rate, the Term Loan or such part that
bears interest at the Fixed Rate, as the case may be, will be redeemable at
the option of the Company, in whole or in part, at any time at the
redemption prices (expressed as a percentage of principal amount) set forth
below, plus accrued and unpaid interest to the redemption date, if redeemed
during the 12-month period beginning January 1 of the years indicated
below:
Year Percentage
---- ----------
2005 ........................................ 106.75%
2006 ........................................ 104.50%
2007 ........................................ 102.25%
2008 and thereafter............................ 100.00%
Notice of prepayment having been given as aforesaid, the principal
amount of the Loans to be prepaid shall become due and payable on the
prepayment date. Amounts of the Loans so prepaid may not be reborrowed. No
such prepayment shall be made without the consent of the Lenders unless all
amounts owing are paid in full.
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(ii) MANDATORY PREPAYMENTS.
(a) PREPAYMENTS FROM ASSET SALES. Upon receipt by the Company or
any Restricted Subsidiary of the Company of Cash Proceeds of any Asset Sale
permitted by Section 6.13, the Company or any Restricted Subsidiary of the
Company shall, or shall cause its Restricted Subsidiaries to, apply the Net
Cash Proceeds of such Asset Sale (w) to prepay the term loans outstanding
under the Senior Credit Facility, (x) to prepay revolving loans outstanding
under the Senior Credit Facility; PROVIDED that except in the case of a
prepayment of such revolving loans with the proceeds of a sale of Public
Internet Investments, the commitment under the Senior Credit Facility is
permanently reduced to the extent of the prepayment, (y) to prepay any
other Senior Indebtedness or Subsidiary Guarantor Senior Indebtedness or
(z) apply any Net Cash Proceeds remaining after application pursuant to
clauses (w), (x) and (y) above to a Related Business. Promptly after the
consummation of an Asset Sale, the Company shall deliver to the Agents an
Officer's Certificate demonstrating the derivation of Net Cash Proceeds
from the gross sales price of such Asset Sale.
To the extent not used as above, the Company shall, or shall cause its
Restricted Subsidiaries to, prepay the Loans with the Net Cash Proceeds
received from any Asset Sale on a date not later than the Business Day next
succeeding the 360th day after the consummation of such Asset Sale if and
to the extent that such Net Cash Proceeds are not applied by the Company or
any Restricted Subsidiary of the Company within 360 days as provided in the
immediately preceding paragraph; PROVIDED that at such time as the Term
Loan bears interest at the Fixed Rate, any such Net Cash Proceeds not so
applied shall be used to make an offer to purchase the Term Loan from each
Lender on a PRO RATA basis at 100% of the principal amount thereof plus
accrued and unpaid interest thereon to the date of repurchase; PROVIDED,
FURTHER, that if the Senior Subordinated Indenture requires the Company to
make an offer to purchase Exchange Notes in connection with an Asset Sale,
to the extent holders of Exchange Notes do not accept such offer the
Company will apply any Net Cash Proceeds not accepted by the holders of
Exchange Notes to prepay the Loans.
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Notwithstanding the foregoing provisions of this paragraph, so long as
no Potential Event of Default or Event of Default shall have occurred and
be continuing, no mandatory repayments shall be required pursuant to this
paragraph until the date on which the aggregate Net Cash Proceeds from all
Asset Sales not reinvested within the time periods specified by this
paragraph equal or exceed $5 million.
(b) PREPAYMENTS FROM ISSUANCES OF TAKE-OUT SECURITIES.
Concurrently with the receipt by the Company of proceeds from the issuance
of Take-Out Securities, the Company shall prepay the Loans (at a price per
Note equal to the principal amount of such Note plus accrued and unpaid
interest, if any, to the date of payment) in a principal amount equal to
the lesser of the proceeds thereof (net of expenses payable by the Company
to any Person other than an Affiliate of the Company in connection with the
issuance thereof) or the aggregate principal amount of the Notes then
outstanding.
(c) NOTICE. The Company shall notify the Agents of any prepayment
to be made pursuant to this Section 2.5A(ii) at least two Business Days
prior to such prepayment date (unless shorter notice is satisfactory to the
Agents).
(iii) COMPANY'S MANDATORY PREPAYMENT OBLIGATION; APPLICATION OF
PREPAYMENTS. All prepayments shall include payment of accrued interest on
the principal amount so prepaid and shall be applied to payment of interest
before application to principal.
(iv) MANDATORY OFFER TO PURCHASE NOTES.
(a) Upon the occurrence of a Change of Control after the
Conversion Date (the date of such occurrence, the "Change of Control
Date"), the Lenders shall have the right to require the repurchase of all
of the Notes pursuant to an offer to purchase (the "Change of Control
Offer") at a purchase price equal to 101% of the aggregate principal amount
thereof plus accrued interest thereon to the date of repurchase. Prior to
the mailing of the notice to the Agents provided for in paragraphs (b) and
(c) below but in any event within 30 days following any Change of Control,
the Company hereby covenants to (i) repay in full and terminate all
commitments under Indebtedness under the Senior Credit Facility and all
other Senior Indebtedness
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the terms of which require repayment upon a Change of Control or to offer
to repay in full and terminate all commitments under all Indebtedness under
the Senior Credit Facility and all other such Senior Indebtedness and to
repay the Indebtedness of each lender which has accepted such offer or (ii)
obtain the requisite consents under the Senior Credit Facility and all
other Senior Indebtedness to permit the repurchase of the Notes as provided
for in paragraph (d) below. The Company shall first comply with the
covenant in the immediately preceding sentence before it shall be required
to repurchase the Notes pursuant to this Section 2.5A(iv). After the
Conversion Date, the Company's failure to comply with the covenant
described in the second preceding sentence (and any failure to send the
notice referred to in clause (c) below as a result of the prohibition in
the second preceding sentence) may (with notice and lapse of time)
constitute an Event of Default described in Section 7.3 but shall not
constitute an Event of Default described in Section 7.1.
(b) The notice to the Agents shall contain all instructions and
materials necessary to enable the Lenders to tender Notes pursuant to the
Change of Control Offer.
(c) Within 30 days following the Change of Control Date the
Company shall mail a notice to the Agents stating:
(1) that the Change of Control Offer is being made pursuant
to this Section 2.5A(iv) and that all Notes validly tendered will be
accepted for payment;
(2) the purchase price and the purchase date, which shall be
a Business Day that is no earlier than 30 days nor later than 60 days
from the date such notice is mailed (the "Offer Payment Date");
(3) that any Note not tendered will continue to accrue
interest;
(4) that any Note accepted for payment pursuant to the
Change of Control Offer shall cease to accrue interest after the Offer
Payment Date unless the Company shall default in the payment of the
repurchase price of the Notes;
(5) that if a Lender elects to have a Note purchased
pursuant to the Change of Control Offer it
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will be required to surrender the Note, with the form entitled "Option
of Holder to Elect Purchase" on the reverse of the Note completed, to
the Company prior to 3:00 p.m. New York time on the Offer Payment
Date;
(6) that a Lender will be entitled to withdraw its election
if the Company receives, not later than 3:00 p.m. New York time on the
Business Day preceding the Offer Payment Date, a telegram, telex,
facsimile transmission or letter setting forth the principal amount of
Notes such Lender delivered for purchase, and a statement that such
Lender is withdrawing its election to have such Note purchased; and
(7) that if Notes are purchased only in part a new Note of
the same type will be issued in principal amount equal to the
unpurchased portion of the Notes surrendered.
(d) On or before the Offer Payment Date, the Company shall (i)
accept for payment Notes or portions thereof which are to be purchased in
accordance with the above, and (ii) deposit at the Payment Office U.S.
Legal Tender sufficient to pay the purchase price of all Notes to be
purchased. The Agents shall promptly mail to the Lenders whose Notes are so
accepted payment in an amount equal to the purchase price unless such
payment is prohibited pursuant to Section 8 hereof or otherwise.
(e) The Company shall comply with the requirements of Rule 14e-1
under the Exchange Act and any other securities laws and regulations
thereunder to the extent such laws and regulations are applicable in
connection with the purchase of Notes pursuant to an offer hereunder. To
the extent the provisions of any securities laws or regulations conflict
with the provisions under this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue thereof.
B. MANNER AND TIME OF PAYMENT. All payments of principal and
interest hereunder and under the Notes by the Company shall be made without
defense, set-off or counterclaim and in same-day funds and delivered to the
Agents, unless otherwise specified, not later than 3:00 P.M. (New York time) on
the date due at the Payment Office for the account of the Lenders; funds
received by the Agents after that time shall be deemed to have been paid by the
Company on the next succeeding
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Business Day. The Company hereby authorizes the Agents to charge its account
with the Agents in order to cause timely payment to be made of all principal,
interest and fees due hereunder (subject to sufficient funds being available in
its account for that purpose).
C. PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment to be made
hereunder or under the Notes shall be stated to be due on a day which is not a
Business Day, the payment shall be made on the next succeeding Business Day and
such extension of time shall be included in the computation of the payment of
interest hereunder or under the Notes or of the commitment and other fees
hereunder, as the case may be.
D. NOTATION OF PAYMENT. Each Lender agrees that before disposing
of any Note held by it, or any part thereof (other than by granting
participations therein), such Lender will make a notation thereon of all
principal payments previously made thereon and of the date to which interest
thereon has been paid and will notify the Company of the name and address of the
transferee of that Note; PROVIDED that the failure to make (or any error in the
making of) such a notation or to notify the Company of the name and address of
such transferee shall not limit or otherwise affect the obligation of the
Company hereunder or under such Notes with respect to the Loans and payments of
principal or interest on any such Note.
2.6 USE OF PROCEEDS
A. BRIDGE LOAN. The proceeds of the Bridge Loan shall be applied
by the Company, together with borrowings under the Senior Credit Facility, the
A/R Facility and funds raised in the Equity Financing, the Columbine/XL Ventures
Disposition and the Mezzanine Financing, to the payment of the Transaction Costs
and to pay for the Recapitalization.
B. TERM LOAN. Upon the extension of a Term Loan by a Lender, the
Company and such Lender shall cancel a corresponding principal amount of Bridge
Notes held by such Lender.
C. MARGIN REGULATIONS. No portion of the proceeds of any
borrowing under this Agreement shall be used by the Company in any manner which
might cause the borrowing or the application of such proceeds to violate the
applicable requirements of Regulation U, Regulation T or Regulation X of the
Board of Governors of the Federal Reserve System or any other regulation of the
Board of Governors or to violate the Exchange
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Act, in each case as in effect on the date or dates of such borrowing and such
use of proceeds.
SECTION 3 CONDITIONS
3.1 CONDITIONS TO BRIDGE LOAN
The obligations of the Lenders to make the Bridge Loan are subject to
prior or concurrent satisfaction of each of the following conditions:
A. On or before the Closing Date, all corporate and other
proceedings taken or to be taken in connection with the transactions
contemplated hereby and all documents incidental thereto not previously found
acceptable by the Agents shall be reasonably satisfactory in form and substance
to the Agents, and the Agents shall have received on behalf of the Lenders the
following items, each of which shall be in form and substance reasonably
satisfactory to the Agents and, unless otherwise noted, dated the Closing Date:
1. a copy of Big Flower's, the Company's and each Subsidiary
Guarantor's charter, certified as of the Closing Date by one of its
Officers, together with a certificate of status, compliance, good standing
or like certificate with respect to Big Flower, the Company and each
Subsidiary Guarantor issued by the appropriate government officials of the
jurisdiction of its incorporation, each to be dated a recent date prior to
the Closing Date;
2. a copy of Big Flower's, the Company's and each Subsidiary
Guarantor's bylaws, certified as of the Closing Date by one of its
Officers;
3. resolutions of Big Flower's, the Company's and each Subsidiary
Guarantor's Board of Directors approving and authorizing the execution,
delivery and performance of this Agreement, each of the other Documents to
which it is a party and any other documents, instruments and certificates
required to be executed by Big Flower, the Company or such Subsidiary
Guarantor in connection herewith and therewith and approving and
authorizing the execution and delivery of the Documents and the
consummation of the Transactions, each certified as of the Closing Date by
one of its Officers as being in full force and effect without modification
or amendment;
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4. executed copies of this Agreement and the Bridge Notes
substantially in the form of EXHIBIT I executed in accordance with Section
2.1D drawn to the order of the Lenders and with appropriate insertions;
5. an originally executed Notice of Borrowing substantially in
the form of EXHIBIT IV-A, signed by a duly authorized Officer of the
Company;
6. originally executed copies of the written opinions of (I)
Xxxxxxxx & Xxxxxxxx, counsel for Big Flower, the Company and the Subsidiary
Guarantors, substantially in the form of EXHIBIT VI and addressed to the
Lenders, (II) Xxxxx X. Xxxxxx, Esq., Vice President and Associate General
Counsel for Big Flower, the Company and the Subsidiary Guarantors,
substantially in the form of EXHIBIT VII and addressed to the Lenders, and
(III) such other opinions of counsel and such certificates or opinions of
accountants, appraisers or other professionals as the Agents shall have
reasonably requested including, without limitation, receipt of an
environmental report and technical reports from independent consultants in
respect of the Company and the Subsidiaries of the Company and their
respective properties, reasonably satisfactory to the Agents;
7. a solvency certificate addressed to the Agents and dated the
Closing Date from the chief financial officer of the Company, which
solvency certificate shall be in the form of Exhibit G (appropriately
completed) to the Senior Credit Facility, expressing opinions of value and
other appropriate factual information regarding the solvency of the Company
and its Subsidiaries (on a consolidated basis) after giving effect to the
Transactions and the incurrence of all financings contemplated herein, and
a solvency opinion from Valuation Research Corporation in the form required
to be delivered to shareholders of Big Flower pursuant to the
Recapitalization Agreement and otherwise in form and substance satisfactory
to the Agents;
8. true and correct copies of the Recapitalization Agreement,
which shall not have been amended without the Agents' consent (which
consent shall not be unreasonably withheld or delayed) and which shall be
in full force and effect and each of the conditions to purchase contained
therein shall have been performed or complied with substantially on the
terms set forth therein and not materially
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waived without the Agents' consent (which consent shall not be unreasonably
withheld or delayed);
9. (i) executed or conformed copies of the Senior Credit
Facility and any amendments thereto made on or prior to the Closing Date
and a copy of each legal opinion delivered in connection with the Senior
Credit Facility, and the terms and provisions of the Senior Credit Facility
and all documents and instruments relating thereto shall be reasonably
satisfactory to the Agents, (ii) an Officers' Certificate from the Company
certifying that the Senior Credit Facility is in full force and effect on
the Closing Date and (iii) an Officers' Certificate from the Company to the
effect that such party has performed or complied with all agreements and
conditions contained in the Senior Credit Facility, except where such
agreements or conditions would not reasonably be expected to have a
Material Adverse Effect; the Company shall have received $536.5 million in
cash on the Closing Date from borrowings under the Senior Credit Facility;
and the Company shall have available to it a revolving credit facility; and
10. a notation of Guarantee, executed and delivered by each
Subsidiary Guarantor, dated the date of this Agreement, substantially in
the form of EXHIBIT IX, as applicable.
B. On or before the Closing Date, all authorizations, consents
and approvals necessary in connection with the Transactions shall have been
obtained and remain in full force and effect and all applicable waiting periods
under Law applicable to the Recapitalization shall have expired without any
action being taken by any competent authority (including without limitation, any
Tribunal) which restrains, prevents or imposes materially adverse conditions
upon the completion of the Recapitalization or the financing thereof and
evidence of the receipt of such authorizations, consents and approvals
satisfactory to the Agents shall have been delivered to the Agents.
C. On or before the Closing Date, the Company shall have paid to
Bankers Trust Corporation, Chase and Nations the fees payable on the Closing
Date pursuant to Section 2.4.
D. At the Closing Date, Big Flower shall have consummated the
Equity Financing and received gross proceeds in cash of at least $394,247,700
therefrom ($86,144,846 of which may be in the form of rollover equity). The
Equity Financing shall have been definitively documented on terms and conditions
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reasonably satisfactory to the Agents, all such documentation shall be in full
force and effect (and a copy thereof shall have been provided to the Agents) and
the parties thereto shall be in compliance with all agreements thereunder except
for such agreements as would not reasonably be expected to have a Material
Adverse Effect.
E. The existing A/R Facility shall remain in place, and all such
documentation shall be in full force and effect (and a copy thereof shall have
been provided to the Agents).
F. At the Closing Date, if Big Flower shall have consummated each
of the Columbine Sale and the Private Internet Sale, such sales shall have been
on terms and in form and substance reasonably satisfactory to the Agents and Big
Flower shall have received the proceeds from the Columbine Dividend (and a copy
of all documents in connection with each of the Columbine Sale, the Private
Internet Sale and the Columbine Dividend shall have been provided to the
Agents).
G. At the Closing Date, Big Flower shall have entered into
definitive documentation on terms and in form and substance reasonably
satisfactory to the Agents with respect to the Mezzanine Financing, and all such
documentation shall be in full force and effect (and a copy thereof shall have
been provided to the Agents).
H. Big Flower shall have received $100 million from the Mezzanine
Financing.
I. The Company shall have received tenders and consents of the
holders of at least 51% of the outstanding principal amount of each of the
series of the Big Flower Press Notes pursuant to the Tender Offer, and the
Company shall have, simultaneously with the funding of the Bridge Loan,
purchased all Notes pursuant to the Tender Offer and shall have executed
supplemental indentures therefor.
J. Simultaneously with the making of the Bridge Loan by the
Lenders, the Company shall have delivered to the Agents an Officers' Certificate
from the Company in form and substance satisfactory to the Agents to the effect
that (i) the representations and warranties in Section 4 are true, correct and
complete in all material respects on and as of the Closing Date to the same
extent as though made on and as of that date, (ii) on or prior to the Closing
Date, the Company has performed and complied with in all material respects all
covenants and conditions to be performed and observed by the Company hereunder
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on or prior to the Closing Date (other than such conditions the satisfaction of
which is subject to the satisfaction of the Agents and/or the Required Lenders)
and (iii) all conditions to the consummation of the Recapitalization in the
Recapitalization Agreement have been satisfied substantially on the terms set
forth therein and have not been waived or amended without the Agents' prior
written consent.
K. No event shall have occurred and be continuing or would result
from the consummation of the borrowing contemplated by the Notice of Borrowing
which would constitute an Event of Default or Potential Event of Default.
L. The PRO FORMA consolidated capital structure of the Company
and its Subsidiaries, after giving effect to the Transactions, shall be
consistent with the capital structure contemplated in the Commitment Letter, and
other than the Bridge Loan, the Senior Credit Facility, the A/R Facility, the
Mezzanine Financing and other indebtedness reasonably satisfactory to the
Lenders, Big Flower, the Company and their subsidiaries, after giving effect to,
and upon consummation of, the Transactions, shall have no outstanding
indebtedness for money borrowed.
M. The Company shall have entered into an agreement to engage one
or more investment banks (collectively, the "Take-Out Banks") reasonably
satisfactory to the Agents providing that the Take-Out Banks will, to the extent
that the Company deems it necessary and advisable, publicly sell or privately
place the Demand Take-Out Notes, and such agreement shall be in full force and
effect.
N. There shall not have occurred (i) since December 31, 1998,
except as disclosed in reports filed by Big Flower with the Commission on or
prior to the date hereof or disclosed in the Recapitalization Agreement as of
the date hereof or in the disclosure schedules to the Recapitalization Agreement
as of the date hereof, (and the Lenders shall have become aware of no facts or
conditions not previously known to the Lenders) anything which the Lenders shall
reasonably determine could have a material adverse effect on the rights or
remedies of the Lenders, or on the ability of the Company to perform its
obligations to the Lenders or which could have a materially adverse effect on
the business, property, assets, nature of assets, liabilities, condition
(financial or otherwise), results of operations or prospects of the Company
after giving effect to the Transactions; (ii) trading in securities generally on
the New York or American Stock Exchange shall not
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have been suspended; minimum or maximum prices shall not have been established
on any such exchange; (iii) a banking moratorium shall not have been declared by
New York or United States authorities; or (iv) either (A) an outbreak or
escalation of hostilities between the United States and any foreign power, or
(B) an outbreak or escalation of any other insurrection or armed conflict
involving the United States or any other national or international calamity or
emergency, or (C) any material change in the general financial markets of the
United States since the date of the Commitment Letter which, in the reasonable
judgment of the Agents, would materially and adversely affect the ability to
sell or syndicate the Bridge Loan or to sell or place the Demand Take-Out Notes.
O. The Agents and their counsel shall be satisfied that the
consummation of the Recapitalization and the related financing, including the
funding of the Bridge Loan, shall be in compliance with all applicable Laws
(including without limitation Regulation T, U or X of the Board of Governors of
the Federal Reserve System). On or prior to the Closing Date, (A) all necessary
governmental (domestic and foreign), regulatory and third party approvals in
connection with the Loan Documents and otherwise referred to herein or therein
shall have been obtained and remain in full force and effect and evidence
thereof shall have been provided to the Agents and (B) all necessary material
governmental (domestic and foreign), regulatory and third party approvals in
connection with any existing indebtedness and Convertible QUIPS which are to
remain outstanding after the Closing Date and the consummation of the
Transactions shall have been obtained and remain in full force and effect and
evidence thereof shall have been provided to the Agents. On the Closing Date, no
litigation by any entity (private or governmental) shall be pending or
threatened in writing (i) with respect to the Transactions or any documentation
executed in connection therewith (including any Loan Document) or the
transactions contemplated thereby or with respect to any existing indebtedness
or (ii) which any Agent shall reasonably determine would reasonably be likely to
have (x) a materially adverse effect on the Transactions or on the rights or
remedies of any Agent or the Lenders, or on the ability of Big Flower, the
Company or any of their Subsidiaries to perform their respective obligations
hereunder to the Agents and the Lenders or (y) a Material Adverse Effect.
P. The Merger shall be consummated simultaneously with the making
of the Initial Loans.
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Q. Copies of the Projections shall have been made available to
the Agents.
R. On or prior to the Closing Date, there shall have been made
available to the Agents true and correct copies, certified as true and complete
by an appropriate officer of Big Flower, of the following documents, in each
case as the same will be in effect on the Closing Date after the consummation of
the Transactions:
1. all agreements (including, without limitation, shareholders'
agreements, subscription agreements and registration rights agreements)
entered into by Big Flower or any of its Subsidiaries governing the terms
and relative rights of its capital stock and any agreements entered into by
shareholders relating to any such entity with respect to its capital stock
(collectively, the "Shareholders' Agreements");
2. all material agreements with members of, or with respect to,
the management of Big Flower or any of its Subsidiaries (collectively, the
"Management Agreements");
3. any material employment agreements entered into by Big Flower
or any of its Subsidiaries in connection with the Recapitalization
(collectively, the "Employment Agreements");
4. all agreements evidencing or relating to Existing Indebtedness
(as defined in the Senior Credit Facility) of Big Flower or any of its
Subsidiaries after giving effect to the Transactions; and
5. any Tax Sharing Agreements;
all of which Shareholders' Agreements, Management Agreements, Employment
Agreements, Existing Indebtedness agreements and Tax Sharing Agreements shall be
in form and substance satisfactory to the Agents and the Required Lenders and
shall be in full force and effect on the Closing Date.
3.2 CONDITIONS TO TERM LOAN
The obligation of the Lenders to make the Term Loan on the Conversion
Date is subject to the prior or concurrent satisfaction or waiver of the
following conditions precedent:
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A. The Agents shall have received in accordance with the
provisions of Section 2.2B an originally executed Notice of Conversion.
B. An Event of Default or Potential Event of Default shall not
have occurred and be continuing under Section 7.5 or 7.6.
C. No Event of Default or Potential Event of Default (whether
matured or not) shall have occurred and be continuing under Section 7.1.
D. No Event of Default or Potential Event of Default shall have
occurred under Section 7.2; PROVIDED that if an event described in this Section
3.2D is continuing at the Conversion Date but 10 days has not passed since the
date of written notice of the commencement of such 10-day period from the
Required Lenders (the "Grace Period"), the Conversion Date shall be deferred
until the earlier to occur of (x) the cure of such event or (y) the expiration
of such Grace Period.
E. On the Conversion Date, the Agents shall have received an
Officers' Certificate from the Company, dated the Conversion Date and
satisfactory in form and substance to the Agents, to the effect that the
conditions in this Section 3.2 are satisfied on and as of the Conversion Date.
F. The Company shall have executed and delivered to the Agents on
the Conversion Date for delivery to the Lenders Term Notes dated the Conversion
Date substantially in the form of EXHIBIT II to evidence the Term Loan, in the
principal amount of (which principal amount shall be the aggregate principal
amount of the Bridge Loan outstanding on the Conversion Date) the Term Loan and
with other appropriate insertions.
G. The Company shall have paid any fees owing pursuant to Section
2.4 in cash to Bankers Trust Corporation, Chase and Nations.
H. The conversion to the Term Loan shall not violate Regulation
T, U or X of the Board of Governors of the Federal Reserve System or any other
regulation of the Board.
SECTION 4 REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders to enter into this Agreement and to
make the Loans, each of Big Flower (solely
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with respect to Sections 4.2, 4.3, 4.7, 4.10, 4.20, 4.21, 4.25 and 4.27) and the
Company represents and warrants with respect to itself to the Lenders that, at
the time of execution hereof and after consummation of the Transactions, the
following statements are true, correct and complete:
4.1 COMPANY STATUS
Each of the Company and each of its Subsidiaries (i) is a duly
organized and validly existing company in good standing under the laws of the
jurisdiction of its organization, (ii) has the company power and authority to
own its property and assets and to transact the business in which it is engaged
and presently proposes to engage and (iii) is duly qualified and is authorized
to do business and is in good standing in each jurisdiction where the conduct of
its business requires such qualification except for failures to be so qualified
which, individually or in the aggregate, would not reasonably be expected to
have a Material Adverse Effect.
4.2 COMPANY POWER AND AUTHORITY
Each of Big Flower, the Company and their Subsidiaries has the power
and authority to execute, deliver and perform the terms and provisions of each
of the Documents to which it is a party and has taken all necessary company
action to authorize the execution, delivery and performance by it of each of
such Documents. Each of Big Flower, the Company and their Subsidiaries has duly
executed and delivered each of the Documents to which it is a party, and each of
such Documents constitutes the legal, valid and binding obligation of such party
enforceable in accordance with its terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium or other similar laws
generally affecting creditors' rights and by equitable principles (regardless of
whether enforcement is sought in equity or at law).
4.3 NO VIOLATION
Neither the execution, delivery or performance by Big Flower or any of
its Subsidiaries of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, nor consummation of the transactions
contemplated therein (i) will contravene any material provision of any
applicable law, statute, rule or regulation or of any applicable order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or
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result in any breach of any of the terms, covenants, conditions or provisions
of, or constitute a default under, or result in the creation or imposition of
(or the obligation to create or impose) any Lien (except pursuant to the Senior
Credit Facility) upon any of the material properties or assets of Big Flower or
any of its Subsidiaries pursuant to the terms of any indenture, mortgage, deed
of trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Big Flower or any of its Subsidiaries is a
party or by which it or any of its material property or assets is bound or to
which it may be subject (including, without limitation, the indentures relating
to the Big Flower Press Notes, the Senior Credit Facility, the Mezzanine
Financing Documents, the A/R Facility Documents and, on and after the execution
and delivery thereof, the indentures relating to the Exchange Notes, the Demand
Take-Out Notes and the Take-Out Securities), provided that no representation or
warranty is made hereunder in respect of such agreements referred to in this
clause (ii) relating to Indebtedness in an aggregate amount not to exceed
$10,000,000 for all such agreements, or (iii) will violate any provision of the
certificate of incorporation or by-laws (or equivalent organizational documents)
of the Company or any of its Subsidiaries.
4.4 GOVERNMENTAL APPROVALS
No order, consent, approval, license, authorization or validation of,
or filing, recording or registration with (except as have been obtained or made
prior to the date when required and which remain in full force and effect), or
exemption by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with, (i) the
Transactions, (ii) the execution, delivery and performance of any Document or
(iii) the legality, validity, binding effect or enforceability of any such
Document.
4.5 FINANCIAL STATEMENTS; FINANCIAL CONDITION; UNDISCLOSED
LIABILITIES; PROJECTIONS; ETC.
(a) (i) The audited consolidated statements of financial
condition of the Company and its Subsidiaries at December 31, 1996, December 31,
1997 and December 31, 1998 and the related consolidated statements of income and
cash flow and changes in shareholders' equity of the Company and its
Subsidiaries for the fiscal years ended on such dates, and furnished to the
Lenders prior to the Closing Date, (ii) the audited consolidated balance sheet
of the Company and its Subsidiaries as
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of the end of the fiscal quarter of the Company ended September 30, 1999, and
the related consolidated statements of earnings, shareholders' equity and cash
flows of the Company and its Subsidiaries for such quarterly period, and
furnished to the Lenders prior to the Closing Date, (iii) the consolidated
balance sheet of the Company and its Subsidiaries as of the end of the fiscal
month of the Company ended October 31, 1999 and the related consolidated
statements of earnings, shareholders' equity and cash flows of the Company and
its Subsidiaries for such monthly period and (iv) an unaudited pro forma
consolidated balance sheet of the Company and its Subsidiaries as of the Closing
Date and after giving effect to the Transactions and the incurrence of all
Indebtedness (including the Bridge Loan, the Senior Credit Facility and the
Mezzanine Financing) contemplated herein (the "Pro Forma Balance Sheet"), in
each case present fairly in all material respects the financial condition of the
Company and its Subsidiaries at the date of such statements of financial
condition and the results of the operations of the Company and its Subsidiaries
for the periods covered thereby (or, in the case of the Pro Forma Balance Sheet,
presents a good faith estimate of the consolidated PRO FORMA financial condition
of the Company (after giving effect to the Transactions at the date thereof)),
subject, in the case of unaudited financial statements, to normal year-end
adjustments. All such financial statements (other than the aforesaid Pro Forma
Balance Sheet) have been prepared in accordance with GAAP and practices
consistently applied, except, in the case of the quarterly and monthly
statements, for the omission of footnotes, and certain reclassifications and
ordinary end of period adjustments and accruals (all of which are of a recurring
nature and none of which individually, or in the aggregate, would be material).
(b) After giving effect to the Transactions, since December 31,
1998, there has been no Material Adverse Change in the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the Company and its Subsidiaries taken as a whole.
(c) On and as of the Closing Date, after giving effect to the
Transactions and to all Indebtedness (including the Bridge Loan, the Senior
Credit Facility and the Mezzanine Financing) being incurred or assumed, and
Liens created by each party in connection therewith, (x) the sum of the assets,
at a fair valuation, of the Company and its Subsidiaries taken as a whole (each
of the foregoing, as to itself and its Subsidiaries, a "Solvent Entity") will
exceed its debts; (y) each Solvent Entity has not incurred and does not intend
to incur, nor
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believes that it will incur, debts beyond its ability to pay such debts as such
debts mature; and (z) each Solvent Entity will have sufficient capital with
which to conduct its business. For purposes of this Section 4.5(c), "debt" means
any liability on a claim, and "claim" means (i) right to payment, whether or not
such a right is reduced to judgment, liquidated, unliquidated, fixed,
contingent, matured, unmatured, legal, equitable, secured, or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, secured or unsecured.
(d) On and as of the Closing Date, the projections which have been
delivered to the Agents and the Lenders prior to the Closing Date, are based on
good faith estimates and assumptions made by management of the Company and there
are no statements or conclusions in any of the projections which are based upon
or include information known to the executive officers of the Company to be
misleading or which fail to take into account material information regarding the
matters reported therein, it being understood by the Agents and the Lenders that
projections as to future events are not to be viewed as facts and that the
actual results during the periods covered by the Projections may differ from the
projected results set forth therein.
(e) Except as fully reflected in the financial statements described in
Section 4.5(a) and the Indebtedness incurred under this Agreement, the Senior
Credit Facility and the Mezzanine Financing, as of the Closing Date (and after
giving effect to any Bridge Loan made on such date), (i) there were no
liabilities or obligations (excluding current obligations incurred in the
ordinary course of business) with respect to Big Flower or any of its
Subsidiaries of any nature whatsoever (whether absolute, accrued, contingent or
otherwise and whether or not due) which, either individually or in the
aggregate, could reasonably be expected to have Material Adverse Effect and (ii)
neither the Company nor any of its Subsidiaries knows of any basis for the
assertion against it or any of its Subsidiaries of any such liability or
obligation of any nature whatsoever that is not fully disclosed in the financial
statements delivered pursuant to Section 4.5(a) and that, either individually or
in the aggregate, is or would be reasonably likely to have a Material Adverse
Effect.
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4.6 LITIGATION
There are no actions, suits or proceedings pending or threatened in
writing (excluding actions, suits or proceedings under Environmental Laws, which
matters are covered in Section 4.17) (i) with respect to any Loan Document or
(ii) that would reasonably be expected to have a Material Adverse Effect.
4.7 TRUE AND COMPLETE DISCLOSURE
All factual information (taken as a whole) furnished by or on behalf
of the Company or any of its Subsidiaries in writing to the Agents or any Lender
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement, the other Documents or any
transaction contemplated herein or therein is, and all other such information
(taken as a whole) hereafter furnished by or on behalf of any such Person in
writing to the Agents or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided; PROVIDED that with
respect to projected financial information, the only representations and
warranties made hereby are that such information was prepared based on good
faith estimates and assumptions made by management of Big Flower believed to be
reasonable at the time made and that there are no statements or conclusions in
any such information which are based upon or include information known to the
executive officers of Big Flower to be misleading or which fail to take into
account material information regarding the matters reported therein.
4.8 TAX RETURNS AND PAYMENTS
Each of the Company and its Subsidiaries has timely filed or caused to
be timely filed, on the due dates thereof or within applicable grace periods
(inclusive of any permitted extensions), with the appropriate taxing authority,
all Federal, material state and other material returns, statements, forms and
reports for Taxes (the "Returns") required to be filed by or with respect to the
income, properties or operations of the Company and/or any of its Subsidiaries.
The Returns accurately reflect all material liability for Taxes of the Company
and its Subsidiaries for the periods covered thereby. The Company and each of
its Subsidiaries have paid all material Taxes payable by them other than Taxes
which are not due and payable, and
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other than those contested in good faith by appropriate proceedings and for
which adequate reserves have been established in accordance with GAAP. As of the
Closing Date, there is no action, suit, proceeding, investigation, audit, or
claim now pending or, to the knowledge of the Company, threatened by any
authority regarding any material Taxes relating to the Company or any of its
Subsidiaries. As of the Closing Date, neither the Company nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to enter
into an agreement or waiver extending any statute of limitations relating to the
payment or collection of Taxes of the Company or its Subsidiaries, or is aware
of any circumstances that would cause the taxable years or other taxable periods
of the Company or any of its Subsidiaries not to be subject to the normally
applicable statute of limitations. Neither the Company nor any of its
Subsidiaries has provided, with respect to themselves or property held by them,
any consent under Section 341 of the Internal Revenue Code. Neither the Company
nor any of its Subsidiaries has incurred, or will incur, any material Tax
liability in connection with the Transactions.
4.9 COMPLIANCE WITH ERISA
Except to the extent that any breach, noncompliance, failure or
inaccuracy, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect:
(a) Except as set forth on SCHEDULE B, each Plan is in substantial
compliance with the applicable provisions of ERISA and the Internal Revenue
Code; no Reportable Event has occurred with respect to a Plan; no Plan or
Multiemployer Plan is insolvent or in reorganization. Except as discussed
on SCHEDULE B hereto, no Plan has an Unfunded Current Liability, no Plan
has an accumulated or waived funding deficiency or has applied for an
extension of any amortization period within the meaning of Section 412 of
the Internal Revenue Code; all contributions required to be made by the
Company or any of its Subsidiaries or any ERISA Affiliate with respect to
each Plan, each Multiemployer Plan and each Foreign Pension Plan have been
timely made or accrued or otherwise properly reserved on the Company's or
such Subsidiary's balance sheet; neither the Company nor any of its
Subsidiaries nor any ERISA Affiliate has incurred any liability to or on
account of any Plan or Multiemployer Plan pursuant to Section 409, 502(i),
502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section
401(a)(29), 4971, 4975 or 4980 of the Internal Revenue Code or reasonably
expects to incur
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any liability (including any indirect, contingent, or secondary liability)
under any of the foregoing Sections with respect to any Plan or
Multiemployer Plan; no proceedings have been instituted to terminate or
appoint a trustee to administer any Plan under Section 4042 of ERISA; no
condition exists which presents a material risk to the Company or any of
its Subsidiaries or any ERISA Affiliate of liability to or on account of
any Plan or, to the best knowledge of the Company, any Multiemployer Plan
pursuant to the foregoing provisions of ERISA and the Internal Revenue
Code; no lien imposed under the Internal Revenue Code or ERISA on the
assets of the Company or any of its Subsidiaries or, to the best knowledge
of the Company, any ERISA Affiliate exists or is reasonably likely to arise
on account of any Plan or Multiemployer Plan; and the Company and its
Subsidiaries do not maintain or contribute to any employee welfare benefit
plan (as defined in Section 3(1) of ERISA) which provides benefits to
retired employees or other former employees (other than as required by
Section 601 of ERISA) or any Plan the obligations with respect to which
would reasonably be expected to have a Material Adverse Effect.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all
applicable laws, statutes, rules, regulations and orders and has been
maintained, where required, in good standing with applicable regulatory
authorities. Neither the Company nor any of its Subsidiaries has incurred
any liability in connection with the termination of or withdrawal from any
Foreign Pension Plan that has not been accrued or otherwise properly
reserved on the Company's or such Subsidiary's balance sheet. With respect
to each Foreign Pension Plan that is required by applicable local law or by
its terms to be funded through a separate funding vehicle, the present
value of the accrued benefit liabilities (whether or not vested) under each
such Foreign Pension Plan, determined as of the latest valuation date for
such Foreign Pension Plan on the basis of actuarial assumptions, each of
which is reasonable, did not exceed the current value of the assets of such
Foreign Pension Plan allocable to such benefit liabilities by an amount
which, when added to the aggregate amount of the accrued benefit
liabilities with respect to all other foreign pension plans, is in excess
of $5,000,000.
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4.10 REPRESENTATIONS AND WARRANTIES IN DOCUMENTS
All representations and warranties by Big Flower and its Subsidiaries
set forth in the other Documents were true and correct in all material respects
at the time as of which such representations and warranties were made (or deemed
made) and shall be true and correct in all material respects as of the Closing
Date as if such representations or warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations or warranties shall be true and correct in all material respects
as of such earlier date.
4.11 PROPERTIES
Each of the Company and its Subsidiaries has good and marketable title
to, or a validly subsisting leasehold interest in, all material properties owned
or leased by them, including all property reflected in the balance sheets
referred to in Section 4.5(a) and in the Pro Forma Balance Sheet (except as sold
or otherwise disposed of since the respective dates of such balance sheets in
the ordinary course of business or as otherwise permitted by this Agreement),
free and clear of all Liens, other than (i) as referred to in the balance sheets
or in the notes thereto or (ii) Permitted Encumbrances.
4.12 CAPITALIZATION
On the Closing Date, the authorized capital stock of the Company
consisted of 3,000 shares of common stock, $.01 par value per share, of which
1,000 shares are issued and outstanding and owned by Big Flower. All such
outstanding shares have been duly and validly issued, are fully paid and
nonassessable and free of preemptive rights. The Company does not have
outstanding any securities convertible into or exchangeable for its capital
stock or outstanding any rights to subscribe for or to purchase, or any options
for the purchase of, or any agreement providing for the issuance (contingent or
otherwise) of, or any calls, commitments or claims of any character relating to,
its capital stock.
4.13 SUBSIDIARIES
On and as of the Closing Date, the Company has no Subsidiaries other
than those Subsidiaries listed on SCHEDULE C. SCHEDULE C correctly sets forth,
as of the Closing Date, the percentage ownership (direct and indirect) of the
Company in each class of capital stock or other equity interests of
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each of its Subsidiaries and also identifies the direct owner thereof. All
outstanding shares of capital stock of each Subsidiary of the Company have been
duly and validly issued, are fully paid and nonassessable and have been issued
free of preemptive rights. Except as set forth on SCHEDULE C, no Subsidiary of
the Company has outstanding any securities convertible into or exchangeable for
its capital stock or outstanding any right to subscribe for or to purchase, or
any options or warrants for the purchase of, or any agreement providing for the
issuance (contingent or otherwise) of or any calls, commitments or claims of any
character relating to, its capital stock or any stock appreciation or similar
rights.
4.14 COMPLIANCE WITH STATUTES, ETC.
Each of the Company and its Subsidiaries and each of their respective
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (excluding applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls, which matters are
covered under Section 4.17), except such noncompliances as would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
4.15 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.
4.16 PUBLIC UTILITY HOLDING COMPANY ACT
Neither the Company nor any of its Subsidiaries is a "holding
company," or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company" within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
4.17 ENVIRONMENTAL MATTERS
Except for such failures and noncompliances of the types described
herein which, individually or in the aggregate, would not reasonably be expected
to have a Material Adverse Effect:
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(a) The Company and each of its Subsidiaries is in compliance with
all applicable Environmental Laws and neither the Company nor any of its
Subsidiaries is liable for any material penalties, fines, or forfeitures
for failure to comply with any of the foregoing, and the requirements of
any permits issued under such Environmental Laws; there are no pending or,
to the knowledge of the Company, threatened Environmental Claims against
the Company or any of its Subsidiaries or any Real Property Assets owned or
operated by the Company or any of its Subsidiaries; and there are no facts,
circumstances, conditions or occurrences on any Real Property Assets at any
time owned or operated by the Company or any of its Subsidiaries or, to the
knowledge of the Company, on any property adjoining or in the vicinity of
any such Real Property Assets that would reasonably be expected (i) to form
the basis of an Environmental Claim against the Company or any of its
Subsidiaries or any Real Property Assets currently owned or operated by the
Company or any of its Subsidiaries, or (ii) to cause any such currently
owned Real Property Assets to be subject to any restrictions on the
ownership, occupancy, use or transferability of such Real Property Assets
by the Company or any of its Subsidiaries under any applicable
Environmental Law; and
(b) The Company and its Subsidiaries have not at any time
generated, used, treated or stored Hazardous Materials on, or transported
Hazardous Materials to or from, or Released Hazardous Materials on or from
any Real Property Assets owned or operated by the Company or any of its
Subsidiaries except in compliance with all applicable Environmental Laws
and in connection with the operation, use or maintenance of any such Real
Property Assets by the Company's or such Subsidiary's business.
Notwithstanding anything to the contrary contained above, to the extent the
representation and warranty contained in this Section 4.17 relates to any
Subsidiary of the Company for any period prior to the acquisition thereof
by the Company or any of its Subsidiaries, such representation and warranty
is made to the best knowledge of the Company.
4.18 LABOR RELATIONS
Neither the Company nor any of its Subsidiaries is engaged in any
unfair labor practice that would reasonably be expected to have a Material
Adverse Effect. There is (i) no unfair labor practice complaint pending or, to
the knowledge of the Company, threatened against the Company or any of its
Subsidiaries
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before the National Labor Relations Board and no material grievance or material
arbitration proceeding arising out of or under any collective bargaining
agreement is so pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries, (ii) no strike, labor dispute, slowdown
or stoppage is pending or, to the knowledge of the Company, threatened against
the Company or any of its Subsidiaries and (iii) no union representation
question exists with respect to the employees of the Company or any of its
Subsidiaries, except (with respect to any matter specified in clause (i), (ii)
or (iii) above, either individually or in the aggregate) such as would not
reasonably be expected to have a Material Adverse Effect.
4.19 PATENTS, LICENSES, FRANCHISES AND FORMULAS
Except as described on SCHEDULE D, each of the Company and each of its
Subsidiaries owns all patents, trademarks, permits, service marks, trade names,
copyrights, licenses, franchises and formulas, or rights with respect to the
foregoing, and has obtained assignments of all leases and other rights of
whatever nature, reasonably necessary for the present conduct of its business,
without any known conflict with the rights of others, which, or the failure to
own or obtain which, as the case may be, would be reasonably likely to result in
a Material Adverse Effect.
4.20 INDEBTEDNESS
SCHEDULE E sets forth a true and complete list of all Indebtedness
(exclusive of (u) Indebtedness pursuant to this Agreement, (v) the Senior Credit
Facility, (w) the Mezzanine Financing, (x) the Big Flower Press Notes, (y) the
Convertible Subordinated Debentures and (z) the A/R Facility) of Big Flower, the
Company and their Subsidiaries as of the Closing Date and which is to remain
outstanding after giving effect to the Transactions and the incurrence of Bridge
Loans on such date, in each case showing the aggregate principal amount thereof
(and the aggregate amount of any undrawn commitments with respect thereto) and
the name of the respective borrower and any other entity which directly or
indirectly guaranteed such debt.
4.21 TRANSACTIONS
At the time of consummation thereof, the Transactions shall have been
consummated in accordance with the terms of the Documents and all applicable
laws. At the time of consummation
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thereof, all consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Transactions in
accordance with the terms of the Documents and all applicable laws have been
obtained, given, filed or taken and are or will be in full force and effect (or
effective judicial relief with respect thereto has been obtained). All
applicable waiting periods with respect thereto have or, prior to the time when
required, will have, expired without, in all such cases, any action being taken
by any competent authority which restrains, prevents, or imposes material
adverse conditions upon the Transactions. Additionally, there does not exist any
judgment, order or injunction prohibiting or imposing material adverse
conditions upon the consummation of the Transactions or the performance by any
of Big Flower, the Company or their respective Subsidiaries of their respective
obligations under the Documents and all applicable laws.
4.22 INSURANCE
Set forth on SCHEDULE F hereto is a true, correct and complete summary
of all material insurance carried by each of the Company and its Subsidiaries on
and as of the Closing Date, with the amounts insured set forth therein.
4.23 YEAR 2000 REPRESENTATION
(a) All software, systems and hardware owned or used by the
Company and its Subsidiaries are substantially Year 2000 Compliant and are
reasonably expected to be Year 2000 Compliant by December 31, 1999, except for
such software, systems and hardware the failure of which to be Year 2000
Compliant would not, individually or in the aggregate, have a Material Adverse
Effect.
(b) The Company and its Subsidiaries have taken, or are taking,
commercially reasonable steps to determine whether all material third-party
software, systems and hardware used by, for, or on behalf of the Company and its
Subsidiaries are Year 2000 Compliant or are reasonably expected to be Year 2000
Compliant by December 31, 1999.
4.24 NO DEFAULT
No event has occurred and is continuing which constitutes a Potential
Event of Default or an Event of Default.
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4.25 COMPLIANCE WITH CONTRACTS, ETC.
None of Big Flower or any of its Subsidiaries is (A) in violation of
its certificate of incorporation, bylaws or other organizational documents or
(B) in violation of any applicable law, ordinance, administrative or
governmental rule or regulation, or (C) in default (nor will an event occur
which with notice or passage of time or both would constitute such a default)
under or in violation of any indenture or loan or credit agreement or any other
material agreement or instrument to which it is a party or by which it or any of
its properties or assets may be bound or affected, except, with respect to
clauses (B) and (C), for such violations or defaults that would not, singly or
in the aggregate, have a Material Adverse Effect.
4.26 USE OF PROCEEDS; MARGIN STOCK, ETC.
The proceeds of the Bridge Loan will be used solely for the purposes
specified herein. Neither the making of the Loans nor the use of proceeds
thereof will violate or be inconsistent with the provisions of Regulation T, U
or X, of the Board of Governors of the Federal Reserve System.
4.27 SURVIVAL OF REPRESENTATIONS AND WARRANTIES
Subject to Section 12.10B, all representations and warranties in the
Loan Documents shall survive delivery of the Bridge Notes and the making of the
Bridge Loan and shall continue until repayment of the Notes and the Obligations,
and any investigation at any time made by or on behalf of the Lenders shall not
diminish the Lenders' right to rely thereon.
4.28 GUARANTEES
Each future Subsidiary Guarantor shall, on the date it executes and
delivers a Guarantee hereunder, have the full corporate power, authority and
capacity to execute and deliver such Guarantee and to perform all of its
obligations to be performed thereunder; all corporate and other acts, conditions
and things required to be done and performed or to have occurred prior to such
execution and delivery to constitute such Guarantee as a valid and legally
binding obligation of such Subsidiary Guarantor enforceable in accordance with
its terms shall have been done and performed and shall have occurred in due
compliance with all applicable Laws; on the date of such execution and delivery,
the execution, delivery and performance of such Guarantee by such Subsidiary
Guarantor will not (i) violate
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any provision of Law, (ii) violate any provision of the charter or bylaws of
such Subsidiary Guarantor, or (iii) result in a breach of, a default under
(including, without limitation, any event which with notice or lapse of time, or
both, would constitute a breach of or a default under), or the creation of any
Lien on the properties or assets of such Subsidiary Guarantor, the Company or
any other Subsidiary of the Company under any Contract to which such Subsidiary
Guarantor or the Company or any other Subsidiary of the Company is a party or by
which the properties or assets of such Subsidiary Guarantor, the Company or any
other Subsidiary of the Company may be bound or affected, except, in the case of
clauses (i) and (iii) for such violations, breaches, defaults or Liens which
would not, individually or in the aggregate, have a Material Adverse Effect; on
the date of such execution and delivery, each Guarantee executed and delivered
by a Subsidiary Guarantor shall constitute legal, valid, binding and
unconditional obligations of the Subsidiary Guarantor executing and delivering
it to the Lenders hereunder, enforceable in accordance with its terms, except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, reorganization or similar laws affecting the enforcement
of creditors' rights generally or by general principles of equity (regardless of
whether such enforcement is considered in a proceeding in equity or at law).
4.29 SENIOR SUBORDINATED INDENTURE; ETC.
Each of the Company and the Subsidiary Guarantors shall (to the extent
such documents are executed), on the date it executes and delivers the Senior
Subordinated Indenture and the Exchange Notes and the Demand Take-Out Notes and
the indenture governing the Demand Take-Out Notes (or the guarantees related
thereto, as the case may be), have the full corporate power, authority and
capacity to do so and to perform all of its obligations to be performed
thereunder; all corporate and other acts, conditions and things required to be
done and performed or to have occurred prior to such execution and delivery to
constitute them as valid and legally binding obligations of the Company
enforceable against the Company and the Subsidiary Guarantors in accordance with
their respective terms except to the extent that the enforceability thereof may
be limited by applicable bankruptcy, insolvency, reorganization or similar laws
affecting the enforcement of creditors' rights generally or by general
principles of equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law), shall have been done and performed and shall
have occurred in due compliance with all applicable Laws; on the date, if any,
of such execution and delivery by the Company and the Subsidiary
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Guarantors, the Senior Subordinated Indenture and the Exchange Notes and the
Demand Take-Out Notes (and the guarantees) and the indenture governing the
Demand Take-Out Notes shall constitute legal, valid, binding and unconditional
obligations of the Company and the Subsidiary Guarantors, as the case may be,
enforceable against the Company and the Subsidiary Guarantors, as the case may
be, in accordance with their respective terms, except to the extent that the
enforceability thereof may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the enforcement of creditors' rights
generally or by general principles of equity (regardless of whether such
enforcement is considered in a proceeding in equity or at law).
SECTION 5 AFFIRMATIVE COVENANTS
Each of Big Flower (solely with respect to Sections 5.10, 5.12 and
5.16) and the Company covenants and agrees that, until the Loans and the Notes
and all other amounts due under this Agreement have been indefeasibly paid in
full it shall perform all covenants in this Section 5 required to be performed
by it:
5.1 FINANCIAL STATEMENTS AND OTHER REPORTS
The Company will maintain, and cause each of its Subsidiaries to
maintain, a system of accounting established and administered in accordance with
sound business practices to permit preparation of consolidated financial
statements in conformity with GAAP. The Company will deliver to each Lender and
the Agents:
(a) MONTHLY REPORTS. Within 35 days after the end of each calendar
month of the Company (or within 45 days after the end of the last month of each
fiscal year), the consolidated balance sheet of the Company and its Subsidiaries
as at the end of such month and the related consolidated statement of income for
such calendar month and the elapsed portion of the calendar year ended with the
last day of such month, in each case setting forth comparative figures for the
corresponding month in the prior calendar year, subject to normal year-end audit
adjustments and the absence of footnotes.
(b) QUARTERLY FINANCIAL STATEMENTS. As soon as available and in
any event within 50 days after the close of each of the first three quarterly
accounting periods in each fiscal year, (i) the consolidated balance sheet of
the Company
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and its Subsidiaries as at the end of such quarterly period and the related
consolidated statements of income and retained earnings and cash flows for such
quarterly period and for the elapsed portion of the fiscal year ended with the
last day of such quarterly period and setting forth comparative figures for the
related periods in the prior fiscal year and the budgeted figures for such
quarterly period as set forth in the respective budget delivered pursuant to
Section 5.1(e) and (ii) management's discussion and analysis of the important
operational and financial developments during such quarterly period, all of
which shall be certified by the chief financial officer or the controller of the
Company, subject to normal year-end audit adjustments and the absence of
footnotes. If the Company has designated any Unrestricted Subsidiaries
hereunder, then the quarterly financial information required by this Section
5.1(b) shall include a reasonably detailed presentation, either on the face of
the financial statements or in the footnotes thereto, and in management's
discussion and analysis of operational and financial developments, of the
financial condition and results of operations of Unrestricted Subsidiaries of
the Company separate from the financial condition and results of operations of
the Company and its Subsidiaries.
(c) ANNUAL FINANCIAL STATEMENTS. Within 95 days after the close of
each fiscal year, (I) the consolidated balance sheet of each of the Company and
its Subsidiaries as at the end of such fiscal year and the related consolidated
statements of income and retained earnings and of cash flows (and a statement of
net sales, EBITDA and operating income for each business segment of the Company
and its Subsidiaries (i.e., insert advertising and newspaper services, direct
marketing services, digital services and specialty products and commercial
printing) and the combined international operations of the Company and its
Subsidiaries, setting forth, as appropriate, eliminations for intercompany sales
and corporate expenses) for such fiscal year setting forth comparative figures
for the preceding fiscal year (and, in the case of the income statement,
comparable budgeted figures for such fiscal year as set forth in the respective
budget delivered pursuant to Section 5.1(e)) and (except for such comparable
budgeted figures) certified, in the case of the consolidated statements, by
Deloitte & Touche LLP or such other independent certified public accountants of
recognized national standing reasonably acceptable to the Agents, together with
a report of such accounting firm stating that in the course of its regular
audits of the financial statements of the Company and its Subsidiaries, which
audits were conducted in accordance with generally accepted auditing standards,
such accounting firm obtained no knowledge of any Potential Event of
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Default or Event of Default which has occurred and is continuing or, if in the
opinion of such accounting firm such a Potential Event of Default or Event of
Default with respect to the covenants set forth in Sections 6.1 through 6.14,
inclusive, has occurred and is continuing, a statement as to the nature thereof
and (II) management's discussion and analysis of the important operational and
financial developments during such fiscal year. If the Company has designated
any Unrestricted Subsidiaries hereunder, then the annual financial information
required by this Section 5.1(c) shall include a reasonably detailed
presentation, either on the face of the financial statements or in the footnotes
thereto, and in management's discussion and analysis of operational and
financial developments, of the financial condition and results of operations of
the Unrestricted Subsidiaries of the Company separate from the financial
condition and results of operations of the Company and its Subsidiaries.
(d) MANAGEMENT LETTERS. Promptly after the receipt thereof by the
Company or any of its Subsidiaries, a copy of any "management letter" received
by such Person from their certified public accountants and the management's
non-privileged responses thereto.
(e) BUDGETS. No later than 90 days (or earlier, if available)
following the commencement of the first day of each fiscal year, a budget in
form satisfactory to the Agents (including budgeted statements of income and
sources and uses of cash and balance sheets) prepared by the Company for (x)
each of the four fiscal quarters of such fiscal year prepared in reasonable
detail and (y) each of the four fiscal years immediately following such fiscal
year prepared in summary form, in each case, on a consolidated basis, for the
Company and its Subsidiaries (and on a business segment and combined
international operational basis as described in Section 5.1(c) above).
(f) OFFICER'S CERTIFICATES. Together with each delivery of
financial statements pursuant to Sections 5.1(a), (b) and (c) above, the Company
shall furnish to the Agents (a) an Officers' Certificate of the Company stating
that the signers have reviewed the terms of this Agreement and the Notes and
have made, or caused to be made under their supervision, a review in reasonable
detail of the transactions and condition of the Company and its Subsidiaries
during the accounting period covered by such financial statements and that such
review has not disclosed the existence during or at the end of such accounting
period, and that the signers do not have knowledge of the existence as of the
date of the Officers' Certificate, of
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any condition or event which constitutes an Event of Default or Potential Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action the Company has taken, is
taking and proposes to take with respect thereto; and (b) a Compliance
Certificate demonstrating in reasonable detail compliance (as determined in
accordance with GAAP) during and at the end of such accounting periods with the
covenants contained in Section 6.
(g) NOTICE OF DEFAULT OR LITIGATION. As soon as practicable, and
in any event within five Business Days after an executive officer of the Company
obtains actual knowledge thereof, notice of (i) the occurrence of any event
which constitutes a Potential Event of Default or an Event of Default, (ii) any
litigation or governmental investigation or proceeding pending or threatened in
writing (x) against the Company or any of its Subsidiaries which would
reasonably be expected to have a Material Adverse Effect, or (y) with respect to
any material Indebtedness of the Company or any of its Subsidiaries taken as a
whole and (iii) any other event which would reasonably be expected to have a
Material Adverse Effect.
(h) OTHER REPORTS AND FILINGS. As soon as practicable, and in any
event within 10 Business Days after the filing or delivery thereof, as the case
may be, copies of all financial information, proxy materials and other
information and reports, if any, which the Company or any of its Subsidiaries
shall file with the Commission or any successor thereto, the Registrar of
Companies in England and Wales or any governmental authority and copies of all
notices and reports which the Company or any of its Subsidiaries shall deliver
to holders of their Indebtedness (including indebtedness pursuant to the Big
Flower Press Notes, the Senior Credit Facility, the Mezzanine Financing, and on
and after the execution and delivery thereof, the Exchange Notes, Demand
Take-Out Notes and Take-Out Securities) pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or other
representative therefor) or holders of their capital stock pursuant to the terms
of the documentation relating thereto (or any trustee, agent or other
representative therefor).
(i) ENVIRONMENTAL MATTERS. As soon as practicable, and in any
event within 20 Business Days after an executive officer of the Company obtains
actual knowledge thereof, notice of any of the following environmental matters,
unless such environmental matters would not, individually or when aggregated
with all other such environmental matters, be reasonably expected
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to (x) have a Material Adverse Effect or (y) result in a remedial cost to the
Company or any of its Subsidiaries in excess of $5,000,000:
(i) any pending or threatened Environmental Claim against the
Company or any of its Subsidiaries or any Real Property Assets owned or
operated by the Company or any of its Subsidiaries;
(ii) any condition or occurrence after the Closing Date on or
arising from any Real Property Assets owned or operated by the Company or
any of its Subsidiaries that (a) results in noncompliance by the Company or
any of its Subsidiaries with any applicable Environmental Law or (b) would
reasonably be expected to form the basis of an Environmental Claim against
the Company or any of its Subsidiaries or any such Real Property Assets;
(iii) any condition or occurrence on any Real Property Assets owned
or operated by the Company or any of its Subsidiaries that would reasonably
be expected to cause such Real Property Assets to be subject to any
restrictions on the ownership, occupancy, use or transferability by the
Company or any of its Subsidiaries of such Real Property Assets under any
Environmental Law; and
(iv) the taking of any removal or remedial action in response to
the actual or alleged presence of any Hazardous Material on any Real
Property Assets owned or operated by the Company or any of its Subsidiaries
as required by any Environmental Law or any governmental or other
administrative agency.
All such notices shall describe in reasonable detail, to the extent known at
such time upon diligent inquiry, the nature of the claim, investigation,
condition, occurrence or removal or remedial action, and the Company's or such
Subsidiary's response or proposed response thereto. In addition, each of the
Company and its Subsidiaries will provide the Agents with copies of all material
communications regarding matters reasonably likely to result in environmental
liabilities in excess of $5,000,000 between the Company or any of its
Subsidiaries and any government or governmental agency relating to Environmental
Laws, all communications regarding matters reasonably likely to result in
environmental liabilities in excess of $5,000,000 between the Company or any of
its Subsidiaries and any Person (other than its attorneys) relating to
Environmental Claims, and such non-privileged detailed reports of any
Environmental
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Claim as may be requested by the Agents or the Required Lenders.
(j) ANNUAL MEETINGS WITH LENDERS. At the request of the Agents,
the Company shall within 120 days after the close of each fiscal year of the
Company hold a meeting (at a mutually agreeable location and time) with all of
the Lenders at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of the Company and its
Subsidiaries and the budgets presented for the current fiscal year of the
Company and its Subsidiaries.
(k) ADDITIONAL SUBSIDIARIES. The Company shall furnish to the
Agents, promptly upon any Person becoming a Subsidiary of the Company, a written
notice setting forth with respect to such Person (a) the date on which such
Person became a Subsidiary of the Company and (b) all of the data required to be
set forth in SCHEDULE C with respect to all Subsidiaries of the Company.
(l) OTHER INFORMATION. From time to time, such other information
or documents (financial or otherwise) with respect to the Company or its
Subsidiaries as the Agents or any Lender (through the Agents) may reasonably
request.
5.2 BOOKS, RECORDS AND INSPECTIONS
The Company will, and will cause each of its Subsidiaries to, keep
proper books of record and account in which full, true and correct entries in
conformity with GAAP in all material respects and all requirements of law shall
be made of all dealings and transactions in relation to its business and
activities. The Company will, and will cause each of its Subsidiaries to, permit
officers and designated representatives of the Agents or any Lender to visit and
inspect, at the Agents' or such other Lender's own expense, as the case may be
(or, if a Potential Event of Default or Event of Default is in existence, at the
Company's expense), during regular business hours, upon reasonable advance
notice and under guidance of officers of the Company or such Subsidiary, any of
the properties of the Company and any of its Subsidiaries, and to examine the
books of account of the Company and any of its Subsidiaries and discuss the
affairs, finances and accounts of the Company and any of its Subsidiaries with,
and be advised as to the same by, its and their officers and independent
accountants, all at such reasonable times and intervals and to any reasonable
extent as the Agents or any Lender may reasonably request; PROVIDED that all
such visits and inspections by each Lender shall be limited
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to one such inspection and visit per Lender in each year (except when a
Potential Event of Default or Event of Default has occurred and is continuing,
in which case there shall be no limitations on such inspections and visits).
5.3 MAINTENANCE OF PROPERTY; INSURANCE
The Company will, and will cause each of its Subsidiaries to (i) keep
all property necessary in its business in good working order and condition
(ordinary wear and tear excepted), (ii) maintain, with financially sound and
reputable insurance companies, insurance on all its property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice or past practices of the Company and its Subsidiaries as in
effect as on the Closing Date and (iii) furnish to the Agents and each Lender,
upon written request, full information as to the insurance carried. Such
insurance shall include physical damage insurance on all real and personal
property (whether now owned or hereafter acquired) on an all risk basis,
covering the full repair and replacement costs of all such property and business
interruption insurance for the actual loss sustained.
5.4 CORPORATE FRANCHISES
The Company will, and will cause each of its Subsidiaries to, do or
cause to be done, all things necessary to preserve and keep in full force and
effect its existence and its material rights, franchises, licenses and patents;
PROVIDED, HOWEVER, that nothing in this Section 5.4 shall prevent (i)
transactions permitted in accordance with the applicable requirements of Section
6.6 or (ii) the withdrawal by the Company or any of its Subsidiaries of its
qualification as a foreign corporation in any jurisdiction where such withdrawal
would not reasonably be expected to have a Material Adverse Effect.
5.5 COMPLIANCE WITH STATUTES, ETC.
The Company will, and will cause each of its Subsidiaries to, comply
with all applicable statutes, regulations and orders of, and all applicable
restrictions imposed by, all governmental bodies, domestic or foreign, in
respect of the conduct of its business and the ownership of its property, except
such noncompliances as would not, individually or in the aggregate, reasonably
be expected to have a Material Adverse Effect.
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5.6 COMPLIANCE WITH ENVIRONMENTAL LAWS
The Company will comply, and will cause each of its Subsidiaries to
comply, in all material respects with all Environmental Laws applicable to the
ownership or use of its Real Property Assets now or hereafter owned or operated
by the Company or any of its Subsidiaries, will pay or cause to be paid all
costs and expenses incurred in connection with such compliance, and will keep or
cause to be kept all such Real Property Assets free and clear of any Liens
(other than Permitted Encumbrances) imposed pursuant to such Environmental Laws.
Neither the Company nor any of its Subsidiaries will generate, use, treat,
store, Release or dispose of, or permit the generation, use, treatment, storage,
Release or disposal of Hazardous Materials on any Real Property Assets now or
hereafter owned or operated by the Company or any of its Subsidiaries, or
transport or permit the transportation of Hazardous Materials to or from any
such Real Property Assets except for Hazardous Materials used or stored at any
such Real Property Assets in compliance (excluding non-compliance which,
individually and in the aggregate would not reasonably be expected to have a
Material Adverse Effect) with all applicable Environmental Laws and reasonably
required in connection with the business of the Company and its Subsidiaries or
the operation, use and maintenance of any such Real Property Assets. If the
Company or any of its Subsidiaries or any tenant or occupant of any Real
Property Assets owned or operated by the Company or any of its Subsidiaries
causes or permits any intentional or unintentional act or omission resulting in
the presence or Release of any Hazardous Material in a quantity or concentration
sufficient to require reporting or to trigger an obligation to undertake
clean-up, removal or remedial action under applicable Environmental Laws, the
Company agrees to undertake, and/or to cause any of its Subsidiaries, tenants or
occupants to undertake, at their sole expense, any clean up, removal, remedial
or other action required pursuant to Environmental Laws to remove and clean up
any Hazardous Materials from any Real Property Assets except where the failure
to do so would not reasonably be expected to have a Material Adverse Effect;
PROVIDED that neither the Company nor any of its Subsidiaries shall be required
to undertake any clean up, removal, remedial or other action while the
requirement to undertake such clean up, removal, remedial or other action is
being contested in good faith and by proper proceedings so long as it has
maintained adequate reserves with respect to such clean up, removal, remedial or
other action to the extent required in accordance with GAAP.
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5.7 ERISA
As soon as possible and, in any event, within 15 days after the
Company, any Subsidiary of the Company or any ERISA Affiliate knows or has
reason to know of the occurrence of any of the following, the Company will
deliver to the Agents a certificate of the chief financial officer or treasurer
of the Company setting forth details as to such occurrence and the action, if
any, that the Company, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by the Company, such Subsidiary, such ERISA Affiliate, the
PBGC, a Plan or Multiemployer Plan participant or the Plan administrator with
respect thereto, that a Reportable Event has occurred; that an accumulated
funding deficiency has been incurred or an application may be reasonably
expected to 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
Internal Revenue Code with respect to a Plan or Multiemployer Plan; that a
contribution required to be made by the Company or a Subsidiary or an ERISA
Affiliate to a Plan or Multiemployer Plan or Foreign Pension Plan has not been
timely made; that a Plan or Multiemployer Plan has been or may be reasonably
expected to be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA; that a Plan or Multiemployer Plan has an Unfunded Current
Liability giving rise to a lien under ERISA or the Internal Revenue Code; that
proceedings may be reasonably expected to be or have been instituted to
terminate or appoint a trustee to administer a Plan; that a proceeding has been
instituted pursuant to Section 515 of ERISA to collect a delinquent contribution
to a Plan; that the Company, any Subsidiary of the Company or any ERISA
Affiliate will or may reasonably be expected to incur any material liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan or Multiemployer Plan or otherwise
under Section 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or with
respect to a Plan or otherwise under Section 401(a)(29), 4971, 4975 or 4980 of
the Internal Revenue Code or Section 409 or 502(i) or 502(l) of ERISA; or that
the Company or any Subsidiary of the Company may reasonably be expected to incur
any material liability pursuant to any employee welfare benefit plan (as defined
in Section 3(1) of ERISA) that provides benefits to retired employees or other
former employees (other than as required by Section 601 of ERISA) or pursuant to
any employee pension benefit plan (as defined in Section 3(2) of ERISA) in
addition to any liability existing on the Effective
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Date pursuant to any such welfare or pension plan or plans. If requested by any
Agent or the Required Lenders in writing, the Company will deliver to the Agents
or the requesting Lenders, as the case may be, a complete copy of the annual
report (Form 5500) of each Plan (including, to the extent required, the related
financial and actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Agents pursuant to the first sentence hereof, copies of any material
notices received by the Company, any Subsidiary of the Company or any ERISA
Affiliate (i) from any government agency with respect to any Plan or Foreign
Pension Plan or (ii) received from any government agency or plan administrator
or sponsor or trustee with respect to any Multiemployer Plan, shall be delivered
to the Agents no later than 15 days after the date such notice has been received
by the Company, such Subsidiary or such ERISA Affiliate, as applicable.
5.8 PERFORMANCE OF OBLIGATIONS
The Company will, and will cause each of its Subsidiaries to, perform
all of its obligations under the terms of each mortgage, deed of trust,
indenture, loan agreement or credit agreement and each other material agreement,
contract or instrument, by which it is bound, except such non-performances as
would not, individually or in the aggregate, reasonably be expected to have a
Material Adverse Effect.
5.9 PAYMENT OF TAXES
The Company will pay and discharge or cause to be paid and discharged,
and will cause each of its Subsidiaries to pay and discharge, all material
Taxes, assessments and governmental charges or levies imposed upon it or upon
its income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims for material sums that have become due and
payable which, if unpaid, might become a lien or charge upon any properties of
the Company or any of its Subsidiaries; PROVIDED that neither the Company nor
any of its Subsidiaries shall be required to pay any such Tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it maintains adequate reserves with respect thereto in accordance
with GAAP.
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5.10 OWNERSHIP OF SUBSIDIARIES
Notwithstanding anything to the contrary contained in this Agreement,
Big Flower shall at all times own directly 100% of the capital stock of the
Company.
5.11 YEAR 2000 COMPLIANCE
The Company will take commercially reasonable steps to ensure that all
material third party's software, systems and hardware used by, for, or on behalf
of the Company and its Subsidiaries are Year 2000 Compliant by December 31,
1999, except to the extent any failure to take such steps would not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect, and shall notify the Agents and each Lender promptly upon
detecting any failure of such software systems and hardware to be Year 2000
Compliant. In addition, the Company shall provide the Agents and each Lender
with such information about its year 2000 computer readiness (including, without
limitation, information as to contingency plans, budgets and testing results) as
the Agents or such Lender shall reasonably request.
5.12 TAKE-OUT FINANCING
A. The Company and Big Flower each agree that upon written
request (a "Request") from the Take-Out Banks made at any time after March 31,
2000 and prior to the payment in full of the Loans, the Company and/or Big
Flower, as applicable, will take all actions reasonably requested, to the extent
within its power, so that the Take-Out Banks can, as soon as reasonably
practicable after such Request, publicly sell or privately place the Demand
Take-Out Notes (the "Initial Request Date"). The Company and Big Flower each
further agree that upon written notice by the Take-Out Banks, at any time and
from time to time following the Initial Request Date, the Company and/or Big
Flower, as applicable, will issue and sell Demand Take-Out Notes upon such terms
and conditions as specified in such notice; PROVIDED that (i) the interest rate
thereon shall be determined by the Take-Out Banks in light of the then
prevailing market conditions but in no event shall (x) the interest or the yield
(excluding any equity component) on the Demand Take-Out Notes exceed 13.0% per
annum, with respect to any issuance on or prior to June 1, 2000, and 13.5% per
annum, with respect to any issuance after June 1, 2000, to the extent such
issuance is by either the Company or Big Flower, individually, and (y) the
Weighted Average Yield (excluding any equity component) on the Demand Take-Out
Notes exceed 13.0% per annum, with
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respect to any issuance on or prior to June 1, 2000, and 13.5% per annum, with
respect to any issuance after June 1, 2000, to the extent such issuance of
Demand Take-Out Notes is both by the Company and Big Flower, together; PROVIDED,
that any issuance of Demand Take-Out Notes by Big Flower shall be limited to
$100.0 million gross proceeds at the time of issuance and may pay interest in
the form of cash or pay-in-kind securities; PROVIDED, FURTHER that any issuance
of Demand Take-Out Notes by the Company shall allow for the payment of interest
on such Demand Take-Out Notes issued by Big Flower; (ii) the Demand Take-Out
Notes shall be issued through a public offering or a private placement and, if
issued in a private placement, the Demand Take-Out Notes will be accompanied by
customary registration rights; (iii) the Demand Take-Out Notes will contain such
terms, conditions and covenants as are customary for similar high-yield
financings and as are reasonably satisfactory in all respects to the Agents, the
Required Lenders (as defined in the Senior Credit Facility) under the Senior
Credit Facility (to the extent such approval is required under the Senior Credit
Facility) and the Company; (iv) the maturity of any Demand Take-Out Notes shall
not be earlier than the tenth anniversary of the Closing Date; and (v) all other
arrangements with respect to the Demand Take-Out Notes shall be reasonably
satisfactory in all respects to the Take-Out Banks and the Company and/or Big
Flower in light of the then prevailing market conditions. The foregoing shall
not limit the Company's right to refinance the Bridge Loan or the Term Loan by
any other means.
B. If it shall be reasonably determined by the Take-Out Banks in
consultation with the Company and Big Flower based upon the prevailing market
conditions that it is necessary and advisable to sell the Demand Take-Out Notes
with an equity component, Big Flower shall issue common equity to the purchasers
of the Demand Take-Out Notes in such amount as is necessary in order for the
Company to receive net proceeds from the sale of the Demand Take-Out Notes in an
amount sufficient to repay the Bridge Loan or the Term Loan in full, after
taking into account the prevailing market conditions; PROVIDED that in no event
will Big Flower be required to issue common equity representing more than the
following applicable percentage of its fully diluted common equity at the time
of sale of the Demand Take-Out Notes pursuant to this sentence: 2.0% with
respect to any issuance on or prior to June 1, 2000; 3.5% with respect to any
issuance after June 1, 2000 and on or prior to the one year anniversary of the
Closing Date; and 5.0% with respect to any issuance after the one year
anniversary of the Closing Date. Such common equity will take the form of
warrants substantially in the form attached hereto as EXHIBIT XIII
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or as otherwise agreed to by Big Flower and the Agents (the "Warrant Agreement")
and shall have the benefit of the Registration Rights and Stockholders
Agreement.
C. The Company and Big Flower agree that, in connection with the
issuance of Demand Take-Out Notes, they shall prepare promptly, and in any event
no later than March 1, 2000, a draft offering memorandum relating to the Demand
Take-Out Notes (which offering memorandum shall contain audited, unaudited and
pro forma financial statements meeting the requirements of Regulation S-X under
the Securities Act, of the Company and Big Flower for the periods required of a
registrant on Form S-1). In addition, each of the Company and Big Flower agrees
that it will use its reasonable best efforts to assist the Take-Out Banks in
marketing the Demand Take-Out Notes to refinance the Bridge Loan, including,
without limitation, making their respective senior management and other
representatives available (at mutually agreeable times) to participate in
meetings with prospective investors and providing such information and
assistance as the Take-Out Banks shall reasonably request during the course of
such marketing process.
5.13 EXCHANGE OF TERM NOTES
On any date after the Conversion Date, the Company will, on the 30th
Business Day following the written request (the "Exchange Request") of a holder
of Term Notes requesting the exchange of Term Notes for Exchange Notes:
(i) Execute and deliver, cause each Subsidiary Guarantor to
execute and deliver, and cause a bank or trust company acting as trustee
thereunder to execute and deliver, the Senior Subordinated Indenture, if
such Senior Subordinated Indenture has not previously been executed and
delivered;
(ii) Execute and deliver to such holders or beneficial owners in
accordance with the Senior Subordinated Indenture notes in the form
attached to the Senior Subordinated Indenture (the "Exchange Notes")
bearing a fixed interest rate equal to the Fixed Rate in exchange for such
Term Notes dated the date of the issuance of such Exchange Notes, payable
to the order of such holder or owner, as the case may be, in the same
principal amount as such Term Notes being exchanged, and cause each
Subsidiary Guarantor to endorse its guarantee thereon; and
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(iii) Execute and deliver, and cause each Subsidiary Guarantor to
execute and deliver, to such holder or owner, as the case may be, a
Registration Rights Agreement in the form of EXHIBIT V, if such
Registration Rights Agreement has not previously been executed and
delivered or, if such Registration Rights Agreement has previously been
executed and delivered and such holder or owner is not already a party
thereto, permit such holder or owner to become a party thereto.
The principal amount of the Term Notes to be exchanged pursuant to
this Section 5.13 shall be at least $5,000,000 and integral multiples of $10,000
in excess thereof. Term Notes delivered to the Company under this Section 5.13
in exchange for Exchange Notes shall be canceled by the Company and the
corresponding amount of the Term Loan deemed repaid and the Exchange Notes shall
be governed by and construed in accordance with the terms of the Senior
Subordinated Indenture.
The bank or trust company acting as trustee under the Senior
Subordinated Indenture shall at all times be a corporation organized and doing
business under the laws of the United States of America or the State of New
York, in good standing and having its principal offices in the Borough of
Manhattan, in The City of New York, which is authorized under such laws to
exercise corporate trust powers and is subject to supervision or examination by
Federal or State authority.
5.14 PAYMENTS IN U.S. DOLLARS
All payments of any Obligations to be made hereunder or under the
Notes by the Company or any other obligor with respect thereto shall be made
solely in U.S. Dollars or such other currency as is then legal tender for public
and private debts in the United States of America.
5.15 REGISTER
The Company hereby designates the Agents to serve as the Company's
agents, solely for purposes of this Section 5.15, to maintain a register (the
"Register") on which they will record the Loans made by each of the Lenders and
each repayment in respect of the principal amount of the Loans of each Lender.
Failure to make any such recordation, or any error in such recordation shall not
affect the Company's obligations in respect of such Loans. With respect to any
Lender, the transfer of the Loan Commitments of such Lender and the rights to
the principal of, and interest on, any Loan made pursuant to such Loan
Commitments
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shall not be effective until such transfer is recorded on the Register
maintained by the Agents with respect to ownership of such Loan Commitments and
Loans and prior to such recordation all amounts owing to the transferor with
respect to such Loan Commitments and Loans shall remain owing to the transferor.
The registration of assignment or transfer of all or part of any Loan
Commitments and Loans shall be recorded by the Agents on the Register only upon
the receipt by the Agents of a properly executed and delivered assignment and
assumption agreement pursuant to Section 12.2A. Coincident with the delivery of
such an assignment and assumption agreement to the Agents for acceptance and
registration of assignment or transfer of all or part of a Loan, or as soon
thereafter as practicable, the assigning or transferor Lender shall surrender
the Note evidencing such Loan, and thereupon one or more new Notes of the same
type and in the same aggregate principal amount shall be issued to the assigning
or transferor Lender and/or the new Lender.
5.16 MEZZANINE SUBORDINATED DEBT, ETC.
Big Flower shall pay interest owing on any outstanding amounts under
the Mezzanine Financing through the issuance of additional subordinated
indebtedness, rather than in cash, to the maximum extent permitted by the
Mezzanine Financing Documents.
SECTION 6 NEGATIVE COVENANTS
The Company covenants and agrees that until the satisfaction in full
of the Loans and the Notes and all other Obligations due under this Agreement it
will fully and timely perform all covenants in this Section 6.
6.1 INDEBTEDNESS
The Company shall not, and shall not cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, Incur, or remain or become
directly or indirectly liable with respect to, any Indebtedness, except for the
following ("Permitted Indebtedness"):
(i) the Company and the Subsidiary Guarantors may Incur and remain
liable with respect to the Obligations and the Guarantee Obligations;
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(ii) the Company and the Restricted Subsidiaries may Incur and
remain liable with respect to the Indebtedness under the Senior Credit
Facility; PROVIDED, HOWEVER, that the aggregate principal amount of
Indebtedness under the Senior Credit Facility shall not exceed $855,000,000
less the amount of all mandatory principal payments of term debt actually
made and permanent commitment reductions under the Senior Credit Facility
with Net Cash Proceeds of Asset Sales applied thereto as required by
Section 2.5A(ii)(a);
(iii) the Company and the Subsidiary Guarantors may Incur and remain
liable with respect to the Bridge Notes, Term Notes, Take-Out Securities
and Exchange Notes;
(iv) the Company and its Restricted Subsidiaries may become and
remain liable with respect to Interest Rate Agreements;
(v) the Company and its Restricted Subsidiaries may Incur and
remain liable with respect to Intercompany Indebtedness;
(vi) the Company and its Restricted Subsidiaries may remain liable
with respect to the Indebtedness which is existing on the Closing Date and
is described on SCHEDULE E attached hereto;
(vii) the Company and its Restricted Subsidiaries may remain liable
with respect to Indebtedness in respect of Capitalized Lease Obligations;
PROVIDED that the aggregate amount of Indebtedness incurred under this
Section 6.1(vii), Section 6.1(viii) and Section 6.1(xiii) (A) from and
after the Closing Date and on or prior to the Conversion Date, shall not
exceed $10,000,000 at any time outstanding, and (B) after the Conversion
Date, shall not exceed $40,000,000 at any time outstanding;
(viii) the Company and its Restricted Subsidiaries may become and
remain liable with respect to Indebtedness incurred to finance (a) the
purchase price of equipment, fixtures and any other similar property or the
remodeling or other improvement costs of any facility of the Company or any
of its Subsidiaries or (b) the purchase price of any Real Property Assets;
PROVIDED that the aggregate principal amount of all such Indebtedness,
together with all Indebtedness incurred under Section 6.1(vii) and Section
6.1(xiii), (A) from and after the Closing Date and on
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or prior to the Conversion Date, shall not exceed $10,000,000 at any time
outstanding and (B) after the Conversion Date, shall not exceed $40,000,000
at any time outstanding;
(ix) the Company and its Restricted Subsidiaries may become and
remain liable with respect to Indebtedness under Raw Material Hedge
Agreements;
(x) the Company and the Subsidiary Guarantors may guarantee
Indebtedness of the Company or any Restricted Subsidiary if the
Indebtedness so guaranteed is permitted under this Agreement;
(xi) the Company and the Subsidiary Guarantors may become and
remain liable with respect to other Indebtedness in an aggregate principal
amount not to exceed at any time outstanding (A) $10,000,000 prior to the
Conversion Date and (B) $35,000,000 after the Conversion Date, it being
understood that all or a portion of the Indebtedness permitted to be
incurred hereunder may be incurred under the Senior Credit Facility;
(xii) the Company and its Restricted Subsidiaries may become and
remain liable with respect to Permitted Refinancing Indebtedness;
(xiii) Restricted Subsidiaries of the Company acquired in accordance
with the terms of this Agreement may remain liable with respect to
Indebtedness existing immediately prior to the time any such entity became
a Restricted Subsidiary of the Company in an aggregate amount for all such
Restricted Subsidiaries incurred under this Section 6.1(xiii), Section
6.1(vii) and Section 6.1(viii) not to exceed (A) $10,000,000 at any time
outstanding prior to the Conversion Date and (B) $40,000,000 at any time
outstanding after the Conversion Date; PROVIDED that such Indebtedness is
not incurred in contemplation of such entity becoming a Restricted
Subsidiary of the Company;
(xiv) the Company and its Restricted Subsidiaries may incur and
remain liable with respect to Indebtedness under Currency Agreements;
(xv) the Company and its Restricted Subsidiaries may incur and
remain liable with respect to Indebtedness arising from the honoring by a
bank or other financial institution of a check, draft or other similar
instrument inadvertently
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drawn against insufficient funds in the ordinary course of business;
(xvi) the Company and its Restricted Subsidiaries may incur and
remain liable with respect to Indebtedness constituting letters of credit
and reimbursement obligations with respect to letters of credit issued in
the ordinary course of business, including, without limitation, letters of
credit in respect of workers' compensation claims or self-insurance, or
other Indebtedness with respect to reimbursement-type obligations regarding
workers' compensation claims and with respect to Indebtedness arising from
agreements providing for indemnification, adjustment of purchase price
incurred or assumed with the disposition or acquisition of any business;
(xvii) the Company and its Restricted Subsidiaries may incur and
remain liable with respect to obligations in respect of performance and
surety bonds and completion guarantees provided by the Company or any
Subsidiary of the Company in the ordinary course of business;
(xviii) the Company or any of its Restricted Subsidiaries may
guarantee obligations of the lessee under any lease pursuant to which the
Company or any of its Restricted Subsidiaries is the lessee so long as such
lease is otherwise permitted hereunder;
(xix) the Company or any of its Restricted Subsidiaries may
guarantee obligations pursuant to the Tax Sharing Agreement;
(xx) Columbine may incur Indebtedness pursuant to the Columbine
Sale so long as the Columbine Sale is consummated immediately after the
incurrence thereof; and
(xxi) in addition to the foregoing, at any time after the Conversion
Date, if no Potential Event of Default or Event of Default shall have
occurred and be continuing at the time of or as a consequence of the
incurrence of any such Indebtedness, the Company or any Subsidiary
Guarantor may incur Indebtedness if immediately before and immediately
after giving effect to the incurrence of such Indebtedness, the Fixed
Charge Coverage Ratio of the Company would be greater than 2.25 to 1.0, it
being understood that all or a portion of Indebtedness permitted to be
incurred hereunder may be incurred under the Senior Credit Facility. Once
Indebtedness is incurred pursuant to this
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paragraph, it may remain outstanding regardless of any subsequent decrease
in the Company's Fixed Charge Coverage Ratio.
Notwithstanding anything in this Agreement to the contrary,
transactions contemplated pursuant to the A/R Facility shall not be deemed to be
the incurrence of Indebtedness by the Company or by any Restricted Subsidiary.
6.2 LIENS
The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create, incur, assume or
permit to exist any Lien on or with respect to any asset now owned or hereafter
acquired by it, or assign or otherwise convey any right to receive any income or
profits therefrom, except:
(i) Permitted Encumbrances;
(ii) Liens on equipment, fixtures and other similar property of the
Company and any of its Subsidiaries, in each case securing Indebtedness
described in Sections 6.1(vii) and 6.1(viii); PROVIDED that such Liens
shall extend only to equipment, fixtures and other similar property so
financed (and improvements or attachments thereto) and the proceeds
thereof;
(iii) Liens securing Indebtedness permitted under Sections
6.1(xiii), which Liens existed prior to the time the entity which incurred
such Indebtedness became a Subsidiary of the Company; PROVIDED that such
Liens were not incurred in contemplation of the acquisition of such
Subsidiary of the Company and such Liens extend to or cover only the
property and assets of such entity which were covered by such Liens and
which were owned by such entity, in each case at the time such entity
became a Subsidiary of the Company (and improvements or attachments
thereto);
(iv) Liens securing Interest Rate Agreements, Currency Agreements
and Raw Material Hedge Agreements; and
(v) the replacement, extension or renewal of any Lien permitted by
this Section 6.2 upon or in the same property subject to such Lien and as
security for the same obligations or any refinancings thereof to the extent
such refinancings are permitted under Section 6.1; PROVIDED that such Lien
does not extend to or cover any property
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other than the property covered by such Lien immediately prior to such
replacement, extension or renewal of such Lien (and improvements or
attachments thereto) and the principal of the obligations secured thereby
is not increased.
6.3 RESTRICTED PAYMENTS
(a) The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, (i) declare or pay any
dividend, or make any distribution, on any Capital Stock of the Company (other
than dividends or distributions payable solely in Qualified Capital Stock of the
Company), (ii) purchase, redeem or otherwise acquire or retire for value any of
the Company's Capital Stock, or any warrants, rights or options to acquire
shares of any class of such Capital Stock or (iii) make any principal payment
on, purchase, defease, redeem, prepay, or otherwise acquire or retire for value,
other than any scheduled final maturity, scheduled repayment or scheduled
sinking fund payment, any Subordinated Indebtedness or Pari Passu Indebtedness
of the Company or any Subsidiary Guarantor (any such dividend, distribution,
purchase, redemption, acquisition, retirement, defeasance or prepayment set
forth in clauses (i), (ii) and (iii) above, a "Restricted Payment").
(b) Notwithstanding clause (a) above and (c) below (once clause
(c) becomes operative), if no Potential Event of Default or Event of Default
shall have occurred and be continuing or shall be caused as a consequence
thereof, the provisions set forth in the immediately preceding paragraph will
not prevent (1) the acquisition of any shares of Capital Stock of the Company or
the repurchase, redemption or other repayment of any Subordinated Indebtedness
or Pari Passu Indebtedness of the Company or any Subsidiary Guarantor in
exchange for or solely out of the proceeds of the substantially concurrent sale
(other than to a Subsidiary of the Company) of shares of Qualified Capital Stock
of the Company; (2) the repurchase, redemption or other repayment of any
Subordinated Indebtedness or Pari Passu Indebtedness of the Company or any
Subsidiary Guarantor in exchange for or solely out of the proceeds of the
substantially concurrent sale (other than to a Subsidiary of the Company) of
Subordinated Indebtedness or Pari Passu Indebtedness of the Company or such
Subsidiary Guarantor with a Weighted Average Life to Maturity equal to or
greater than the then remaining Weighted Average Life to Maturity of the
Subordinated Indebtedness or Pari Passu Indebtedness repurchased, redeemed or
repaid; (3) the making of distributions, loans or advances in an
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amount not to exceed $5.0 million plus any other amounts of corporate overhead
expenses payable by Big Flower which were deducted in calculating the
Consolidated Net Income of the Company in accordance with GAAP per annum
sufficient to permit Big Flower to pay the ordinary operating expenses of Big
Flower (including, without limitation, directors fees, indemnification
obligations, professional fees and expenses) related to Big Flower's ownership
of Capital Stock of the Company (other than to the Equity Investors or their
Affiliates); (4) the payment by the Company of cash dividends to Big Flower in
the amounts and at the times of any payment by Big Flower in respect of taxes,
PROVIDED that (x) the amount of cash dividends paid pursuant to this clause (4)
to enable Big Flower to pay Federal and state income taxes at any time shall not
exceed the lesser of (A) the amount of such Federal and state income taxes owing
by Big Flower at such time for the respective period and (B) the amount of such
Federal and state income taxes that would be owing by the Company and its
Subsidiaries on a consolidated basis for such period if determined without
regard to Big Flower's ownership of the Company and (y) any refunds shall
promptly be returned by Big Flower to the Company; (5) payments for the purpose
of and in an amount equal to the amount required to permit Big Flower to redeem
or repurchase Big Flower's common equity or options in respect thereof, in each
case in connection with the repurchase, put or call provisions under employee
stock option, management subscription, retained share or stock purchase
agreements or other agreements to compensate management employees; PROVIDED that
such redemptions or repurchases pursuant to this clause (5) shall not exceed (a)
prior to the Conversion Date, the sum of (i) $4.0 million plus (ii) $2.5
million, PROVIDED any amount pursuant to this clause (ii) is expended on or
after the 180th day after the Closing Date plus (iii) $4.5 million, provided
such amount is expended on or after the 364th day after the Closing Date
(provided that the 180 day and 364 day restriction shall not apply to any
amounts provided in this clause (iii) or the immediately preceding clause (ii)
if such amounts shall become payable by virtue of the resignation of one or more
employee managers) and (b) after the Conversion Date, $10.0 million per annum;
PROVIDED that amounts not used pursuant to this clause (5) in prior years shall
not be carried forward for use in future years; (6) so long as no Potential
Event of Default or Event of Default shall have occurred and be continuing,
payments not to exceed $500,000 in the aggregate to enable Big Flower to make
payments to holders of its Capital Stock in lieu of issuance of fractional
shares of its Capital Stock; (7) cash dividends to Big Flower, of which Big
Flower in turn shall utilize the full amount for the purpose of paying (and so
long as Big Flower by
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the immediately succeeding Business day, utilizes the full amount of such cash
dividends to pay) interest as and when due on the Convertible Subordinated
Debentures then outstanding to BF Trust, which in turn shall utilize the full
amount of such interest payments on the day of its receipt thereof to pay
accrued dividends then owing with respect to Convertible QUIPS then outstanding,
PROVIDED that (x) the amount of cash dividends payable to Big Flower pursuant to
this clause (7) shall not exceed the amounts necessary to make such dividend
payments owing with respect to the Convertible QUIPS, (y) no such dividend shall
be paid at any time when the payment of cash interest on the Convertible
Subordinated Debentures is not permitted to be made pursuant to the
subordination provisions applicable thereto and (z) no such dividend may be paid
at any time following the occurrence and during the continuance of any Potential
Event of Default or Event of Default or if a Potential Event of Default or Event
of Default would exist immediately after giving effect to the payment of such
dividend; (8) on the Closing Date, the Company may pay cash dividends to Big
Flower with the proceeds of loans from the Senior Credit Facility, of which Big
Flower in turn shall utilize the full amount for the purpose of making (and so
long as Big Flower promptly utilizes the full amount of such cash dividends to
make) Initial Convertible QUIPS Conversion Payments in accordance with the
requirements of the Senior Credit Facility; (9) dividends to Big Flower solely
from the proceeds of revolving loans under the Senior Credit Facility, of which
Big Flower in turn shall utilize the full amount for the purpose of making (and
so long as Big Flower, by the immediately succeeding Business Day, utilizes the
full amount of such cash dividends to make) Post-Closing Convertible QUIPS
Conversion Payments to holders of Convertible QUIPS who have elected to convert
their Convertible QUIPS into the right to receive Post-Closing Convertible QUIPS
Conversion Payments pursuant to a Permitted Conversion, in each case at such
time and in such amounts as are required by the relevant Convertible QUIPS
Documents, PROVIDED that no such dividend may be paid at any time following the
occurrence and during the continuance of any Potential Event of Default or Event
of Default or if a Potential Event of Default or Event of Default would exist
immediately after giving effect to the payment of such dividend; (10) dividends
to Big Flower, of which Big Flower in turn shall utilize the full amount for the
purpose of paying (and so long as Big Flower, by the immediately succeeding
Business Day, utilizes the full amount of such cash dividends to pay) cash
interest as and when due on amounts then outstanding pursuant to the Mezzanine
Financing, PROVIDED that no such dividend shall be paid at any time following
the occurrence and during the continuance of any Potential Event of Default
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or Event of Default or if a Potential Event of Default or Event of Default would
exist immediately after giving effect to the payment of such dividend; (11) the
payment of any dividend within 60 days after the date of declaration thereof, if
at the date of declaration thereof such payment would have complied with the
provisions of this Agreement; and (12) payments made to the Equity Investors
allowed pursuant to Section 6.8; PROVIDED, HOWEVER, that with respect to
payments made pursuant to clauses (3) and (4) of this paragraph (b) payments can
be made without regard to whether a Potential Event of Default or Event of
Default is then in existence or shall have occurred and be continuing as a
consequence thereof.
(c) Notwithstanding clause (a) above, subsequent to the Conversion
Date, if (i) no Potential Event of Default or Event of Default shall have
occurred and be continuing or shall be caused as a consequence thereof and (ii)
the Company could Incur $1.00 of additional Indebtedness in compliance with
clause (xxi) of Section 6.1 hereof, the Company may make Restricted Payments
subsequent to the Conversion Date not in excess of the sum of (x) 25% of the
cumulative Consolidated Net Income of the Company, if any, earned subsequent to
the Closing Date and on or prior to the date such Restricted Payment occurs (the
"Reference Date") (treating such period as a single accounting period); plus (y)
100% of the aggregate net cash proceeds received by the Company from any Person
(other than a Subsidiary of the Company) from the issuance and sale subsequent
to the Conversion Date and on or prior to the Reference Date of Qualified
Capital Stock of the Company; plus (z) without duplication of any amounts
included in the immediately preceding clause (y), 100% of the aggregate net cash
proceeds of any equity contribution received by the Company from a holder of the
Company's Capital Stock subsequent to the Conversion Date and on or prior to the
Reference Date.
In determining the aggregate amount expended for Restricted Payments
in accordance with paragraph (c) above, amounts expended under clauses (5), (10)
and (11) of paragraph (b) of this Section 6.3 shall be included.
6.4 INVESTMENTS; JOINT VENTURES
The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, make or own any Investment
in any Person, including any Joint Venture (other than Permitted Investments),
except:
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(i) the Company and its Subsidiaries may continue to own the
Investments owned by them as of the Closing Date (after giving effect to
the Transactions);
(ii) the Company and its Restricted Subsidiaries may accept
promissory notes received in consideration of, or the deferral of a portion
of the sales price accepted with respect to, any Asset Sale permitted under
Section 6.13;
(iii) the Company and its Restricted Subsidiaries may guarantee
Indebtedness permitted under Section 6.1;
(iv) the Company may make loans and advances to the Management
Participants on the Closing Date to enable the Management Participants to
purchase common stock of Big Flower on the same terms as the Equity
Investors, so long as the aggregate principal amount thereof at any time
outstanding (determined without regard to any write-downs or write-offs
thereof) shall not exceed $6,500,000;
(v) the Company and its Restricted Subsidiaries may make loans and
advances to employees of the Company and its Subsidiaries not in excess of
$5,000,000 at any one time outstanding prior to the Conversion Date and
$10,000,000 at any one time outstanding after the Conversion Date; and
(vi) the Company and its Restricted Subsidiaries may make and own
Investments received in connection with the bankruptcy of suppliers and
customers or received pursuant to a plan of reorganization of any supplier
or customer, in each case in settlement of delinquent obligations or
disputes with such suppliers or customers.
6.5 SENIOR SUBORDINATED INDEBTEDNESS
Neither the Company nor any of the Subsidiary Guarantors shall,
directly or indirectly, (x) prior to the Conversion Date, Incur any Indebtedness
(other than the Notes, the Exchange Notes and the Take-Out Securities) that is
by its terms (or by the terms of any agreement governing such Indebtedness)
subordinated in right of payment to any other Indebtedness of the Company or of
such Subsidiary Guarantor, as the case may be, unless such Indebtedness is also
by its terms (or by the terms of any agreement governing such Indebtedness) made
expressly subordinate to the Loans and the Notes and the Guarantees to the same
extent and in the same manner as such Loans and Notes and Guarantees are
subordinated to the Senior Credit
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Facility and (y) after the Conversion Date, Incur any Indebtedness that by its
terms would rank senior in right of payment to the Notes or any Guarantee, as
the case may be, and would rank subordinate in right of payment to any other
Indebtedness of the Company or of such Subsidiary Guarantor, as the case may be.
6.6 RESTRICTION ON FUNDAMENTAL CHANGES
(a) Prior to the Conversion Date, the Company shall not, nor shall
it cause or permit any of the Subsidiary Guarantors to (i) enter into any
transaction, or series of related transactions, of merger, amalgamation,
consolidation or combination, (ii) consolidate, liquidate, wind up or dissolve
itself (or suffer any liquidation or dissolution), (iii) directly or indirectly
convey, sell, lease, sublease, transfer or otherwise dispose of, in one
transaction or in a series of transactions, in the case of this clause (iii),
all or substantially all of its business, property or assets, whether now owned
or hereafter acquired, or (iv) consummate any acquisition of any capital stock
or assets of any Person, except:
(i) in connection with the Recapitalization;
(ii) the Company or any Subsidiary Guarantor may merge with an
Affiliate incorporated solely for the purposes of reincorporating the
Company or such Subsidiary Guarantor in another jurisdiction;
(iii) any Subsidiary Guarantor may be merged, amalgamated,
consolidated or combined with or into the Company or any Subsidiary
Guarantor or be liquidated, wound up or dissolved, or all or substantially
all of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or in a series of
transactions, to the Company or to any Subsidiary Guarantor; PROVIDED,
HOWEVER, that (A) no Potential Event of Default or Event of Default shall
have occurred and be continuing or would result therefrom, (B) in the case
of such a merger, amalgamation, consolidation or combination of the Company
and a Subsidiary Guarantor, the Company shall be the continuing or
surviving corporation, and (C) the surviving entity (I) continues to be
bound as such under this Agreement or the Guarantee of such Subsidiary
Guarantor, as the case may be, and (II) executes and delivers to the Agents
immediately upon consummation of such transaction a written confirmation or
acknowledgment to such effect, in form and substance satisfactory to
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the Agents, together with evidence of appropriate corporate power,
authority and action and a written legal opinion in form and substance
satisfactory to the Agents to the effect that this Agreement and such
Guarantee continue to be a legal, valid and binding obligation of such
entity, enforceable against such entity in accordance with its terms
(subject to customary exceptions in respect of bankruptcy, insolvency and
other equitable remedies), and with respect to such other matters as the
Agents may reasonably request; and
(iv) the Company or any Restricted Subsidiary may acquire the
capital stock or assets of any Person either through merger or acquisition
of capital stock or assets so long as the total consideration for such
acquisition pursuant to this Section 6.6(a)(iv) shall not exceed $10.0
million and the total consideration for all of such acquisitions pursuant
to this Section 6.6(a)(iv) shall not exceed $30.0 million in the aggregate.
(b) After the Conversion Date, neither the Company nor any
Subsidiary Guarantor will consolidate or merge with or into, or sell, lease,
convey or otherwise dispose of all or substantially all of its assets
(including, without limitation, by way of liquidation or dissolution) or assign
any of its obligations hereunder, under the Notes or under the Guarantees (as an
entirety or substantially in one transaction or a series of related
transactions) to, any Person or permit any of its Restricted Subsidiaries to do
any of the foregoing (in each case other than with the Company or another
Subsidiary Guarantor) unless: (i) the Person formed by or surviving such
consolidation or merger (if other than the Company or such Subsidiary Guarantor,
as the case may be), or to which such sale, lease, conveyance or other
disposition or assignment will be made (collectively, the "Successor"), is a
solvent corporation or other legal entity organized and existing under the laws
of the United States or any state thereof or the District of Columbia, and the
Successor assumes by supplemental agreement in a form reasonably satisfactory to
the Agents all of the obligations of the Company or such Subsidiary Guarantor,
as the case may be, under the Notes or such Subsidiary Guarantor's Guarantee, as
the case may be, and this Agreement, (ii) immediately after giving effect to
such transaction, no Potential Event of Default or Event of Default has occurred
and is continuing and (iii) immediately after giving effect to such transaction
and the use of any net proceeds therefrom, on a PRO FORMA basis, the Company or
the Successor (in the case of a transaction involving the Company), as the case
may be, would be entitled to
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Incur at least $1.00 of additional Indebtedness under the Consolidated Fixed
Charge Coverage Ratio test set forth in clause (xxi) of Section 6.1 hereof. The
foregoing provisions shall not apply to a transaction involving the
consolidation or merger of a Subsidiary Guarantor with or into another Person,
or the sale, lease, conveyance or other disposition of all or substantially all
of the assets of such Subsidiary Guarantor, that results in such Subsidiary
Guarantor being released from its Subsidiary Guarantee as provided under Section
10.6 hereof.
(c) Upon any consolidation or merger, or any sale, lease,
conveyance or other disposition of all or substantially all of the assets of the
Company or any assignment of its obligations under this Agreement in accordance
with Section 6.6(b) hereof, upon assumption by the successor corporation, by
supplemental agreement, executed and delivered to the Agents and satisfactory in
form to the Agents, of the due and punctual payment of the principal of,
premium, if any, and interest on all of the Notes and the due and punctual
performance and observance of all the covenants and conditions of this Agreement
to be performed or observed by the Company, the Successor formed by such
consolidation or into or with which the Company is merged or to which such sale,
lease, conveyance or other disposition or assignment is made will succeed to,
and be substituted for, and may exercise every right and power of, the Company
under this Agreement with the same effect as if such Successor has been named as
the Company herein and such Successor may cause to be signed and may issue in
its own name or in the name of the Company, any or all Notes issuable hereunder
and the predecessor Company in the case of a sale, lease, conveyance or other
disposition or assignment, will be released from all obligations under the Loan
Documents.
6.7 LIMITATION ON DIVIDEND AND OTHER PAYMENT RESTRICTIONS
AFFECTING RESTRICTED SUBSIDIARIES
The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, create or otherwise cause or
permit or suffer to exist or become effective any encumbrance or restriction on
the ability of any Subsidiary of the Company to (a) pay dividends or make any
other distributions on its Capital Stock or any other interest or participation
in, or measured by, its profits; (b) make loans or advances or pay any
Indebtedness or other obligation owed to the Company or to any Restricted
Subsidiary of the Company; or (c) transfer any of its property or assets to the
Company or to any Restricted Subsidiary of the Company (any such restriction or
encumbrance a "Payment Restriction"), except for
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such encumbrances or restrictions existing under or by reason of any
restrictions contained in (i) the Loan Documents, the Senior Subordinated
Indenture and any instrument governing the Take-Out Securities or Exchange Notes
to the extent Incurred in accordance with this Agreement; (ii) each of the
Senior Credit Facility and the A/R Facility; (iii) the Indebtedness pertaining
to a Subsidiary of the Company that is not a Subsidiary of the Company on the
Closing Date in existence at the time such Subsidiary becomes a Subsidiary of
the Company; PROVIDED, HOWEVER, that any such Indebtedness was not incurred as a
result of, in connection with or in anticipation of the transaction pursuant to
which such entity becomes a Subsidiary of the Company and it does not apply to
any Person, or the properties of assets of any Person, other than the Subsidiary
acquired and such Indebtedness is otherwise permitted to be incurred pursuant to
Section 6.1; (iv) secured Indebtedness otherwise permitted to be incurred
pursuant to Sections 6.1 and 6.2 that limits the right of the debtor to dispose
of the assets securing such Indebtedness; (v) customary non-assignment
provisions of any contract or of any lease governing a leasehold interest of any
Subsidiary of the Company; (vi) applicable law; (vii) agreements existing on the
Closing Date; (viii) customary non-assignment provisions entered into in the
ordinary course of business and consistent with past practices; (ix) the terms
of purchase money obligations for property acquired in the ordinary course of
business, but only to the extent that such purchase money obligations restrict
or prohibit the transfer of the property so acquired; (x) any encumbrance or
restriction with respect to a Subsidiary imposed pursuant to an agreement which
has been entered into for the sale or disposition of all or substantially all
the Capital Stock or assets of such Subsidiary; (xi) any instrument that
Refinances any Indebtedness; PROVIDED, HOWEVER, that the provisions relating to
any such encumbrance or restriction in any such instrument are not materially
less favorable to the Company or its Subsidiaries or the Lenders than those
contained in the agreements governing the Indebtedness that was refinanced; and
(xii) an agreement governing Indebtedness (including the Senior Credit Facility)
permitted to be incurred pursuant to Sections 6.1(xi) and (xxi) PROVIDED that
provisions relating to such encumbrance or restriction contained in such
Indebtedness are no less favorable to the Company in any material respect as
determined by the Board of Directors of the Company in its reasonable and good
faith judgment than the provisions contained in the Senior Credit Facility as in
effect on the Closing Date.
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6.8 TRANSACTIONS WITH SHAREHOLDERS AND AFFILIATES
(a) The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with, or for the
benefit of, any Affiliate of the Company (each, an "Affiliate Transaction")
other than (x) Permitted Affiliate Transactions permitted under paragraph (b)
below and (y) Affiliate Transactions on terms that are no less favorable than
those that might reasonably have been obtained in a comparable transaction at
such time on an arm's-length basis from a Person that is not an Affiliate of the
Company or such Restricted Subsidiary. All Affiliate Transactions (or a series
of related Affiliate Transactions which are part of a common plan) involving
aggregate payments or other property with a fair market value in excess of
$5,000,000 shall be approved by a majority of the disinterested members of the
Board of Directors of the Company, such approval to be evidenced by a Board
Resolution stating that such Board of Directors has determined that such
transaction complies with the foregoing provisions. If the Company or any
Subsidiary of the Company enters into an Affiliate Transaction (or a series of
related Affiliate Transactions which are part of a common plan) that involves an
aggregate fair market value of more than $15,000,000 prior to the Conversion
Date and $30,000,000 after the Conversion Date, the Company or such Restricted
Subsidiary, as the case may be, shall, prior to the consummation thereof, obtain
a favorable opinion as to the fairness of such transaction or series of related
transactions to the Company or the relevant Restricted Subsidiary, as the case
may be, from a financial point of view, from an Independent Financial Advisor
and file the same with the Agents.
(b) The foregoing restrictions shall not apply to the following
"Permitted Affiliate Transactions": (i) any transaction exclusively between the
Company and any of its Restricted Subsidiaries or exclusively between any of the
Company's Restricted Subsidiaries, (ii) reasonable and customary fees paid to
members of the Board of Directors of the Company, (iii) reasonable and customary
fees and compensation paid to, and indemnity provided on behalf of, officers,
directors, consultants or employees of Big Flower or any of its Restricted
Subsidiaries (other than the THL Affiliates and the ECP Affiliates, which are
set forth in clauses (vi), (vii) and (viii) below), as determined by the Board
of Directors of the Company or any such Restricted Subsidiary or the senior
management thereof in good faith, including, without limitations, issuances of
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stock, payment of bonuses and other transactions pursuant to employment or
compensation agreements, stock option agreements, indemnification agreements and
other arrangements in effect on the Closing Date or substantially similar
thereto, (iv) any agreement as in effect as of the Closing Date or any amendment
thereto or any transaction contemplated thereby (including pursuant to any
amendment thereto) in any replacement agreement thereto so long as any such
amendment or replacement agreement is not more disadvantageous to the Lenders in
any material respect than the original agreement as in effect on the Closing
Date, (v) Restricted Payments permitted by this Agreement, (vi) the payment, on
a quarterly basis, of management fees to (A) THL and/or the THL Affiliates not
to exceed $250,000 in any fiscal quarter and (B) ECP and/or the ECP Affiliates
not to exceed $62,500 in any fiscal quarter, in each case in accordance with the
management agreement between THL, the THL Affiliates, ECP and/or the ECP
Affiliates and Big Flower, (vii) the reimbursement of THL, the THL Affiliates,
ECP and/or the ECP Affiliates for the reasonable out-of-pocket expenses incurred
by them in connection with performing management services to Big Flower and its
Restricted Subsidiaries, and (viii) the payment of one-time fees to THL, the THL
Affiliates, ECP and/or the ECP Affiliates in connection with acquisitions
permitted by this Agreement, such fees to be payable at the time of each such
acquisition and not to exceed (for all fees paid pursuant to this clause (viii))
2.5% of the aggregate consideration paid by Big Flower and its Restricted
Subsidiaries for any such acquisition. Notwithstanding the foregoing, prior to
the Conversion Date the Company shall not pay any management or other fees or
expenses permitted hereunder to the Equity Investors or their Affiliates at a
time when a Potential Event of Default or an Event of Default exists and after
the Conversion Date the Company shall only pay one-half of any such fees or
expenses at a time when a Potential Event of Default or an Event of Default
exists; PROVIDED, that such unpaid fees and/or expenses shall be paid at such
time as such Potential Event of Default or Event of Default shall have been
cured or waived.
6.9 SUBSIDIARY STOCK
Except for any sale of 100% of the Capital Stock or other equity
securities of any of the Company's Restricted Subsidiaries in compliance with
the provisions of Section 6.6, the Company will not and will not permit any of
its Restricted Subsidiaries to directly or indirectly sell or dispose of any
shares of Capital Stock or other equity securities of any of its Restricted
Subsidiaries, except (i) to qualify directors if required by applicable law,
(ii) to the Company or to a Wholly-Owned
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Restricted Subsidiary of the Company or (iii) Asset Sales made in compliance
with this Agreement.
6.10 BUSINESS ACTIVITIES
The Company shall not, nor shall the Company cause or permit any of
its Restricted Subsidiaries to, directly or indirectly, materially alter the
nature of the consolidated business of the Company and its Restricted
Subsidiaries from that in existence immediately after giving effect to the
Transactions or similar or related businesses.
6.11 AMENDMENTS OR WAIVERS OF CERTAIN DOCUMENTS
The Company shall not, nor shall it cause or permit any of its
Restricted Subsidiaries to, directly or indirectly, enter into any amendment,
modification, supplement or waiver with respect to the Senior Credit Facility as
in effect on the Closing Date that would modify any of the provisions thereof in
respect of issuances of Take-Out Securities, the Term Notes or the Exchange
Notes in a manner materially adverse to the Lenders.
6.12 REFINANCING OF THE LOANS IN PART
The Company shall not, nor shall the Company cause or permit any of
its Restricted Subsidiaries to, Incur any Indebtedness to Refinance the Loans in
part other than the Take-Out Securities or the Demand Take-Out Notes, unless the
terms, conditions, covenants, events of default and other provisions in respect
of the instruments evidencing the Indebtedness Incurred to Refinance the Loans
in part shall have been approved in writing by the Agents (which approval shall
not be unreasonably delayed or withheld) prior to the Incurrence of any such
Indebtedness.
6.13 ASSET SALES
(a) Prior to the Conversion Date, the Company shall not, nor shall
it cause or permit any of its Restricted Subsidiaries to, directly or
indirectly, consummate any Asset Sale other than an Asset Sale of (x) Public
Internet Investments, provided that in connection with such Asset Sale of a
Public Internet Investment prior to the Conversion Date, (1) the Company or such
Restricted Subsidiary, as the case may be, receives consideration therefor at
the time thereof at least equal to the fair market value of such Internet
Investment, (2) at least 75% of the consideration received therefor by the
Company
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or such Restricted Subsidiary is in the form of cash or Cash Equivalents and (3)
all of the Net Cash Proceeds in respect thereof are applied by the Company or a
Restricted Subsidiary of the Company in accordance with Section 2.5A(ii)(a) and
(y) the strategic database services division of Webcraft, Inc.
(b) After the Conversion Date, the Company shall not, nor shall it
cause or permit any of its Restricted Subsidiaries to, directly or indirectly,
consummate any Asset Sale unless (1) the Company or such Restricted Subsidiary,
as the case may be, receives consideration therefor at the time thereof at least
equal to the fair market value at the time of such Asset Sale of the property,
assets or stock that is the subject of such Asset Sale, (2) at least 75% of the
consideration received therefor by the Company or such Restricted Subsidiary is
in the form of cash or Cash Equivalents, (3) all of the Net Cash Proceeds in
respect thereof are applied by the Company or a Restricted Subsidiary of the
Company in accordance with Section 2.5A(ii)(a), (4) the Net Cash Proceeds from
any single Asset Sale under this Section 6.13(b) do not exceed $75,000,000 and
(5) the Net Cash Proceeds from all such Asset Sales permitted under this Section
6.13(b) do not exceed $150,000,000.
6.14 ADDITIONAL GUARANTEES
The Company will require each of its Wholly-Owned Restricted
Subsidiaries, at the time of creation or the acquisition of the same, other than
Foreign Subsidiaries, any Receivables Subsidiary, RGP and Treasure Chest of
Nevada, to execute a Guarantee of the Obligations of the Company under this
Agreement, to the extent that such Wholly-Owned Restricted Subsidiary is a
borrower or guarantor under the Senior Credit Facility. Thereafter, such
Subsidiary shall be a Subsidiary Guarantor for all purposes of this Agreement.
SECTION 7 EVENTS OF DEFAULT
If any of the following conditions or events ("Events of Default")
shall occur and be continuing:
7.1 FAILURE TO MAKE PAYMENTS WHEN DUE
Failure to pay (i) any installment of principal of the Loans when due
and payable, whether at stated maturity, by acceleration, by notice of
prepayment or otherwise (whether or
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not such payment is prohibited by Section 8 or Section 11), or (ii) any interest
on the Loans when due and payable and such failure continues for a period of 30
days (whether or not such payment is prohibited by Section 8 or Section 11).
7.2 DEFAULT IN OTHER AGREEMENTS
Failure of the Company or any of its Restricted Subsidiaries to pay at
final maturity (giving effect to any applicable grace period and extensions
thereof) the principal of any Indebtedness of the Company or of any of its
Material Subsidiaries (other than Indebtedness referred to in Section 7.1) or
the acceleration of the final stated maturity of any such Indebtedness (which
acceleration is not rescinded, annulled or otherwise cured within 30 days of
receipt by the Company or such Restricted Subsidiary of notice of any such
acceleration) if the aggregate principal amount of such Indebtedness, together
with the principal amount of any other such Indebtedness in default for failure
to pay principal at final maturity or which has been accelerated (in each case
with respect to which the 30-day period described above has elapsed), aggregates
$20,000,000 or more at any time.
7.3 BREACH OF CERTAIN COVENANTS
Failure of the Company to perform or comply with any covenant, term or
condition contained in Section 2.5A(ii), 2.5A(iv) or 6.6 and such default shall
not have been remedied or waived in accordance with this Agreement within 30
days after the date of written notice specifying the default (and demanding that
such default shall be remedied) from the holder or holders of not less than 25%
in aggregate principal amount of the Loans then outstanding.
7.4 OTHER DEFAULTS UNDER AGREEMENT OR LOAN DOCUMENTS
The Company shall default in the performance of or compliance with any
covenant, term or condition contained in this Agreement or the other Loan
Documents (other than those covered by Section 7.1, 7.3 or 7.9) and such default
shall not have been remedied or waived in accordance with this Agreement within
60 days after the date of written notice specifying the default (and demanding
that such default be remedied) from the holder or holders of not less than 25%
in aggregate principal amount of the Loans then outstanding.
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7.5 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF CUSTODIAN, ETC.
A court of competent jurisdiction enters a Bankruptcy Order under any
Bankruptcy Law that:
(A) is for relief against the Company or any Material Subsidiary
in an involuntary case or proceeding, or
(B) appoints a Custodian of the Company or any Material Subsidiary
for all or substantially all of its properties, or (C) orders the
liquidation of the Company or any Material Subsidiary,
and in each case the order or decree remains unstayed and in effect for 60
consecutive days.
7.6 VOLUNTARY BANKRUPTCY; APPOINTMENT OF CUSTODIAN, ETC.
The Company or any Material Subsidiary pursuant to or within the
meaning of any Bankruptcy Law:
(A) commences a voluntary case or proceeding, or
(B) consents to the entry of a Bankruptcy Order for relief against
it in an involuntary case or proceeding, or
(C) consents to the appointment of a Custodian of it or for all or
substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors or
files a proposal or scheme of arrangement involving the rescheduling or
composition of its indebtedness, or
(E) consents to the filing of a petition in bankruptcy against it.
7.7 JUDGMENTS AND ATTACHMENTS
Any money judgment, writ or warrant of attachment, or similar process
involving in any individual case or in the aggregate at any time an amount in
excess of $20,000,000 (to the extent not covered by third-party insurance as to
which the insurance company has acknowledged coverage) shall be entered or
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filed against the Company or any of its Restricted Subsidiaries and shall remain
undischarged, unvacated, unbonded or unstayed for a period of 60 consecutive
days.
7.8 GUARANTEE
(i) Any Guarantee of a Material Subsidiary shall cease to be in
full force or effect (other than by reason of release in accordance with its
express terms), shall be declared to be null and void and unenforceable or shall
be found to be invalid, or (ii) any Subsidiary Guarantor that is a Material
Subsidiary shall deny or disaffirm such Subsidiary Guarantor's obligations under
its Guarantee (other than by reason of release in accordance with the terms of
this Agreement.)
7.9 FORECLOSURE
At any time prior to the Conversion Date, the Agents under the Senior
Credit Facility or any other party entitled to act thereunder commences judicial
proceedings to foreclose on the collateral securing the Senior Credit Facility
or exercises any right under applicable law or any instrument evidencing a
security interest or other encumbrance in respect of such collateral to take
ownership or effect the transfer of such collateral in lieu of foreclosure.
7.10 CHANGE OF CONTROL ON OR PRIOR TO THE CONVERSION DATE
There occurs a Change of Control on or prior to the Conversion Date.
THEN (i) upon the occurrence and during the continuation of any Event
of Default described in the foregoing Section 7.5 or 7.6 with respect to the
Company, all of the unpaid principal amount of and accrued interest on the Loans
and all other outstanding Obligations shall automatically become immediately due
and payable, without presentment, demand, protest or other requirements of any
kind, all of which are hereby expressly waived by the Company, and the
commitments of the Lenders hereunder shall thereupon terminate, and (ii) upon
the occurrence and during the continuation of any Event of Default not referred
to in clause (i), the Agents shall, upon written notice of the holder or holders
of at least 25% in aggregate principal amount of the Loans then outstanding, by
written notice to the Company and the Representative under the Senior Credit
Facility specifying the respective Event of Default and that it is a "notice of
acceleration" (the "Acceleration Notice"), declare
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all of the unpaid principal amount of and accrued interest on the Loans and all
other outstanding Obligations to be, and the same (x) shall forthwith become,
due and payable, or (y) if there are any amounts outstanding under the Senior
Credit Facility, shall become immediately due and payable upon the first to
occur of an acceleration under the Senior Credit Facility or five business days
after receipt by the Company and the Representative under the Senior Credit
Facility of such Acceleration Notice but only if such Event of Default is then
continuing, and the obligations of the Lenders hereunder shall thereupon
terminate. Nevertheless, if at any time after acceleration of the maturity of
the Loans, the Company shall pay all arrears of interest and all payments on
account of the principal thereof which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement or the Notes) and all
Events of Default and Potential Events of Default (other than non-payment of
principal of and accrued interest on the Loans and the Notes due and payable
solely by virtue of acceleration) shall be remedied or waived pursuant to
Section 12.6, then the Agents shall, upon written notice of the holders of at
least a majority in aggregate principal amount of the Loans then outstanding, by
written notice to the Company rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Potential Event of Default or impair any right consequent thereon.
SECTION 8 SUBORDINATION
8.1 SECURITIES SUBORDINATED TO SENIOR INDEBTEDNESS
Anything herein to the contrary notwithstanding, the Company, for
itself and its successors, and each Lender agrees that the payment of all
Obligations owing to the Lenders is subordinated, to the extent and in the
manner provided in this Section 8, to the prior payment in full in cash or Cash
Equivalents, or such payment duly provided for to the satisfaction of the
holders of Senior Indebtedness, of all Senior Indebtedness Obligations
(including the Senior Indebtedness Obligations with respect to the Senior Credit
Facility, whether outstanding on the Closing Date or thereafter incurred).
This Section 8 shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, Senior Indebtedness, and such provisions
are made for the benefit of the holders of Senior Indebtedness and such holders
are made
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obligees hereunder and any one or more of them may enforce such provisions.
8.2 SUSPENSION OF PAYMENT WHEN SENIOR INDEBTEDNESS IS IN DEFAULT
(a) If any default occurs and is continuing in the payment when
due, whether at maturity, upon any redemption, by declaration or otherwise, of
any principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Senior Indebtedness
(including, without limitation, guarantees of the foregoing items which
constitute Senior Indebtedness) (a "Payment Default"), then no payment or
distribution of any kind or character shall be made by or on behalf of the
Company or any other Person on its or their behalf with respect to any
Obligations or to acquire any of the Loans for cash or property or otherwise
until such Payment Default (and all other Payment Defaults) shall have been
cured or waived in accordance with the terms of the documentation governing the
respective Senior Indebtedness or ceased to exist or all Senior Indebtedness
with respect to which any Payment Default has occurred and is continuing shall
have been discharged or paid in full in cash or Cash Equivalents.
(b) If any event of default (other than a Payment Default) occurs
and is continuing with respect to any Designated Senior Indebtedness (as such
event of default is defined in the instrument creating or evidencing such
Designated Senior Indebtedness) permitting the holders of such Designated Senior
Indebtedness then outstanding to accelerate the maturity thereof (a "Non-payment
Default"), and if the Representative for the respective issue of Designated
Senior Indebtedness gives notice of the event of default to the Agents stating
that such notice is a payment blockage notice (a "Payment Blockage Notice"),
then during the period (the "Payment Blockage Period") beginning upon the
delivery of such Payment Blockage Notice and ending on the earlier of the 180th
day after such delivery and the date on which (x) all events of default with
respect to all Designated Senior Indebtedness have been cured or waived or cease
to exist, (y) all Designated Senior Indebtedness with respect to which any such
event of default has occurred and is continuing is discharged or paid in full in
cash or Cash Equivalents, or (z) the Agents receive notice thereof from the
Representative for the respective issue of Designated Senior Indebtedness
terminating the Payment Blockage Period, neither the Company nor any other
Person on its behalf shall (i) make any payment of any kind or character with
respect to
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any Obligations or (ii) acquire any of the Loans for cash or property or
otherwise. Notwithstanding anything herein to the contrary, (x) in no event will
a Payment Blockage Period extend beyond 180 days from the date the applicable
Payment Blockage Notice is received by the Agents and (y) only one such Payment
Blockage Period may be commenced within any 360 consecutive days. For all
purposes of this Section 8.2(b), no event of default which existed or was
continuing on the date of the commencement of any Payment Blockage Period with
respect to the Designated Senior Indebtedness shall be, or be made, the basis
for the commencement of a second Payment Blockage Period by the Representative
of such Designated Senior Indebtedness whether or not within a period of 360
consecutive days, unless such event of default shall have been cured or waived
for a period of not less than 90 consecutive days (it being acknowledged that
any subsequent action, or any breach of any financial covenants for a period
ending after the date of commencement of such Payment Blockage Period that, in
either case, would give rise to an event of default pursuant to any provisions
under which an event of default previously existed or was continuing shall
constitute a new event of default for this purpose).
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Agents or any Lender when such payment is prohibited by
the foregoing provisions of this Section 8.2, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Senior Indebtedness (PRO RATA to such holders on the basis of the respective
amount of Senior Indebtedness held by such holders) or their respective
Representatives, as their respective interests may appear. The Agents shall be
entitled to rely on information regarding amounts then due and owing on the
Senior Indebtedness, if any, received from the holders of Senior Indebtedness
(or their Representatives) or, if such information is not received from such
holders or their Representatives, from the Company and only amounts included in
the information provided to the Agents shall be paid to the holders of Senior
Indebtedness.
Nothing contained in this Section 8 shall limit the right of the
Agents or the Lenders to take any action to accelerate the maturity of the Loans
and all other Obligations pursuant to Section 7 or to pursue any rights or
remedies hereunder; PROVIDED that all Senior Indebtedness thereafter due or
declared to be due shall first be paid in full in cash or Cash Equivalents
before the Lenders are entitled to receive any payment of any kind or character
with respect to Obligations.
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8.3 OBLIGATIONS SUBORDINATED TO PRIOR PAYMENT OF ALL SENIOR
INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF
COMPANY
(a) Upon any payment or distribution of assets of the Company of
any kind or character, whether in cash, property or securities, to creditors
upon any total or partial liquidation, dissolution, winding-up, reorganization,
assignment for the benefit of creditors or marshaling of assets and liabilities
of the Company or in a bankruptcy, reorganization, insolvency, receivership or
other similar proceeding relating to the Company or its assets, whether
voluntary or involuntary, all Senior Indebtedness Obligations due or to become
due shall first be paid in full in cash or Cash Equivalents, or such payment
duly provided for to the satisfaction of the holders of Senior Indebtedness,
before any payment or distribution of any kind or character is made on account
of any Obligations or for the acquisition of any of the Loans for cash or
property or otherwise. Upon any such dissolution, winding-up, liquidation,
reorganization, receivership or similar proceeding, any payment or distribution
of assets of the Company of any kind or character, whether in cash, property or
securities, to which the Lenders or the Agents would be entitled, except for the
provisions hereof, shall be paid by the Company or by any receiver, trustee in
bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the Lenders or by the Agents if received by them, directly
to the holders of Senior Indebtedness (PRO RATA to such holders on the basis of
the respective amounts of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of Senior
Indebtedness.
(b) To the extent any payment of Senior Indebtedness (whether by
or on behalf of the Company, as proceeds of security or enforcement of any right
of setoff or otherwise) is declared to be fraudulent or preferential, set aside
or required to be paid to any receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person under any bankruptcy, insolvency,
receivership, fraudulent conveyance or similar law, then, if such payment is
recovered by, or paid over to, such receiver, trustee in bankruptcy, liquidating
trustee, agent or other similar Person, the Senior Indebtedness or part thereof
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originally intended to be satisfied shall be deemed to be reinstated and
outstanding as if such payment had not occurred.
It is further agreed that any diminution (whether pursuant to court
decree or otherwise, including without limitation for any of the reasons
described in the preceding sentence) of the Company's obligation to make any
distribution or payment pursuant to any Senior Indebtedness, except to the
extent such diminution occurs by reason of the repayment (which has not been
disgorged or returned) of such Senior Indebtedness in cash or Cash Equivalents,
shall have no force or effect for purposes of the subordination provisions
contained in this Section 8, with any turnover of payments as otherwise
calculated pursuant to this Section 8 to be made as if no such diminution had
occurred.
(c) In the event that, notwithstanding the foregoing, any payment
or distribution of assets of the Company of any kind or character, whether in
cash, property or securities, shall be received by any Lender when such payment
or distribution is prohibited by this Section 8.3, such payment or distribution
shall be held in trust for the benefit of, and shall be paid over or delivered
to, the holders of Senior Indebtedness (PRO RATA to such holders on the basis of
the respective amount of Senior Indebtedness held by such holders) or their
respective Representatives, or to the trustee or trustees under any indenture
pursuant to which any of such Senior Indebtedness may have been issued, as their
respective interests may appear, for application to the payment of Senior
Indebtedness remaining unpaid until all such Senior Indebtedness has been paid
in full in cash or Cash Equivalents, after giving effect to any concurrent
payment, distribution or provision therefor to or for the holders of such Senior
Indebtedness.
(d) The consolidation of the Company with, or the merger of the
Company with or into, another corporation, partnership, trust or limited
liability company or the liquidation or dissolution of the Company following the
conveyance or transfer of all or substantially all of its assets, to another
corporation, partnership, trust or limited liability company upon the terms and
conditions provided in Section 6.6 hereof and as long as permitted under the
terms of the Senior Indebtedness shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section if such other
corporation shall, as a part of such consolidation, merger, conveyance or
transfer, assume the Company's obligations hereunder in accordance with Section
6.6 hereof.
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8.4 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION
Nothing contained in this Section 8 or elsewhere in this Agreement
shall prevent (i) the Company, except under the conditions described in Sections
8.2 and 8.3, from making payments at any time for the purpose of making payments
of principal of and interest on the Obligations, or from depositing with Bankers
Trust Company, on behalf of the Agents, any monies for such payments, or (ii) in
the absence of actual knowledge by the Agents that a given payment would be
prohibited by Section 8.2 or 8.3, the application by the Agents of any monies
deposited with them for the purpose of making such payments of principal of, and
interest on, the Obligations to the Lenders entitled thereto unless at least one
Business Day prior to the date upon which such payment would otherwise become
due and payable the Agents shall have actually received the written notice
provided for in the first sentence of Section 8.2(b) (PROVIDED that,
notwithstanding the foregoing, the Lenders receiving any payments made in
contravention of Section 8.2 and/or 8.3 (and the respective such payments) shall
otherwise be subject to the provisions of Section 8.2 and Section 8.3). The
Company shall give prompt written notice to the Agents of any dissolution,
winding-up, liquidation or reorganization of the Company, although any delay or
failure to give any such notice shall have no effect on the subordination
provisions contained herein.
8.5 LENDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS
Subject to the payment in full in cash or Cash Equivalents of all
Senior Indebtedness, the Lenders shall be subrogated to the rights of the
holders of Senior Indebtedness to receive payments or distributions of cash,
property or securities of the Company applicable to the Senior Indebtedness
until the Obligations shall be paid in full; and, for the purposes of such
subrogation, no such payments or distributions to the holders of the Senior
Indebtedness by or on behalf of the Company, or by or on behalf of the Lenders
by virtue of this Section 8, which otherwise would have been made to the Lenders
shall, as between the Company and the Lenders, be deemed to be a payment by the
Company to or on account of the Senior Indebtedness, it being understood that
the provisions of this Section 8 are and are intended solely for the purpose of
defining the relative rights of the Lenders, on the one hand, and the holders of
Senior Indebtedness, on the other hand.
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8.6 OBLIGATIONS OF THE COMPANY UNCONDITIONAL
Nothing contained in this Section 8 or elsewhere in this Agreement is
intended to or shall impair, as among the Company, its creditors other than the
holders of Senior Indebtedness, and the Lenders, the obligation of the Company,
which is absolute and unconditional, to pay to the Lenders the principal of and
any interest on the Obligations as and when the same shall become due and
payable in accordance with their terms, or is intended to or shall affect the
relative rights of the Lenders and creditors of the Company other than the
holders of the Senior Indebtedness, nor shall anything herein or therein prevent
any Lender or the Agents on its behalf from exercising all remedies otherwise
permitted by applicable law upon default under this Agreement, subject to the
rights, if any, under this Section 8, of the holders of Senior Indebtedness in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
8.7 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
Upon any payment or distribution of assets of the Company referred to
in this Section 8, the Agents, subject to the provisions of Section 9 hereof,
and the Lenders shall be entitled to rely upon any order or decree made by any
court of competent jurisdiction in which any insolvency, bankruptcy,
receivership, dissolution, winding-up, liquidation, reorganization or similar
case or proceeding is pending, or upon a certificate of the receiver, trustee in
bankruptcy, liquidating trustee, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Agents or the
Lenders, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Senior Indebtedness and other
Indebtedness of the Company, the amount thereof or payable thereon, the amount
or amounts paid or distributed thereon and all other facts pertinent thereto or
to this Section 8.
8.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
COMPANY OR HOLDERS OF SENIOR INDEBTEDNESS
No right of any present or future holders of any Senior Indebtedness
to enforce subordination as provided herein shall at any time in any way be
prejudiced or impaired by any act or failure to act on the part of the Company
or by any act or failure to act, in good faith, by any such holder, or by any
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noncompliance by the Company with the terms of this Agreement, regardless of any
knowledge thereof which any such holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Senior Indebtedness may, at any time and from time to time,
without the consent of or notice to the Agents, without incurring responsibility
to the Agents or the Lenders and without impairing or releasing the
subordination provided in this Section 8 or the obligations hereunder of the
Lenders to the holders of the Senior Indebtedness, do any one or more of the
following: (i) change the manner, place or terms of payment or extend the time
of payment of, or renew or alter, Senior Indebtedness, or otherwise amend or
supplement in any manner Senior Indebtedness, or any instrument evidencing the
same or any agreement under which Senior Indebtedness is outstanding; (ii) sell,
exchange, release or otherwise deal with any property pledged, mortgaged or
otherwise securing Senior Indebtedness; (iii) release any Person liable in any
manner for the payment or collection of Senior Indebtedness; and (iv) exercise
or refrain from exercising any rights against the Company and any other Person.
8.9 LENDERS AUTHORIZE AGENTS TO EFFECTUATE SUBORDINATION OF
OBLIGATIONS
Each Lender authorizes and expressly directs the Agents on its behalf
to take such action as may be necessary or appropriate to effectuate, as between
the holders of Senior Indebtedness and the Lenders, the subordination provided
in this Section 8, and appoints each Agent its attorney-in-fact for such
purposes, including, in the event of any dissolution, winding-up, liquidation or
reorganization of the Company (whether in bankruptcy, insolvency, receivership,
reorganization or similar proceedings or upon an assignment for the benefit of
credits or otherwise) tending towards liquidation of the business and assets of
the Company, the filing of a claim for the unpaid balance of its Obligations and
accrued interest in the form required in those proceedings.
If the Agents do not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Senior Indebtedness or
their Representative are or is hereby authorized to have the right to file and
are or is hereby authorized to file an appropriate claim for and on behalf of
the Lenders. Nothing herein contained shall be deemed to authorize the Agents or
the holders of Senior
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Indebtedness or their Representative to authorize or consent to or accept or
adopt on behalf of any Lender any plan of reorganization, arrangement,
adjustment or composition affecting the Obligations or the rights of any Lender
thereof, or to authorize the Agents or the holders of Senior Indebtedness or
their Representative to vote in respect of the claim of any Lender in any such
proceeding.
8.10 AMENDMENTS OR MODIFICATIONS TO SECTION 8
Notwithstanding anything to the contrary contained in this Agreement,
no amendment or modification to any provision of this Section 8 or the related
definitions used herein (other than to cure any ambiguity, defect, mistake or
inconsistency herein, so long as such amendment or modification does not
adversely affect the rights of the holders of any Senior Indebtedness then
outstanding) shall be permitted without the consent of the "Required Lenders,"
as such term is used in the Senior Credit Facility.
SECTION 9 THE AGENTS
9.1 APPOINTMENT
Each Lender hereby irrevocably designates and appoints BTCo, Chase and
Nations as Agents of such Lender to act as specified herein and in the other
Loan Documents, and each Lender hereby irrevocably authorizes BTCo, Chase and
Nations as the Agents to take such action on its behalf under the provisions of
this Agreement and the other Loan Documents and to exercise such powers and
perform such duties as are expressly delegated to the Agents by the terms of
this Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. The Agents agree to act as such upon the
express conditions contained in this Section 9. Notwithstanding any provision to
the contrary elsewhere in this Agreement or in any other Loan Document, the
Agents shall not have any duties or responsibilities, except those expressly set
forth herein or in the other Loan Documents, or any fiduciary relationship with
any Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Agents. The provisions of this Section 9 are solely for the benefit
of the Agents and the Lenders, and neither the Company nor any of its
Subsidiaries shall have any rights as a third party beneficiary of any of the
provisions hereof. In performing their functions and duties under this
Agreement, the
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Agents shall act solely as agents of the Lenders and the Agents do not assume
and shall not be deemed to have assumed any obligation or relationship of agent
or trust with or for the Company or any of its Subsidiaries.
9.2 DELEGATION OF DUTIES
The Agents may execute any of their duties under this Agreement or any
other Loan Document by or through agents or attorneys-in-fact and shall be
entitled to advice of counsel concerning all matters pertaining to such duties.
The Agents shall not be responsible for the negligence or misconduct of any
agents or attorneys-in-fact selected by them with reasonable care except to the
extent otherwise required by Section 9.3.
9.3 EXCULPATORY PROVISIONS
Neither the Agents nor any of their officers, directors, employees,
agents, attorneys-in-fact or affiliates shall be (i) liable for any action
lawfully taken or omitted to be taken by them or such Person under or in
connection with this Agreement or the other Loan Documents (except for their or
such Person's own gross negligence or willful misconduct) or (ii) responsible in
any manner to any of the Lenders for any recitals, statements, representations
or warranties made by the Company, any of its Subsidiaries or any of their
respective officers contained in this Agreement, any other Loan Documents, or in
any certificate, report, statement or other document referred to or provided for
in, or received by the Agents under or in connection with, this Agreement or any
other Loan Document or for any failure of the Company, any of its Subsidiaries
or any of their respective officers to perform its obligations hereunder or
thereunder. The Agents shall not be under any obligation to any Lender to
ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or the other Loan
Documents, or to inspect the properties, books or records of the Company or any
of its Subsidiaries. The Agents shall not be responsible to any Lender for the
effectiveness, genuineness, validity, enforceability, collectability or
sufficiency of this Agreement or any other Loan Document or for any
representations, warranties, recitals or statements made herein or therein or
made in any written or oral statement or in any financial or other statements,
instruments, reports, certificates or any other documents in connection herewith
or therewith furnished or made by the Agents to the Lenders or by or on behalf
of the Company or any of its Subsidiaries to the Agents or any Lender or be
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required to ascertain or inquire as to the performance or observance of any of
the terms, conditions, provisions, covenants or agreements contained herein or
therein or as to the use of the proceeds of the Loans or of the existence or
possible existence of any Potential Event of Default or Event of Default.
9.4 RELIANCE BY AGENTS
The Agents shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, facsimile, telex or teletype message,
statement, order or other document or conversation believed by them to be
genuine and correct and to have been signed, sent or made by the proper Person
or Persons, and upon advice and statements of legal counsel (including, without
limitation, counsel to the Company or any of its Subsidiaries), independent
accountants and other experts selected by the Agents. The Agents shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless they shall first receive such advice or concurrence
of the Required Lenders as they deem appropriate or they shall first be
indemnified to their satisfaction by the Lenders against any and all liability
and expense which may be incurred by them by reason of taking or continuing to
take any such action. As between the Agents and the Lenders, the Agents shall in
all cases be fully protected in acting, or in refraining from acting, under this
Agreement and the other Loan Documents in accordance with a request of the
Required Lenders, and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders.
9.5 NOTICE OF DEFAULT
The Agents shall not be deemed to have knowledge or notice of the
occurrence of any Potential Event of Default or Event of Default hereunder
unless the Agents have actually received notice from a Lender or the Company
referring to this Agreement, describing such Potential Event of Default or Event
of Default and stating that such notice is a "notice of default." In the event
that the Agents receive such a notice, the Agents shall give prompt notice
thereof to the Lenders. The Agents shall take such action with respect to such
Potential Event of Default or Event of Default as shall be reasonably directed
by the Required Lenders; PROVIDED that, as between the Agents and the Lenders
unless and until the Agents shall have received such directions, the Agents may
(but shall not be obligated to) take such action, or refrain from taking such
action,
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with respect to such Potential Event of Default or Event of Default as they
shall deem advisable in the best interests of the Lenders.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS
Each Lender expressly acknowledges that neither the Agents nor any of
their respective officers, directors, employees, agents, attorneys-in-fact or
affiliates have made any representations or warranties to it and that no act by
the Agents hereinafter taken, including any review of the affairs of the Company
or any of its Subsidiaries, shall be deemed to constitute any representation or
warranty by the Agents to any Lender. Each Lender represents to the Agents that
it has, independently and without reliance upon the Agents or any other Lender,
and based on such documents and information as it has deemed appropriate, made
its own appraisal of and investigation into the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Company and its Subsidiaries and made its own decision to make its Loans
hereunder and enter into this Agreement. Each Lender also represents that it
will, independently and without reliance upon the Agents or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement, and to make such investigation
as it deems necessary to inform itself as to the business, assets, operations,
property, financial and other condition, prospects and creditworthiness of the
Company and its Subsidiaries. The Agents shall not have any duty or
responsibility to provide any Lender with any credit or other information
concerning the business, operations, assets, property, financial and other
condition, prospects or creditworthiness of the Company or any of its
Subsidiaries which may come into the possession of the Agents or any of their
officers, directors, employees, agents, attorneys-in-fact or affiliates.
9.7 INDEMNIFICATION
The Lenders agree to indemnify the Agents in their capacity as such
ratably according to their respective "percentages" as used in determining the
Required Lenders at such time, from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
reasonable expenses or disbursements of any kind whatsoever which may at any
time (including, without limitation, at any time following the payment in full
of the Obligations) be imposed
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on, incurred by or asserted against the Agents in their capacity as such in any
way relating to or arising out of this Agreement or any other Loan Document, or
any documents contemplated by or referred to herein or the transactions
contemplated hereby of any action taken or omitted to be taken by the Agents
under or in connection with any of the foregoing, but only to the extent that
any of the foregoing is not paid by the Company or any of its Subsidiaries;
PROVIDED that no Lender shall be liable to the Agents for the payment of any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting solely from the
gross negligence or willful misconduct of the Agents. If any indemnity furnished
to the Agents for any purpose shall, in the opinion of the Agents be
insufficient or become impaired, the Agents may call for additional indemnity
and cease, or not commence, to do the acts indemnified against until such
additional indemnity is furnished. The agreements in this Section 9.7 shall
survive the payment in full of all Obligations.
9.8 AGENTS IN THEIR INDIVIDUAL CAPACITY
The Agents and their affiliates may make loans to, accept deposits
from and generally engage in any kind of business with the Company and its
Subsidiaries as though the Agents were not the Agents hereunder. With respect to
the Loans made by them and all Obligations owing to them, the Agents shall have
the same rights and powers under this Agreement as any Lender and may exercise
the same as though they were not the Agents and the terms "Lender" and "Lenders"
shall include the Agents in their individual capacities.
9.9 RESIGNATION OF AN AGENT; SUCCESSOR AGENT
An Agent may resign as Agent upon 20 days' notice to the Lenders and
the Company. Upon the resignation of an Agent, the Required Lenders shall
appoint from among the Lenders a successor Agent which is a bank or a trust
company for the Lenders subject to prior approval by the Company (such approval
not to be unreasonably withheld or delayed), whereupon such successor Agent
shall succeed to the rights, powers and duties of the resigning Agent, and the
term "Agent" shall include such successor Agent effective upon its appointment,
and the resigning Agent's rights, powers and duties as an Agent shall be
terminated, without any other or further act or deed on the part of such former
Agent or any of the parties to this Agreement. After the resignation of an Agent
hereunder, the provisions of this Section 9 shall inure to its benefit as to any
actions
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taken or omitted to be taken by it while it was Agent under this Agreement.
SECTION 10 GUARANTEE
10.1 UNCONDITIONAL GUARANTEE
Each Subsidiary Guarantor hereby unconditionally, jointly and
severally, guarantees (such guarantee to be referred to herein as the
"Guarantee"), subject to Section 11, to each of the Lenders and to the Agents
and their respective successors and assigns that (i) the principal of and
interest on the Loans will be promptly paid in full when due, subject to any
applicable grace period, whether at maturity, by acceleration or otherwise, and
interest on the overdue principal, if any, and interest on any interest, if any,
to the extent lawful, of the Loans and all other obligations of the Company to
the Lenders or the Agents hereunder or thereunder will be promptly paid in full
or performed, all in accordance with the terms hereof and thereof; and (ii) in
case of any extension of time of payment or renewal of any of the Loans or of
any such other obligations, the same will be promptly paid in full when due or
performed in accordance with the terms of the extension or renewal, subject to
any applicable grace period, whether at stated maturity, by acceleration or
otherwise, subject, however, in the case of clauses (i) and (ii) above, to the
limitations set forth in Section 10.5. Each Subsidiary Guarantor hereby agrees
that its obligations hereunder shall be unconditional, irrespective of the
validity, regularity or enforceability of the Loans or this Agreement, the
absence of any action to enforce the same, any waiver or consent by any of the
Lenders with respect to any provisions hereof or thereof, the recovery of any
judgment against the Company, any action to enforce the same or any other
circumstance which might otherwise constitute a legal or equitable discharge or
defense of a Subsidiary Guarantor. Each Subsidiary Guarantor hereby waives
diligence, presentment, demand of payment, filing of claims with a court in the
event of insolvency or bankruptcy of the Company, any right to require a
proceeding first against the Company, protest, notice and all demands whatsoever
and covenants that this Guarantee will not be discharged except by complete
performance of the obligations contained in the Loans, this Agreement and in
this Guarantee. If any Lender or the Agents are required by any court or
otherwise to return to the Company, any Subsidiary Guarantor, or any custodian,
trustee, liquidator or other similar official acting in relation to the Company
or any Subsidiary Guarantor, any amount paid by the
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Company or any Subsidiary Guarantor to the Agents or such Lender, this
Guarantee, to the extent theretofore discharged, shall be reinstated in full
force and effect. Each Subsidiary Guarantor further agrees that, as between each
Subsidiary Guarantor, on the one hand, and the Lenders and the Agents, on the
other hand, (x) the maturity of the obligations guaranteed hereby may be
accelerated as provided in Section 7 for the purposes of this Guarantee, and (y)
in the event of any acceleration of such obligations as provided in Section 7,
such obligations (whether or not due and payable) shall forthwith become due and
payable by each Subsidiary Guarantor for the purpose of this Guarantee.
10.2 SUBORDINATION OF GUARANTEE
The obligations of each Subsidiary Guarantor to the Lenders and to the
Agents pursuant to the Guarantee of such Subsidiary Guarantor and this Agreement
are expressly subordinate and subject in right of payment to the prior payment
in full of all Subsidiary Guarantor Senior Indebtedness of such Subsidiary
Guarantor, to the extent and in the manner provided in Section 11.
10.3 SEVERABILITY
In case any provision of this Guarantee shall be invalid, illegal or
unenforceable, the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
10.4 RELEASE OF A SUBSIDIARY GUARANTOR
Upon (i) the release by the lenders under the Senior Credit Facility
and related documents of all guarantees of a Subsidiary Guarantor and all Liens
on the property and assets of such Subsidiary Guarantor relating to such
Indebtedness, or (ii) the sale or disposition (whether by merger, stock
purchase, asset sale or otherwise) of a Subsidiary Guarantor (or all or
substantially all its assets) to an entity which is not a Subsidiary of the
Company and which sale or disposition is otherwise in compliance with the terms
of this Agreement, such Subsidiary Guarantor shall be deemed released from all
obligations under this Section 10 without any further action required on the
part of the Agents or any Lender; PROVIDED that any such termination shall occur
only to the extent that all obligations of such Subsidiary Guarantor under all
of its guarantees of, and under all of its pledges of assets or other security
interests
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which secure, such Indebtedness of the Company shall also terminate upon such
release, sale or transfer.
The Agents shall promptly deliver an appropriate instrument evidencing
such release upon receipt of a request by the Company accompanied by an
Officers' Certificate certifying as to the compliance with this Section 10.4.
Any Subsidiary Guarantor not so released remains liable for the full amount of
principal of and interest on the Loans as provided in this Section 10.
10.5 LIMITATION OF SUBSIDIARY GUARANTOR'S LIABILITY
Each Subsidiary Guarantor and by its acceptance hereof each of the
Lenders hereby confirms that it is the intention of all such parties that the
guarantee by such Subsidiary Guarantor pursuant to its Guarantee not constitute
a fraudulent transfer or conveyance for purposes of any Bankruptcy Law, the
Uniform Fraudulent Conveyance Act, the Uniform Fraudulent Transfer Act or any
similar Federal or state law. To effectuate the foregoing intention, the Lenders
and such Subsidiary Guarantor hereby irrevocably agree that the obligations of
such Subsidiary Guarantor under the Guarantee shall be limited to the maximum
amount as will, after giving effect to all other contingent and fixed
liabilities of such Subsidiary Guarantor (including, but not limited to, the
Subsidiary Guarantor Senior Indebtedness of such Subsidiary Guarantor) and after
giving effect to any collections from or payments made by or on behalf of any
other Subsidiary Guarantor in respect of the obligations of such other
Subsidiary Guarantor under its Guarantee or pursuant to Section 10.7, result in
the obligations of such Subsidiary Guarantor under the Guarantee not
constituting such fraudulent transfer or conveyance.
10.6 SUBSIDIARY GUARANTORS MAY CONSOLIDATE, ETC., ON CERTAIN TERMS
(a) Nothing contained in this Agreement or in the Loans shall
prevent any consolidation or merger of a Subsidiary Guarantor with or into the
Company or another Subsidiary Guarantor or shall prevent any sale or conveyance
of the property of a Subsidiary Guarantor as an entirety or substantially as an
entirety, to the Company or another Subsidiary Guarantor. Upon any such
consolidation, merger, sale or conveyance, the Guarantee given by such
Subsidiary Guarantor shall no longer have any force or effect.
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(b) Except as set forth in Section 6.6, nothing contained in this
Agreement or in the Loans shall prevent any consolidation or merger of a
Subsidiary Guarantor with or into a corporation or corporations other than the
Company or another Subsidiary Guarantor (whether or not affiliated with the
Subsidiary Guarantor); PROVIDED that, subject to Sections 10.4 and 10.6(a), (i)
immediately after such transaction, and giving effect thereto, no Potential
Event of Default or Event of Default shall have occurred as a result of such
transaction and be continuing, and (ii) upon any such consolidation, merger,
sale or conveyance, the Guarantee of such Subsidiary Guarantor set forth in this
Section 10, and the due and punctual performance and observance of all of the
covenants and conditions of this Agreement to be performed by such Subsidiary
Guarantor, shall be expressly assumed (in the event that the Subsidiary
Guarantor is not the surviving corporation in the merger), by an agreement or
supplemental indenture reasonably satisfactory in form to the Agents, executed
and delivered to the Agents, by the corporation formed by such consolidation, or
into which the Subsidiary Guarantor shall have merged, or by the corporation
that shall have acquired such property. In the case of any such consolidation,
merger, sale or conveyance and upon the assumption by the successor corporation,
by an agreement or supplemental indenture executed and delivered to the Agents
and satisfactory in form and substance to the Agents of the due and punctual
performance of all of the covenants and conditions of this Agreement to be
performed by the Subsidiary Guarantor, such successor corporation shall succeed
to and be substituted for the Subsidiary Guarantor with the same effect as if it
had been named herein as a Subsidiary Guarantor.
10.7 CONTRIBUTION
In order to provide for just and equitable contribution among the
Subsidiary Guarantors, the Subsidiary Guarantors agree, INTER SE, that in the
event any payment or distribution is made by any Subsidiary Guarantor (a
"Funding Subsidiary Guarantor") under its Guarantee, such Funding Subsidiary
Guarantor shall be entitled to a contribution from all other Subsidiary
Guarantors in a PRO RATA amount based on the Adjusted Net Assets of each
Subsidiary Guarantor (including the Funding Subsidiary Guarantor) for all
payments, damages and expenses incurred by that Funding Subsidiary Guarantor in
discharging the Company's obligations with respect to the Obligations. "Adjusted
Net Assets" of such Subsidiary Guarantor at any date shall mean the lesser of
(x) the amount by which the fair value of the property of such Subsidiary
Guarantor exceeds the total amount of liabilities, including, without
limitation, contingent
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liabilities (after giving effect to all other fixed and contingent liabilities
incurred or assumed on such date (other than liabilities of such Subsidiary
Guarantor under Subordinated Indebtedness)), but excluding liabilities under the
Guarantee, of such Subsidiary Guarantor at such date and (y) the amount by which
the present fair salable value of the assets of such Subsidiary Guarantor at
such date exceeds the amount that will be required to pay the probable
liabilities of such Subsidiary Guarantor on its debts including, without
limitation, Subsidiary Guarantor Senior Indebtedness (after giving effect to all
other fixed and contingent liabilities incurred or assumed on such date and
after giving effect to any collection from any Subsidiary of such Subsidiary
Guarantor in respect of the obligations of such Subsidiary under the Guarantee),
excluding debt in respect of the Guarantee of such Subsidiary Guarantor, as they
become absolute and matured.
10.8 WAIVER OF SUBROGATION
Each Subsidiary Guarantor hereby irrevocably waives any claim or other
rights which it may now or hereafter acquire against the Company that arise from
the existence, payment, performance or enforcement of such Subsidiary
Guarantor's obligations under its Guarantee and this Agreement, including,
without limitation, any right of subrogation, reimbursement, exoneration,
indemnification, and any right to participate in any claim or remedy of any
Lender against the Company, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from the Company, directly or indirectly, in cash
or other property or by set-off or in any other manner, payment or security on
account of such claim or other rights. If any amount shall be paid to any
Subsidiary Guarantor in violation of the preceding sentence and the Loans shall
not have been paid in full, such amount shall be deemed to have been paid to
such Subsidiary Guarantor for the benefit of, and held in trust for the benefit
of, the Lenders, and shall, subject to the provisions of Section 8, Section 10.2
and Section 11, forthwith be paid to the Agents for the benefit of such Lenders
to be credited and applied upon the Loans, whether matured or unmatured, in
accordance with the terms of this Agreement. Each Subsidiary Guarantor
acknowledges that it will receive direct and indirect benefits from the
financing arrangements contemplated by this Agreement and that the waiver set
forth in this Section 10.8 is knowingly made in contemplation of such benefits.
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10.9 EVIDENCE OF GUARANTEE
To evidence their guarantees to the Lenders set forth in this Section
10, each of the Subsidiary Guarantors hereby agrees to execute the notation of
Guarantee in substantially the form included in EXHIBIT IX. Each such notation
of Guarantee shall be signed on behalf of each Subsidiary Guarantor by an
Officer or an assistant Secretary.
10.10 WAIVER OF STAY, EXTENSION OR USURY LAWS
Each Subsidiary Guarantor covenants that it will not at any time
insist upon, plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury law or other law that would
prohibit or forgive such Subsidiary Guarantor from performing its Guarantee as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Agreement; and each
Subsidiary Guarantor hereby expressly waives all benefit or advantage of any
such law, and covenants that it will not hinder, delay or impede the execution
of any power herein granted to the Agents, but will suffer and permit the
execution of every such power as though no such law had been enacted.
SECTION 11 SUBORDINATION OF GUARANTEE OBLIGATIONS
11.1 GUARANTEE OBLIGATIONS SUBORDINATED TO SUBSIDIARY GUARANTOR
SENIOR INDEBTEDNESS
Anything herein to the contrary notwithstanding, each of the
Subsidiary Guarantors, for itself and its successors, and each Lender agrees
that the payment of all Guarantee Obligations of such Subsidiary Guarantor are
subordinated, to the extent and in the manner provided in this Section 11, to
the prior payment in full in cash or Cash Equivalents, or such payment duly
provided for to the satisfaction of the holders of Subsidiary Guarantor Senior
Indebtedness, of all Subsidiary Guarantor Senior Indebtedness Obligations of
such Subsidiary Guarantor (including Subsidiary Guarantor Senior Indebtedness
Obligations with respect to the Senior Credit Facility, whether outstanding on
the Closing Date or thereafter incurred).
This Section 11 shall constitute a continuing offer to all Persons who
become holders of, or continue to hold, Subsidiary Guarantor Senior
Indebtedness, and such provisions are made for the benefit of the holders of
Subsidiary Guarantor
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Senior Indebtedness and such holders are made obligees hereunder and any one or
more of them may enforce such provisions.
11.2 SUSPENSION OF GUARANTEE OBLIGATIONS WHEN SUBSIDIARY GUARANTOR
SENIOR INDEBTEDNESS IS IN DEFAULT
(a) If any default occurs and is continuing in the payment when
due, whether at maturity, upon any redemption, by declaration or otherwise, of
any principal of, interest on, unpaid drawings for letters of credit issued in
respect of, or regularly accruing fees with respect to, any Subsidiary Guarantor
Senior Indebtedness (including, without limitation, guarantees of the foregoing
items which constitute Subsidiary Guarantor Senior Indebtedness), then no
payment or distribution of any kind or character shall be made by or on behalf
of such Subsidiary Guarantor or any other Person on its or their behalf with
respect to any Guarantee Obligations or to acquire any of the Loans for cash or
property or otherwise until such Payment Default (and all other Payment
Defaults) shall have been cured or waived in accordance with the terms of the
documentation governing the respective Subsidiary Guarantor Senior Indebtedness
or ceased to exist or all Subsidiary Guarantor Senior Indebtedness with respect
to which any Payment Default has occurred and is continuing shall have been
discharged or paid in full in cash or Cash Equivalents.
(b) During any Payment Blockage Period (as determined in
accordance with Section 8.2(b), including the limitations set forth therein),
neither any Subsidiary Guarantor nor any other Person on any Subsidiary
Guarantor's behalf shall (i) make any payment of any kind or character with
respect to any Guarantee Obligations or (ii) acquire any of the Loans for cash
or property or otherwise.
(c) In the event that, notwithstanding the foregoing, any payment
shall be received by the Agents or any Lender when such payment is prohibited by
the foregoing provisions of this Section 11.2, such payment shall be held in
trust for the benefit of, and shall be paid over or delivered to, the holders of
Subsidiary Guarantor Senior Indebtedness (PRO RATA to such holders on the basis
of the respective amount of Subsidiary Guarantor Senior Indebtedness held by
such holders) or their respective Representatives, as their respective interests
may appear. The Agents shall be entitled to rely on information regarding
amounts then due and owing on the Subsidiary Guarantor Senior Indebtedness, if
any, received from the holders of Subsidiary Guarantor Senior Indebtedness (or
their Representatives)
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or, if such information is not received from such holders or their
Representatives, from a Subsidiary Guarantor and only amounts included in the
information provided to the Agents shall be paid to the holders of Subsidiary
Guarantor Senior Indebtedness.
11.3 GUARANTEE OBLIGATIONS SUBORDINATED TO PRIOR PAYMENT OF ALL
SUBSIDIARY GUARANTOR SENIOR INDEBTEDNESS ON DISSOLUTION,
LIQUIDATION OR REORGANIZATION OF SUCH SUBSIDIARY GUARANTOR
(a) Upon any payment or distribution of assets of any Subsidiary
Guarantor of any kind or character, whether in cash, property or securities, to
creditors upon any total or partial liquidation, dissolution, winding-up,
reorganization, assignment for the benefit of creditors or marshaling of assets
of such Subsidiary Guarantor or in a bankruptcy, reorganization, insolvency,
receivership or other similar proceeding relating to such Subsidiary Guarantor
or its property, whether voluntary or involuntary, all Subsidiary Guarantor
Senior Indebtedness Obligations due or to become due shall first be paid in full
in cash or Cash Equivalents, or such payment duly provided for to the
satisfaction of the holders of Subsidiary Guarantor Senior Indebtedness, before
the Lenders shall be entitled to receive any payment or distribution of any kind
or character on account of any Guarantee Obligations or for the acquisition of
any of the Loans for cash or property or otherwise. Upon any such dissolution,
winding-up, liquidation, reorganization, receivership or similar proceeding, any
payment or distribution of assets of such Subsidiary Guarantor of any kind or
character, whether in cash, property or securities, to which the Lenders or the
Agents would be entitled, except for the provisions hereof, shall be paid by
such Subsidiary Guarantor or by any receiver, trustee in bankruptcy, liquidating
trustee, agent or other Person making such payment or distribution, or by the
Lenders or by the Agents if received by them, directly to the holders of
Subsidiary Guarantor Senior Indebtedness (PRO RATA to such holders on the basis
of the respective amounts of Subsidiary Guarantor Senior Indebtedness held by
such holders) or their respective Representatives, or to the trustee or trustees
under any indenture pursuant to which any of such Subsidiary Guarantor Senior
Indebtedness may have been issued, as their respective interests may appear, for
application to the payment of Subsidiary Guarantor Senior Indebtedness remaining
unpaid until all such Subsidiary Guarantor Senior Indebtedness has been paid in
full in cash or Cash Equivalents after giving effect to any concurrent payment,
distribution or
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provision therefor to or for the holders of Subsidiary Guarantor Senior
Indebtedness.
(b) To the extent any payment of Subsidiary Guarantor Senior
Indebtedness (whether by or on behalf of a Subsidiary Guarantor, as proceeds of
security or enforcement of any right of setoff or otherwise) is declared to be
fraudulent or preferential, set aside or required to be paid to any receiver,
trustee in bankruptcy, liquidating trustee, agent or other similar Person under
any bankruptcy, insolvency, receivership, fraudulent conveyance or similar law,
then, if such payment is recovered by, or paid over to, such receiver, trustee
in bankruptcy, liquidating trustee, agent or other similar Person, the
Subsidiary Guarantor Senior Indebtedness or part thereof originally intended to
be satisfied shall be deemed to be reinstated and outstanding as if such payment
had not occurred.
It is further agreed that any diminution (whether pursuant to court
decree or otherwise, including without limitation for any of the reasons
described in the preceding sentence) of any Subsidiary Guarantor's obligation to
make any distribution or payment pursuant to any Subsidiary Guarantor Senior
Indebtedness, except to the extent such diminution occurs by reason of the
repayment (which has not been disgorged or returned) of such Subsidiary
Guarantor Senior Indebtedness in cash or Cash Equivalents, shall have no force
or effect for purposes of the subordination provisions contained in this Section
11, with any turnover of payments as otherwise calculated pursuant to this
Section 11 to be made as if no such diminution had occurred.
(c) In the event that, notwithstanding the foregoing, any payment
or distribution of assets of any Subsidiary Guarantor of any kind or character,
whether in cash, property or securities, shall be received by any Lender when
such payment or distribution is prohibited by this Section 11.3, such payment or
distribution shall be held in trust for the benefit of, and shall be paid over
or delivered to, the holders of Subsidiary Guarantor Senior Indebtedness (PRO
RATA to such holders on the basis of the respective amount of Subsidiary
Guarantor Senior Indebtedness held by such holders) or their respective
Representatives, or to the trustee or trustees under any indenture pursuant to
which any of such Subsidiary Guarantor Senior Indebtedness may have been issued,
as their respective interests may appear, for application to the payment of
Subsidiary Guarantor Senior Indebtedness remaining unpaid until all such
Subsidiary Guarantor Senior Indebtedness has been paid in full in cash or Cash
Equivalents, after giving effect to any concurrent
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payment, distribution or provision therefor to or for the holders of such
Subsidiary Guarantor Senior Indebtedness.
(d) The consolidation of any Subsidiary Guarantor with, or the
merger of any Subsidiary Guarantor with or into, another corporation or the
liquidation or dissolution of a Subsidiary Guarantor following the conveyance or
transfer of all or substantially all of its assets, to another corporation upon
the terms and conditions provided in Section 6.6 and as long as permitted under
the terms of the Subsidiary Guarantor Senior Indebtedness shall not be deemed a
dissolution, winding-up, liquidation or reorganization for the purposes of this
Section if such other corporation shall, as a part of such consolidation,
merger, conveyance or transfer, assume the Guarantee of such Subsidiary
Guarantor hereunder in accordance with Section 6.6.
11.4 PAYMENTS MAY BE PAID PRIOR TO DISSOLUTION
Nothing contained in this Section 11 or elsewhere in this Agreement
shall prevent (i) any Subsidiary Guarantor, except under the conditions
described in Sections 11.2 and 11.3, from making payments at any time for the
purpose of making payments on Guarantee Obligations, or from depositing with
Bankers Trust Company, on behalf of the Agents, any monies for such payments, or
(ii) in the absence of actual knowledge by the Agents that a given payment would
be prohibited by Section 11.2 or 11.3, the application by the Agents of any
monies deposited with them for the purpose of making such payments on Guarantee
Obligations to the Lenders entitled thereto unless at least one Business Day
prior to the date upon which such payment would otherwise become due and payable
the Agents shall have actually received the written notice provided for in the
first sentence of Section 8.2(b) (PROVIDED that, notwithstanding the foregoing,
the Lenders receiving any payments made in contravention of Sections 11.2 and/or
11.3 (and the respective such payments) shall otherwise be subject to the
provisions of Section 11.2 and Section 11.3). Each Subsidiary Guarantor shall
give prompt written notice to the Agents of any dissolution, winding-up,
liquidation or reorganization of such Subsidiary Guarantor, although any delay
or failure to give any such notice shall have no effect on the subordination
provisions contained herein.
11.5 LENDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SUBSIDIARY
GUARANTOR SENIOR INDEBTEDNESS
Subject to the payment in full in cash or Cash Equivalents of all
Subsidiary Guarantor Senior Indebtedness,
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the Lenders shall be subrogated to the rights of the holders of Subsidiary
Guarantor Senior Indebtedness of such Subsidiary Guarantor to receive payments
or distributions of cash, property or securities of such Subsidiary Guarantor
applicable to such Subsidiary Guarantor Senior Indebtedness until all amounts
owing on or in respect of the Guarantee Obligations shall be paid in full; and,
for the purposes of such subrogation, no such payments or distributions to the
holders of such Subsidiary Guarantor Senior Indebtedness by or on behalf of such
Subsidiary Guarantor, or by or on behalf of the Lenders by virtue of this
Section 11, which otherwise would have been made to the Lenders shall, as
between such Subsidiary Guarantor and the Lenders, be deemed to be a payment by
such Subsidiary Guarantor to or on account of such Subsidiary Guarantor Senior
Indebtedness, it being understood that the provisions of this Section 11 are and
are intended solely for the purpose of defining the relative rights of the
Lenders, on the one hand, and the holders of Subsidiary Guarantor Senior
Indebtedness, on the other hand.
11.6 GUARANTEE OBLIGATIONS OF THE SUBSIDIARY GUARANTORS
UNCONDITIONAL
Nothing contained in this Section 11 or elsewhere in this Agreement or
in the Guarantees is intended to or shall impair, as among the Subsidiary
Guarantors, their creditors other than the holders of Subsidiary Guarantor
Senior Indebtedness, and the Lenders, the obligation of the Subsidiary
Guarantors, which is absolute and unconditional, to pay to the Lenders all
amounts due and payable under the Guarantees as and when the same shall become
due and payable in accordance with their terms, or is intended to or shall
affect the relative rights of the Lenders and creditors of the Subsidiary
Guarantors other than the holders of the Subsidiary Guarantor Senior
Indebtedness, nor shall anything herein or therein prevent any Lender or the
Agents on its behalf from exercising all remedies otherwise permitted by
applicable law upon default under this Agreement, subject to the rights, if any,
under this Section 11, of the holders of Subsidiary Guarantor Senior
Indebtedness in respect of cash, property or securities of the Subsidiary
Guarantors received upon the exercise of any such remedy.
11.7 RELIANCE ON JUDICIAL ORDER OR CERTIFICATE OF LIQUIDATING AGENT
Upon any payment or distribution of assets of a Subsidiary Guarantor
referred to in this Section 11, the Agents, subject to the provisions of Section
9 hereof, and the Lenders
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shall be entitled to rely upon any order or decree made by any court of
competent jurisdiction in which any insolvency, bankruptcy, receivership,
dissolution, winding-up, liquidation, reorganization or similar case or
proceeding is pending, or upon a certificate of the trustee in bankruptcy,
liquidating trustee, receiver, assignee for the benefit of creditors, agent or
other person making such payment or distribution, delivered to the Agents or the
Lenders, for the purpose of ascertaining the Persons entitled to participate in
such payment or distribution, the holders of the Subsidiary Guarantor Senior
Indebtedness and other Indebtedness of such Subsidiary Guarantor, the amount
thereof or payable thereon, the amount or amounts paid or distributed thereon
and all other facts pertinent thereto or to this Section 11.
11.8 SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF THE
SUBSIDIARY GUARANTORS OR HOLDERS OF SUBSIDIARY GUARANTOR
SENIOR INDEBTEDNESS
No right of any present or future holders of any Subsidiary Guarantor
Senior Indebtedness to enforce subordination as provided herein shall at any
time in any way be prejudiced or impaired by any act or failure to act on the
part of any Subsidiary Guarantor or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by any Subsidiary Guarantor with the
terms of this Agreement, regardless of any knowledge thereof which any such
holder may have or otherwise be charged with.
Without in any way limiting the generality of the foregoing paragraph,
the holders of Subsidiary Guarantor Senior Indebtedness may, at any time and
from time to time, without the consent of or notice to the Agents, without
incurring responsibility to the Agents or the Lenders and without impairing or
releasing the subordination provided in this Section 11 or the obligations
hereunder of the Lenders to the holders of Subsidiary Guarantor Senior
Indebtedness, do any one or more of the following: (i) change the manner, place
or terms of payment or extend the time of payment of, or renew or alter,
Subsidiary Guarantor Senior Indebtedness, or otherwise amend or supplement in
any manner Subsidiary Guarantor Senior Indebtedness, or any instrument
evidencing the same or any agreement under which Subsidiary Guarantor Senior
Indebtedness is outstanding; (ii) sell, exchange, release or otherwise deal with
any property pledged, mortgaged or otherwise securing Subsidiary Guarantor
Senior Indebtedness; (iii) release any Person liable in any manner for the
payment or collection of Subsidiary
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Guarantor Senior Indebtedness; and (iv) exercise or refrain from exercising any
rights against the Subsidiary Guarantors and any other Person.
11.9 LENDERS AUTHORIZE AGENTS TO EFFECTUATE SUBORDINATION OF
GUARANTEE OBLIGATIONS
Each Lender, by its acceptance of the Guarantee Obligations,
authorizes and expressly directs the Agents on its behalf to take such action as
may be necessary or appropriate to effectuate, as between the holders of
Subsidiary Guarantor Senior Indebtedness and the Lenders, the subordination
provided in this Section 11, and appoints each Agent its attorney-in-fact for
such purposes, including, in the event of any dissolution, winding-up,
liquidation or reorganization of any Subsidiary Guarantor (whether in
bankruptcy, insolvency, receivership, reorganization or similar proceedings or
upon an assignment for the benefit of credits or otherwise) tending towards
liquidation of the business and assets of any Subsidiary Guarantor, the filing
of a claim for the unpaid balance under its Guarantee Obligations and accrued
interest in the form required in those proceedings.
If the Agents do not file a proper claim or proof of debt in the form
required in such proceeding prior to 30 days before the expiration of the time
to file such claim or claims, then the holders of the Subsidiary Guarantor
Senior Indebtedness or their Representative are or is hereby authorized to have
the right to file and are or is hereby authorized to file an appropriate claim
for and on behalf of the Lenders. Nothing herein contained shall be deemed to
authorize the Agents or the holders of Subsidiary Guarantor Senior Indebtedness
or their Representative to authorize or consent to or accept or adopt on behalf
of any Lender any plan of reorganization, arrangement, adjustment or composition
affecting the Guarantee Obligations or the rights of any Lender, or to authorize
the Agents or the holders of Subsidiary Guarantor Senior Indebtedness or their
Representative to vote in respect of the claim of any Lender in any such
proceeding.
11.10 THIS SECTION 11 NOT TO PREVENT EVENTS OF DEFAULT
The failure to make a payment on account of principal of or interest
on the Guarantee Obligations by reason of any provision of this Section 11 will
not be construed as preventing the occurrence of an Event of Default.
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11.11 AMENDMENTS OR MODIFICATIONS TO SECTION 11
Notwithstanding anything to the contrary contained in this Agreement,
no amendment or modification to any provision of this Section 11 or the related
definitions used herein (other than to cure any ambiguity, defect, mistake or
inconsistency herein, so long as such amendment or modification does not
adversely affect the rights of the holders of any Subsidiary Guarantor Senior
Indebtedness then outstanding) shall be permitted without the consent of the
"Required Lenders," as such term is used in the Senior Credit Facility.
SECTION 12 MISCELLANEOUS
12.1 REPRESENTATION OF THE LENDERS
Each Lender hereby represents that it is a commercial lender which
makes loans in the ordinary course of its business and that it will make the
Loans hereunder for its own account or the account of its affiliates in the
ordinary course of such business.
12.2 PARTICIPATIONS IN AND ASSIGNMENTS OF LOANS AND NOTES
A. Each Lender shall have the right at any time to sell, assign,
transfer or negotiate (collectively, a "Syndication") all or any portion of its
Notes or its Loan Commitment in an aggregate amount of not less than $1,000,000
to any Eligible Assignee, other than to an Eligible Assignee which has, or has
an Affiliate which has, a principal line of business similar to any principal
line of business of the Company or any of its Subsidiaries; PROVIDED that prior
to the Conversion Date Bankers Trust Company shall be the book running
syndication agent and any Syndication shall reduce the Lenders' respective
Commitments and Loans on a pro rata basis. In the case of any sale, transfer or
negotiation of all or part of the Notes or any Loan Commitment authorized under
this Section 12.2A, the assignee, transferee or recipient shall become a party
to this Agreement as a Lender by execution of an assignment and assumption
agreement; PROVIDED that (i) at such time Section 2.1A or 2.2A, as the case may
be, shall be deemed modified to reflect the Loan Commitment of such new Lender
and of the existing Lenders, (ii) upon surrender of the Notes, new Notes will be
issued to such new Lender and to the assigning Lender, such new Notes to be in
conformity with the requirements of Section 2.1D or 2.2E, as the case may be
(with appropriate modifications),
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to the extent needed to reflect the revised Loan Commitment, and (iii) the
Agents shall receive at the time of each such assignment, from the assigning or
assignee Lender, the payment of a non-refundable assignment fee of $3,500; and
PROVIDED, FURTHER, that such transfer or assignment will not be effective until
recorded by the Agents on the Register pursuant to Section 5.15. To the extent
of any assignment pursuant to this Section 12.2A, the assigning Lender shall be
relieved of its obligations hereunder with respect to its assigned Loan
Commitment, and the assignee, transferee or recipient shall have, to the extent
of such sale, assignment, transfer or negotiation, the same rights, benefits and
obligations as it would if it were a Lender with respect to such Notes or Loan
Commitment, including, without limitation, the right to approve or disapprove
actions which, in accordance with the terms hereof, require the approval of a
Lender. At the time of each assignment pursuant to this Section 12.2A to an
Eligible Assignee which is not already a Lender hereunder and which is not a
United States Person (as such term is defined in Section 7701(a)(30) of the
Internal Revenue Code) for Federal income tax purposes, the respective Eligible
Assignee shall provide to the Company and the Agents the appropriate Internal
Revenue Service Forms (and, if applicable, a Section 12.2E(ii) Certificate)
described in Section 12.2E.
B. Each Lender may grant participations in all or any part of its
Notes or its Loan Commitment in an aggregate amount of not less than $1,000,000
to any Eligible Assignee, other than to an Eligible Assignee which has, or has
an Affiliate which has, a principal line of business similar to any principal
line of business of the Company or any of its Subsidiaries; PROVIDED that prior
to the Conversion Date Bankers Trust Company shall be the book running agent
with respect to any and all participations and all such participations shall be
on a pro rata basis with respect to all Lenders.
C. The Company shall, at its own cost and expense, provide such
certificates, acknowledgments and further assurances in respect of this
Agreement and the Loans as any Lender may reasonably require in connection with
any participation, transfer or assignment pursuant to this Section 12.2.
D. Nothing in this Agreement shall prevent or prohibit any Lender
from pledging its Loan and Notes hereunder to a Federal Reserve Bank in support
of borrowings made by such Lender from such Federal Reserve Bank.
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E. Each Lender that is an assignee or transferee of an interest
under this Agreement pursuant to Section 12.2A (unless the respective Lender was
already a Lender hereunder immediately prior to such assignment or transfer) and
that is not a United States Person (as such term is defined in Section
7701(a)(30) of the Internal Revenue Code) agrees to deliver to the Company and
the Agents, on the date of such assignment or transfer to such Lender, (i) two
accurate and complete original signed copies of Internal Revenue Service Form
4224 or 1001 (or successor forms) certifying to such Lender's entitlement to a
complete exemption from United States withholding tax with respect to payments
to be made under this Agreement and under any Note, or (ii) if the Lender is not
a "bank" within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code
and cannot deliver either Internal Revenue Service Form 1001 or 4224 pursuant to
clause (i) above, two accurate and complete original signed copies of Internal
Revenue Service Form W-8 (or successor form) certifying to such Lender's
entitlement to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that, when a lapse in time or change in
circumstances renders the previous certification obsolete or inaccurate in any
material respect, it will deliver to the Company and the Agents two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001, or Form W-8, as the case may be, and such other forms as may be required
in order to confirm or establish the entitlement of such Lender to a continued
exemption from or reduction in United States withholding tax with respect to
payments under this Agreement and any Note, or it shall immediately notify the
Company and the Agents of its inability to deliver any such Form or Certificate.
Subject to Section 12.2A and the immediately succeeding sentence, the Company
shall be entitled, to the extent it is required to do so by law, to deduct or
withhold income or similar taxes imposed by the United States (or any political
subdivision or taxing authority thereof or therein) from interest, fees or other
amounts payable hereunder or made on any other Loan Document for the account of
any Lender which is not a United States Person (as such term is defined in
Section 7701(a)(30) of the Internal Revenue Code) for U.S. Federal income tax
purposes to the extent that such Lender has not provided to the Company U.S.
Internal Revenue Service Forms that establish a complete exemption from such
deduction or withholding. Notwithstanding anything to the contrary contained in
the preceding sentence or elsewhere in this Section 12.2E and except as set
forth in Section 12.2A, the Company agrees to pay additional amounts and to
indemnify and hold harmless each Lender (without regard to the
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identity of the jurisdiction requiring the deduction or withholding), and
reimburse such Lender upon its written request, in respect of any amounts
deducted or withheld by it as described in the immediately preceding sentence as
a result of any changes after the date of any assignment or transfer in any
applicable law, treaty, governmental rule, regulation, guideline or order, or in
the interpretation thereof, relating to the deducting or withholding of income
or similar Taxes.
F. Notwithstanding the foregoing, the Lenders as of the Closing
Date shall retain at all times prior to Conversion Date the right to vote with
respect to at least 51% of the aggregate principal amount of the Loans then
outstanding.
12.3 EXPENSES
Whether or not the transactions contemplated hereby shall be
consummated (but other than with respect to the sale of Demand Take-Out
Securities, the fees and expenses in connection with which will be payable as is
customary in such transactions), the Company agrees to promptly pay (i) all the
actual and reasonable costs and expenses of preparation of the Loan Documents
and all the costs of furnishing all opinions by counsel for the Company
(including without limitation any opinions reasonably requested by the Lenders
as to any legal matters arising hereunder), and of the Company's performance of
and compliance with all agreements and conditions contained herein on its part
to be performed or complied with; (ii) the reasonable fees, reasonable expenses
and reasonable disbursements of counsel to the Lenders in connection with the
negotiation, preparation, execution and administration of the Loan Documents and
the Loans hereunder, and any amendments, modifications and waivers hereto or
thereto and consents to departures from the terms hereof and thereof; and (iii)
after the occurrence of an Event of Default, all costs and expenses (including
actual and reasonable attorneys fees and costs of settlement) incurred by the
Lenders or the Agents in enforcing any Obligations of or in collecting any
payments due from the Company hereunder or under the Notes by reason of such
Event of Default or in connection with any refinancing or restructuring of the
credit arrangements provided under this Agreement in the nature of a "work-out"
or of any insolvency or bankruptcy proceedings; PROVIDED, HOWEVER, that if the
Transactions are not consummated the Company shall have no obligation pursuant
to this Section 12.3 unless the Equity Investors or any Affiliate of the Equity
Investors receives any termination or similar fee or any expense reimbursement
pursuant to the Recapitalization Agreement or otherwise but only to the extent
of the Lenders' pro rata share
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of the aggregate amount of such expense reimbursements received by the Equity
Investors and Affiliates of the Equity Investors (based upon the relative
expenses of the co-agents under the Senior Credit Facility, the Equity
Investors, Affiliates of the Equity Investors and the Agents and Lenders).
12.4 INDEMNITY
In addition to the payment of expenses pursuant to Section 12.3,
whether or not the transactions contemplated hereby shall be consummated, the
Company agrees to indemnify, pay and hold each of the Lenders, the Agents and
any holder of any of the Notes, and each of their respective officers,
directors, employees, agents, representatives and affiliates (collectively
called the "Indemnitees"), harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
claims, costs, expenses and disbursements of any kind or nature whatsoever
(including, without limitation, the reasonable fees and disbursements of counsel
for such Indemnitees in connection with any investigative, administrative or
judicial proceeding commenced or threatened, whether or not such Indemnitee
shall be designated as a party thereto), which may be suffered by, imposed on,
incurred by, or asserted against that Indemnitee, in any manner resulting from,
connected with, in respect of, relating to or arising out of this Agreement, the
other Loan Documents, the Commitment Letter, the Lenders' agreements to make the
Loans or the use or intended use of any of the proceeds of the Loans hereunder,
the issuance of the Exchange Notes or the Take-Out Securities or the
Recapitalization (the "Indemnified Liabilities"); PROVIDED that the Company
shall have no obligation to an Indemnitee hereunder with respect to Indemnified
Liabilities (i) to the extent such liabilities are finally judicially determined
to have resulted solely from (A) the gross negligence, bad faith or recklessness
of that Indemnitee or (B) the failure of such Indemnitee to perform its
obligations under any Loan Document or (C) such Indemnitee's violation of law or
(ii) in connection with the obligations of any Indemnitee under any Loan
Document or for any transfer fees. To the extent that the undertaking to
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Company
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law to the payment and satisfaction of all Indemnified
Liabilities incurred by the Indemnitees or any of them.
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12.5 SETOFF
Subject to Section 8, in addition to any rights now or hereafter
granted under applicable law and not by way of limitation of any such rights,
upon the occurrence of any Event of Default, each Lender, the Agents and each
subsequent holder of any Note are hereby authorized by the Company at any time
or from time to time, without notice to the Company, or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and to
apply any and all deposits (general or special, including, but not limited to,
Indebtedness evidenced by certificates of deposit, whether matured or unmatured
but not including trust accounts or any other accounts held for the benefit of
another Person) and any other Indebtedness at any time held or owing by such
Person or any such subsequent holder to or for the credit or the account of the
Company against and on account of the obligations and liabilities of the Company
to such Person or such subsequent holder under this Agreement and the Notes,
including, but not limited to, all claims of any nature or description arising
out of or connected with this Agreement or the Notes, irrespective of whether or
not (a) such Person or such subsequent holder shall have made any demand
hereunder or (b) such Person or such subsequent holder shall have declared the
principal of or the interest on its portion of the Loans and its Notes and other
amounts due hereunder to be due and payable as permitted by Section 7 and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
12.6 AMENDMENTS AND WAIVERS
No amendment, modification, termination or waiver of any term or
provision of this Agreement, of the Notes, any Guarantee or, prior to the
execution and delivery thereof, of the form of the Registration Rights
Agreement, the form of the Senior Subordinated Indenture, form of Warrant
Agreement or form of Registration Rights and Stockholders Agreement, or consent
to any departure by the Company or any Subsidiary Guarantor therefrom, shall in
any event be effective without the prior written concurrence of the Company or
such Subsidiary Guarantor, as the case may be, and the Required Lenders;
PROVIDED that without the prior written consent of each Lender affected, an
amendment, modification, termination or waiver of this Agreement, any Notes, any
Guarantee, and, prior to the execution and delivery thereof, of the form of
Registration Rights Agreement, the form of Senior Subordinated Indenture, form
of Warrant Agreement or form of Registration Rights and Stockholders Agreement
or consent to departure from a term or
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provision hereof or thereof may not: (i) reduce the principal amount of Notes
whose holders must consent to any such amendment, modification, termination,
waiver or consent; (ii) reduce the rate of or extend the time for payment of
principal or interest on any Note; (iii) reduce the principal amount of any
Note; (iv) make any Note payable in money other than that stated in the Note;
(v) make any change in Section 2.5A(iv) or in the definition of Change of
Control, in the last paragraph of Section 7 or in Section 8.5, 11.5 or 12.6;
(vi) reduce the rate or extend the time of payment of fees or other compensation
payable to the Lenders hereunder; (vii) modify the provisions of Section 8 or
any of the defined terms related thereto in any manner adverse to the Lenders;
or (viii) waive performance by the Company of its obligations under, or consent
to any departure from any of the terms and provisions of, Section 2.5A(iv); and
PROVIDED, FURTHER, that without the consent of the Agents, no such amendment,
modification, termination or waiver may amend, modify, terminate or waive any
provision of Section 9 as the same applies to the Agents or any other provision
of this Agreement as it relates to the rights or obligations of the Agents. No
amendment, modification or waiver of any provision of this Agreement, the Notes,
any Guarantee or the form of the Senior Subordinated Indenture shall adversely
affect the rights of the holders of Senior Indebtedness or the holders of
Subsidiary Guarantor Senior Indebtedness without their consent. Any waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which it was given. No notice to or demand on the Company in any
case shall entitle the Company to any further notice or demand in similar or
other circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section 12.6 shall be binding upon each holder
of the Notes at the time outstanding, each further holder of the Notes, and, if
signed by the Company or a Subsidiary Guarantor, on the Company and such
Subsidiary Guarantor. In addition to the provisions contained in this Section
12.6, the provisions of Sections 8.10 and 11.11 shall apply with respect to
amendments or modifications of the subordination provisions contained in
Sections 8 and 11, respectively.
12.7 INDEPENDENCE OF COVENANTS
All covenants hereunder shall be given independent effect so that if a
particular action or condition is not permitted by any of such covenants, the
fact that it would be permitted by an exception to, or be otherwise within the
limitation of, another covenant shall not avoid the occurrence of an
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Event of Default or Potential Event of Default if such action is taken or
condition exists.
12.8 ENTIRETY
The Loan Documents and the Commitment Letter embody the entire
agreement of the parties and supersede all prior agreements and understandings,
if any, relating to the subject matter hereof and thereof.
12.9 NOTICES
Unless otherwise provided herein, any notice or other communications
herein required or permitted to be given shall be in writing and may be
personally served, telecopied, telexed or sent by mail and shall be deemed to
have been given when delivered in person, upon receipt of telecopy or telex
against receipt of answer back or four Business Days after depositing it in the
mail, registered or certified, with postage prepaid and properly addressed;
PROVIDED that notices shall not be effective until received. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 12.9 (at which time notice of a change
thereof shall also be delivered to the administrative agent under the Senior
Credit Facility and the Representative for any other Designated Senior
Indebtedness)) shall be set forth under each party's name on the signature pages
hereto.
12.10 SURVIVAL OF WARRANTIES AND CERTAIN AGREEMENTS
A. All agreements, representations and warranties made herein
shall survive the execution and delivery of this Agreement and the Commitment
Letter, the making of the Loans hereunder and the execution and delivery of the
Notes and, notwithstanding the making of the Loans, the execution and delivery
of the Notes or any investigation made by or on behalf of any party, shall
continue in full force and effect. The closing of the transactions herein
contemplated shall not prejudice any right of one party against any other party
in respect of anything done or omitted hereunder or in respect of any right to
damages or other remedies.
B. Notwithstanding anything in this Agreement or implied by law
to the contrary, the agreements of the Company set forth in Sections 12.3, 12.4,
12.14, 12.15, 12.17, 12.19
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and 12.22 shall survive the payment of the Loans and the Notes and the
termination of this Agreement.
12.11 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE
No failure or delay on the part of any Agent or any Lender or any
holder of any Note in the exercise of any power, right or privilege hereunder,
under a Guarantee or under the Notes shall impair such power, right or privilege
or be construed to be a waiver of any default or acquiescence therein, nor shall
any single or partial exercise of any such power, right or privilege preclude
other or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under this Agreement, under a Guarantee or the
Notes are cumulative to and not exclusive of any rights or remedies otherwise
available.
12.12 SEVERABILITY
In case any provision in or obligation under this Agreement, under a
Guarantee or the Notes shall be invalid, illegal or unenforceable in any
jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby.
12.13 HEADINGS
Section and Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
12.14 APPLICABLE LAW
THIS AGREEMENT, EACH GUARANTEE AND THE NOTES SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAW.
12.15 SUCCESSORS AND ASSIGNS; SUBSEQUENT HOLDERS OF NOTES
This Agreement shall be binding upon the parties hereto and their
respective successors and assigns and shall inure to the benefit of the parties
hereto and the successors and assigns of the Lenders. The terms and provisions
of this
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Agreement and each Guarantee shall inure to the benefit of any assignee or
transferee of the Notes pursuant to Section 12.2A, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon the
Lenders shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. In determining whether
the holders of a sufficient aggregate principal amount of the Loans shall have
consented to any action under this Agreement, any amount of the Loans owned or
held by the Company, any Subsidiary Guarantor or any of their respective
Affiliates shall be disregarded. The Company's rights or any interest therein
hereunder may not be assigned without the prior express written consent of each
of the Lenders.
12.16 COUNTERPARTS; EFFECTIVENESS
This Agreement and any amendments, waivers, consents or supplements
may be executed in any number of counterparts and by different parties hereto in
separate counterparts, each of which when so executed and delivered shall be
deemed an original, but all such counterparts together shall constitute but one
and the same instrument. This Agreement shall become effective upon the
execution of a counterpart hereof by each of the parties hereto, and delivery
thereof to the Agents or, in the case of the Lenders, written telex or facsimile
notice or telephonic notification (confirmed in writing) of such execution and
delivery. The Agents will give the Company and each Lender prompt notice of the
effectiveness of this Agreement.
12.17 CONSENT TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL
A. Any legal action or proceeding with respect to this Agreement,
any Note or any Guarantee may be brought in the courts of the State of New York
or of the United States for the Southern District of New York, and, by execution
and delivery of this Agreement, each of the parties to this Agreement hereby
irrevocably accepts for itself and in respect of its respective property,
generally and unconditionally, the jurisdiction of the aforesaid courts. Each of
the parties to this Agreement hereby further irrevocably waives any claim that
any such courts lack jurisdiction over such party, and agrees not to plead or
claim, in any legal action or proceeding with respect to this Agreement, the
Notes or the Guarantees brought in any of the aforesaid courts, that any such
court lacks jurisdiction over such party. Each of the parties to this Agreement
irrevocably consents to the service of process in any such action or proceeding
by the mailing of copies thereof by registered or
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certified mail, postage prepaid, to such party, at its respective address for
notices pursuant to Section 12.9, such service to become effective 30 days after
such mailing. To the extent permitted by law, each of the parties to this
Agreement hereby irrevocably waives any objection to such service of process and
further irrevocably waives and agrees not to plead or claim in any action or
proceeding commenced hereunder or under any Note or any Guarantee that service
of process was in any way invalid or ineffective. Nothing herein shall affect
the right of any party to this Agreement to serve process in any other manner
permitted by law or to commence legal proceedings or otherwise proceed against
any party in any other jurisdiction.
B. Each of the parties to this Agreement hereby irrevocably
waives any objection which it may now or hereafter have to the laying of venue
of any of the aforesaid actions or proceedings arising out of or in connection
with this Agreement, the Notes or the Guarantees brought in the courts referred
to in clause A above and hereby further irrevocably waives and agrees not to
plead or claim in any such court that any such action or proceeding brought in
any such court has been brought in an inconvenient forum.
C. Each of the parties to this Agreement hereby irrevocably
waives all right to a trial by jury in any action, proceeding or counterclaim
arising out of or relating to this Agreement, the Notes or the Guarantees or the
transactions contemplated hereby or thereby.
12.18 PAYMENTS PRO RATA
A. The Agents agree that promptly after their receipt of each
payment of any interest or premium on or principal of the Notes from or on
behalf of the Company or any Subsidiary Guarantor, they shall, except as
otherwise provided in this Agreement, distribute such payment to the Lenders
(other than any Lender that has consented in writing to waive its PRO RATA share
of such payment) PRO RATA based upon their respective PRO RATA shares, if any,
of such payment.
B. Each of the Lenders agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security, by
the exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Loan Documents, or otherwise)
which is applicable to the payment of the principal of, or interest on, the
Loans of a sum which with respect to the related sum or sums received by other
Lenders is in a greater
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proportion than the total of such Obligation then owed and due to such Lender
bears to the total of such Obligation then owed and due to all of the Lenders
immediately prior to such receipt, then such Lender receiving such excess
payment shall purchase for cash without recourse or warranty from the other
Lenders an interest in the Obligations of the Company to such Lenders in such
amount as shall result in a proportional participation by all of the Lenders in
such amount; PROVIDED that, if all or any portion of such excess amount is
thereafter recovered from such Lender, such purchase shall be rescinded and the
purchase price restored to the extent of such recovery, but without interest.
12.19 TAXES
A. Any and all payments by the Company hereunder or under any of
the other Loan Documents shall be made free and clear of and without deduction
or withholding for any and all present or future Taxes, unless such Taxes are
required by law or the administration thereof to be deducted or withheld and
excluding (i) in the case of each Lender and the Agents, Taxes imposed on its
net income and franchise taxes imposed on it by the jurisdiction under the laws
of which such Person is organized or any political subdivision thereof, (ii) in
the case of each such Lender and the Agents, any Taxes that are in effect and
that would apply to a payment to such Person, as applicable, as of the Closing
Date, and (iii) if any Person acquires any interest in this Agreement (a
"Transferee"), any Taxes to the extent that they are in effect and would apply
to a payment to such Transferee as of the date of the acquisition of such
interest, as the case may be (all such nonexcluded Taxes being hereinafter
referred to as "Covered Taxes"). If the Company shall be required by Law or the
administration thereof to deduct or withhold any Covered Taxes from or in
respect of any sum payable hereunder or under any other Loan Document, (a)
unless such requirement results from the failure of the payee to perform its
obligations under Section 12.2E, the sum payable shall be increased as may be
necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional amounts paid
under this paragraph), the Lender receives an amount equal to the sum it would
have received if no such deduction or withholding had been made; (b) the Company
shall make such deductions or withholdings; and (c) the Company forthwith shall
pay the full amount deducted or withheld to the relevant taxation or other
authority in accordance with applicable Law.
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B. The Company agrees to pay forthwith any present or future
stamp documentary taxes or any other excise or property taxes, charges or
similar levies (all such taxes, charges and levies being herein referred to as
"Other Taxes") imposed by any jurisdiction (or any political subdivision or
taxing authority thereof or therein) which arise from any payment made by the
Company hereunder or under any of the other Loan Documents or from the
execution, delivery or registration of, or otherwise with respect to, this
Agreement or any of the other Loan Documents.
C. The Company agrees to indemnify the Agents and each of the
Lenders for the full amount of Covered Taxes or Other Taxes not deducted or
withheld and paid by the Company in accordance with Sections 12.19A and 12.19B
to the relevant taxation or other authority and any Taxes other than Covered
Taxes or Other Taxes imposed by any jurisdiction on amounts payable by the
Company under this Section 12.19 paid by the Lender or the Agents and any
liability (including penalties, interest and expenses) arising therefrom or with
respect thereto, whether or not any such Taxes or Other Taxes were correctly or
legally asserted. Payment under this indemnification shall be made within 30
days from the date the Agents or such Lender makes written demand therefor. A
certificate as to the amount of such Taxes or Other Taxes and evidence of
payment thereof submitted to the Company shall be prima facie evidence, absent
manifest error, of the amount due from the Company to the Agents or such Lender.
D. The Company shall furnish to the Agents and each of the
Lenders the original or a certified copy of a receipt evidencing any payment of
Taxes or Other Taxes made by the Company as soon as such receipt becomes
available.
E. The provisions of this Section 12.19 shall survive the
termination of the Agreement and repayment of all Obligations.
12.20 WAIVER OF STAY, EXTENSION OR USURY LAWS
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law or any usury law or
other law that would prohibit or forgive the Company from paying all or any
portion of the principal of or interest on the Loans as contemplated herein,
wherever enacted, now or at any time hereafter in force, or which may affect the
covenants or the performance
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of this Agreement; and (to the extent that it may lawfully do so) the Company
hereby expressly waives all benefit or advantage of any such law, and covenants
that it will not hinder, delay or impede the execution of any power herein
granted to the Agents, but will suffer and permit the execution of every such
power as though no such law had been enacted.
12.21 REQUIREMENTS OF LAW
If at any time after the Closing Date any Lender reasonably determines
that the introduction of or any change in any applicable law or governmental
rule, regulation, order, guideline, directive or request (whether or not having
the force of law) concerning capital adequacy, or any change in interpretation
or administration thereof by any governmental authority, central bank or
comparable agency, will have the effect of increasing the amount of capital
required or expected to be maintained by such Lender or any corporation
controlling such Lender based on the existence of such Lender's Loans hereunder
or its obligations hereunder, then Big Flower, the Company and each of their
respective Subsidiaries jointly and severally agree to pay to such Lender, upon
its written demand therefor, such additional amounts as shall be required to
compensate such Lender or such other corporation for the increased cost to such
Lender or such other corporation or the reduction in the rate of return to such
Lender or such other corporation as a result of such increase of capital. In
determining such additional amounts, each Lender will act reasonably and in good
faith and will use averaging and attribution methods which are reasonable,
PROVIDED that such Lender's reasonable good faith determination of compensation
owing under this Section 12.21 shall, absent demonstrable error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 12.21, will
give written notice thereof to Big Flower (a copy of which shall be sent by such
Lender to the Agents), which notice shall show the basis for calculation of such
additional amounts, although the failure to give any such notice shall not
release or diminish any of Big Flower's, the Company's or their Subsidiaries'
obligations to pay additional amounts pursuant to this Section 12.21 upon the
subsequent receipt of such notice.
12.22 CONFIDENTIALITY
A. Subject to the provisions of clause B of this Section 12.22,
each Lender agrees that it will use its best efforts not to disclose without the
prior consent of Big Flower
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(other than to its Affiliates, employees, auditors, advisors or counsel or to
another Lender if the Lender or such Lender's holding or parent company in its
sole discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 12.22 to the same extent as such Lender) any information with respect to
Big Flower, the Company or any of their Subsidiaries which is now or in the
future furnished pursuant to this Agreement or any other Loan Document and which
is designated by any of Big Flower, the Company or any of the Subsidiary
Guarantors to the Lenders in writing as confidential, PROVIDED that any Lender
may disclose any such information (a) as has become generally available to the
public, (b) as may be required or appropriate in any report, statement or
testimony submitted to any municipal, state or Federal regulatory body having or
claiming to have jurisdiction over such Lender or to the Federal Reserve Board
or the Federal Deposit Insurance Corporation or similar organizations (whether
in the United States or elsewhere) or their successors, (c) as may be required
or appropriate in respect to any summons or subpoena or in connection with any
litigation, (d) in order to comply with any law, order, regulation or ruling
applicable to such Lender, (e) to the Agents and (f) to any prospective or
actual transferee or participant in connection with any contemplated transfer or
participation of any of the Notes or any interest therein by such Lender,
PROVIDED that such prospective transferee agrees to provisions substantially the
same as those contained in this Section 12.22.
B. Each of Big Flower, the Company and the Subsidiary Guarantors
hereby acknowledges and agrees that each Lender may share with any of its
affiliates any information related to Big Flower, the Company or any of their
Subsidiaries (including, without limitation, any nonpublic customer information
regarding the creditworthiness of Big Flower, the Company and their
Subsidiaries), provided such Persons shall be subject to the provisions of this
Section 12.22 to the same extent as such Lender.
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WITNESS the due execution hereof by the respective duly authorized
officers of the undersigned as of the date first written above.
COMPANY:
BIG FLOWER PRESS HOLDINGS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Notice Address:
c/o Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial
Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
BIG FLOWER HOLDINGS, INC.
Solely with Respect to
Sections 4.2, 4.3, 4.7, 4.10,
4.20, 4.21, 4.25, 4.27, 5.10,
5.12, 5.16, 12.7-12.10, 12.12-
12.17, 12.21 and 12.22
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
Notice Address:
Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial
Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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SUBSIDIARY GUARANTORS:
TREASURE CHEST ADVERTISING
COMPANY, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
TREASURE CHEST ADVERTISING
COMPANY OF NEW YORK, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
TREASURE CHEST ADVERTISING
HOLDING COMPANY OF TEXAS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
TREASURE CHEST ADVERTISING
COMPANY OF TEXAS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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PRINTCO, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
BF AVIATION CORP.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
X.X. XXXXX INCORPORATED
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WEBCRAFT, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
COLORSTREAM TECHNOLOGIES, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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WEBCRAFT MIDWEST, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
WEBCRAFT CHEMICALS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
KSS TRANSPORTATION CORPORATION
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
IMPCO ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
OLWEN INTERNATIONAL DIRECT MAIL,
INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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BIG FLOWER DIGITAL SERVICES, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
LASER TECH COLOR, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
PACIFIC COLOR CONNECTION, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
DCS, INCORPORATED
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
GAMMA ONE, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
IMMEDIA GRAPHICS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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ENTERON GROUP, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
MASTER EAGLE GRAPHICS SERVICES,
INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
MASTER VU INCORPORATED
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
REVERE PHOTO PLATEMAKERS COMPANY
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
COMPUTER COLOR GRAPHICS, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
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IMAGING CONSORTIUM, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
REACH AMERICA, INC.
By: /s/ Xxxxx X. Xxxxxx
-----------------------------------
Name: Xxxxx X. Xxxxxx
Title: Vice President
BIG FLOWER DIGITAL SERVICES
(DELAWARE), INC.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Executive Vice President
BIG FLOWER DIGITAL LLC
By: BIG FLOWER DIGITAL SERVICES
(DELAWARE), INC.
By: /s/ Xxxx Xxxxxxxx
-----------------------------------
Name: Xxxx Xxxxxxxx
Title: Executive Vice President
Notice Address for all Subsidiary
Guarantors:
Big Flower Holdings, Inc.
0 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Chief Financial
Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-160-
AGENTS:
BANKERS TRUST COMPANY,
as co-agent
By:
-----------------------------------
Name:
Title:
THE CHASE MANHATTAN BANK,
as co-agent
By: /s/ Xxxxxx Xxxx
-----------------------------------
Name: Xxxxxx Xxxx
Title:
NATIONSBRIDGE, L.L.C.,
as co-agent
By: /s/ X. X. Xxxxx
-----------------------------------
Name: X. X. Xxxxx
Title: Senior Vice President
Notice Address for Agents:
c/o Bankers Trust Company
One Bankers Trust Plaza
000 Xxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-161-
The Chase Manhattan Bank
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
and
NationsBridge, L.L.C.
000 Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, Xxxxx Xxxxxxxx 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-162-
LENDERS:
Commitment: $191,250,000 BANKERS TRUST CORPORATION
By:
-----------------------------------
Name:
Title:
Notice Address:
One Bankers Trust Plaza
000 Xxxxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxx
with a copy to:
Deutsche Bank Securities Inc.
00 Xxxx 00xx Xxxxxx, 0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Commitment: $168,750,000 THE CHASE MANHATTAN BANK
By:
-----------------------------------
Name:
Title:
Notice Address:
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
-163-
Commitment: $90,000,000 NATIONSBRIDGE, L.L.C.
By:
-----------------------------------
Name:
Title:
Notice Address:
000 Xxxxx Xxxxx Xxxxxx
0xx Xxxxx
Xxxxxxxxx, XX 00000
Attention: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
