EXHIBIT 4.1
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
CREDIT AGREEMENT
AMONG
DAMES & XXXXX GROUP,
AS BORROWER,
THE SEVERAL LENDERS
FROM TIME TO TIME PARTIES HERETO
AND
CANADIAN IMPERIAL BANK OF COMMERCE,
AS ADMINISTRATIVE AGENT
DATED AS OF JULY 31, 1998
CIBC XXXXXXXXXXX CORP.,
AS ARRANGER
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
SECTION 1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Other Definitional Provisions. . . . . . . . . . . . . . . . . . . . . . 20
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS. . . . . . . . . . . . . . . . . . . . 21
2.1 Term Commitments . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
2.2 Procedure for Term Loan Borrowing. . . . . . . . . . . . . . . . . . . . 21
2.3 Repayment of Term Loans. . . . . . . . . . . . . . . . . . . . . . . . . 21
2.4 Revolving Commitments. . . . . . . . . . . . . . . . . . . . . . . . . . 22
2.5 Procedure for Revolving Loan Borrowing . . . . . . . . . . . . . . . . . 22
2.6 Commitment Fees, etc. . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.7 Termination or Reduction of Revolving Commitments. . . . . . . . . . . . 23
2.8 Optional Prepayments . . . . . . . . . . . . . . . . . . . . . . . . . . 23
2.9 Mandatory Prepayments and Commitment Reductions. . . . . . . . . . . . . 24
2.10 Conversion and Continuation Options. . . . . . . . . . . . . . . . . . . 25
2.11 Limitations on Eurodollar Tranches . . . . . . . . . . . . . . . . . . . 26
2.12 Interest Rates and Payment Dates . . . . . . . . . . . . . . . . . . . . 26
2.13 Computation of Interest and Fees . . . . . . . . . . . . . . . . . . . . 26
2.14 Inability to Determine Interest Rate . . . . . . . . . . . . . . . . . . 27
2.15 Pro Rata Treatment and Payments. . . . . . . . . . . . . . . . . . . . . 27
2.16 Requirements of Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 29
2.17 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.18 Indemnity. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
2.19 Change of Lending Office . . . . . . . . . . . . . . . . . . . . . . . . 33
2.20 Replacement of Lenders . . . . . . . . . . . . . . . . . . . . . . . . . 33
SECTION 3. LETTERS OF CREDIT. . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.1 L/C Commitment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
3.2 Procedure for Issuance of Letter of Credit . . . . . . . . . . . . . . . 34
3.3 Fees and Other Charges . . . . . . . . . . . . . . . . . . . . . . . . . 34
3.4 L/C Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
3.5 Reimbursement Obligation of the Borrower . . . . . . . . . . . . . . . . 36
3.6 Obligations Absolute . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.7 Letter of Credit Payments. . . . . . . . . . . . . . . . . . . . . . . . 37
3.8 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
SECTION 4. REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . 37
4.1 Financial Condition. . . . . . . . . . . . . . . . . . . . . . . . . . . 37
4.2 No Change. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
4.3 Corporate Existence; Compliance with Law . . . . . . . . . . . . . . . . 38
4.4 Corporate Power; Authorization; Enforceable Obligations. . . . . . . . . 38
-i-
Page
----
4.5 No Legal Bar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.6 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.7 No Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
4.8 Ownership of Property; Liens . . . . . . . . . . . . . . . . . . . . . . 39
4.9 Intellectual Property. . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.10 Taxes. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.11 Federal Regulations. . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.12 Labor Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.13 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
4.14 Investment Company Act; Other Regulations. . . . . . . . . . . . . . . . 41
4.15 Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.16 Use of Proceeds. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.17 Environmental Matters. . . . . . . . . . . . . . . . . . . . . . . . . . 41
4.18 Accuracy of Information, etc . . . . . . . . . . . . . . . . . . . . . . 42
4.19 Security Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.20 Solvency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.21 Year 2000 Matters. . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
4.22 Regulation H . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
4.23 Certain Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
SECTION 5. CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . 44
5.1 Conditions to Initial Extension of Credit. . . . . . . . . . . . . . . . 44
5.2 Conditions to Each Extension of Credit . . . . . . . . . . . . . . . . . 47
SECTION 6. AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . 47
6.1 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . 47
6.2 Certificates; Other Information. . . . . . . . . . . . . . . . . . . . . 48
6.3 Payment of Obligations . . . . . . . . . . . . . . . . . . . . . . . . . 49
6.4 Maintenance of Existence; Compliance.. . . . . . . . . . . . . . . . . . 49
6.5 Maintenance of Property; Insurance . . . . . . . . . . . . . . . . . . . 49
6.6 Inspection of Property; Books and Records; Discussions . . . . . . . . . 49
6.7 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.8 Environmental Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
6.9 Interest Rate Protection . . . . . . . . . . . . . . . . . . . . . . . . 51
6.10 Additional Collateral, etc . . . . . . . . . . . . . . . . . . . . . . . 51
SECTION 7. NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . 52
7.1 Financial Condition Covenants. . . . . . . . . . . . . . . . . . . . . . 53
7.2 Indebtedness . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
7.3 Liens. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
7.4 Fundamental Changes. . . . . . . . . . . . . . . . . . . . . . . . . . . 56
7.5 Disposition of Property. . . . . . . . . . . . . . . . . . . . . . . . . 57
7.6 Restricted Payments. . . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.7 Capital Expenditures . . . . . . . . . . . . . . . . . . . . . . . . . . 58
7.8 Investments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
-ii-
Page
----
7.9 Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . 60
7.10 Sales and Leasebacks . . . . . . . . . . . . . . . . . . . . . . . . . . 60
7.11 Changes in Fiscal Periods. . . . . . . . . . . . . . . . . . . . . . . . 60
7.12 Negative Pledge Clauses. . . . . . . . . . . . . . . . . . . . . . . . . 60
7.13 Clauses Restricting Subsidiary Distributions . . . . . . . . . . . . . . 60
7.14 Lines of Business. . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
7.15 Amendments to Acquisition Documentation. . . . . . . . . . . . . . . . . 61
SECTION 8. EVENTS OF DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
SECTION 9. THE AGENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.1 Appointment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.2 Delegation of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . 64
9.3 Exculpatory Provisions . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.4 Reliance by Administrative Agent . . . . . . . . . . . . . . . . . . . . 65
9.5 Notice of Default. . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
9.6 Non-Reliance on Agents and Other Lenders . . . . . . . . . . . . . . . . 66
9.7 Indemnification. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
9.8 Agent in Its Individual Capacity . . . . . . . . . . . . . . . . . . . . 67
9.9 Successor Administrative Agent . . . . . . . . . . . . . . . . . . . . . 67
9.10 Authorization to Release Guarantees and Liens. . . . . . . . . . . . . . 67
9.11 Documentation Agent, Syndication Agent . . . . . . . . . . . . . . . . . 68
SECTION 10. MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.1 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . 68
10.2 Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
10.3 No Waiver; Cumulative Remedies . . . . . . . . . . . . . . . . . . . . . 69
10.4 Survival of Representations and Warranties . . . . . . . . . . . . . . . 69
10.5 Payment of Expenses and Taxes. . . . . . . . . . . . . . . . . . . . . . 69
10.6 Successors and Assigns; Participations and Assignments . . . . . . . . . 71
10.7 Adjustments; Set-off . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.8 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.9 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
10.10 Integration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.11 GOVERNING LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.12 Submission To Jurisdiction; Waivers . . . . . . . . . . . . . . . . . . 74
10.13 Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74
10.14 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
10.15 WAIVERS OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . . . . 76
-iii-
ANNEX:
A Pricing Grid
SCHEDULES:
1.1A Commitments
1.1B Mortgaged Property
4.4 Consents, Authorizations, Filings and Notices
4.15 Subsidiaries
4.19(a) UCC Filing Jurisdictions
4.19(b) Mortgage Filing Jurisdictions
7.2(d) Existing Indebtedness
7.3(f) Existing Liens
7.8 Permitted Investments
EXHIBITS:
A Form of Guarantee and Collateral Agreement
B Form of Compliance Certificate
C Form of Closing Certificate
E Form of Assignment and Acceptance
F Form of Legal Opinion of Xxxxxx & Xxxxxxx
G Form of Exemption Certificate
-iv-
CREDIT AGREEMENT, dated as of July 31, 1998, among DAMES & XXXXX
GROUP, a Delaware corporation (the "BORROWER"), the several banks and other
financial institutions or entities from time to time parties to this Agreement
(the "LENDERS"), and CANADIAN IMPERIAL BANK OF COMMERCE, as administrative
agent.
The parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1 DEFINED TERMS. As used in this Agreement, the terms listed in
this Section 1.1 shall have the respective meanings set forth in this Section
1.1.
"ACQUISITION": as defined in Section 5.1(b).
"ACQUISITION AGREEMENT": the Equity Purchase Agreement, dated as of
June 23, 1998, between the Borrower and the Seller.
"ACQUISITION DOCUMENTATION": collectively, the Acquisition Agreement
and all schedules, exhibits and annexes thereto and all side letters and
agreements affecting the terms thereof or entered into in connection therewith,
in each case as amended, supplemented or otherwise modified from time to time in
accordance with Section 7.16.
"ADJUSTMENT DATE": as defined in the Pricing Grid.
"ADMINISTRATIVE AGENT": Canadian Imperial Bank of Commerce, together
with its affiliates, as the arranger of the Commitments and as the
administrative agent for the Lenders under this Agreement and the other Loan
Documents, together with any of its successors.
"AFFILIATE": as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by, or is under common control with,
such Person. For purposes of this definition, "control" of a Person means the
power, directly or indirectly, either to (a) vote 10% or more of the securities
having ordinary voting power for the election of directors (or persons
performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.
"AGENTS": the collective reference to the Administrative Agent, the
Documentation Agent, the Syndication Agent and the Arranger.
"AGGREGATE EXPOSURE": with respect to any Lender at any time, an
amount equal to (a) until the Closing Date, the aggregate amount of such
Lender's Commitments at such time and (b) thereafter, the sum of (i) the
aggregate then unpaid principal amount of such Lender's Term Loans and (ii) the
amount of such Lender's Revolving Commitment then in effect or, if the Revolving
Commitments have been terminated, the amount of such Lender's Revolving
Extensions of Credit then outstanding.
2
"AGGREGATE EXPOSURE PERCENTAGE": with respect to any Lender at any
time, the ratio (expressed as a percentage) of such Lender's Aggregate Exposure
at such time to the Aggregate Exposure of all Lenders at such time.
"AGREEMENT": this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"ALTERNATIVE CURRENCY": any freely available currency that is freely
transferrable and freely convertible into Dollars and requested by the Borrower
and acceptable to the Issuing Lender and the Administrative Agent.
"ALTERNATIVE CURRENCY L/C EXPOSURE": at any time, the Assigned Dollar
Value of the aggregate undrawn amount of all outstanding Letters of Credit
denominated in an Alternative Currency at such time.
"APPLICABLE MARGIN": for each Type of Loan, the rate per annum as
follows: (i) for Base Rate Loans, .50%, and (ii) for Eurodollar Loans, 1.50%;
PROVIDED, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margin with respect to Revolving Loans and Term Loans will be
determined pursuant to the Pricing Grid; and PROVIDED, FURTHER, that,
notwithstanding the foregoing, in the event that the Consolidated Leverage Ratio
is greater than 3.75 to 1.0, the Applicable Margin will be determined pursuant
to the Pricing Grid.
"APPLICATION": an application, in such form as the Issuing Lender may
specify from time to time, requesting the Issuing Lender to open a Letter of
Credit.
"ARRANGER": CIBC Xxxxxxxxxxx Corp.
"ASSET SALE": any Disposition of property or series of related
Dispositions of property (excluding any such Disposition permitted by clause
(a), (b), (c), (d), (g), (h), (i) or (j) of Section 7.5) that yields gross
proceeds to the Borrower or any of its Subsidiaries (valued at the initial
principal amount thereof in the case of non-cash proceeds consisting of notes
or other debt securities and valued at fair market value in the case of other
non-cash proceeds) in excess of $300,000.
"ASSIGNEE": as defined in Section 10.6(c).
"ASSIGNED DOLLAR VALUE": (a) in respect of the undrawn amount of any
Letter of Credit denominated in an Alternative Currency, the Dollar Equivalent
thereof determined based upon the applicable Spot Exchange Rate as of (i) the
date of issuance of such Letter of Credit, until the first Calculation Date
thereafter and (ii) thereafter, the most recent Calculation Date and (b) in
respect of a Reimbursement Obligation denominated in an Alternative Currency,
the Dollar Equivalent thereof determined based upon the applicable Spot Exchange
Rate as of the date such Reimbursement Obligation was incurred.
3
"ASSIGNMENT AND ACCEPTANCE": an Assignment and Acceptance,
substantially in the form of Exhibit E.
"ASSIGNOR": as defined in Section 10.6(c).
"AVAILABLE REVOLVING COMMITMENT": as to any Revolving Lender at any
time, an amount equal to the excess, if any, of (a) such Lender's Revolving
Commitment then in effect OVER (b) such Lender's Revolving Extensions of Credit
then outstanding.
"BASE RATE": for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/16 of 1%) equal to the greatest of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on such
day plus 1/2 of 1%. For purposes hereof: "PRIME RATE" shall mean the rate of
interest per annum publicly announced from time to time by the Reference Lender
as its prime rate in effect at its principal office in New York City (the Prime
Rate not being intended to be the lowest rate of interest charged by the
Reference Lender in connection with extensions of credit to debtors). Any
change in the Base Rate due to a change in the Prime Rate or the Federal Funds
Effective Rate shall be effective as of the opening of business on the effective
day of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"BASE RATE LOANS": Loans the rate of interest applicable to which is
based upon the Base Rate.
"BENEFITTED LENDER": as defined in Section 10.7(a).
"BOARD": the Board of Governors of the Federal Reserve System of the
United States (or any successor).
"BORROWER": as defined in the preamble hereto.
"BORROWING DATE": any Business Day specified by the Borrower as a
date on which the Borrower requests the relevant Lenders to make Loans
hereunder.
"BUSINESS": as defined in Section 4.17(b).
"BUSINESS DAY": a day other than a Saturday, Sunday or other day on
which commercial banks in New York City are authorized or required by law to
close, PROVIDED, that with respect to notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, such day is
also a day for trading by and between banks in Dollar deposits in the London
interbank eurodollar market.
"CALCULATION DATE": the last Business Day of each calendar month.
"CAPITAL EXPENDITURES": for any period, with respect to any Person,
the aggregate of all expenditures by such Person and its Subsidiaries for the
acquisition or leasing (pursuant to a capital lease) of fixed or capital assets
or additions to equipment (including replacements,
4
capitalized repairs and improvements during such period) that should be
capitalized under GAAP on a consolidated balance sheet of such Person and its
Subsidiaries.
"CAPITAL LEASE OBLIGATIONS": as to any Person, the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP
and, for the purposes of this Agreement, the amount of such obligations at any
time shall be the capitalized amount thereof at such time determined in
accordance with GAAP.
"CAPITAL STOCK": any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants, rights or options to purchase any of the foregoing.
"CASH EQUIVALENTS": (a) marketable direct obligations issued by, or
unconditionally guaranteed by, the United States Government or issued by any
agency 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; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of six months or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States or any state thereof having combined capital and
surplus of not less than $500,000,000; (c) commercial paper of an issuer rated
at least A-1 by Standard & Poor's Ratings Services ("S&P") or P-1 by Xxxxx'x
Investors Service, Inc. ("MOODY'S"), or carrying an equivalent rating by a
nationally recognized rating agency, if both of the two named rating agencies
cease publishing ratings of commercial paper issuers generally, and maturing
within six months from the date of acquisition; (d) repurchase obligations of
any Lender or of any commercial bank satisfying the requirements of clause (b)
of this definition, having a term of not more than 30 days, with respect to
securities issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the date of
acquisition issued or fully guaranteed by any state, commonwealth or territory
of the United States, by any political subdivision or taxing authority of any
such state, commonwealth or territory or by any foreign government, the
securities of which state, commonwealth, territory, political subdivision,
taxing authority or foreign government (as the case may be) are rated at least A
by S&P or A by Moody's; (f) securities with maturities of six months or less
from the date of acquisition backed by standby letters of credit issued by any
Lender or any commercial bank satisfying the requirements of clause (b) of this
definition; or (g) shares of money market mutual or similar funds which invest
exclusively in assets satisfying the requirements of clauses (a) through (f) of
this definition.
"CLOSING DATE": the date on which the conditions precedent set forth
in Section 5.1 shall have been satisfied or waived, which satisfaction or waiver
shall be evidenced by the funding of the initial Loans hereunder.
"CODE": the Internal Revenue Code of 1986, as amended from time to
time.
5
"COLLATERAL": all property of the Loan Parties, now owned or
hereafter acquired, upon which a Lien is purported to be created by any Security
Document.
"COMMERCIAL LETTER OF CREDIT" as defined in subsection 3.1(b)(i)(C).
"COMMITMENT": as to any Lender, the sum of the Term Commitment and
the Revolving Commitment of such Lender.
"COMMITMENT FEE RATE": 3/8 of 1% per annum; PROVIDED, that on and
after the first Adjustment Date occurring after the completion of two full
fiscal quarters of the Borrower after the Closing Date, the Commitment Fee Rate
will be determined pursuant to the Pricing Grid; and PROVIDED, FURTHER, that,
notwithstanding the foregoing, in the event that the Consolidated Leverage Ratio
is greater than 3.75 to 1.0, the Commitment Fee Rate will be determined pursuant
to the Pricing Grid.
"COMMONLY CONTROLLED ENTITY": an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.
"COMPLIANCE CERTIFICATE": a certificate duly executed by a
Responsible Officer substantially in the form of Exhibit B.
"CONFIDENTIAL INFORMATION MEMORANDUM": the Confidential Information
Memorandum on Radian International LLC dated February 1998 and furnished to the
Lenders.
"CONSOLIDATED CURRENT ASSETS": at any date, all amounts (other than
cash and Cash Equivalents) that would, in conformity with GAAP, be set forth
opposite the caption "total current assets" (or any like caption) on a
consolidated balance sheet of the Borrower and its Subsidiaries at such date.
"CONSOLIDATED CURRENT LIABILITIES": at any date, all amounts that
would, in conformity with GAAP, be set forth opposite the caption "total current
liabilities" (or any like caption) on a consolidated balance sheet of the
Borrower and its Subsidiaries at such date, but excluding (a) the current
portion of any Consolidated Funded Debt of the Borrower and its Subsidiaries and
(b) without duplication of clause (a) above, all Indebtedness consisting of
Revolving Loans to the extent otherwise included therein.
"CONSOLIDATED EBITDA": for any period, Consolidated Net Income for
such period PLUS, without duplication and to the extent reflected as a charge in
the statement of such Consolidated Net Income for such period, the sum of (a)
income tax expense, (b) interest expense, amortization or writeoff of debt
discount and debt issuance costs and commissions, discounts and other fees and
charges associated with Indebtedness (including the Loans), (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period, losses on sales of assets outside of the ordinary course of business)
and (f) any other non-cash charges, and
6
MINUS, to the extent included in the statement of such Consolidated Net
Income for such period, the sum of (a) interest income, (b) any
extraordinary, unusual or non-recurring income or gains (including, whether
or not otherwise includable as a separate item in the statement of such
Consolidated Net Income for such period, gains on the sales of assets outside
of the ordinary course of business) and (c) any other non-cash income, all as
determined on a consolidated basis. For the purposes of calculating
Consolidated EBITDA for any period of four consecutive fiscal quarters (each,
a "Reference Period") pursuant to any determination of the Consolidated
Leverage Ratio, (i) if at any time during such Reference Period the Borrower
or any Subsidiary shall have made any Material Disposition, the Consolidated
EBITDA for such Reference Period shall be reduced by an amount equal to the
Consolidated EBITDA (if positive) attributable to the property that is the
subject of such Material Disposition for such Reference Period or increased
by an amount equal to the Consolidated EBITDA (if negative) attributable
thereto for such Reference Period and (ii) if during such Reference Period
the Borrower or any Subsidiary shall have made a Material Acquisition,
Consolidated EBITDA for such Reference Period shall be calculated after
giving PRO FORMA effect thereto as if such Material Acquisition occurred on
the first day of such Reference Period. As used in this definition,
"MATERIAL ACQUISITION" means any acquisition of property or series of related
acquisitions of property that (a) constitutes assets comprising all or
substantially all of an operating unit of a business or constitutes all or
substantially all of the common stock of a Person and (b) involves the
payment of consideration by the Borrower and its Subsidiaries in excess of
$2,000,000; and "MATERIAL DISPOSITION" means any Disposition of property or
series of related Dispositions of property that yields gross proceeds to the
Borrower or any of its Subsidiaries in excess of $2,000,000.
Notwithstanding the foregoing, in any calculation of Consolidated EBITDA that
includes any calendar quarter of 1997, the contribution to Consolidated
EBITDA of Radian for such quarter shall be deemed to be equal to 25% of the
product of 12/5ths times the Consolidated EBITDA of Radian and its
Subsidiaries for the five-month period ended May 31, 1998
"CONSOLIDATED FIXED CHARGE COVERAGE RATIO": for any period, the ratio
of (a) Consolidated EBITDA for such period less the aggregate amount actually
paid by the Borrower and its Subsidiaries during such period on account of
Capital Expenditures (excluding the principal amount of Indebtedness incurred in
connection with such expenditures) to (b) Consolidated Fixed Charges for such
period.
"CONSOLIDATED FIXED CHARGES": for any period, the sum (without
duplication) of (a) Consolidated Interest Expense for such period and (b) income
taxes actually paid in cash by the Borrower and its Subsidiaries during such
period and (c) scheduled payments made during such period on account of
principal of Indebtedness of the Borrower or any of its Subsidiaries (including
scheduled principal payments in respect of the Term Loans).
"CONSOLIDATED FUNDED DEBT": for any date, the amount of all
Indebtedness of the Borrower and its Subsidiaries that would be reflected on a
consolidated balance sheet of the Borrower and its Subsidiaries prepared in
accordance with GAAP as of such date, that matures more than one year from the
date of its creation or matures within one year from such date but is renewable
or extendible, at the option of the Borrower or such Subsidiary, to a date more
than one year from such date or arises under a revolving credit or similar
agreement that obligates the lender or lenders to extend credit during a period
of more than one year from such date, including all current maturities and
current
7
sinking fund payments in respect of such Indebtedness whether or not required
to be paid within one year from the date of its creation and, in the case of
the Borrower, Indebtedness in respect of the Loans.
"CONSOLIDATED INTEREST EXPENSE": for any period, total cash interest
expense (including that attributable to Capital Lease Obligations) of the
Borrower and its Subsidiaries for such period with respect to all outstanding
Indebtedness of the Borrower and its Subsidiaries (including all commissions,
discounts and other fees and charges owed with respect to letters of credit and
bankers' acceptance financing and net costs under Hedge Agreements in respect of
interest rates to the extent such net costs are allocable to such period in
accordance with GAAP).
"CONSOLIDATED LEASE EXPENSE": for any period, the aggregate amount of
fixed and contingent rentals payable by the Borrower and its Subsidiaries for
such period with respect to leases of real and personal property, determined on
a consolidated basis in accordance with GAAP.
"CONSOLIDATED LEVERAGE RATIO": on any day, the ratio of
(a) Consolidated Funded Debt on such day to (b) Consolidated EBITDA for the
then most recently ended period of four consecutive fiscal quarters of the
Borrower for which financial statements shall have been delivered to the
Lenders pursuant to Section 6.1.
"CONSOLIDATED NET INCOME": for any period, the consolidated net
income (or loss) of the Borrower and its Subsidiaries, determined on a
consolidated basis in accordance with GAAP; PROVIDED that there shall be
excluded (a) the income (or deficit) of any Person accrued prior to the date it
becomes a Subsidiary of the Borrower or is merged into or consolidated with the
Borrower or any of its Subsidiaries, (b) the income (or deficit) of any Person
(other than a Subsidiary of the Borrower) in which the Borrower or any of its
Subsidiaries has an ownership interest, except to the extent that any such
income is actually received by the Borrower or such Subsidiary in the form of
dividends or similar distributions and (c) the undistributed earnings of any
Subsidiary of the Borrower to the extent that the declaration or payment of
dividends or similar distributions by such Subsidiary is not at the time
permitted by the terms of any Contractual Obligation (other than under any Loan
Document) or Requirement of Law applicable to such Subsidiary.
"CONSOLIDATED WORKING CAPITAL": at any time, the excess of
Consolidated Current Assets over Consolidated Current Liabilities.
"CONTINUING DIRECTORS": the directors of the Borrower on the Closing
Date, after giving effect to the Acquisition and the other transactions
contemplated hereby, and each other director, if, in each case, such other
director's nomination for election to the board of directors of the Borrower is
recommended by at least 66-2/3% of the then Continuing Directors.
"CONTRACTUAL OBLIGATION": as to any Person, any provision of any
security issued by such Person or of any agreement, instrument or other
undertaking to which such Person is a party or by which it or any of its
property is bound.
8
"DEFAULT": any of the events specified in Section 8, whether or not
any requirement for the giving of notice, the lapse of time, or both, has been
satisfied.
"DISPOSITION": with respect to any property, any sale, lease, sale
and leaseback, assignment, conveyance, transfer or other disposition thereof.
The terms "DISPOSE" and "DISPOSED OF" shall have correlative meanings.
"DOCUMENTATION AGENT": as defined in the preamble hereto.
"DOLLAR EQUIVALENT": with respect to an amount of any Alternative
Currency on any date, the amount of Dollars that may be required to purchase
such amount of such Alternative Currency at the Spot Exchange Rate with respect
to such Alternative Currency on such date.
"DOLLARS" and "$": dollars in lawful currency of the United States.
"DOMESTIC SUBSIDIARY": any Subsidiary of the Borrower organized under
the laws of any jurisdiction within the United States.
"ENVIRONMENTAL LAWS": any and all applicable foreign, Federal, state,
local or municipal laws, rules, orders, regulations, statutes, ordinances,
codes, decrees, requirements of any Governmental Authority or other Requirements
of Law (including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect.
"ERISA": the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"EUROCURRENCY RESERVE REQUIREMENTS": for any day as applied to a
Eurodollar Loan, the aggregate (without duplication) of the maximum rates
(expressed as a decimal fraction) of reserve requirements in effect on such day
(including basic, supplemental, marginal and emergency reserves under any
regulations of the Board or other Governmental Authority having jurisdiction
with respect thereto) dealing with reserve requirements prescribed for
eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the Board) maintained by a member bank of the Federal Reserve
System.
"EURODOLLAR BASE RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum determined on the
basis of the rate for deposits in Dollars for a period equal to such Interest
Period commencing on the first day of such Interest Period appearing on Page
3750 of the Dow Xxxxx Markets screen as of 11:00 A.M., London time, two Business
Days prior to the beginning of such Interest Period. In the event that such
rate does not appear on Page 3750 of the Dow Xxxxx Markets screen (or otherwise
on such screen), the "EURODOLLAR BASE RATE" shall be determined by reference to
such other comparable publicly available service for displaying eurodollar rates
as may be selected by the Administrative Agent or, in the absence of such
availability, by reference to the rate at which the Administrative Agent is
offered Dollar deposits at or about 11:00 A.M., London time, two Business Days
prior to the beginning of such Interest Period in the interbank
9
eurodollar market where its eurodollar and foreign currency and exchange
operations are then being conducted for delivery on the first day of such
Interest Period for the number of days comprised therein.
"EURODOLLAR LOANS": Loans the rate of interest applicable to which is
based upon the Eurodollar Rate.
"EURODOLLAR RATE": with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, a rate per annum determined for such day
in accordance with the following formula (rounded upward to the nearest 1/100th
of 1%):
Eurodollar Base Rate
----------------------------------------
1.00 - Eurocurrency Reserve Requirements
"EURODOLLAR TRANCHE": the collective reference to Eurodollar Loans
the then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).
"EVENT OF DEFAULT": any of the events specified in Section 8,
PROVIDED that any requirement for the giving of notice, the lapse of time, or
both, has been satisfied.
"EXCESS CASH FLOW": for any fiscal year of the Borrower, the excess,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) an amount equal to the amount of all non-cash charges
(including depreciation and amortization) deducted in arriving at such
Consolidated Net Income, (iii) an amount equal to the aggregate net non-cash
loss on the Disposition of property by the Borrower and its Subsidiaries during
such fiscal year (other than sales of inventory in the ordinary course of
business), to the extent deducted in arriving at such Consolidated Net Income
and (iv) the amount by which Consolidated Working Capital decreased during such
fiscal year OVER (b) the sum, without duplication, of (i) an amount equal to the
amount of all non-cash credits included in arriving at such Consolidated Net
Income, (ii) the aggregate amount actually paid by the Borrower and its
Subsidiaries in cash during such fiscal year on account of Capital Expenditures
(excluding the principal amount of Indebtedness incurred in connection with such
expenditures and any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all prepayments of
Revolving Loans during such fiscal year to the extent accompanying permanent
optional reductions of the Revolving Commitments and all optional prepayments of
the Term Loans during such fiscal year, (iv) the aggregate amount of all
regularly scheduled principal payments of Consolidated Funded Debt (including
the Term Loans) of the Borrower and its Subsidiaries made during such fiscal
year (other than in respect of any revolving credit facility to the extent there
is not an equivalent permanent reduction in commitments thereunder), (v) an
amount equal to the aggregate net non-cash gain on the Disposition of property
by the Borrower and its Subsidiaries during such fiscal year (other than sales
of inventory in the ordinary course of business), to the extent included in
arriving at such Consolidated Net Income and (vi) the amount by which
Consolidated Working Capital increased during such fiscal year.
"EXCESS CASH FLOW APPLICATION DATE": as defined in Section 2.9(c).
10
"EXCLUDED FOREIGN SUBSIDIARY": any Foreign Subsidiary in respect of
which either (a) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (b) the guaranteeing by such Subsidiary of the Obligations, would,
in the good faith judgment of the Borrower, result in adverse tax consequences
to the Borrower.
"FACILITY": each of (a) the Term Commitments and the Term Loans made
thereunder (the "TERM FACILITY") and (b) the Revolving Commitments and the
extensions of credit made thereunder (the "REVOLVING FACILITY").
"FEDERAL FUNDS EFFECTIVE RATE": for any day, 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 on the next
succeeding Business Day by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for the day of such transactions received by the Reference Lender
from three federal funds brokers of recognized standing selected by it.
"FEE LETTER": the Fee Letter, dated July 23, 1998, to the Borrower
from Canadian Imperial Bank of Commerce.
"FOREIGN SUBSIDIARY": any Subsidiary of the Borrower that is not a
Domestic Subsidiary.
"FUNDING OFFICE": the office of the Administrative Agent specified in
Section 10.2 or such other office within the United States as may be specified
from time to time by the Administrative Agent as its funding office by written
notice to the Borrower and the Lenders.
"GAAP": generally accepted accounting principles in the United States
as in effect from time to time, except that for purposes of Section 7.1 and any
calculation of the Consolidated Leverage Ratio, GAAP shall be determined on the
basis of such principles in effect on the date hereof and consistent with those
used in the preparation of the most recent audited financial statements
delivered pursuant to Section 4.1(b).
"GOVERNMENTAL AUTHORITY": any nation or government, any state or
other political subdivision thereof, any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative functions of or
pertaining to government, any securities exchange and any self-regulatory
organization (including the National Association of Insurance Commissioners).
"GUARANTEE AND COLLATERAL AGREEMENT": the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower and each Subsidiary
Guarantor, substantially in the form of Exhibit A, as the same may be amended,
supplemented or otherwise modified from time to time.
"GUARANTEE OBLIGATION": as to any Person (the "GUARANTEEING PERSON"),
any obligation of (a) the guaranteeing person or (b) another Person (including
any bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or
11
similar obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "PRIMARY
OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any property constituting direct or indirect security
therefor, (ii) to advance or supply funds (1) for the purchase or payment of
any such primary obligation or (2) to maintain working capital or equity
capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; PROVIDED,
HOWEVER, that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business.
The amount of any Guarantee Obligation of any guaranteeing person shall be
deemed to be the lower of (a) an amount equal to the stated or determinable
amount of the primary obligation in respect of which such Guarantee
Obligation is made and (b) the maximum amount for which such guaranteeing
person may be liable pursuant to the terms of the instrument embodying such
Guarantee Obligation, unless such primary obligation and the maximum amount
for which such guaranteeing person may be liable are not stated or
determinable, in which case the amount of such Guarantee Obligation shall be
such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"GUARANTORS": the collective reference to the Subsidiary Guarantors.
"HEDGE AGREEMENTS": all interest rate swaps, caps or collar
agreements or similar arrangements providing for protection against fluctuations
in interest rates or currency exchange rates or the exchange of nominal interest
obligations, either generally or under specific contingencies.
"INDEBTEDNESS": of any Person at any date, without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations
of such Person for the deferred purchase price of property or services (other
than current trade payables incurred in the ordinary course of such Person's
business), (c) all obligations of such Person evidenced by notes, bonds,
debentures or other similar instruments, (d) all indebtedness created or
arising under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights and
remedies of the seller or lender under such agreement in the event of default
are limited to repossession or sale of such property), (e) all Capital Lease
Obligations of such Person, (f) all obligations of such Person, contingent or
otherwise, as an account party under acceptance, letter of credit or similar
facilities, (g) all Guarantee Obligations of such Person in respect of
obligations of the kind referred to in clauses (a) through (f) above; (h) all
obligations of the kind referred to in clauses (a) through (g) above secured
by (or for which the holder of such obligation has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including
accounts and contract rights) owned by such Person, whether or not such
Person has assumed or become liable for the payment of such obligation; and
(i) for the purposes of Section 8(e) only, all obligations of such Person in
respect of Hedge Agreements.
12
"INSOLVENCY": with respect to any Multiemployer Plan, the condition
that such Plan is insolvent within the meaning of Section 4245 of ERISA.
"INSOLVENT": pertaining to a condition of Insolvency.
"INTELLECTUAL PROPERTY": the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including
copyrights, copyright licenses, patents, patent licenses, trademarks, trademark
licenses, technology, know-how and processes, and all rights to xxx at law or in
equity for any infringement or other impairment thereof, including the right to
receive all proceeds and damages therefrom.
"INTEREST PAYMENT DATE": (a) as to any Base Rate Loan, the last day
of each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or less, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Loan that is an Base
Rate Loan), the date of any repayment or prepayment made in respect thereof.
"INTEREST PERIOD": as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; PROVIDED that, all of the
foregoing provisions relating to Interest Periods are subject to the following:
(i) if any Interest Period would otherwise end on a day that is
not a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) the Borrower may not select an Interest Period for
(x) Revolving Loans that would extend beyond the Revolving Termination Date
or (y) Term Loans that would extend beyond the date final payment is due on
the Term Loans;
(iii) any Interest Period that begins on the last Business Day of
a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of a calendar month; and
(iv) the Borrower shall select Interest Periods so as not to
require a payment or prepayment of any Eurodollar Loan during an Interest
Period for such Loan.
13
"INVESTMENTS": as defined in Section 7.8.
"ISSUING LENDER": Canadian Imperial Bank of Commerce, in its capacity
as issuer of any Letter of Credit.
"L/C COMMITMENT": $40,000,000.
"L/C FEE PAYMENT DATE": the last day of each March, June, September
and December, and the last day of the Revolving Commitment Period.
"L/C OBLIGATIONS": at any time, an amount equal to the sum of (a) the
sum of (i) the aggregate then undrawn and unexpired amount of the then
outstanding Letters of Credit denominated in Dollars plus (ii) the then
Alternative Currency L/C Exposure and (b) the aggregate amount of drawings under
Letters of Credit which have not then been reimbursed pursuant to Section 3.5.
"L/C PARTICIPANTS": the collective reference to all the Revolving
Lenders other than the Issuing Lender.
"LENDERS": as defined in the preamble hereto.
"LETTERS OF CREDIT": as defined in Section 3.1(a).
"LIEN": any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other), charge or other security
interest or any preference, priority or other security agreement or preferential
arrangement of any kind or nature whatsoever (including any conditional sale or
other title retention agreement and any capital lease having substantially the
same economic effect as any of the foregoing).
"LOAN": any loan made by any Lender pursuant to this Agreement.
"LOAN DOCUMENTS": this Agreement, the Security Documents and the
Notes.
"LOAN PARTIES": the Borrower and each Subsidiary of the Borrower that
is a party to a Loan Document.
"MAJORITY FACILITY LENDERS": with respect to any Facility, the
holders of more than 50% of the aggregate unpaid principal amount of the Term
Loans or the Total Revolving Extensions of Credit, as the case may be,
outstanding under such Facility (or, in the case of the Revolving Facility,
prior to any termination of the Revolving Commitments, the holders of more than
50% of the Total Revolving Commitments).
"MAJORITY REVOLVING FACILITY LENDERS": the Majority Facility Lenders
in respect of the Revolving Facility.
14
"MATERIAL ADVERSE EFFECT": a material adverse effect on (a) the
Acquisition, (b) the business, property, operations, condition (financial or
otherwise) or prospects of the Borrower and its Subsidiaries taken as a whole or
(c) the validity or enforceability of this Agreement or any of the other Loan
Documents or the rights or remedies of the Administrative Agent or the Lenders
hereunder or thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN": any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including asbestos, polychlorinated biphenyls
and urea-formaldehyde insulation.
"MORTGAGE": a mortgage, in form and substance acceptable to the
Administrative Agent, which evidences a lien on real property.
"MORTGAGED PROPERTY": any real property that is the subject of a
Mortgage.
"MULTIEMPLOYER PLAN": a Plan that is a multiemployer plan as defined
in Section 4001(a)(3) of ERISA.
"NET CASH PROCEEDS": (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys' fees, accountants' fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured by
a Lien expressly permitted hereunder on any asset that is the subject of such
Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other fees and expenses actually incurred in connection therewith
and net of taxes paid or reasonably estimated to be payable as a result thereof
(after taking into account any available tax credits or deductions and any tax
sharing arrangements) and (b) in connection with any issuance or sale of equity
securities or debt securities or instruments or the incurrence of loans, the
cash proceeds received from such issuance or incurrence, net of attorneys' fees,
investment banking fees, accountants' fees, underwriting discounts and
commissions and other fees and expenses actually incurred in connection
therewith.
"NON-EXCLUDED TAXES": as defined in Section 2.17(a).
"NON-GUARANTOR SUBSIDIARY": any Subsidiary of the Borrower that is
not a Subsidiary Guarantor.
"NON-U.S. LENDER": as defined in Section 2.17(d).
"NOTES": the collective reference to any promissory note evidencing
Loans.
"OBLIGATIONS": the unpaid principal of and interest on (including
interest accruing after the maturity of the Loans and Reimbursement Obligatiofns
and interest accruing after the filing of
15
any petition in bankruptcy, or the commencement of any insolvency,
reorganization or like proceeding, relating to the Borrower, whether or not a
claim for post-filing or post-petition interest is allowed in such
proceeding) the Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender (or, in the case of
Hedge Agreements, any affiliate of any Lender), whether direct or indirect,
absolute or contingent, due or to become due, or now existing or hereafter
incurred, which may arise under, out of, or in connection with, this
Agreement, any other Loan Document, the Letters of Credit, any Hedge
Agreement entered into with any Lender or any affiliate of any Lender or any
other document made, delivered or given in connection herewith or therewith,
whether on account of principal, interest, reimbursement obligations, fees,
indemnities, costs, expenses (including all fees, charges and disbursements
of counsel to the Administrative Agent or to any Lender that are required to
be paid by the Borrower pursuant hereto) or otherwise.
"OTHER TAXES": any and all present or future stamp or documentary
taxes or any other excise or property taxes, charges or similar levies arising
from any payment made hereunder or from the execution, delivery or enforcement
of, or otherwise with respect to, this Agreement or any other Loan Document.
"PARTICIPANT": as defined in Section 10.6(b).
"PBGC": the Pension Benefit Guaranty Corporation established pursuant
to Subtitle A of Title IV of ERISA (or any successor).
"PERFORMANCE STANDBY LETTER OF CREDIT": as defined in subsection
3.1(b)(i)(A).
"PERMITTED SALE AND LEASEBACK TRANSACTION": as defined in Section
7.10.
"PERSON": an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated association,
joint venture, Governmental Authority or other entity of whatever nature.
"PLAN": at a particular time, any employee benefit plan that is
covered by ERISA and in respect of which the Borrower or a Commonly Controlled
Entity is (or, if such plan were terminated at such time, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PRICING GRID": the pricing grid attached hereto as Annex A.
"PRO FORMA BALANCE SHEET": as defined in Section 4.1(a).
"PROJECTIONS": as defined in Section 6.2(c).
"PROPERTIES": as defined in Section 4.17(a).
"RADIAN": Radian International LLC, a Delaware limited liability
company.
16
"RECOVERY EVENT": any settlement of or payment in respect of any
property or casualty insurance claim or any condemnation proceeding relating
to any asset of the Borrower or any of its Subsidiaries.
"REFERENCE LENDER": Canadian Imperial Bank of Commerce.
"REGISTER": as defined in Section 10.6(d).
"REGULATION U": Regulation U of the Board as in effect from time
to time.
"REIMBURSEMENT OBLIGATION": the obligation of the Borrower to
reimburse the Issuing Lender pursuant to Section 3.5 for amounts drawn under
Letters of Credit.
"REINVESTMENT DEFERRED AMOUNT": with respect to any Reinvestment
Event, the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans or reduce the Revolving Commitments pursuant to Section 2.9(b) as a
result of the delivery of a Reinvestment Notice.
"REINVESTMENT EVENT": any Asset Sale or Recovery Event in respect
of which the Borrower has delivered a Reinvestment Notice.
"REINVESTMENT NOTICE": a written notice executed by a Responsible
Officer stating that no Event of Default has occurred and is continuing and
that the Borrower (directly or indirectly through a Subsidiary) intends and
expects to use all or a specified portion of the Net Cash Proceeds of an
Asset Sale or Recovery Event to acquire assets useful in its business or to
make one or more acquisitions.
"REINVESTMENT PREPAYMENT AMOUNT": with respect to any Reinvestment
Event, the Reinvestment Deferred Amount relating thereto less any amount
expended prior to the relevant Reinvestment Prepayment Date to acquire assets
useful in the Borrower's business or to make one or more acquisitions.
"REINVESTMENT PREPAYMENT DATE": with respect to any Reinvestment
Event, the earlier of (a) the date occurring six months after such
Reinvestment Event and (b) the date on which the Borrower shall have
determined not to, or shall have otherwise ceased to, acquire assets useful
in the Borrower's business or to make one or more acquisitions with all or
any portion of the relevant Reinvestment Deferred Amount.
"REORGANIZATION": with respect to any Multiemployer Plan, the
condition that such plan is in reorganization within the meaning of Section
4241 of ERISA.
"REPORTABLE EVENT": any of the events set forth in Section 4043(c)
of ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC
Reg. Section 4043.
17
"REQUIRED LENDERS": at any time, the holders of more than 50% of
(a) until the Closing Date, the Commitments then in effect and (b)
thereafter, the sum of (i) the aggregate unpaid principal amount of the Term
Loans then outstanding and (ii) the Total Revolving Commitments then in
effect or, if the Revolving Commitments have been terminated, the Total
Revolving Extensions of Credit then outstanding.
"REQUIRED PREPAYMENT LENDERS": the Majority Facility Lenders in
respect of each Facility.
"REQUIREMENT OF LAW": as to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person, and any law, treaty, rule or regulation or determination of an
arbitrator or a court or other Governmental Authority, in each case
applicable to or binding upon such Person or any of its property or to which
such Person or any of its property is subject.
"RESPONSIBLE OFFICER": the chief executive officer, president or
chief financial officer of the Borrower, but in any event, with respect to
financial matters, the chief financial officer of the Borrower.
"RESTRICTED PAYMENTS": as defined in Section 7.6.
"REVOLVING COMMITMENT": as to any Lender, the obligation of such
Lender, if any, to make Revolving Loans and participate in Letters of Credit
in an aggregate principal and/or face amount not to exceed the amount set
forth under the heading "Revolving Commitment" opposite such Lender's name on
Schedule 1.1A or in the Assignment and Acceptance pursuant to which such
Lender became a party hereto, as the same may be changed from time to time
pursuant to the terms hereof. The original amount of the Total Revolving
Commitments is $75,000,000.
"REVOLVING COMMITMENT PERIOD": the period from and including the
Closing Date to the Revolving Termination Date.
"REVOLVING EXTENSIONS OF CREDIT": as to any Revolving Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Loans held by such Lender then outstanding and (b) such
Lender's Revolving Percentage of the L/C Obligations then outstanding.
"REVOLVING LENDER": each Lender that has a Revolving Commitment or
that holds Revolving Loans.
"REVOLVING LOANS": as defined in Section 2.4(a).
"REVOLVING PERCENTAGE": as to any Revolving Lender at any time,
the percentage which such Lender's Revolving Commitment then constitutes of
the Total Revolving Commitments (or, at any time after the Revolving
Commitments shall have expired or terminated, the percentage which the
aggregate principal amount of such Lender's Revolving Loans then outstanding
constitutes of the aggregate principal amount of the Revolving Loans then
outstanding).
18
"REVOLVING TERMINATION DATE": June 30, 2004.
"SEC": the Securities and Exchange Commission, any successor
thereto and any analogous Governmental Authority.
"SECURITY DOCUMENTS": the collective reference to the Guarantee
and Collateral Agreement, the Mortgages and all other security documents
hereafter delivered to the Administrative Agent granting a Lien on any
property of any Person to secure the obligations and liabilities of any Loan
Party under any Loan Document.
"SELLER": Dow Chemical Company, a Delaware corporation.
"SENIOR UNSECURED NOTES": $120,000,000 in senior unsecured notes
described on Schedule 7.2(d).
"SINGLE EMPLOYER PLAN": any Plan that is covered by Title IV of
ERISA, but that is not a Multiemployer Plan.
"SOLVENT": when used with respect to any Person, means that, as of
any date of determination, (a) the amount of the "present fair saleable
value" of the assets of such Person will, as of such date, exceed the amount
of all "liabilities of such Person, contingent or otherwise", as of such
date, as such quoted terms are determined in accordance with applicable
federal and state laws governing determinations of the insolvency of debtors,
(b) the present fair saleable value of the assets of such Person will, as of
such date, be greater than the amount that will be required to pay the
liability of such Person on its debts as such debts become absolute and
matured, (c) such Person will not have, as of such date, an unreasonably
small amount of capital with which to conduct its business, and (d) such
Person will be able to pay its debts as they mature. For purposes of this
definition, (i) "debt" means liability on a "claim", and (ii) "claim" means
any (x) right to payment, whether or not such a right is reduced to judgment,
liquidated, unliquidated, fixed, contingent, matured, unmatured, disputed,
undisputed, legal, equitable, secured or unsecured or (y) right to an
equitable remedy for breach of performance if such breach gives rise to a
right to payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured or unmatured, disputed, undisputed,
secured or unsecured.
"SPOT EXCHANGE RATE": on any day, with respect to any Alternative
Currency, the spot rate at which such Alternative Currency is offered for
Dollars on such day by the Administrative Agent in London or in the interbank
market where its foreign currency exchange operations in respect of such
Alternative Currency are then being conducted at approximately 11:00 A.M.
(local time). Notwithstanding the foregoing, if for any reason at the time
of any determination of the Spot Exchange Rate as described above, no such
rate is being quoted, the Administrative Agent may use any reasonable method,
applied consistently, it deems appropriate to determine such rate, and such
determination shall be conclusive absent manifest error.
"STANDBY LETTER OF CREDIT": as defined in Section 3.1(b)(i)(B).
19
"SUBSIDIARY": as to any Person, a corporation, partnership,
limited liability company or other entity of which shares of stock or other
ownership interests having ordinary voting power (other than stock or such
other ownership interests having such power only by reason of the happening
of a contingency) to elect a majority of the board of directors or other
managers of such corporation, partnership or other entity are at the time
owned, or the management of which is otherwise controlled, directly or
indirectly through one or more intermediaries, or both, by such Person.
Unless otherwise qualified, all references to a "Subsidiary" or to
"Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"SUBSIDIARY GUARANTOR": each Subsidiary of the Borrower other than
any Excluded Foreign Subsidiary.
"SYNDICATION AGENT": as defined in the preamble hereto.
"TERM COMMITMENT": as to any Lender, the obligation of such
Lender, if any, to make a Term Loan to the Borrower hereunder in a principal
amount not to exceed the amount set forth under the heading "Term Commitment"
opposite such Lender's name on Schedule 1.1A. The original aggregate amount
of the Term Commitments is $265,000,000.
"TERM LENDERS": each Lender that has a Term Commitment or is the
holder of a Term Loan.
"TERM LOANS": as defined in Section 2.1.
"TERM PERCENTAGE": as to Term Lender at any time, the percentage
which such Lender's Term Commitment then constitutes of the aggregate Term
Commitments (or, at any time after the Closing Date, the percentage which the
aggregate principal amount of such Lender's Term Loans then outstanding
constitutes of the aggregate principal amount of the Term Loans then
outstanding).
"TOTAL REVOLVING COMMITMENTS": at any time, the aggregate amount
of the Revolving Commitments then in effect.
"TOTAL REVOLVING EXTENSIONS OF CREDIT": at any time, the aggregate
amount of the Revolving Extensions of Credit of the Revolving Lenders
outstanding at such time.
"TRANSFEREE": any Assignee or Participant.
"TYPE": as to any Loan, its nature as an Base Rate Loan or a
Eurodollar Loan.
"UNIFORM CUSTOMS": the Uniform Customs and Practice for
Documentary Credits (1993 Revision), International Chamber of Commerce
Publication No. 500, as the same may be amended from time to time.
"UNITED STATES": the United States of America.
"U.S. TAXES": as defined in Section 10.6(d).
20
"WHOLLY OWNED SUBSIDIARY": as to any Person, any other Person all
of the Capital Stock of which (other than directors' qualifying shares
required by law) is owned by such Person directly and/or through other Wholly
Owned Subsidiaries.
1.2 OTHER DEFINITIONAL PROVISIONS. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document
made or delivered pursuant hereto or thereto.
(b) As used herein and in the other Loan Documents, and any
certificate or other document made or delivered pursuant hereto or thereto,
(i) accounting terms relating to the Borrower and its Subsidiaries not
defined in Section 1.1 and accounting terms partly defined in Section 1.1, to
the extent not defined, shall have the respective meanings given to them
under GAAP, (ii) the words "include", "includes" and "including" shall be
deemed to be followed by the phrase "without limitation", and (iii) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, Capital Stock, securities, revenues, accounts, leasehold
interests and contract rights.
(c) The words "hereof", "herein" and "hereunder" and words of
similar import when used in this Agreement shall refer to this Agreement as a
whole and not to any particular provision of this Agreement, and Section,
Schedule and Exhibit references are to this Agreement unless otherwise
specified.
(d) The meanings given to terms defined herein shall be equally
applicable to both the singular and plural forms of such terms.
SECTION 2. AMOUNT AND TERMS OF COMMITMENTS
2.1 TERM COMMITMENTS. Subject to the terms and conditions hereof,
each Term Lender severally agrees to make a term loan (a "TERM LOAN";
collectively, the "TERM LOANS") to the Borrower (i) on the Closing Date and
(ii) on any Business Day occurring on or before September 29, 1998 in an
aggregate amount equal to the amount of the Term Commitment of such Lender,
PROVIDED, HOWEVER, that, unless the Senior Unsecured Notes are repaid on the
Closing Date, the aggregate principal amount of the Term Loans made on the
Closing Date shall in no event exceed $140,000,000, and PROVIDED, FURTHER,
that the second drawdown shall only occur if the Senior Unsecured Notes are
not repaid on the Closing Date and the proceeds of the Term Loans made on
such second Borrowing Date may only be used for the purpose of repaying the
Senior Unsecured Notes. The Term Loans may from time to time be Eurodollar
Loans or Base Rate Loans, as determined by the Borrower and notified to the
Administrative Agent in accordance with Sections 2.2 and 2.10.
2.2 PROCEDURE FOR TERM LOAN BORROWING. The Borrower shall give the
Administrative Agent irrevocable notice (which notice must be received by the
Administrative Agent prior to 10:00 A.M., New York City time, one Business
Day prior to the anticipated Borrowing Date) requesting that the Term Lenders
make the Term Loans on such Borrowing Date and specifying the amount to be
borrowed. The Term Loans shall initially be Base Rate Loans, and, unless
otherwise agreed by the Administrative Agent in its sole discretion, until
the date that is 65 days after the Closing Date all Interest Periods for
21
all Loans hereunder which are LIBOR Loans shall be of one month duration and
shall end on the same Business Day. Upon receipt of such notice the
Administrative Agent shall promptly notify each Term Lender thereof. Not
later than 12:00 Noon, New York City time, on the Borrowing Date each Term
Lender shall make available to the Administrative Agent at the Funding Office
an amount in immediately available funds equal to the Term Loan or Term Loans
to be made by such Lender on such Borrowing Date. The Administrative Agent
shall credit the account of the Borrower on the books of such office of the
Administrative Agent with the aggregate of the amounts made available to the
Administrative Agent by the Term Lenders in immediately available funds.
2.3 REPAYMENT OF TERM LOANS. The Term Loans of each Lender shall
mature in 21 consecutive quarterly installments, commencing on June 30, 1999,
each of which shall be in an amount equal to such Lender's Term Percentage
multiplied by the amount set forth below opposite such installment:
Installment Principal Amount
----------- ----------------
June 30, 1999 $2,500,000
September 30, 1999 2,500,000
December 31, 1999 2,500,000
March 31, 2000 2,500,000
June 30, 2000 3,750,000
September 30, 2000 3,750,000
December 31, 2000 3,750,000
March 31, 2001 3,750,000
June 30, 2001 6,250,000
September 30, 2001 6,250,000
December 31, 2001 6,250,000
March 31, 2002 6,250,000
June 30, 2002 8,750,000
September 30, 2002 8,750,000
December 31, 2002 8,750,000
March 31, 2003 8,750,000
June 30, 2003 10,000,000
September 30, 2003 10,000,000
December 31, 2003 10,000,000
March 31, 2004 10,000,000
June 30, 2004 140,000,000
2.4 REVOLVING COMMITMENTS. (a) Subject to the terms and
conditions hereof, each Revolving Lender severally agrees to make revolving
credit loans ("REVOLVING LOANS") to the Borrower from time to time during the
Revolving Commitment Period in an aggregate principal amount at any one time
outstanding which, when added to such Lender's Revolving Percentage of the
L/C Obligations then outstanding, does not exceed the amount of such Lender's
Revolving Commitment. During the Revolving Commitment Period the Borrower
may use the Revolving Commitments by borrowing, prepaying the Revolving Loans
in whole or in part, and reborrowing, all in accordance with the terms and
conditions hereof. The
22
Revolving Loans may from time to time be Eurodollar Loans or Base Rate Loans,
as determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.5 and 2.10.
(b) The Borrower shall repay all outstanding Revolving Loans on
the Revolving Termination Date.
2.5 PROCEDURE FOR REVOLVING LOAN BORROWING. The Borrower may
borrow under the Revolving Commitments during the Revolving Commitment Period
on any Business Day, PROVIDED that the Borrower shall give the Administrative
Agent irrevocable notice (which notice must be received by the Administrative
Agent prior to 12:00 Noon, New York City time, (a) three Business Days prior
to the requested Borrowing Date, in the case of Eurodollar Loans, or (b) one
Business Day prior to the requested Borrowing Date, in the case of Base Rate
Loans), specifying (i) the amount and Type of Revolving Loans to be borrowed,
(ii) the requested Borrowing Date and (iii) in the case of Eurodollar Loans,
the respective amounts of each such Type of Loan and the respective lengths
of the initial Interest Period therefor. Any Revolving Loans made on the
Closing Date shall initially be Base Rate Loans and, until the date that is
65 days after the Closing Date all Interest Periods for all Loans hereunder
which are LIBOR Loans shall be of one month duration and shall end on the
same Business Day. Each borrowing under the Revolving Commitments shall be
in an amount equal to (x) in the case of Base Rate Loans, $1,000,000 or a
whole multiple of $100,000 in excess thereof (or, if the then aggregate
Available Revolving Commitments are less than $1,000,000, such lesser amount)
and (y) in the case of Eurodollar Loans, $2,000,000 or a whole multiple of
$100,000 in excess thereof. Upon receipt of any such notice from the
Borrower, the Administrative Agent shall promptly notify each Revolving
Lender thereof. Each Revolving Lender will make the amount of its PRO RATA
share of each borrowing available to the Administrative Agent for the account
of the Borrower at the Funding Office prior to 12:00 Noon, New York City
time, on the Borrowing Date requested by the Borrower in funds immediately
available to the Administrative Agent. Such borrowing will then be made
available to the Borrower by the Administrative Agent crediting the account
of the Borrower on the books of such office with the aggregate of the amounts
made available to the Administrative Agent by the Revolving Lenders and in
like funds as received by the Administrative Agent.
2.6 COMMITMENT FEES, ETC. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Lender a commitment
fee for the period from and including the Closing Date to the last day of the
Revolving Commitment Period, computed at the Commitment Fee Rate on the
average daily amount of the Available Revolving Commitment of such Lender
during the period for which payment is made, payable quarterly in arrears on
the last day of each March, June, September and December and on the Revolving
Termination Date, commencing on the first of such dates to occur after the
date hereof.
(b) The Borrower agrees to pay to the Arranger and the
Administrative Agent the fees in the amounts and on the dates set forth in
the Fee Letter.
2.7 TERMINATION OR REDUCTION OF REVOLVING COMMITMENTS. The
Borrower shall have the right, upon not less than three Business Days' notice
to the Administrative Agent, to terminate the Revolving Commitments or, from
time to time, to reduce the amount of the Revolving Commitments; PROVIDED
that no such termination or reduction of Revolving Commitments shall be
permitted if, after
23
giving effect thereto and to any prepayments of the Revolving Loans made on
the effective date thereof, the Total Revolving Extensions of Credit would
exceed the Total Revolving Commitments. Any such reduction shall be in an
amount equal to at least $1,000,000 and shall reduce permanently the
Revolving Commitments then in effect.
2.8 OPTIONAL PREPAYMENTS. The Borrower may at any time and from
time to time prepay the Loans, in whole or in part, without premium or
penalty, upon irrevocable notice delivered to the Administrative Agent at
least three Business Days prior thereto in the case of Eurodollar Loans and
at least one Business Day prior thereto in the case of Base Rate Loans, which
notice shall specify the date and amount of prepayment and whether the
prepayment is of Eurodollar Loans or Base Rate Loans; PROVIDED, that if a
Eurodollar Loan is prepaid on any day other than the last day of the Interest
Period applicable thereto, the Borrower shall also pay any amounts owing
pursuant to Section 2.18. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof. If any such notice
is given, the amount specified in such notice shall be due and payable on the
date specified therein, together with (except in the case of Revolving Loans
that are Base Rate Loans) accrued interest to such date on the amount
prepaid. Partial prepayments of Term Loans and Revolving Loans shall be in
an aggregate principal amount of $500,000 or a whole multiple of $100,000 in
excess thereof.
2.9 MANDATORY PREPAYMENTS AND COMMITMENT REDUCTIONS. (a) Unless
the Required Prepayment Lenders shall otherwise agree, if any Capital Stock
or Indebtedness shall be issued or incurred by the Borrower or any of its
Subsidiaries (excluding any Indebtedness incurred in accordance with Section
7.2 (other than Section 7.2(f))), an amount equal to (i) 100%, in the case of
Indebtedness, and (ii) 50%, in the case of Capital Stock, of the Net Cash
Proceeds thereof shall be applied on the date of such issuance or incurrence
toward the prepayment of the Term Loans and the reduction of the Revolving
Commitments as set forth in Section 2.9(e).
(b) Unless the Required Prepayment Lenders shall otherwise agree,
if on any date the Borrower or any of its Subsidiaries shall receive Net Cash
Proceeds from any Asset Sale or Recovery Event in excess of $300,000 then,
unless a Reinvestment Notice shall be delivered in respect thereof, such Net
Cash Proceeds shall be applied on such date toward the prepayment of the Term
Loans and the reduction of the Revolving Commitments as set forth in Section
2.9(e); PROVIDED, that, notwithstanding the foregoing, (i) the aggregate Net
Cash Proceeds of Asset Sales and Recovery Events that may be excluded from
the foregoing requirement pursuant to a Reinvestment Notice shall not exceed
$10,000,000 in any fiscal year of the Borrower and (ii) on each Reinvestment
Prepayment Date, an amount equal to the Reinvestment Prepayment Amount with
respect to the relevant Reinvestment Event shall be applied toward the
prepayment of the Term Loans and the reduction of the Revolving Commitments
as set forth in Section 2.9(e).
(c) Unless the Required Prepayment Lenders shall otherwise agree,
if, for any fiscal year of the Borrower commencing with the fiscal year
ending in March, 1999, there shall be Excess Cash Flow in excess of $300,000
and the Consolidated Leverage Ratio at the end of such fiscal year is greater
than 3.0 to 1.0, the Borrower shall, on the relevant Excess Cash Flow
Application Date, apply 50% of such Excess Cash Flow toward the prepayment of
the Term Loans and the reduction of the Revolving Commitments as set forth in
Section 2.9(e). Each such prepayment and commitment reduction shall be
24
made on a date (an "EXCESS CASH FLOW APPLICATION DATE") no later than five
days after the earlier of (i) the date on which the financial statements of
the Borrower referred to in Section 6.1(a), for the fiscal year with respect
to which such prepayment is made, are required to be delivered to the Lenders
and (ii) the date such financial statements are actually delivered.
(d) Unless the Required Prepayment Lenders shall otherwise agree,
if on any date the Borrower or any of its Subsidiaries is entitled to receive
a payment in excess of $300,000 under the Acquisition Agreement, an amount
equal to the excess of such payment over $300,000 shall be applied toward the
prepayment of the Term Loans and the reduction of the Revolving Commitments
as set forth in Section 2.9(e).
(e) Amounts to be applied in connection with prepayments and
Commitment reductions made pursuant to Section 2.9 shall be applied, FIRST,
to the prepayment of the Term Loans and, SECOND, to reduce permanently the
Revolving Commitments. Any such reduction of the Revolving Commitments shall
be accompanied by prepayment of the Revolving Loans to the extent, if any,
that the Total Revolving Extensions of Credit exceed the amount of the Total
Revolving Commitments as so reduced, PROVIDED that if the aggregate principal
amount of Revolving Loans then outstanding is less than the amount of such
excess (because L/C Obligations constitute a portion thereof), the Borrower
shall, to the extent of the balance of such excess, replace outstanding
Letters of Credit and/or deposit an amount in cash in a cash collateral
account established with the Administrative Agent for the benefit of the
Lenders on terms and conditions satisfactory to the Administrative Agent.
The application of any prepayment pursuant to Section 2.9 shall be made,
FIRST, to Base Rate Loans and, SECOND, to Eurodollar Loans. Each prepayment
of the Loans under Section 2.9 (except in the case of Revolving Loans that
are Base Rate Loans) shall be accompanied by accrued interest to the date of
such prepayment on the amount prepaid.
(f) If, at any time for any reason, the Revolving Extensions of
Credit exceed an amount equal to the Revolving Commitments on such date, the
Borrower shall: FIRST prepay the Revolving Loans then outstanding; SECOND pay
any Reimbursement Obligations then outstanding and, LAST, cash collateralize
any outstanding L/C Obligation in an amount equal to such excess.
(g) If, at any time for any reason, the L/C Obligations exceed an
amount equal to the L/C Commitment on such date, the Borrower shall: FIRST
pay any Reimbursement Obligations then outstanding and, THEN, cash
collateralize any outstanding L/C Obligations in an amount equal to such
excess.
2.10 CONVERSION AND CONTINUATION OPTIONS.(a) The Borrower may
elect from time to time to convert Eurodollar Loans to Base Rate Loans by
giving the Administrative Agent at least one Business Day's prior irrevocable
notice of such election, PROVIDED that any such conversion of Eurodollar
Loans may only be made on the last day of an Interest Period with respect
thereto. The Borrower may elect from time to time to convert Base Rate Loans
to Eurodollar Loans by giving the Administrative Agent at least three
Business Days' prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), PROVIDED that no
Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan when any Event of Default has occurred and is continuing and the
Administrative Agent or the Majority Facility Lenders in respect of such
Facility have determined in
25
its or their sole discretion not to permit such conversions. Upon receipt of
any such notice the Administrative Agent shall promptly notify each relevant
Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the
expiration of the then current Interest Period with respect thereto by the
Borrower giving irrevocable notice to the Administrative Agent, in accordance
with the applicable provisions of the term "Interest Period" set forth in
Section 1.1, of the length of the next Interest Period to be applicable to
such Loans, PROVIDED that no Eurodollar Loan under a particular Facility may
be continued as such when any Event of Default has occurred and is continuing
and the Administrative Agent has or the Majority Facility Lenders in respect
of such Facility have determined in its or their sole discretion not to
permit such continuations, and PROVIDED, FURTHER, that if the Borrower shall
fail to give any required notice as described above in this paragraph or if
such continuation is not permitted pursuant to the preceding proviso such
Loans shall be automatically converted to Base Rate Loans on the last day of
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.
2.11 LIMITATIONS ON EURODOLLAR TRANCHES. Notwithstanding anything
to the contrary in this Agreement, all borrowings, conversions and
continuations of Eurodollar Loans hereunder and all selections of Interest
Periods hereunder shall be in such amounts and be made pursuant to such
elections so that, (a) after giving effect thereto, the aggregate principal
amount of the Eurodollar Loans comprising each Eurodollar Tranche shall be
equal to $1,000,000 or a whole multiple of $100,000 in excess thereof and (b)
no more than ten Eurodollar Tranches shall be outstanding at any one time.
2.12 INTEREST RATES AND PAYMENT DATES. (a) Each Eurodollar Loan
shall bear interest for each day during each Interest Period with respect
thereto at a rate per annum equal to the Eurodollar Rate determined for such
day plus the Applicable Margin.
(b)Each Base Rate Loan shall bear interest at a rate per annum
equal to the Base Rate plus the Applicable Margin.
(c) (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum equal to (x) in the case of the Loans, the rate
that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section PLUS 2% or (y) in the case of Reimbursement
Obligations, the rate applicable to Base Rate Loans under the Revolving
Facility PLUS 2%, and (ii) if all or a portion of any interest payable on any
Loan or Reimbursement Obligation or any commitment fee or other amount
payable hereunder shall not be paid when due (whether at the stated maturity,
by acceleration or otherwise), such overdue amount shall bear interest at a
rate per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility PLUS 2% (or, in the case of any such other amounts that do
not relate to a particular Facility, the rate then applicable to Base Rate
Loans under the Revolving Facility PLUS 2%), in each case, with respect to
clauses (i) and (ii) above, from the date of such non-payment until such
amount is paid in full (as well after as before judgment).
26
(d) Interest shall be payable in arrears on each Interest Payment
Date, PROVIDED that interest accruing pursuant to paragraph (c) of this Section
shall be payable from time to time on demand.
2.13 COMPUTATION OF INTEREST AND FEES. (a) Interest and fees payable
pursuant hereto shall be calculated on the basis of a 360-day year for the
actual days elapsed, except that, with respect to Base Rate Loans the rate of
interest on which is calculated on the basis of the Prime Rate, the interest
thereon shall be calculated on the basis of a 365- (or 366-, as the case may be)
day year for the actual days elapsed. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of each determination
of a Eurodollar Rate. Any change in the interest rate on a Loan resulting from
a change in the Base Rate or the Eurocurrency Reserve Requirements shall become
effective as of the opening of business on the day on which such change becomes
effective. The Administrative Agent shall as soon as practicable notify the
Borrower and the relevant Lenders of the effective date and the amount of each
such change in interest rate.
(b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate pursuant to Section 2.12(a).
2.14 INABILITY TO DETERMINE INTEREST RATE. If prior to the first day
of any Interest Period:
(a) the Administrative Agent shall have determined (which
determination shall be conclusive and binding upon the Borrower) that, by
reason of circumstances affecting the relevant market, adequate and
reasonable means do not exist for ascertaining the Eurodollar Rate for such
Interest Period, or
(b) the Administrative Agent shall have received notice from the
Majority Facility Lenders in respect of the relevant Facility that the
Eurodollar Rate determined or to be determined for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (as
conclusively certified by such Lenders) of making or maintaining their
affected Loans during such Interest Period,
the Administrative Agent shall give telecopy or telephonic notice thereof to the
Borrower and the relevant Lenders as soon as practicable thereafter. If such
notice is given (x) any Eurodollar Loans under the relevant Facility requested
to be made on the first day of such Interest Period shall be made as Base Rate
Loans, (y) any Loans under the relevant Facility that were to have been
converted on the first day of such Interest Period to Eurodollar Loans shall be
continued as Base Rate Loans and (z) any outstanding Eurodollar Loans under the
relevant Facility shall be converted, on the last day of the then-current
Interest Period, to Base Rate Loans. In the case of any such notice given under
Section 2.14(a), until such notice has been withdrawn by the Administrative
Agent, no further Eurodollar Loans under the relevant Facility shall be made or
continued as such, nor shall the Borrower have the right to convert Loans under
the relevant Facility to Eurodollar Loans.
27
2.15 PRO RATA TREATMENT AND PAYMENTS. (a) Each borrowing by the
Borrower from the Lenders hereunder, each payment by the Borrower on account of
any commitment fee and any reduction of the Commitments of the Lenders shall be
made PRO RATA according to the respective Term Percentages or Revolving
Percentages, as the case may be, of the relevant Lenders.
(b) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Term Loans shall be made PRO RATA
according to the respective outstanding principal amounts of the Term Loans then
held by the Term Lenders. The amount of each principal prepayment of the Term
Loans shall be applied to reduce the then remaining installments of the Term
Loans PRO RATA based upon the then remaining principal amount thereof, PROVIDED
that (i) such prepayment made pursuant to Section 2.9(c), and each prepayment
made pursuant to Sections 2.9(a), (b) and (d) at a time which the Consolidated
Leverage Ratio exceeds 3.0 to 1.0, shall be applied to the then remaining
installments of the Term Loans in the inverse order of their stated maturity and
(ii) such prepayment made pursuant to Section 2.8 shall be applied to the then
remaining installments of the Term Loans in the order directed by the Borrower
(or, in the absence of such direction, ratably among such installments in
accordance with the respective principal amounts thereof). Amounts prepaid on
account of the Term Loans may not be reborrowed.
(c) Each payment (including each prepayment) by the Borrower on
account of principal of and interest on the Revolving Loans shall be made PRO
RATA according to the respective outstanding principal amounts of the Revolving
Loans then held by the Revolving Lenders.
(d) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 p.m., New
York City time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Funding Office, in Dollars and in immediately
available funds. The Administrative Agent shall distribute such payments to the
Lenders promptly upon receipt in like funds as received. If any payment
hereunder (other than payments on the Eurodollar Loans) becomes due and payable
on a day other than a Business Day, such payment shall be extended to the next
succeeding Business Day. If any payment on a Eurodollar Loan becomes due and
payable on a day other than a Business Day, the maturity thereof shall be
extended to the next succeeding Business Day unless the result of such extension
would be to extend such payment into another calendar month, in which event such
payment shall be made on the immediately preceding Business Day. In the case of
any extension of any payment of principal pursuant to the preceding two
sentences, interest thereon shall be payable at the then applicable rate during
such extension.
(e) Unless the Administrative Agent shall have been notified in
writing by any Lender prior to a borrowing that such Lender will not make the
amount that would constitute its share of such borrowing available to the
Administrative Agent, the Administrative Agent may assume that such Lender is
making such amount available to the Administrative Agent, and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available to
the Administrative Agent. A certificate of the Administrative
28
Agent submitted to any Lender with respect to any amounts owing under this
paragraph shall be conclusive in the absence of manifest error. If such
Lender's share of such borrowing is not made available to the Administrative
Agent by such Lender within three Business Days of such Borrowing Date, the
Administrative Agent shall also be entitled to recover such amount with
interest thereon at the rate per annum applicable to the applicable Loans
under the relevant Facility, on demand, from the Borrower.
(f) Unless the Administrative Agent shall have been notified in
writing by the Borrower prior to the date of any payment being made hereunder
that the Borrower will not make such payment to the Administrative Agent, the
Administrative Agent may assume that the Borrower is making such payment, and
the Administrative Agent may, but shall not be required to, in reliance upon
such assumption, make available to the Lenders their respective PRO RATA shares
of a corresponding amount. If such payment is not made to the Administrative
Agent by the Borrower within three Business Days of such required date, the
Administrative Agent shall be entitled to recover, on demand, from each Lender
to which any amount which was made available pursuant to the preceding sentence,
such amount with interest thereon at the rate per annum equal to the daily
average Federal Funds Effective Rate. Nothing herein shall be deemed to limit
the rights of the Administrative Agent or any Lender against the Borrower.
2.16 REQUIREMENTS OF LAW. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or compliance
by any Lender with any request or directive (whether or not having the force of
law) from any central bank or other Governmental Authority (other than a request
or directive to comply with a Requirement of Law in effect and operative on the
date hereof) made subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever
with respect to this Agreement, any Letter of Credit, any Application or
any Eurodollar Loan made by it, or change the basis of taxation of payments
to such Lender in respect thereof (except for Non-Excluded Taxes covered by
Section 2.17 and changes in the rate of tax on the overall net income of,
or in the rate at which any franchise or other tax (imposed in lieu of net
income tax) is calculated for, such Lender);
(ii) shall impose, modify or hold applicable any reserve, special
deposit, compulsory loan or similar requirement against assets held by,
deposits or other liabilities in or for the account of, advances, loans or
other extensions of credit by, or any other acquisition of funds by, any
office of such Lender that is not otherwise included in the determination
of the Eurodollar Rate hereunder; or
(iii) shall impose on such Lender any other condition;
and the result of any of the foregoing is to increase the cost to such Lender,
by an amount that such Lender deems to be material, of making, converting into,
continuing or maintaining Eurodollar Loans or issuing or participating in
Letters of Credit, or to reduce any amount receivable hereunder in respect
thereof, then, in any such case, the Borrower shall promptly pay such Lender,
upon its demand, any additional amounts necessary to compensate such Lender for
such increased cost or reduced amount
29
receivable PROVIDED that the Borrower shall not be required to compensate a
Lender pursuant to this paragraph for any amounts incurred more than six
months prior to the date that such Lender notified the Borrower of such
Lender's intention to claim compensation therefor; and PROVIDED, FURTHER,
that, if the circumstances giving rise to such claim have a retroactive
effect, then such six-month period shall be extended to include the period of
such retroactive effect. If any Lender becomes entitled to claim any
additional amounts pursuant to this paragraph, it shall promptly notify the
Borrower (with a copy to the Administrative Agent) of the event by reason of
which it has become so entitled.
(b) If any Lender shall have determined that the adoption of or any
change in any Requirement of Law regarding capital adequacy or in the
interpretation or application thereof or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) from any Governmental
Authority (other than a request or directive to comply with a Requirement of Law
in effect and operative on the date hereof) made subsequent to the date hereof
shall have the effect of reducing the rate of return on such Lender's or such
corporation's capital as a consequence of its obligations hereunder or under or
in respect of any Letter of Credit to a level below that which such Lender or
such corporation could have achieved but for such adoption, change or compliance
(taking into consideration such Lender's or such corporation's policies with
respect to capital adequacy) by an amount deemed by such Lender to be material,
then from time to time, after submission by such Lender to the Borrower (with a
copy to the Administrative Agent) of a written request therefor, the Borrower
shall pay to such Lender such additional amount or amounts as will compensate
such Lender for such reduction; PROVIDED that the Borrower shall not be required
to compensate a Lender pursuant to this paragraph for any amounts incurred more
than six months prior to the date that such Lender notifies the Borrower of such
Lender's intention to claim compensation therefor; and PROVIDED FURTHER that, if
the circumstances giving rise to such claim have a retroactive effect, then such
six-month period shall be extended to include the period of such retroactive
effect.
(c) A certificate as to any additional amounts payable pursuant to
this Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be conclusive in the absence of manifest error. The
obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.17 TAXES. (a) All payments made by the Borrower under this
Agreement shall be made free and clear of, and without deduction or withholding
for or on account of, any present or future income, stamp or other taxes,
levies, imposts, duties, charges, fees, deductions or withholdings, now or
hereafter imposed, levied, collected, withheld or assessed by any Governmental
Authority, excluding net income taxes and franchise or other taxes (imposed in
lieu of net income taxes) imposed on the Administrative Agent or any Lender as a
result of a present or former connection between the Administrative Agent or
such Lender and the jurisdiction of the Governmental Authority imposing such tax
or any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from the Administrative Agent or such Lender
having executed, delivered or performed its obligations or received a payment
under, or enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings ("NON-EXCLUDED TAXES") or Other Taxes are required to be withheld
from any amounts payable to the
30
Administrative Agent or any Lender hereunder, the amounts so payable to the
Administrative Agent or such Lender shall be increased to the extent
necessary to yield to the Administrative Agent or such Lender (after payment
of all Non-Excluded Taxes and Other Taxes) interest or any such other amounts
payable hereunder at the rates or in the amounts specified in this Agreement,
PROVIDED, HOWEVER, that the Borrower shall not be required to increase any
such amounts payable to any Lender with respect to any Non-Excluded Taxes (i)
that are attributable to such Lender's failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Lender at the
time the Lender becomes a party to this Agreement, except to the extent that
such Lender's assignor (if any) was entitled, at the time of assignment, to
receive additional amounts from the Borrower with respect to such
Non-Excluded Taxes pursuant to this paragraph.
(b) In addition, the Borrower shall pay any Other Taxes to the
relevant Governmental Authority in accordance with applicable law.
(c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of the relevant
Lender, as the case may be, a certified copy of an original official receipt
received by the Borrower showing payment thereof. If the Borrower fails to pay
any Non-Excluded Taxes or Other Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent the required receipts or
other required documentary evidence, the Borrower shall indemnify the
Administrative Agent and the Lenders for any incremental taxes, interest or
penalties that may become payable by the Administrative Agent or any Lender as a
result of any such failure.
(d) Each Lender (or Transferee) that is not a citizen or resident of
the United States of America, a corporation, partnership or other entity created
or organized in or under the laws of the United States of America (or any
jurisdiction thereof), or any estate or trust that is subject to federal income
taxation regardless of the source of its income (a "NON-U.S. LENDER") shall
deliver to the Borrower and the Administrative Agent (or, in the case of a
Participant, to the Lender from which the related participation shall have been
purchased) two copies of either U.S. Internal Revenue Service Form 1001 or Form
4224, or, in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a statement substantially in the form of
Exhibit G and a Form W-8, or any subsequent versions thereof or successors
thereto, properly completed and duly executed by such Non-U.S. Lender claiming
complete exemption from, or a reduced rate of, U.S. federal withholding tax on
all payments by the Borrower under this Agreement and the other Loan Documents.
Such forms shall be delivered by each Non-U.S. Lender on or before the date it
becomes a party to this Agreement (or, in the case of any Participant, on or
before the date such Participant purchases the related participation). In
addition, each Non-U.S. Lender shall deliver such forms promptly upon the
obsolescence or invalidity of any form previously delivered by such Non-U.S.
Lender. Each Non-U.S. Lender shall promptly notify the Borrower at any time it
determines that it is no longer in a position to provide any previously
delivered certificate to the Borrower (or any other form of certification
adopted by the U.S. taxing authorities for such purpose). Notwithstanding any
other provision of this paragraph, a Non-U.S. Lender shall not be required to
deliver any form pursuant to this paragraph that such Non-U.S. Lender is not
legally able to deliver.
31
(e) A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the Borrower
is located, or any treaty to which such jurisdiction is a party, with respect to
payments under this Agreement shall deliver to the Borrower (with a copy to the
Administrative Agent), at the time or times prescribed by applicable law or
reasonably requested by the Borrower, such properly completed and executed
documentation prescribed by applicable law as will permit such payments to be
made without withholding or at a reduced rate, PROVIDED that such Lender is
legally entitled to complete, execute and deliver such documentation and in such
Lender's judgment such completion, execution or submission would not materially
prejudice the legal position of such Lender.
(f) If the Borrower pays any additional amount under this Section 2.17
to a Lender and such Lender determines, in its sole discretion, that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its tax liabilities in or with respect to the
taxable year in which the additional amount is paid, such Lender shall pay to
the Borrower an amount that such Lender shall, in its sole discretion, determine
is equal to the net benefit, after tax, which was obtained by the Lender in such
year as a consequence of such refund, reduction or credit.
(g) The agreements in this Section shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder.
2.18 INDEMNITY. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss or expense that such Lender may sustain
or incur as a consequence of (a) default by the Borrower in making a borrowing
of, conversion into or continuation of Eurodollar Loans after the Borrower has
given a notice requesting the same in accordance with the provisions of this
Agreement, (b) default by the Borrower in making any prepayment of or conversion
from Eurodollar Loans after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement or (c) the making of a
prepayment of Eurodollar Loans on a day that is not the last day of an Interest
Period with respect thereto. Such indemnification may include an amount equal
to the excess, if any, of (i) the amount of interest that would have accrued on
the amount so prepaid, or not so borrowed, converted or continued, for the
period from the date of such prepayment or of such failure to borrow, convert or
continue to the last day of such Interest Period (or, in the case of a failure
to borrow, convert or continue, the Interest Period that would have commenced on
the date of such failure) in each case at the applicable rate of interest for
such Loans provided for herein (excluding, however, the Applicable Margin
included therein, if any) OVER (ii) the amount of interest (as reasonably
determined by such Lender) that would have accrued to such Lender on such amount
by placing such amount on deposit for a comparable period with leading banks in
the interbank eurodollar market. A certificate as to any amounts payable
pursuant to this Section submitted to the Borrower by any Lender shall be
conclusive in the absence of manifest error. This covenant shall survive the
termination of this Agreement and the payment of the Loans and all other amounts
payable hereunder.
2.19 CHANGE OF LENDING OFFICE. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.16 or 2.17(a)
with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event; PROVIDED, that such
designation is made on terms that, in the
32
sole judgment of such Lender, cause such Lender and its lending office(s) to
suffer no economic, legal or regulatory disadvantage, and PROVIDED, FURTHER,
that nothing in this Section shall affect or postpone any of the obligations
of any Borrower or the rights of any Lender pursuant to Section 2.16 or
2.17(a).
2.20 REPLACEMENT OF LENDERS. (a) If (i) the Borrower is required to
pay any additional amount to any Lender or any Governmental Authority for the
account of any Lender pursuant to Section 2.16 or 2.17(a) or (ii) if any Lender
fails to approve an amendment to this Agreement requested by the Borrower which
requires unanimous consent and has been consented to by the Required Lenders
then the Borrower may, at its sole expense and effort, upon notice to such
Lender and the Administrative Agent, require such Lender to assign and delegate,
without recourse (in accordance with and subject to the restrictions contained
in Section 10.6), all its interests, rights and obligations under this Agreement
to an assignee that shall assume such obligations (which assignee may be another
Lender, if a Lender accepts such assignment); PROVIDED that (i) the Borrower
shall have received the prior written consent of the Administrative Agent, which
consent shall not unreasonably be withheld, (ii) such Lender shall have received
payment of an amount equal to the outstanding principal of its Loans, accrued
interest thereon, accrued fees and all other amounts payable to it hereunder,
from the assignee (to the extent of such outstanding principal and accrued
interest and fees) or the Borrower (in the case of all other amounts) and
(iii) in the case of any such assignment resulting from a claim for payments
required to be made pursuant to Section 2.16 or 2.17(a), such assignment will
result in a reduction in such compensation or payments. A Lender shall not be
required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 3. LETTERS OF CREDIT
3.1 L/C COMMITMENT. (a) Subject to the terms and conditions hereof,
the Issuing Lender, in reliance on the agreements of the other Revolving Lenders
set forth in Section 3.4(a), agrees to issue letters of credit ("LETTERS OF
CREDIT") for the account of the Borrower on any Business Day during the
Revolving Commitment Period in such form as may be approved from time to time by
the Issuing Lender; PROVIDED that the Issuing Lender shall have no obligation to
issue any Letter of Credit if, after giving effect to such issuance, (i) the L/C
Obligations would exceed the L/C Commitment or (ii) the aggregate amount of the
Available Revolving Commitments for all Lenders would be less than zero.
(b) Each Letter of Credit shall:
(i) be denominated in Dollars or an Alternative Currency and
shall be either (A) a performance standby letter of credit, as
described in FEDERAL RESERVE REGULATORY SERVICE PARA 3-1906 (a
"PERFORMANCE LETTER OF CREDIT") and (B) a standby letter of Credit
issued to support Indebtedness and other obligations of the Borrower
and its Subsidiaries (a "STANDBY LETTER OF CREDIT"); and
(ii) expire no later than the earlier of (x) the first (or, in
the case of Letters of Credit the aggregate then undrawn face amount
of which does not at any time
33
exceed $5,000,000, third) anniversary of its date of issuance and
(y) the date that is five Business Days prior to the Revolving
Termination Date, PROVIDED that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional
one-year periods (which shall in no event extend beyond the date
referred to in clause (y) above).
(c) Each Letter of Credit shall be subject to the Uniform Customs and,
to the extent not inconsistent therewith, the laws of the State of New York.
(d) The Issuing Lender shall not at any time be obligated to issue any
Letter of Credit hereunder if such issuance would conflict with, or cause the
Issuing Lender or any L/C Participant to exceed any limits imposed by, any
applicable Requirement of Law.
3.2 PROCEDURE FOR ISSUANCE OF LETTER OF CREDIT. The Borrower may from
time to time request that the Issuing Lender issue a Letter of Credit by
delivering to the Issuing Lender at its address for notices specified herein an
Application therefor, completed to the reasonable satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may reasonably request. Upon receipt of any Application,
the Issuing Lender will process such Application and the certificates, documents
and other papers and information delivered to it in connection therewith in
accordance with its customary procedures and shall promptly issue the Letter of
Credit requested thereby (but in no event shall the Issuing Lender be required
to issue any Letter of Credit earlier than three Business Days after its receipt
of the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed to by the
Issuing Lender and the Borrower. The Issuing Lender shall furnish a copy of
such Letter of Credit to the Borrower promptly following the issuance thereof.
The Issuing Lender shall promptly furnish to the Administrative Agent, which
shall in turn promptly furnish to the Lenders, notice of the issuance of each
Letter of Credit (including the amount thereof).
3.3 FEES AND OTHER CHARGES. (a) The Borrower will pay a fee on all
outstanding Standby Letters of Credit and Commercial Letters of Credit at a per
annum rate equal to the Applicable Margin then in effect with respect to
Eurodollar Loans under the Revolving Facility, shared ratably among the
Revolving Lenders and payable quarterly in arrears on each L/C Fee Payment Date
after the issuance date.
(b) The Borrower will pay a fee on all outstanding Performance Standby
Letters of Credit at a per annum rate equal to 50% of the Applicable Margin then
in effect with respect to Eurodollar Loans under the Revolving Facility, shared
ratably among the Revolving Lenders and payable quarterly in arrears on each L/C
Fee Payment Date after the issuance date.
(c) In addition, the Borrower shall pay to the Issuing Lender for its
own account a fronting fee of 1/4 of 1% per annum on the undrawn and unexpired
amount of each Letter of Credit, payable quarterly in arrears on each L/C Fee
Payment Date after the Issuance Date.
34
(d) In addition to the foregoing fees, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, negotiating, effecting
payment under, amending or otherwise administering any Letter of Credit.
3.4 L/C PARTICIPATIONS. (a) The Issuing Lender irrevocably agrees to
grant and hereby grants to each L/C Participant, and, to induce the Issuing
Lender to issue Letters of Credit hereunder, each L/C Participant irrevocably
agrees to accept and purchase and hereby accepts and purchases from the Issuing
Lender, on the terms and conditions hereinafter stated, for such L/C
Participant's own account and risk an undivided interest equal to such L/C
Participant's Revolving Percentage in the Issuing Lender's obligations and
rights under each Letter of Credit issued hereunder and the amount of each draft
paid by the Issuing Lender thereunder. Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower in accordance with the terms of this Agreement, such L/C Participant
shall pay to the Issuing Lender upon demand at the Issuing Lender's address for
notices specified herein an amount equal to such L/C Participant's Revolving
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.
(b) If any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion
of any payment made by the Issuing Lender under any Letter of Credit is paid to
the Issuing Lender within three Business Days after the date such payment is
due, such L/C Participant shall pay to the Issuing Lender on demand an amount
equal to the product of (i) such amount, times (ii) the daily average Federal
Funds Effective Rate during the period from and including the date such payment
is required to the date on which such payment is immediately available to the
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If any
such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to the Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, the Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per annum
applicable to Base Rate Loans under the Revolving Facility. A certificate of
the Issuing Lender submitted to any L/C Participant with respect to any amounts
owing under this Section shall be conclusive in the absence of manifest error.
(c) Whenever, at any time after the Issuing Lender has made payment
under any Letter of Credit and has received from any L/C Participant its PRO
RATA share of such payment in accordance with Section 3.4(a), the Issuing Lender
receives any payment related to such Letter of Credit (whether directly from the
Borrower or otherwise, including proceeds of collateral applied thereto by the
Issuing Lender), or any payment of interest on account thereof, the Issuing
Lender will distribute to such L/C Participant its PRO RATA share thereof;
PROVIDED, HOWEVER, that in the event that any such payment received by the
Issuing Lender shall be required to be returned by the Issuing Lender, such L/C
Participant shall return to the Issuing Lender the portion thereof previously
distributed by the Issuing Lender to it.
35
3.5 REIMBURSEMENT OBLIGATION OF THE BORROWER. The Borrower agrees to
reimburse the Issuing Lender on the date that is one Business Day after the date
on which the Issuing Lender notifies prior to 11:00 a.m. New York City time the
Borrower of the date and amount of a draft presented under any Letter of Credit
and paid by the Issuing Lender for the amount of (a) such draft so paid
(calculated, in the case of a Letter of Credit denominated in an Alternative
Currency, based upon the Dollar Equivalent of such draft) and (b) any taxes,
fees, charges or other costs or expenses incurred by the Issuing Lender in
connection with such payment. Each such payment shall be made to the Issuing
Lender at its address for notices specified herein in lawful money of the United
States and in immediately available funds. Interest shall be payable on any and
all amounts remaining unpaid by the Borrower under this Section from the date of
the applicable drawing until payment in full at the rate set forth in (i) until
the second Business Day following notice of the date of the applicable drawing,
Section 2.12(b) and (ii) thereafter, Section 2.12(c). Unless the Borrower
notifies the Administrative Agent to the contrary prior to 12:00 Noon, New York
City time, on the Business Day prior to the related Borrowing Date, the payment
of an amount in excess of $1,000,000 under any Letter of Credit shall be deemed
a request by the Borrower for a Base Rate Revolving Loan in accordance with
Section 2.5.
3.6 OBLIGATIONS ABSOLUTE. The Borrower's obligations under this
Section 3 shall be absolute and unconditional under any and all circumstances
and irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against the Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with the Issuing
Lender that the Issuing Lender shall not be responsible for, and the Borrower's
Reimbursement Obligations under Section 3.5 shall not be affected by, among
other things, the validity or genuineness of documents or of any endorsements
thereon, even though such documents shall in fact prove to be invalid,
fraudulent or forged, or any dispute between or among the Borrower and any
beneficiary of any Letter of Credit or any other party to which such Letter of
Credit may be transferred or any claims whatsoever of the Borrower against any
beneficiary of such Letter of Credit or any such transferee. The Issuing Lender
shall not be liable for any error, omission, interruption or delay in
transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct of
the Issuing Lender. The Borrower agrees that any action taken or omitted by the
Issuing Lender under or in connection with any Letter of Credit or the related
drafts or documents, if done in the absence of gross negligence or willful
misconduct and in accordance with the standards of care specified in the Uniform
Commercial Code of the State of New York, shall be binding on the Borrower and
shall not result in any liability of the Issuing Lender to the Borrower.
3.7 LETTER OF CREDIT PAYMENTS. If any draft shall be presented for
payment under any Letter of Credit, the Issuing Lender shall promptly notify the
Borrower of the date and amount thereof. The responsibility of the Issuing
Lender to the Borrower in connection with any draft presented for payment under
any Letter of Credit shall, in addition to any payment obligation expressly
provided for in such Letter of Credit, be limited to determining that the
documents (including each draft) delivered under such Letter of Credit in
connection with such presentment are substantially in conformity with such
Letter of Credit.
36
3.8 APPLICATIONS. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.
SECTION 4. REPRESENTATIONS AND WARRANTIES
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to make the Loans and issue or participate in the Letters of
Credit, and the Borrower hereby jointly and severally represent and warrant to
the Administrative Agent and each Lender that:
4.1 FINANCIAL CONDITION. (a) The unaudited PRO FORMA consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at June 26,
1998 (including the notes thereto) (the "PRO FORMA BALANCE SHEET"), copies of
which have heretofore been furnished to each Lender, has been prepared giving
effect (as if such events had occurred on such date) to (i) the consummation of
the Acquisition, (ii) the Loans to be made on the Closing Date and the use of
proceeds thereof and (iii) the payment of fees and expenses in connection with
the foregoing. The Pro Forma Balance Sheet has been prepared based on the best
information available to the Borrower as of the date of delivery thereof, and
presents fairly on a PRO FORMA basis the estimated financial position of
Borrower and its consolidated Subsidiaries as at June 30, 1998, assuming that
the events specified in the preceding sentence had actually occurred at such
date.
(b) The audited consolidated balance sheets of the Borrower as at
March 29, 1995, March 28, 1997 and March 27, 1998 and the related
consolidated statements of income and of cash flows for the fiscal years
ended on such dates, reported on by and accompanied by an unqualified report
from KPMG Peat Marwick LLP, present fairly the consolidated financial
condition of the Borrower, as at such dates, and the consolidated results of
its operations and its consolidated cash flows for the respective fiscal
years then ended. The audited consolidated balance sheets of Radian as at
December 31, 1996 and December 31, 1997 and the related consolidated
statements of income and of cash flows for the fiscal years ended on such
dates, reported on by and accompanied by an unqualified report from Deloitte
& Touche, present fairly the consolidated financial condition of Radian, as
at such dates, and the consolidated results of its operations and its
consolidated cash flows for the respective fiscal years then ended. The
unaudited consolidated balance sheets of each of the Borrower and Radian as
at June 26, 1998 and June 30, 1998, respectively, and the related unaudited
consolidated statements of income and cash flows for the quarterly and
semi-annual period, respectively, ended on such dates, present fairly the
consolidated financial condition of the Borrower and Radian, respectively, as
at such date, and the consolidated results of their operations and their
consolidated cash flows for the semi-annual periods then ended (subject to
normal year-end audit adjustments). All such financial statements, including
the related schedules and notes thereto, have been prepared in accordance
with GAAP applied consistently throughout the periods involved (except as
approved by the aforementioned firms of accountants and disclosed therein).
The Borrower, Radian and their Subsidiaries do not have any material
Guarantee Obligations, contingent liabilities and liabilities for taxes, or
any long-term leases or unusual forward or long-term commitments, including
any interest rate or foreign currency swap or exchange transaction or other
obligation in respect of derivatives, that are not reflected in the most
recent financial statements referred to in this paragraph. During the period
from June 26, 1998 (or June 30, 1998, in the case of Radian and its
Subsidiaries), to and including the date hereof
37
there has been no Disposition by the Borrower or Radian of any material part
of its business or property.
4.2 NO CHANGE. Since June 26, 1998 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect.
4.3 CORPORATE EXISTENCE; COMPLIANCE WITH LAW. Each of the Borrower
and its Subsidiaries (a) is duly organized, validly existing and in good
standing under the laws of the jurisdiction of its organization, (b) has the
organizational power and authority, and the legal right, to own and operate its
property, to lease the property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
organization and in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its business
requires such qualification and (d) is in compliance with all Requirements of
Law except, in the cases of clauses (c) and (d) to the extent that the failure
to be duly qualified or to comply with Requirements of Law could not, in the
aggregate, reasonably be expected to have a Material Adverse Effect.
4.4 CORPORATE POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS. Each
Loan Party has the organizational power and authority, and the legal right, to
make, deliver and perform the Loan Documents to which it is a party and, in the
case of the Borrower, to borrow hereunder. Each Loan Party has taken all
necessary organizational action to authorize the execution, delivery and
performance of the Loan Documents to which it is a party and, in the case of the
Borrower, to authorize the borrowings on the terms and conditions of this
Agreement. No consent or authorization of, filing with, notice to or other act
by or in respect of, any Governmental Authority or any other Person is required
in connection with the Acquisition and the borrowings hereunder or with the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the Loan Documents, except (i) consents, authorizations, filings and
notices described in Schedule 4.4, which consents, authorizations, filings and
notices have been obtained or made and are in full force and effect, (ii) the
filings referred to in Section 4.19, (iii) consents, authorizations, filings and
notices relating to the Acquisition, the failure to make or obtain could not, in
the aggregate, reasonably be expected to have Material Adverse Effect and (iv)
immaterial consents, authorizations, filings and notices relating to the Loan
Documents to be obtained by Subsidiaries. Each Loan Document has been duly
executed and delivered on behalf of each Loan Party party thereto. This
Agreement constitutes, and each other Loan Document upon execution will
constitute, a legal, valid and binding obligation of each Loan Party party
thereto, enforceable against each such Loan Party in accordance with its terms,
except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or similar laws affecting the enforcement of
creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
4.5 NO LEGAL BAR. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof will not violate any
Requirement of Law or any Contractual Obligation of the Borrower or any of its
Subsidiaries except to the extent that any such violation of a Requirement of
Law or Contractual Obligation could not reasonably be expected to have a
Material Adverse Effect, and will not result in, or require, the creation or
imposition of any Lien on any of their respective properties or
38
revenues pursuant to any Requirement of Law or any such Contractual
Obligation (other than the Liens created by the Security Documents). No
Requirement of Law or Contractual Obligation applicable to the Borrower or
any of its Subsidiaries on the date hereof could reasonably be expected to
have a Material Adverse Effect.
4.6 LITIGATION. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the knowledge
of the Borrower, threatened by or against the Borrower or any of its
Subsidiaries or against any of their respective properties or revenues (a) with
respect to any of the Loan Documents or any of the transactions contemplated
hereby or thereby, or (b) that could reasonably be expected to have a Material
Adverse Effect.
4.7 NO DEFAULT. Neither the Borrower nor any of its Subsidiaries is
in default under or with respect to any of its Contractual Obligations in any
respect that could reasonably be expected to have a Material Adverse Effect. No
Default or Event of Default has occurred and is continuing.
4.8 OWNERSHIP OF PROPERTY; LIENS. Each of the Borrower and its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other property, and none of such property is subject to any Lien except as
permitted by Section 7.3.
4.9 INTELLECTUAL PROPERTY. The Borrower and each of its Subsidiaries
owns, or is licensed to use, all Intellectual Property necessary for the conduct
of its business as currently conducted. To the knowledge of any Responsible
Officer of the Borrower, no material claim has been asserted and is pending by
any Person challenging or questioning the use of any Intellectual Property or
the validity or effectiveness of any Intellectual Property, nor does the
Borrower know of any valid basis for any such claim. The use of Intellectual
Property by the Borrower and its Subsidiaries does not infringe on the rights of
any Person in any material respect.
4.10 TAXES. Each of the Borrower and each of its Subsidiaries has
filed or caused to be filed all Federal, material state and other material tax
returns that are required to be filed and has paid all taxes shown to be due and
payable on said returns or on any assessments made against it or any of its
property and all other taxes, fees or other charges imposed on it or any of its
property by any Governmental Authority (other than any the amount or validity of
that are currently being contested in good faith by appropriate proceedings and
with respect to which reserves in conformity with GAAP have been provided on the
books of the Borrower or its Subsidiaries, as the case may be); no tax Lien has
been filed, and, to the knowledge of the Borrower, no claim is being asserted,
with respect to any such tax, fee or other charge.
4.11 FEDERAL REGULATIONS. No part of the proceeds of any Loans will
be used for "buying" or "carrying" any "margin stock" within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender or the Administrative
Agent, the Borrower will furnish to the Administrative Agent and each Lender a
statement to the foregoing effect in conformity with the requirements of FR Form
G-3 or FR Form U-1, as applicable, referred to in Regulation U.
39
4.12 LABOR MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect: (a) there are no
strikes or other labor disputes against the Borrower or any of its
Subsidiaries pending or, to the knowledge of the Borrower, threatened; (b)
hours worked by and payment made to employees of the Borrower and its
Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Requirement of Law dealing with such matters; and (c)
all payments due from the Borrower or any of its Subsidiaries on account of
employee health and welfare insurance have been paid or accrued as a
liability on the books of the Borrower or the relevant Subsidiary.
4.13 ERISA. Neither a Reportable Event nor an "accumulated funding
deficiency" (within the meaning of Section 412 of the Code or Section 302 of
ERISA) has occurred during the five-year period prior to the date on which this
representation is made or deemed made with respect to any Plan, and each Plan
has complied in all material respects with the applicable provisions of ERISA
and the Code. No termination of a Single Employer Plan has occurred during the
five year period prior to the date on which this representation is made, which
termination could reasonably be expected to result in a material liability for
the Borrower and its Subsidiaries and no Lien in favor of the PBGC or a Plan has
arisen, during such five-year period. The present value of all accrued benefits
under each Single Employer Plan (based on those assumptions used to fund such
Plans) did not, as of the last annual valuation date prior to the date on which
this representation is made or deemed made, exceed the value of the assets of
such Plan allocable to such accrued benefits by a material amount. Neither the
Borrower nor any Commonly Controlled Entity has had a complete or partial
withdrawal from any Multiemployer Plan that has resulted or could reasonably be
expected to result in a material liability under ERISA, and to the Borrower's
knowledge, neither the Borrower nor any Commonly Controlled Entity would become
subject to any liability in excess of $2,500,000 under ERISA if the Borrower or
any such Commonly Controlled Entity were to withdraw completely from any
Multiemployer Plans as of the valuation date most closely preceding the date on
which this representation is made or deemed made. To the Borrower's knowledge,
no such Multiemployer Plan is in Reorganization or Insolvent.
4.14 INVESTMENT COMPANY ACT; OTHER REGULATIONS. No Loan Party is an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law (other than
Regulation X of the Board) that limits its ability to incur Indebtedness.
4.15 SUBSIDIARIES. Except as disclosed to the Administrative Agent by
the Borrower in writing from time to time after the Closing Date,(a) Schedule
4.15 sets forth the name and jurisdiction of organization of each Subsidiary
and, as to each such Subsidiary, the percentage of each class of Capital Stock
owned by any Loan Party and (b) there are no outstanding subscriptions, options,
warrants, calls, rights or other agreements or commitments (other than stock
options granted to employees or directors and directors' qualifying shares) of
any nature relating to any Capital Stock of the Borrower or any Subsidiary,
except as created by the Loan Documents.
4.16 USE OF PROCEEDS. The proceeds of the Term Loans and of up to
$20,000,000 of the Revolving Credit Loans shall be used (i) to finance the
Acquisition, including payment of related fees and expenses, in an amount not to
exceed $123,000,000, (ii) to refinance outstanding Indebtedness of the Borrower
in an amount not to exceed $160,000,000 and (iii) to pay make-whole premiums of
up to
40
$5,000,000 to the holders of the Senior Unsecured Notes. The remaining
proceeds of the Revolving Loans shall be used for general corporate purposes
and for acquisitions permitted under Section 7.8. The Letters of Credit
shall be used for general corporate purposes.
4.17 ENVIRONMENTAL MATTERS. Except as, in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
(a) the facilities and properties owned, leased or operated by the
Borrower or any of its Subsidiaries (the "PROPERTIES") do not contain, and
have not previously contained, any Materials of Environmental Concern in
amounts or concentrations or under circumstances that constitute or
constituted a violation of, or could reasonably be expected to give rise to
liability under, any Environmental Law;
(b) neither the Borrower nor any of its Subsidiaries has received or
is aware of any written notice of violation, alleged violation,
non-compliance, liability or potential liability regarding Environmental
Laws with regard to any of the Properties or the business operated by the
Borrower or any of its Subsidiaries (the "BUSINESS"), nor does the Borrower
have knowledge that any such notice will be received or is being
threatened;
(c) Materials of Environmental Concern have not been transported or
disposed of from the Properties in violation of, or in a manner or to a
location that could give rise to liability under, any Environmental Law,
nor have any Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under any of the Properties in violation
of, or in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law;
(d) no judicial proceeding or governmental or administrative action
is pending or, to the knowledge of the Borrower, threatened, under any
Environmental Law to which the Borrower or any Subsidiary is or will be
named as a party with respect to the Properties or the Business, nor are
there any consent decrees or other decrees, consent orders, administrative
orders or other orders, or other administrative or judicial requirements
outstanding under any Environmental Law with respect to the Properties or
the Business;
(e) there has been no release or threat of release of Materials of
Environmental Concern at or from the Properties, or arising from or related
to the operations of the Borrower or any Subsidiary in connection with the
Properties or otherwise in connection with the Business, in violation of or
in amounts or in a manner that could reasonably be expected to give rise to
liability under Environmental Laws;
(f) the Properties and all operations at the Properties are in
compliance, and have in the last five years been in compliance, with all
applicable Environmental Laws, and there is no contamination at, under or
about the Properties or violation of any Environmental Law with respect to
the Properties or the Business; and
41
(g) neither the Borrower nor any of its Subsidiaries has
contractually assumed any liability of any other Person under Environmental
Laws.
4.18 ACCURACY OF INFORMATION, ETC. No statement or information
contained in this Agreement, any other Loan Document, the Confidential
Information Memorandum or any other document, certificate or statement
furnished by or on behalf of any Loan Party to the Administrative Agent or
the Lenders, or any of them, for use in connection with the transactions
contemplated by this Agreement or the other Loan Documents, contained as of
the date such statement, information, document or certificate was so
furnished (or, in the case of the Confidential Information Memorandum, as of
the date of this Agreement), any untrue statement of a material fact or
omitted to state a material fact necessary to make the statements contained
herein or therein not misleading. The projections and PRO FORMA financial
information contained in the materials referenced above are based upon good
faith estimates and assumptions believed by management of the Borrower to be
reasonable at the time made, it being recognized by the Lenders that such
financial information as it relates to future events is not to be viewed as
fact and that actual results during the period or periods covered by such
financial information may differ from the projected results set forth therein
by a material amount. As of the date hereof, the representations and
warranties of the Borrower and, to the best of the Borrower's knowledge, the
Seller contained in the Acquisition Documentation are true and correct in all
material respects. There is no fact known to any Loan Party that could
reasonably be expected to have a Material Adverse Effect that has not been
expressly disclosed herein, in the other Loan Documents, in the Confidential
Information Memorandum or in any other documents, certificates and statements
furnished to the Administrative Agent and the Lenders for use in connection
with the transactions contemplated hereby and by the other Loan Documents.
4.19 SECURITY DOCUMENTS. (a) The Guarantee and Collateral
Agreement is effective to create in favor of the Administrative Agent, for
the benefit of the Lenders, a legal, valid and enforceable security interest
in the Collateral described therein and proceeds thereof. In the case of the
Pledged Stock which is described in the Guarantee and Collateral Agreement
and is certificated, when stock certificates representing such Pledged Stock
are delivered to the Administrative Agent, and in the case of the other
Collateral described in the Guarantee and Collateral Agreement, when
financing statements and other filings specified on Schedule 4.19(a) in
appropriate form are filed in the offices (i) specified on Schedule 4.19(a),
(ii) in the circumstances contemplated by Section 5.5 of the Guarantee and
Collateral Agreement, notified to the Administrative Agent in accordance with
such Section 5.5 or (iii) in the case of any Person that becomes a Loan Party
by executing an Assumption Agreement in substantially the form of Annex 1 to
the Guarantee and Collateral Agreement, specified in the appropriate
Supplements attached thereto, the Guarantee and Collateral Agreement shall
constitute a fully perfected Lien on, and security interest in, all right,
title and interest of the Loan Parties in such Collateral and the proceeds
thereof, as security for the Obligations (as defined in the Guarantee and
Collateral Agreement), in each case prior and superior in right to any other
Person (except, in the case of Collateral other than Pledged Stock, Liens
permitted by Section 7.3).
(b) Each of the Mortgages, when executed and delivered pursuant to
Section 6.10, will be effective to create in favor of the Administrative
Agent, for the benefit of the Lenders, a legal, valid and enforceable Lien on
the Mortgaged Properties described therein and proceeds thereof, and when the
Mortgages are filed in the appropriate recording offices, each such Mortgage
shall constitute
42
a fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in the Mortgaged Properties and the proceeds
thereof, as security for the Obligations (as defined in the relevant
Mortgage), in each case prior and superior in right to any other Person.
4.20 SOLVENCY. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to
be, Solvent.
4.21 YEAR 2000 MATTERS. Any material reprogramming required to
permit the proper functioning (but only to the extent that such proper
functioning would otherwise be impaired by the occurrence of the year 2000)
in and following the year 2000 of computer systems and other equipment
containing embedded microchips, in either case owned or operated by the
Borrower or any of its Subsidiaries or used or relied upon in the conduct of
their business (including any such systems and other equipment supplied by
others or with which the computer systems of the Borrower or any of its
Subsidiaries interface), and the testing of all such systems and other
equipment as so reprogrammed, will be completed by January 1, 1999. The
costs to the Borrower and its Subsidiaries that have not been incurred as of
the date hereof for such reprogramming and testing and for the other
reasonably foreseeable consequences to them of any improper functioning of
other computer systems and equipment containing embedded microchips due to
the occurrence of the year 2000 could not reasonably be expected to result in
a Default or Event of Default or to have a Material Adverse Effect. Except
for any reprogramming referred to above, the computer systems of the Borrower
and its Subsidiaries are and, with ordinary course upgrading and maintenance,
will continue for the term of this Agreement to be, sufficient for the
conduct of their business as currently conducted.
4.22 REGULATION H. No Mortgage encumbers improved real property
that is located in an area that has been identified by the Secretary of
Housing and Urban Development as an area having special flood hazards and in
which flood insurance has been made available under the National Flood
Insurance Act of 1968.
4.23 CERTAIN DOCUMENTS. The Borrower has delivered to the
Administrative Agent a complete and correct copy of the Acquisition
Documentation, including any amendments, supplements or modifications with
respect to any of the foregoing.
SECTION 5. CONDITIONS PRECEDENT
5.1 CONDITIONS TO INITIAL EXTENSION OF CREDIT. The agreement of
each Lender to make the initial extension of credit requested to be made by
it is subject to the satisfaction or waiver, prior to or concurrently with
the making of such extension of credit on the Closing Date, of the following
conditions precedent:
(a) CREDIT AGREEMENT; GUARANTEE AND COLLATERAL AGREEMENT. The
Administrative Agent shall have received (i) this Agreement, executed and
delivered by the Administrative Agent, the Borrower and each Person listed
on Schedule 1.1A, (ii) the Guarantee and Collateral Agreement, executed and
delivered by the Borrower and each Subsidiary Guarantor and (iii) an
43
Acknowledgement and Consent in the form attached to the Guarantee and
Collateral Agreement, executed and delivered by each Issuer (as defined
therein), if any, that is not a Loan Party.
(b) ACQUISITION, ETC. The following transactions shall have been
consummated, in each case on terms and conditions reasonably satisfactory
to the Lenders:
(i) the Borrower shall have acquired 100% of the ownership
interests of Radian from the Seller, for consideration of not more
than $117,000,000 (the "ACQUISITION");
(ii) the Administrative Agent shall have received satisfactory
evidence that the fees and expenses to be incurred in connection with
the Acquisition and the financing thereof shall not exceed $6,000,000;
and
(iii) (A) The Administrative Agent shall have received
satisfactory evidence that all existing Indebtedness (and any related
security agreements) of the Borrower, Radian and their Subsidiaries
(other than as permitted by Section 7.2), shall have been paid in full
and (B) satisfactory arrangements shall have been made for the
termination of any Liens and security interests granted in connection
therewith;
(c) ACQUISITION DOCUMENTATION. The Administrative Agent shall have
received executed copies of the Acquisition Documentation and be satisfied
in all respects with the terms and conditions thereof (including without
limitation the indemnities by the Seller thereunder).
(d) PRO FORMA BALANCE SHEET; FINANCIAL STATEMENTS. The Lenders shall
have received the financial statements referred to in Section 4.1, and such
financial statements shall not, in the reasonable judgment of the Lenders,
reflect any material adverse change in the consolidated financial condition
of the Borrower or Radian, as reflected in the financial statements or
projections contained in the Confidential Information Memorandum.
(e) APPROVALS. All material governmental and third party approvals
(including landlords' and other consents) necessary in connection with the
Acquisition, the continuing operations of the Borrower and its Subsidiaries
and the transactions contemplated hereby shall have been obtained and be in
full force and effect, and all applicable waiting periods shall have
expired without any action being taken or threatened by any competent
authority that would restrain, prevent or otherwise impose adverse
conditions on the Acquisition or the financing contemplated hereby.
(f) LIEN SEARCHES. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions where assets
of the Loan Parties are located, and such search shall reveal no liens on
any of the assets of the Borrower or its Subsidiaries except for liens
permitted by Section 7.3 or discharged on or prior to the Closing Date
pursuant to documentation satisfactory to the Administrative Agent.
44
(g) FEES. The Lenders, the Arranger and the Administrative Agent
shall have received all fees required to be paid, and all expenses for
which invoices have been presented (including the reasonable fees and
expenses of legal counsel), on or before the Closing Date. All such
amounts will be paid with proceeds of Loans made on the Closing Date and
will be reflected in the funding instructions given by the Borrower to the
Administrative Agent on or before the Closing Date.
(h) CLOSING CERTIFICATE. The Administrative Agent shall have
received, with a counterpart for each Lender, a certificate of each Loan
Party, dated the Closing Date, substantially in the form of Exhibit C, with
appropriate insertions and attachments.
(i) LEGAL OPINIONS. The Administrative Agent shall have received the
following executed legal opinions:
(i) the legal opinion of Xxxxxx & Xxxxxxx, counsel to the
Borrower and its Subsidiaries, substantially in the form of Exhibit F;
and
(ii) to the extent consented to by the relevant counsel, each
legal opinion, if any, delivered in connection with the Acquisition
Agreement, accompanied by a reliance letter in favor of the Lenders.
Each such legal opinion shall cover such other matters incident to the
transactions contemplated by this Agreement as the Administrative Agent may
reasonably require.
(j) PLEDGED STOCK; STOCK POWERS; PLEDGED NOTES. The Administrative
Agent shall have received (i) the certificates representing the shares of
Capital Stock which are certificated and are pledged pursuant to the
Guarantee and Collateral Agreement, together with an undated stock power
for each such certificate executed in blank by a duly authorized officer of
the pledgor thereof and (ii) each promissory note (if any) pledged to the
Administrative Agent pursuant to the Guarantee and Collateral Agreement
endorsed (without recourse) in blank (or accompanied by an executed
transfer form in blank) by the pledgor thereof.
(k) FILINGS, REGISTRATIONS AND RECORDINGS. Each document (including
any Uniform Commercial Code financing statement) required by the Security
Documents or under law or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Lenders, a perfected Lien on
the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section
7.3), shall be in proper form for filing, registration or recordation.
(l) INSURANCE. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 5.2 of the Guarantee
and Collateral Agreement.
45
(m) REMAINING UNDRAWN REVOLVING FACILITY. After giving effect to all
transactions on the Closing Date and payment of related fees and expenses,
the Available Revolving Commitments (minus the then outstanding L/C
Obligations) shall be at least $55,000,000.
5.2 CONDITIONS TO EACH EXTENSION OF CREDIT. The agreement of each
Lender to make any extension of credit requested to be made by it on any date
(including its initial extension of credit) is subject to the satisfaction of
the following conditions precedent:
(a) REPRESENTATIONS AND WARRANTIES. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents
shall be true and correct in all material respects on and as of such date
as if made on and as of such date.
(b) NO DEFAULT. No Default or Event of Default shall have occurred
and be continuing on such date or after giving effect to the extensions of
credit requested to be made on such date.
Each borrowing by and issuance of a Letter of Credit on behalf of the Borrower
hereunder shall constitute a representation and warranty by the Borrower as of
the date of such extension of credit that the conditions contained in this
Section 5.2 have been satisfied.
SECTION 6. AFFIRMATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or the Administrative Agent hereunder, the Borrower shall
and shall cause each of its Subsidiaries to:
6.1 FINANCIAL STATEMENTS. Furnish to the Administrative Agent and
each Lender:
(a) as soon as available, but in any event within 90 days after the
end of each fiscal year of the Borrower, a copy of the audited consolidated
balance sheet of the Borrower and its consolidated Subsidiaries as at the
end of such year and the related audited consolidated statements of income
and of cash flows for such year, setting forth in each case in comparative
form the figures for the previous year, reported on without a "going
concern" or like qualification or exception, or qualification arising out
of the scope of the audit, by KPMG Peat Marwick LLC or other independent
certified public accountants of nationally recognized standing; and
(b) as soon as available, but in any event not later than 45 days
after the end of each of the first three quarterly periods of each fiscal
year of the Borrower, the unaudited consolidated balance sheet of the
Borrower and its consolidated Subsidiaries as at the end of such quarter
and the related unaudited consolidated statements of income and of cash
flows for such quarter and the portion of the fiscal year through the end
of such quarter, setting forth in each case in comparative form the figures
for the previous year, certified by a Responsible Officer as being fairly
stated in all material respects (subject to normal year-end audit
adjustments).
46
All such financial statements shall be complete and correct in all material
respects and shall be prepared in reasonable detail and in accordance with GAAP
applied consistently throughout the periods reflected therein and with prior
periods (except as approved by such accountants or officer, as the case may be,
and disclosed therein).
6.2 CERTIFICATES; OTHER INFORMATION. Furnish to the Administrative
Agent and each Lender (or, in the case of clause (f), to the relevant Lender):
(a) concurrently with the delivery of the financial statements
referred to in Section 6.1(a), a certificate of the independent certified
public accountants reporting on such financial statements stating that in
making the examination necessary therefor no knowledge was obtained of any
Default or Event of Default, except as specified in such certificate;
(b) concurrently with the delivery of any financial statements
pursuant to Section 6.1, (i) a certificate of a Responsible Officer stating
that, to the best of each such Responsible Officer's knowledge, each Loan
Party during such period has observed or performed all of its covenants and
other agreements, and satisfied every condition, contained in this
Agreement and the other Loan Documents to which it is a party to be
observed, performed or satisfied by it, and that such Responsible Officer
has obtained no knowledge of any Default or Event of Default except as
specified in such certificate and (ii) in the case of quarterly or annual
financial statements, (x) a Compliance Certificate containing all
information and calculations necessary for determining compliance by the
Borrower and its Subsidiaries with the provisions of this Agreement
referred to therein as of the last day of the fiscal quarter or fiscal year
of the Borrower, as the case may be, and (y) to the extent not previously
disclosed to the Administrative Agent, a listing of any county or state
within the United States where any Loan Party keeps material inventory or
equipment and of any material Intellectual Property acquired by any Loan
Party since the date of the most recent list delivered pursuant to this
clause (y) (or, in the case of the first such list so delivered, since the
Closing Date);
(c) as soon as available, and in any event no later than 60 days after
the end of each fiscal year of the Borrower, a detailed consolidated budget
for the following fiscal year (including a projected consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of the following
fiscal year, the related consolidated statements of projected cash flow,
projected changes in financial position and projected income and a
description of the underlying assumptions applicable thereto), and, as soon
as available, significant revisions, if any, of such budget and projections
with respect to such fiscal year (collectively, the "PROJECTIONS"), which
Projections shall in each case be accompanied by a certificate of a
Responsible Officer stating that such Projections are based on reasonable
estimates, information and assumptions and that such Responsible Officer
has no reason to believe that such Projections are incorrect or misleading
in any material respect;
(d) within 45 days after the end of each fiscal quarter of the
Borrower, a narrative discussion and analysis of the financial condition
and results of operations of the Borrower and its Subsidiaries for such
fiscal quarter and for the period from the beginning of the then
47
current fiscal year to the end of such fiscal quarter, as compared to the
portion of the Projections covering such periods and to the comparable
periods of the previous year;
(e) within five days after the same are sent, copies of all financial
statements and reports that the Borrower sends to the holders of any class
of its debt securities or public equity securities and, within five days
after the same are filed, copies of all financial statements and reports
that the Borrower may make to, or file with, the SEC; and
(f) promptly, such additional financial and other information as any
Lender may from time to time reasonably request.
6.3 PAYMENT OF OBLIGATIONS. Pay, discharge or otherwise satisfy at
or before maturity or before they become delinquent, as the case may be, all
its material obligations of whatever nature, except where the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have
been provided on the books of the Borrower or its Subsidiaries, as the case
may be.
6.4 MAINTENANCE OF EXISTENCE; COMPLIANCE. (a) (i) Preserve, renew
and keep in full force and effect its corporate existence and (ii) take all
reasonable action to maintain all rights, privileges and franchises necessary
or desirable in the normal conduct of its business, except, in each case, as
otherwise permitted by Section 7.4 and except, in the case of clause (ii)
above, to the extent that failure to do so could not reasonably be expected
to have a Material Adverse Effect; and (b) comply with all Contractual
Obligations and Requirements of Law except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have
a Material Adverse Effect.
6.5 MAINTENANCE OF PROPERTY; INSURANCE. (a) Keep all property
useful and necessary in its business in good working order and condition,
ordinary wear and tear excepted and (b) maintain with financially sound and
reputable insurance companies insurance on all its property in at least such
amounts and against at least such risks (but including in any event public
liability, product liability and business interruption) as are usually
insured against in the same general area by companies engaged in the same or
a similar business.
6.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS. (a)
Keep proper books of records and account in which full, true and correct
entries in conformity with GAAP and all Requirements of Law shall be made of
all dealings and transactions in relation to its business and activities and
(b) permit representatives of any Lender, at the expense of such Lender, to
visit and inspect any of its properties and examine and make abstracts from
any of its books and records at any reasonable time and as often as may
reasonably be desired and to discuss the business, operations, properties and
financial and other condition of the Borrower and its Subsidiaries with
officers and employees of the Borrower and its Subsidiaries and with its
independent certified public accountants.
6.7 NOTICES. Promptly give notice to the Administrative Agent and
each Lender of:
(a) the occurrence of any Default or Event of Default;
48
(b) any (i) default or event of default under any Contractual
Obligation of the Borrower or any of its Subsidiaries or (ii) litigation,
investigation or proceeding that may exist at any time between the Borrower
or any of its Subsidiaries and any Governmental Authority, that in either
case could reasonably be expected to have a Material Adverse Effect;
(c) any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which (i) the amount involved is $5,000,000 or more and not
covered by insurance or (ii) injunctive or similar relief is sought and
could reasonably be expected to have a Material Adverse Effect;
(d) the following events, as soon as possible and in any event within
30 days after the Borrower knows thereof: (i) the occurrence of any
Reportable Event with respect to any Plan, a failure to make any material
required contribution to a Plan, the creation of any Lien in favor of the
PBGC or a Plan or any withdrawal from, or the termination, Reorganization
or Insolvency of, any Multiemployer Plan if such withdrawal, termination,
Reorganization or Insolvency could reasonably be expected to result in
material liability for the Borrower and its Subsidiaries or (ii) the
institution of proceedings or the taking of any other action by the PBGC or
the Borrower or any Commonly Controlled Entity or any Multiemployer Plan
with respect to the withdrawal from, or the termination, Reorganization or
Insolvency of, any Plan if such withdrawal, termination, Reorganization or
Insolvency could reasonably be expected to result in material liability for
the Borrower and its Subsidiaries; and
(e) any development or event that has had or could reasonably be
expected to have a Material Adverse Effect.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement
of a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action the Borrower or the relevant Subsidiary
proposes to take with respect thereto.
6.8 ENVIRONMENTAL LAWS. Comply in all material respects with, and
ensure compliance in all material respects by all tenants and subtenants, if
any, with, all applicable Environmental Laws, and obtain and comply in all
material respects with and maintain, and ensure that all tenants and
subtenants obtain and comply in all material respects with and maintain, any
and all licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws.
6.9 INTEREST RATE PROTECTION. If, within nine months of the
Closing Date, the Borrower does not refinance on a fixed rate basis at least
$100,000,000 of the Term Loans, enter into Hedge Agreements to the extent
necessary to provide that at least 50% of the aggregate principal amount of
the Term Loans is subject to (x) either a fixed interest rate or interest
rate protection, each for a period of not less than three years, which Hedge
Agreements shall have terms and conditions reasonably satisfactory to the
Administrative Agent.
6.10 ADDITIONAL COLLATERAL, ETC. (a) With respect to any property
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than (x) any property described in paragraph (b), (c) or (d) below, (y)
any property subject to a Lien expressly permitted by Section
49
7.3(g) and (z) property acquired by any Excluded Foreign Subsidiary) as to
which the Administrative Agent, for the benefit of the Lenders, does not have
a perfected Lien, promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a security
interest in such property and (ii) take all actions necessary or advisable to
grant to the Administrative Agent, for the benefit of the Lenders, a
perfected first priority security interest in such property, including the
filing of Uniform Commercial Code financing statements in such jurisdictions
as may be required by the Guarantee and Collateral Agreement or by law or as
may be requested by the Administrative Agent and PROVIDED, that such actions
with respect to motor vehicles and cash collateral need only be taken if and
to the extent the Administrative Agent reasonably requests.
(b) With respect to any fee interest in any real property having a
value (together with improvements thereof) of at least $2,000,000 acquired
after the Closing Date by the Borrower or any of its Subsidiaries (other than
(x) any such real property subject to a Lien expressly permitted by Section
7.3(g) and (z) real property acquired by any Excluded Foreign Subsidiary),
promptly (i) execute and deliver a first priority Mortgage, in favor of the
Administrative Agent, for the benefit of the Lenders, covering such real
property, (ii) if reasonably requested by the Administrative Agent, provide
the Lenders with (x) title and extended coverage insurance covering such real
property in an amount at least equal to the purchase price of such real
property (or such other amount as shall be reasonably specified by the
Administrative Agent) as well as a current ALTA survey thereof, together with
a surveyor's certificate and (y) any consents or estoppels reasonably deemed
necessary or advisable by the Administrative Agent in connection with such
mortgage or deed of trust, each of the foregoing in form and substance
reasonably satisfactory to the Administrative Agent and (iii) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall
be in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.
(c) With respect to any new Subsidiary (other than an Excluded
Foreign Subsidiary) created or acquired after the Closing Date by the
Borrower (which, for the purposes of this paragraph (c), shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary), the
Borrower or any of its Subsidiaries, promptly (i) execute and deliver to the
Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of the Subsidiary Guarantors, (ii)
deliver to the Administrative Agent the certificates representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement, (B) to take such actions necessary or
advisable to grant to the Administrative Agent for the benefit of the Lenders
a perfected first priority security interest in the Collateral described in
the Guarantee and Collateral Agreement with respect to such new Subsidiary,
including the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or
by law or as may be requested by the Administrative Agent and (C) to deliver
to the Administrative Agent a certificate of such Subsidiary, substantially
in the form of Exhibit C, with
50
appropriate insertions and attachments, and (iv) if reasonably requested by
the Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
(d) With respect to any new Excluded Foreign Subsidiary created or
acquired after the Closing Date by the Borrower or any of its Subsidiaries
(other than an Excluded Foreign Subsidiary), promptly (i) execute and deliver
to the Administrative Agent such amendments to the Guarantee and Collateral
Agreement as the Administrative Agent deems necessary or advisable to grant
to the Administrative Agent, for the benefit of the Lenders, a perfected
first priority security interest in the Capital Stock of such new Subsidiary
that is owned by the Borrower or any of its Subsidiaries (provided that in no
event shall more than 65% of the total outstanding voting Capital Stock of
any such new Subsidiary be required to be so pledged), (ii) deliver to the
Administrative Agent the certificates, if any, representing such Capital
Stock, together with undated stock powers, in blank, executed and delivered
by a duly authorized officer of the Borrower or such Subsidiary, as the case
may be, and take such other action as may be necessary or, in the opinion of
the Administrative Agent, desirable to perfect the Administrative Agent's
security interest therein, and (iii) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 7. NEGATIVE COVENANTS
The Borrower hereby agrees that, so long as the Commitments remain
in effect, any Letter of Credit remains outstanding or any Loan or other
amount is owing to any Lender or the Administrative Agent hereunder, the
Borrower shall not, and shall not permit any of its Subsidiaries to, directly
or indirectly:
7.1 FINANCIAL CONDITION COVENANTS.
(a) CONSOLIDATED LEVERAGE RATIO. Permit the Consolidated Leverage
Ratio on the last day of any period of four consecutive fiscal quarters of the
Borrower ending on the last day of any fiscal quarter included in any period set
forth below ( a "TEST PERIOD") to exceed the ratio set forth below opposite such
Test Period:
51
Consolidated
Fiscal Quarter Leverage Ratio
-------------- --------------
Closing Date - 12/13/98 4.00x
03/31/99 - 06/30/99 3.75x
09/30/99 - 12/31/99 3.50x
03/03/00 - 12/31/00 3.25x
03/31/91 and thereafter 3.00x
(b) CONSOLIDATED FIXED CHARGE COVERAGE RATIO. Permit the Consolidated
Fixed Charge Coverage Ratio for any period of four consecutive fiscal quarters
of the Borrower (or, if less, the number of full fiscal quarters subsequent to
the Closing Date) ending with any fiscal quarter ending on the last day of any
period set forth below (a "TEST PERIOD") to be less than the ratio set forth
below opposite such Test Period:
Consolidated Fixed Charge
Fiscal Quarter Coverage Ratio
-------------- --------------
Closing Date - 03/31/99 1.60x
06/30/99 - 03/31/00 1.25x
06/30/00 - 03/31/01 1.20x
03/31/91 and thereafter 1.00x
7.2 INDEBTEDNESS. Create, issue, incur, assume, become liable in
respect of or suffer to exist any Indebtedness, except:
(a) Indebtedness of any Loan Party pursuant to any Loan Document;
(b) Indebtedness of the Borrower to any Subsidiary and of any
Subsidiary Guarantor to the Borrower or any other Subsidiary;
(c) Guarantee Obligations incurred in the ordinary course of business
by the Borrower or any of its Subsidiaries of obligations of any Subsidiary
Guarantor;
(d) Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without increasing, or shortening the maturity of, the principal amount
thereof);
(e) Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $20,000,000 at any one time outstanding;
(f) until September 29, 1998, the Senior Unsecured Notes;
(g) Indebtedness of the Borrower the aggregate principal amount of
which incurred subsequent to the date hereof does not exceed $1,000,000 and
the proceeds of which are used by
52
the Borrower to purchase shares of common stock of the Borrower from former
officers and employees of the Borrower and its Subsidiaries as permitted by
Section 7.6(c);
(h) Guarantee Obligations in respect of the performance of obligations
of Persons (other than the Borrower and its Subsidiaries) entered into the
ordinary course of their respective businesses PROVIDED that the aggregate
liability of the Borrower and its Subsidiaries in respect thereof does not
at any time exceed $50,000,000;
(i) subordinated high-yield Indebtedness of the Borrower the Net Cash
Proceeds of which are applied in accordance with Section 2.9(b) to prepay
the Term Loans, PROVIDED that the terms and conditions thereof are
reasonably satisfactory to the Administrative Agent, as evidenced by its
prior written approval thereof;
(j) Indebtedness on the property or assets of a Person which becomes a
Subsidiary after the date of this Agreement or on property or assets
acquired by the Borrower or any Subsidiary after the date of this
Agreement, PROVIDED that such Indebtedness exists at the time such Person
becomes a Subsidiary or such property or assets are acquired, as the case
may be, and are not created in anticipation thereof;
(k) Indebtedness of Non-Guarantor Subsidiaries to the Borrower or any
Subsidiary and Guarantee Obligations of the Borrower and its Subsidiaries
in respect of Indebtedness of Non-Guarantor Subsidiaries PROVIDED that the
aggregate amount of such Indebtedness and Guarantee Obligations are given
by the Borrower and its Subsidiaries subsequent to the date hereof does not
exceed $10,000,000;
(l) Indebtedness of Non-Guarantor Subsidiaries to third parties the
aggregate principal amount of which outstanding at any time does not exceed
$10,000,000;
(m) Indebtedness, in an aggregate amount not to exceed $10,000,000
under promissory notes given to, and "earn-out" arrangements (valued, at
any time, at the amount then reasonably expected by the Borrower to be paid
thereunder) in favor of, sellers in connection with acquisitions by the
Borrower and its Subsidiaries permitted by Section 7.8;
(n) Reimbursement obligations in respect of performance bonds issued
on behalf of the Borrower or any Subsidiary in the ordinary course of
business; and
(o) Indebtedness, in addition to the Indebtedness permitted by the
foregoing provisions of this Section, in an aggregate principal amount not
to exceed $5,000,000 at any one time outstanding.
7.3 LIENS. Create, incur, assume or suffer to exist any Lien upon any
of its property, whether now owned or hereafter acquired, except for:
53
(a) Liens for taxes not yet due or that are being contested in good
faith by appropriate proceedings, PROVIDED that adequate reserves with
respect thereto are maintained on the books of the Borrower or its
Subsidiaries, as the case may be, in conformity with GAAP;
(b) carriers', warehousemen's, mechanics', materialmen's, repairmen's
or other like Liens arising in the ordinary course of business that are
either immaterial or are not overdue for a period of more than 30 days or
that are being contested in good faith by appropriate proceedings;
(c) pledges or deposits in connection with workers' compensation,
unemployment insurance and other social security legislation;
(d) deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, statutory obligations, surety and appeal
bonds, performance bonds and other obligations of a like nature incurred in
the ordinary course of business;
(e) easements, rights-of-way, restrictions and other similar
encumbrances incurred in the ordinary course of business that, in the
aggregate, are not substantial in amount and that do not in any case
materially detract from the value of the property subject thereto or
materially interfere with the ordinary conduct of the business of the
Borrower or any of its Subsidiaries;
(f) Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d), PROVIDED that no such
Lien is spread to cover any additional property after the Closing Date and
that the amount of Indebtedness secured thereby is not increased;
(g) Liens securing Indebtedness of the Borrower or any other
Subsidiary incurred pursuant to Section 7.2(e) to finance the acquisition
of fixed or capital assets, PROVIDED that (i) such Liens shall be created
within 90 days of the acquisition of such fixed or capital assets, (ii)
such Liens do not at any time encumber any property other than the property
financed by such Indebtedness and (iii) the amount of Indebtedness secured
thereby is not increased;
(h) Liens created pursuant to the Security Documents;
(i) any interest or title of a lessor under any lease entered into by
the Borrower or any other Subsidiary in the ordinary course of its business
and covering only the assets so leased;
(j) Liens on the property or assets of a Person which becomes a
Subsidiary after the date of this Agreement or on property or assets
acquired by the Borrower or any Subsidiary after the date of this
Agreement, in each case securing Indebtedness permitted by subsection
7.2(k), PROVIDED that (i) such Liens exist at the time such Person becomes
a Subsidiary or such property or assets are acquired, as the case may be,
and are not created in anticipation thereof and (ii)
54
any such Lien is not extended to cover any property or assets of such
Person or any other property or assets of the Borrower or such Subsidiary,
as the case may be, after the time such Person becomes a Subsidiary or
such property or assets are acquired, as the case may be;
(k) restrictions on the transfer of assets imposed by any licenses or
any other Requirement of Law in the ordinary course of business;
(l) leases or subleases granted to others not interfering in any
material respect with the business of the Borrower and its Subsidiaries
taken as a whole and any interest or title of a lessor under any lease not
prohibited by this Agreement;
(m) Liens arising by reason of a judgement, decree or court order
securing obligations in an amount not exceeding $5,000,000, to the extent
not otherwise resulting in an Event of Default;
(n) Liens on the assets of any Non-Guarantor Subsidiary which secure
Indebtedness of such Non-Guarantor Subsidiary under Section 7.2(l); and
(o) Liens not otherwise permitted under this Section which secure
Indebtedness permitted under Section 7.2 not exceeding, as to the Borrower
and its Subsidiaries taken together, $5,000,000 in aggregate amount at any
time outstanding.
7.4 FUNDAMENTAL CHANGES. Enter into any merger, consolidation or
amalgamation, or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution), or Dispose of, all or substantially all of its
property or business, except that:
(a) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower (PROVIDED that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor (PROVIDED
that the Subsidiary Guarantor shall be the continuing or surviving
corporation);
(b) any Non-Guarantor Subsidiary of the Borrower may be merged or
consolidated with or into another Non-Guarantor Subsidiary of the Borrower;
(c) any Subsidiary of the Borrower may Dispose of any or all of its
assets (upon voluntary liquidation or otherwise) to the Borrower or any
Subsidiary Guarantor.
(d) any Non-Guarantor Subsidiary of the Borrower may Dispose of any or
all of its assets (upon voluntary liquidation or otherwise) to the Borrower
or any Subsidiary; and
(e) the Borrower or any Subsidiary Guarantor may effect pursuant to a
merger or consolidation any Investment permitted by subsection 7.8(l) so
long as the Borrower or such Subsidiary Guarantor is the surviving entity.
55
7.5 DISPOSITION OF PROPERTY. Dispose of any of its property, whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary's Capital Stock to any Person, except:
(a) the Disposition of obsolete or worn out property in the ordinary
course of business;
(b) the sale of inventory in the ordinary course of business;
(c) Dispositions permitted by Sections 7.4(b), (c) and (d) and
Permitted Sale and Leaseback Transactions;
(d) the sale or issuance of any Subsidiary's Capital Stock to the
Borrower or any Subsidiary Guarantor;
(e) the transfer of condemned property to a Governmental Authority
pursuant to a Requirement of Law;
(f) the transfer of property that is the subject of a casualty loss to
the insurer of the Borrower or its Subsidiaries upon the payment of the
insurance covering such loss;
(g) the Disposition of assets of the Borrower to any Subsidiary
Guarantor;
(h) the Disposition of assets of a Non-Guarantor Subsidiary to the
Borrower or any Subsidiary;
(i) the Disposition of Cash Equivalents or any marketable securities;
(j) the Disposition of assets by the Borrower or any Guarantor
Subsidiary to Non-Guarantor Subsidiaries the aggregate fair market value of
which does not exceed $5,000,000 in any fiscal year of the Borrower; and
(k) the Disposition of other property having a fair market value not
to exceed $15,000,000 in the aggregate during any fiscal year of the
Borrower.
7.6 RESTRICTED PAYMENTS. Declare or pay any dividend (other than
dividends payable solely in stock of the Person making such dividend) on, or
make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether now
or hereafter outstanding, or make any other distribution in respect thereof,
either directly or indirectly, whether in cash or property or in obligations of
the Borrower or any Subsidiary (collectively, "RESTRICTED PAYMENTS"), except
that (a) any Subsidiary may make Restricted Payments, (b) the Borrower may
during any of its fiscal quarters make Restricted Payments in an aggregate
amount not to exceed $1,000,000 and, in addition, the Borrower may during any of
its fiscal years make Restricted Payments in an aggregate amount not to exceed
25% of Consolidated Net Income for the preceding fiscal year, PROVIDED
56
that the amount of Restricted Payments that the Borrower shall be permitted
to make in any fiscal year pursuant to this clause (b) shall be reduced by
the aggregate amount of Restricted Payments made by Subsidiaries during such
year that are received by Persons other than the Borrower or its Subsidiaries
(c) the Borrower may purchase shares of its common stock from former officers
and employees of the Borrower and its Subsidiaries for an aggregate purchase
price (including the principal amount of promissory notes delivered in
connection therewith as permitted by Section 7.2(g)) not to exceed $750,000
in any fiscal year and (d) any Non-Guarantor Subsidiary may make Restricted
Payments to any Non-Guarantor Subsidiary to the Borrower or any Subsidiary.
7.7 CAPITAL EXPENDITURES. Make or commit to make any Capital
Expenditure, except (a) Capital Expenditures of the Borrower and its
Subsidiaries in the ordinary course of business not exceeding (when added to the
aggregate amount of Investments made during such fiscal year as permitted by
(and calculated in accordance with) Section 7.8(n)) $30,000,000 in any fiscal
year of the Borrower; PROVIDED, that (i) up to $7,500,000 of any such amount
referred to above, if not so expended in the fiscal year for which it is
permitted, may be carried over for expenditure in the next succeeding fiscal
year and (ii) Capital Expenditures made pursuant to this clause (a) during any
fiscal year shall be deemed made, FIRST, in respect of amounts permitted for
such fiscal year as provided above and, SECOND, in respect of amounts carried
over from the prior fiscal year pursuant to subclause (i) above and (b) Capital
Expenditures made with the proceeds of any Reinvestment Deferred Amount.
7.8 INVESTMENTS. Make any advance, loan, extension of credit (by way
of guaranty or otherwise) or capital contribution to, or purchase any Capital
Stock, bonds, notes, debentures or other debt securities of, or any assets
constituting a business unit of, or make any other investment in, any Person
(all of the foregoing, "INVESTMENTS"), except:
(a) extensions of trade credit in the ordinary course of business;
(b) investments in Cash Equivalents and in marketable securities
provided that the aggregate purchase price of all marketable securities
held by the Borrower at any time shall not exceed $5,000,000;
(c) Guarantee Obligations permitted by Section 7.2;
(d) loans and advances to employees of the Borrower or any Subsidiary
of the Borrower in the ordinary course of business (including for travel,
entertainment and relocation expenses) in an aggregate amount for the
Borrower or any Subsidiary of the Borrower not to exceed $250,000 at any
one time outstanding;
(e) the Acquisition;
(f) Investments in assets useful in the business of the Borrower and
its Subsidiaries made by the Borrower or any of its Subsidiaries with the
proceeds of any Reinvestment Deferred Amount;
57
(g) Investments by the Borrower or any of its Subsidiaries in the
Borrower or any Person that, prior to such investment, is a Wholly Owned
Subsidiary Guarantor;
(h) Investments by the Borrower and its Subsidiaries existing on the
date hereof in other Subsidiaries and in those Persons listed on Schedule
7.8;
(i) Investments by any Non-Guarantor Subsidiary in any Person that,
prior to such Investment, is a Non-Guarantor Subsidiary;
(j) Hedging Agreements entered into in the ordinary course of
business;
(k) promissory notes and Capital Stock received as partial
consideration for Dispositions permitted by Section 7.5(k), PROVIDED that
the sum of (i) the aggregate principal amount of such promissory notes and
(ii) the aggregate fair market value (determined in each case as of the
date of receipt thereof) of such Capital Stock held at any time by the
Borrower and its Subsidiaries shall not exceed $5,000,000;
(l) loans and advances the Indebtedness resulting from which is
permitted by Sections 7.2(b) or (k);
(m) loans to officers and other employees of the Borrower and its
Subsidiaries the entire proceeds of which are used to purchase newly issued
common stock of the Borrower; and
(n) in addition to Investments otherwise expressly permitted by this
Section, Investments by the Borrower or any of its Subsidiaries in an
aggregate amount (valued at cost and including in the valuation of any such
Investment any promissory notes given as consideration therefor as
permitted by Section 7.2(m) and any Indebtedness assumed by the Borrower or
any Subsidiary in connection therewith, but excluding from the valuation of
any such Investment any shares of common stock of the Borrower given as
consideration therefor) in any fiscal year of the Borrower not to exceed
(when added to the aggregate amount of Capital Expenditures made during
such year as permitted by Section 7.7) $30,000,000; PROVIDED that no such
Investment shall be permitted pursuant to this paragraph unless, after
giving effect thereto and to the incurrence of any Indebtedness in
connection therewith, the Consolidated Leverage Ratio would not exceed the
maximum ratio permitted by Section 7.1(a) as at the end of the next fiscal
quarter to end after the date of such acquisition (and with the
Consolidated Leverage Ratio calculated on the basis of Indebtedness
outstanding on the date of such acquisition (including any Indebtedness to
be incurred in connection therewith) and Consolidated EBITDA (giving PRO
FORMA effect to such acquisition) for the then most recently ended period
of four consecutive fiscal quarters for which financial statements shall
have been delivered to the Lenders pursuant to Section 6.1.
7.9 TRANSACTIONS WITH AFFILIATES. Enter into any transaction,
including any purchase, sale, lease or exchange of property, the rendering of
any service or the payment of any management, advisory or similar fees, with any
Affiliate (other than the Borrower or any wholly owned Subsidiary Guarantor)
unless such transaction is (i) otherwise permitted under this Agreement and
(ii) upon fair
58
and reasonable terms no less favorable to the Borrower or such Subsidiary, as
the case may be, than it would obtain in a comparable arm's length
transaction with a Person that is not an Affiliate.
7.10 SALES AND LEASEBACKS. Enter into any arrangement with any Person
providing for the leasing by the Borrower or any Subsidiary of real or personal
property that has been or is to be sold or transferred by the Borrower or such
Subsidiary to such Person or to any other Person to whom funds have been or are
to be advanced by such Person on the security of such property or rental
obligations of the Borrower or such Subsidiary unless such arrangement is
entered into in connection with the financing of the acquisition of such
property through the proceeds of a Capital Lease Obligation permitted by Section
7.2(e) and the sale or transfer of such property occurs within 90 days following
the acquisition thereof by the Borrower or such Subsidiary (a "PERMITTED SALE
AND LEASEBACK TRANSACTION").
7.11 CHANGES IN FISCAL PERIODS. Permit the fiscal year of the
Borrower to end on a day in any month other than March or change the Borrower's
method of determining fiscal quarters.
7.12 NEGATIVE PLEDGE CLAUSES. Enter into or suffer to exist or become
effective any agreement that prohibits or limits the ability of the Borrower or
any of its Subsidiaries to create, incur, assume or suffer to exist any Lien
upon any of its property or revenues, whether now owned or hereafter acquired,
to secure its obligations under the Loan Documents to which it is a party other
than (a) this Agreement and the other Loan Documents and (b) any agreements
governing any purchase money Liens or Capital Lease Obligations otherwise
permitted hereby (in which case, any prohibition or limitation shall only be
effective against the assets financed thereby).
7.13 CLAUSES RESTRICTING SUBSIDIARY DISTRIBUTIONS. Enter into or
suffer to exist or become effective any consensual encumbrance or restriction on
the ability of any Subsidiary of the Borrower to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any Indebtedness
owed to, the Borrower or any other Subsidiary of the Borrower, (b) make loans or
advances to, or other Investments in, the Borrower or any other Subsidiary of
the Borrower or (c) transfer any of its assets to the Borrower or any other
Subsidiary of the Borrower, except for such encumbrances or restrictions
existing under or by reason of (i) any restrictions existing under the Loan
Documents (ii) any restrictions with respect to a Subsidiary imposed pursuant to
an agreement that has been entered into in connection with the Disposition of
all or substantially all of the Capital Stock or assets of such Subsidiary, and
except for such restrictions contained in any Indebtedness permitted by Section
7.2(l).
7.14 LINES OF BUSINESS. Enter into any business, either directly or
through any Subsidiary, except for those businesses which are substantially the
same as the businesses in which the Borrower and its Subsidiaries are engaged on
the date of this Agreement (after giving effect to the Acquisition) or that are
reasonably related thereto.
7.15 AMENDMENTS TO ACQUISITION DOCUMENTATION. On or prior to the
Closing Date, amend, modify, waive or otherwise change, or consent or agree to
any amendment, modification, waiver or other change to, any of the terms and
conditions of the Acquisition Documentation or any other document delivered by
the Seller or any of its affiliates in connection therewith.
59
SECTION 8. EVENTS OF DEFAULT
If any of the following events shall occur and be continuing:
(a) the Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or
the Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes
due in accordance with the terms hereof; or
(b) any representation or warranty made or deemed made by any Loan
Party herein or in any other Loan Document or that is contained in any
certificate, document or financial or other statement furnished by it at
any time under or in connection with this Agreement or any such other Loan
Document shall prove to have been inaccurate in any material respect on or
as of the date made or deemed made; or
(c) (i) any Loan Party shall default in the observance or performance
of any agreement contained in clause (i) or (ii) of Section 6.4(a) (with
respect to the Borrower only), Section 6.7(a) or Section 7 of this
Agreement or Sections 5.5(ii) and (iii) (with respect to the Borrower only)
and 5.7(b) (with respect to the Borrower only) of the Guarantee and
Collateral Agreement or (ii) an "Event of Default" under and as defined in
any Mortgage shall have occurred and be continuing; or
(d) any Loan Party shall default in the observance or performance of
any other agreement contained in this Agreement or any other Loan Document
(other than as provided in paragraphs (a) through (c) of this Section), and
such default shall continue unremedied for a period of 30 days after notice
to the Borrower from the Administrative Agent or any Lender; or
(e) the Borrower or any of its Subsidiaries shall (i) default in
making any payment of any principal of any Indebtedness (including any
Guarantee Obligation, but excluding the Loans and the Senior Unsecured
Notes) on the scheduled or original due date with respect thereto beyond
any grace period; or (ii) default in making any payment of any interest on
any such Indebtedness beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created; or (iii)
default in the observance or performance of any other agreement or
condition relating to any such Indebtedness or contained in any instrument
or agreement evidencing, securing or relating thereto, or any other event
shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or
beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or (in the case of
any such Indebtedness constituting a Guarantee Obligation) to become
payable; PROVIDED, that a default, event or condition described in clause
(i), (ii) or (iii) of this paragraph (e) shall not at any time constitute
an Event of Default unless, at such time, one or more defaults, events or
conditions of the type described in clauses (i), (ii) and (iii) of this
paragraph (e) shall have occurred and be
60
continuing with respect to Indebtedness the outstanding principal amount
of which exceeds in the aggregate $5,000,000; or
(f) (i) the Borrower or any of its material Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to
bankruptcy, insolvency, reorganization or relief of debtors, seeking to
have an order for relief entered with respect to it, or seeking to
adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition
or other relief with respect to it or its debts, or (B) seeking appointment
of a receiver, trustee, custodian, conservator or other similar official
for it or for all or any substantial part of its assets, or the Borrower or
any of its material Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against the
Borrower or any of its material Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or
(iii) there shall be commenced against the Borrower or any of its material
Subsidiaries any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all
or any substantial part of its assets that results in the entry of an order
for any such relief that shall be unvacated, undischarged, or unstayed or
unbonded pending appeal for a period of 60 days from the entry thereof; or
(iv) the Borrower or any of its material Subsidiaries shall take any action
in furtherance of, or indicating its consent to, approval of, or
acquiescence in, any of the acts set forth in clause (i), (ii), or (iii)
above; or (v) the Borrower or any of its material Subsidiaries shall
generally not, or shall be unable to, or shall admit in writing its
inability to, pay its debts as they become due; or
(g) (i) any Person shall engage in any non-exempt "prohibited
transaction" (as defined in Section 406 of ERISA or Section 4975 of the
Code) involving any Plan, (ii) any "accumulated funding deficiency" (as
defined in Section 302 of ERISA), whether or not waived, shall exist with
respect to any Plan or any Lien in favor of the PBGC or a Plan shall arise
on the assets of the Borrower or any Commonly Controlled Entity, (iii) a
Reportable Event shall occur with respect to, or proceedings shall commence
to have a trustee appointed, or a trustee shall be appointed, to administer
or to terminate, any Single Employer Plan, which Reportable Event or
commencement of proceedings or appointment of a trustee is, in the
reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable
opinion of the Required Lenders is likely to, incur any liability in
connection with a withdrawal from, or the Insolvency or Reorganization of,
a Multiemployer Plan or (vi) any other event or condition shall occur or
exist with respect to a Plan; and in each case in clauses (i) through (vi)
above, such event or condition, together with all other such events or
conditions, if any, could, in the sole judgment of the Required Lenders,
reasonably be expected to have a Material Adverse Effect; or
61
(h) one or more judgments or decrees shall be entered against the
Borrower or any of its Subsidiaries involving in the aggregate a liability
(not paid or fully covered by insurance as to which the relevant insurance
company has acknowledged coverage) of $5,000,000 or more, and all such
judgments or decrees shall not have been vacated, discharged, stayed or
bonded pending appeal within 30 days from the entry thereof; or
(i) any of the Security Documents shall cease, for any reason, to be
in full force and effect, or any Loan Party or any Affiliate of any Loan
Party shall so assert, or any Lien created by any of the Security Documents
shall cease to be enforceable and of the same effect and priority purported
to be created thereby; or
(j) the guarantee contained in Section 2 of the Guarantee and
Collateral Agreement shall cease, for any reason, to be in full force and
effect or any Loan Party or any Affiliate of any Loan Party shall so
assert; or
(k)(i) any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act")), (A) shall become, or obtain rights (whether by means
or warrants, options or otherwise) to become, the "beneficial owner" (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of more than 20% of the outstanding common stock of the
Borrower or (B) shall obtain the power (whether or not exercised) to elect
a majority of the Borrower's board of directors; or (ii) the board of
directors of the Borrower shall cease to consist of a majority of
Continuing Directors;
then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under this
Agreement and the other Loan Documents (including all amounts of L/C
Obligations, whether or not the beneficiaries of the then outstanding Letters of
Credit shall have presented the documents required thereunder) shall immediately
become due and payable, and (B) if such event is any other Event of Default,
either or both of the following actions may be taken: (i) with the consent of
the Majority Revolving Facility Lenders, the Administrative Agent may, or upon
the request of the Majority Revolving Facility Lenders, the Administrative Agent
shall, by notice to the Borrower declare the Revolving Commitments to be
terminated forthwith, whereupon the Revolving Commitments shall immediately
terminate; and (ii) with the consent of the Required Lenders, the Administrative
Agent may, or upon the request of the Required Lenders, the Administrative Agent
shall, by notice to the Borrower, declare the Loans hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement and the other
Loan Documents (including all amounts of L/C Obligations, whether or not the
beneficiaries of the then outstanding Letters of Credit shall have presented the
documents required thereunder) to be due and payable forthwith, whereupon the
same shall immediately become due and payable. With respect to all Letters of
Credit with respect to which presentment for honor shall not have occurred at
the time of an acceleration pursuant to this paragraph, the Borrower shall at
such time deposit in a cash collateral account opened by the Administrative
Agent an amount equal to the aggregate then undrawn and unexpired amount of such
Letters of Credit. Amounts held in such cash collateral account shall be
applied by the Administrative Agent to the payment of drafts drawn under
62
such Letters of Credit, and the unused portion thereof after all such Letters
of Credit shall have expired or been fully drawn upon, if any, shall be
applied to repay other obligations of the Borrower hereunder and under the
other Loan Documents. After all such Letters of Credit shall have expired or
been fully drawn upon, all Reimbursement Obligations shall have been
satisfied and all other obligations of the Borrower hereunder and under the
other Loan Documents shall have been paid in full, the balance, if any, in
such cash collateral account shall be returned to the Borrower (or such other
Person as may be lawfully entitled thereto). Except as expressly provided
above in this Section, presentment, demand, protest and all other notices of
any kind are hereby expressly waived by the Borrower.
SECTION 9. THE AGENTS
9.1 APPOINTMENT. Each Lender hereby irrevocably designates and
appoints the Administrative Agent as the agent of such Lender under this
Agreement and the other Loan Documents, and each such Lender irrevocably
authorizes the Administrative Agent, in such capacity, 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 Administrative Agent by the terms of this
Agreement and the other Loan Documents, together with such other powers as
are reasonably incidental thereto. Notwithstanding any provision to the
contrary elsewhere in this Agreement, the Administrative Agent shall not have
any duties or responsibilities, except those expressly set forth herein, or
any fiduciary relationship with any Lender, and no implied covenants,
functions, responsibilities, duties, obligations or liabilities shall be read
into this Agreement or any other Loan Document or otherwise exist against the
Administrative Agent.
9.2 DELEGATION OF DUTIES. The Administrative Agent may execute any of
its duties under this Agreement and the other Loan Documents by or through
agents or attorneys-in-fact and shall be entitled to advice of counsel
concerning all matters pertaining to such duties. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys in-fact selected by it with reasonable care.
9.3 EXCULPATORY PROVISIONS. Neither any Agent nor any of their
respective officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be (i) liable for any action lawfully taken or omitted to be
taken by it or such Person under or in connection with this Agreement or any
other Loan Document (except to the extent that any of the foregoing are found by
a final and nonappealable decision of a court of competent jurisdiction to have
resulted from its 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 any Loan Party or any officer
thereof contained in this Agreement or any other Loan Document 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 the value, validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
for any failure of any Loan Party a party thereto 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 any other Loan
Document, or to inspect the properties, books or records of any Loan Party.
63
9.4 RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent shall
be entitled to rely, and shall be fully protected in relying, upon any
instrument, writing, resolution, notice, consent, certificate, affidavit,
letter, telecopy, telex or teletype message, statement, order or other document
or conversation believed by it 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 counsel to the Borrower), independent
accountants and other experts selected by the Administrative Agent. The
Administrative Agent may deem and treat the payee of any Note as the owner
thereof for all purposes unless a written notice of assignment, negotiation or
transfer thereof in accordance with the provisions of Section 10.6(c) shall have
been filed with the Administrative Agent. The Administrative Agent shall be
fully justified in failing or refusing to take any action under this Agreement
or any other Loan Document unless it shall first receive such advice or
concurrence of the Required Lenders (or, if so specified by this Agreement, all
Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense that may
be incurred by it by reason of taking or continuing to take any such action.
The Administrative Agent 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 (or, if so specified by this
Agreement, all Lenders), and such request and any action taken or failure to act
pursuant thereto shall be binding upon all the Lenders and all future holders of
the Loans.
9.5 NOTICE OF DEFAULT. The Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of Default
hereunder unless the Administrative Agent has received notice from a Lender or
the Borrower referring to this Agreement, describing such Default or Event of
Default and stating that such notice is a "notice of default". In the event
that the Administrative Agent receives such a notice, the Administrative Agent
shall give notice thereof to the Lenders. The Administrative Agent shall take
such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Lenders (or, if so specified by this
Agreement, all Lenders); PROVIDED that unless and until the Administrative Agent
shall have received such directions, the Administrative Agent may (but shall not
be obligated to) take such action, or refrain from taking such action, with
respect to such Default or Event of Default as it 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 any Agent hereinafter
taken, including any review of the affairs of a Loan Party or any affiliate of a
Loan Party, shall be deemed to constitute any representation or warranty by any
Agent to any Lender. Each Lender represents to the Agents that it has,
independently and without reliance upon any Agent 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, operations, property,
financial and other condition and creditworthiness of the Loan Parties and their
affiliates 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 any Agent or any other Lender, and based on such documents
and information as it shall deem appropriate at the time, continue to make its
own credit analysis, appraisals and decisions in taking or not taking action
under this Agreement and the other Loan Documents, and to make such
investigation as it deems necessary to inform itself as to the business,
64
operations, property, financial and other condition and creditworthiness of the
Loan Parties and their affiliates. Except for notices, reports and other
documents expressly required to be furnished to the Lenders by the
Administrative Agent hereunder, the Administrative Agent shall not have any duty
or responsibility to provide any Lender with any credit or other information
concerning the business, operations, property, condition (financial or
otherwise), prospects or creditworthiness of any Loan Party or any affiliate of
a Loan Party that may come into the possession of the Administrative Agent or
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates.
9.7 INDEMNIFICATION. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate Exposure
Percentages immediately prior to such date), from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever that may at any time
(whether before or after the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; PROVIDED that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court of
competent jurisdiction to have resulted from such Agent's gross negligence or
willful misconduct. The agreements in this Section shall survive the payment of
the Loans and all other amounts payable hereunder.
9.8 AGENT IN ITS INDIVIDUAL CAPACITY. Each Agent and its affiliates
may make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent was not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms "Lender" and
"Lenders" shall include each Agent in its individual capacity.
9.9 SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign as Administrative Agent upon 30 days' notice to the Lenders and the
Borrower. If the Administrative Agent shall resign as Administrative Agent
under this Agreement and the other Loan Documents, then the Required Lenders
shall appoint from among the Lenders a successor agent for the Lenders, which
successor agent shall (unless an Event of Default under Section 8(a) or Section
8(f) with respect to the Borrower shall have occurred and be continuing) be
subject to approval by the Borrower (which approval shall not be unreasonably
withheld or delayed), whereupon such successor agent shall succeed to the
rights, powers and duties of the Administrative Agent, and the term
"Administrative Agent" shall mean such successor agent effective upon such
appointment and approval, and the former Administrative Agent's rights, powers
and duties as Administrative Agent shall be terminated, without any other or
further act or deed on the part of such former Administrative Agent or any of
the parties to this Agreement or any holders of the Loans. If no successor
agent has accepted appointment as
65
Administrative Agent by the date that is 30 days following a retiring
Administrative Agent's notice of resignation, the retiring Administrative
Agent's resignation shall nevertheless thereupon become effective and the
Lenders shall assume and perform all of the duties of the Administrative
Agent hereunder until such time, if any, as the Required Lenders appoint a
successor agent as provided for above. After any retiring Administrative
Agent's resignation as Administrative Agent, the provisions of this Section 9
shall inure to its benefit as to any actions taken or omitted to be taken by
it while it was Administrative Agent under this Agreement and the other Loan
Documents.
9.10 AUTHORIZATION TO RELEASE GUARANTEES AND LIENS. Notwithstanding
anything to the contrary contained herein or in any other Loan Document, the
Administrative Agent is hereby irrevocably authorized by each of the Lenders
(without requirement of notice to or consent of any Lender except as expressly
required by Section 10.1) to take any action requested by the Borrower having
the effect of releasing any Collateral or guarantee obligations to the extent
necessary to permit consummation of any transaction not prohibited by any Loan
Document or that has been consented to in accordance with Section 10.1.
9.11 DOCUMENTATION AGENT, SYNDICATION AGENT AND ARRANGER. Neither the
Documentation Agent, the Syndication Agent nor the Arranger shall have any
duties or responsibilities, nor incur any liability, hereunder in its capacity
as such.
SECTION 10. MISCELLANEOUS
10.1 AMENDMENTS AND WAIVERS. Neither this Agreement, any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or, with the written consent of the Required Lenders, the Administrative Agent
and each Loan Party party to the relevant Loan Document may, from time to time,
(a) enter into written amendments, supplements or modifications hereto and to
the other Loan Documents for the purpose of adding any provisions to this
Agreement or the other Loan Documents or changing in any manner the rights of
the Lenders or of the Loan Parties hereunder or thereunder or (b) waive, on such
terms and conditions as the Required Lenders or the Administrative Agent, as the
case may be, may specify in such instrument, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and its
consequences; PROVIDED, HOWEVER, that no such waiver and no such amendment,
supplement or modification shall (i) forgive the principal amount or extend the
final scheduled date of maturity of any Loan, extend the scheduled date of any
amortization payment in respect of any Term Loan, reduce the stated rate of any
interest or fee payable hereunder or extend the scheduled date of any payment
thereof, or increase the amount or extend the expiration date of any Lender's
Revolving Commitment, in each case without the consent of each Lender directly
affected thereby; (ii) amend, modify or waive any provision of this Section 10.1
or reduce any percentage specified in the definition of Required Lenders or
Required Prepayment Lenders, consent to the assignment or transfer by the
Borrower of any of its rights and obligations under this Agreement and the other
Loan Documents, release all or substantially all of the Collateral or release
all or substantially all of the Subsidiary Guarantors from their obligations
under the Guarantee and Collateral Agreement, in each case without the written
consent of all Lenders; (iii) amend, modify or waive any condition precedent to
any extension of credit under the Revolving Facility set forth in Section 5.2
(including in
66
connection with any waiver of an existing Default or Event of Default)
without the written consent of the Majority Revolving Facility Lenders; (iv)
amend, modify or waive any provision of Section 2.15 without the consent of
the Majority Facility Lenders in respect of each Facility adversely affected
thereby; (v) reduce the percentage specified in the definition of Majority
Facility Lenders with respect to any Facility without the written consent of
all Lenders under such Facility; (vi) amend, modify or waive any provision of
Section 9 without the written consent of the Administrative Agent; or (vii)
amend, modify or waive any provision of Section 3 without the written consent
of the Issuing Lender. Any such waiver and any such amendment, supplement or
modification shall apply equally to each of the Lenders and shall be binding
upon the Loan Parties, the Lenders, the Administrative Agent and all future
holders of the Loans. In the case of any waiver, the Loan Parties, the
Lenders and the Administrative Agent shall be restored to their former
position and rights hereunder and under the other Loan Documents, and any
Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other
Default or Event of Default, or impair any right consequent thereon.
10.2 NOTICES. All notices, requests and demands to or upon the
respective parties hereto to be effective shall be in writing (including by
telecopy), and, unless otherwise expressly provided herein, shall be deemed to
have been duly given or made when delivered, or three Business Days after being
deposited in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed as follows in the case of the Borrower and the
Administrative Agent, and as set forth in an administrative questionnaire
delivered to the Administrative Agent in the case of the Lenders, or to such
other address as may be hereafter notified by the respective parties hereto:
The Borrower: Dames & Xxxxx Group
000 Xxxxxxxx Xxxxxxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxx Xxxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
The Administrative Agent: Canadian Imperial Bank of Commerce
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxx Xxxx Xxxx
Telecopy: 000-000-0000
Telephone: 000-000-0000
PROVIDED that any notice, request or demand to or upon the Administrative Agent
or the Lenders under Article 2 shall not be effective until received.
10.3 NO WAIVER; CUMULATIVE REMEDIES. No failure to exercise and no
delay in exercising, on the part of the Administrative Agent or any Lender, any
right, remedy, power or privilege hereunder or under the other Loan Documents
shall operate as a waiver thereof; nor shall any single or partial exercise of
any right, remedy, power or privilege hereunder preclude any other or further
exercise thereof or the exercise of any other right, remedy, power or privilege.
The rights,
67
remedies, powers and privileges herein provided are cumulative and not
exclusive of any rights, remedies, powers and privileges provided by law.
10.4 SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All representations
and warranties made hereunder, in the other Loan Documents and in any document,
certificate or statement delivered pursuant hereto or in connection herewith
shall survive the execution and delivery of this Agreement and the making of the
Loans and other extensions of credit hereunder.
10.5 PAYMENT OF EXPENSES AND TAXES. The Borrower agrees (a) to pay or
reimburse the Administrative Agent and the Arranger for all their reasonable
out-of-pocket costs and expenses incurred in connection with the development,
preparation and execution of, and any amendment, supplement or modification to,
this Agreement and the other Loan Documents and any other documents prepared in
connection herewith or therewith, and the consummation and administration of the
transactions contemplated hereby and thereby, including the reasonable fees and
disbursements of counsel to the Administrative Agent and filing and recording
fees and expenses, with statements with respect to the foregoing to be submitted
to the Borrower prior to the Closing Date (in the case of amounts to be paid on
the Closing Date) and from time to time thereafter on a quarterly basis or such
other periodic basis as the Administrative Agent shall deem appropriate, (b) to
pay or reimburse each Lender and the Administrative Agent for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the other Loan Documents and any such other
documents, including the fees and disbursements of counsel (including the
allocated fees and expenses of in-house counsel) to each Lender and of counsel
to the Administrative Agent, (c) to pay, indemnify, and hold each Lender and the
Administrative Agent harmless from, any and all recording and filing fees and
any and all liabilities with respect to, or resulting from any delay in paying,
stamp, excise and other taxes, if any, that may be payable or determined to be
payable in connection with the execution and delivery of, or consummation or
administration of any of the transactions contemplated by, or any amendment,
supplement or modification of, or any waiver or consent under or in respect of,
this Agreement, the other Loan Documents and any such other documents, and (d)
to pay, indemnify, and hold each Lender, the Arranger and the Administrative
Agent and their respective officers, directors, employees, affiliates, agents
and controlling persons (each, an "INDEMNITEE") harmless from and against any
and all other liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement, the other Loan Documents and any such other
documents, including any of the foregoing relating to the use of proceeds of the
Loans or the violation of, noncompliance with or liability under, any
Environmental Law applicable to the operations of the Borrower any of its
Subsidiaries or any of the Properties and the reasonable fees and expenses of
legal counsel in connection with claims, actions or proceedings by any
Indemnitee against any Loan Party under any Loan Document (all the foregoing in
this clause (d), collectively, the "INDEMNIFIED LIABILITIES"), PROVIDED, that
the Borrower shall have no obligation hereunder to any Indemnitee with respect
to Indemnified Liabilities to the extent such Indemnified Liabilities are found
by a final and nonappealable decision of a court of competent jurisdiction to
have resulted from the gross negligence or willful misconduct of such
Indemnitee. Without limiting the foregoing, and to the extent permitted by
applicable law, the Borrower agrees not to assert and to cause its Subsidiaries
not to assert, and hereby waives and agrees to cause its Subsidiaries to so
waive, all rights for contribution or any other rights of recovery with respect
to all claims, demands, penalties, fines,
68
liabilities, settlements, damages, costs and expenses of whatever kind or
nature, under or related to Environmental Laws, that any of them might have
by statute or otherwise against any Indemnitee. All amounts due under this
Section 10.5 shall be payable promptly after written demand therefor.
Statements payable by the Borrower pursuant to this Section 10.5 shall be
submitted to Xxxx Xxxxx, at the address of the Borrower set forth in Section
10.2, or to such other Person or address as may be hereafter designated by
the Borrower in a written notice to the Administrative Agent. The agreements
in this Section 10.5 shall survive repayment of the Loans and all other
amounts payable hereunder.
10.6 SUCCESSORS AND ASSIGNS; PARTICIPATIONS AND ASSIGNMENTS. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Administrative Agent, all future holders of the Loans and their
respective successors and assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the prior
written consent of each Lender.
(b) Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a "PARTICIPANT") participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents. In the
event of any such sale by a Lender of a participating interest to a Participant,
such Lender's obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, such Lender shall remain the holder of any such
Loan for all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and obligations under
this Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would reduce the principal of, or interest on, the Loans or any fees
payable hereunder, increase such Participant's Commitment, release all or
substantially all of the Collateral or postpone the date of the final maturity
of the Loans, in each case to the extent subject to such participation. If the
Borrower receives written notice of any transfer to any Participant, the
Borrower agrees that if amounts outstanding under this Agreement and the Loans
are due or unpaid, or shall have been declared or shall have become due and
payable upon the occurrence and during the continuance of an Event of Default,
each such Participant shall, to the maximum extent permitted by applicable law,
be deemed to have the right of setoff in respect of its participating interest
in amounts owing under this Agreement to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under this
Agreement, PROVIDED that, in purchasing such participating interest, each such
Participant shall be deemed to have agreed to share with the Lenders the
proceeds thereof as provided in Section 10.7(a) as fully as if it were a Lender
hereunder. The Borrower also agrees that each Participant shall be entitled to
the benefits of Sections 2.16, 2.17 and 2.18 with respect to its participation
in the Commitments and the Loans outstanding from time to time as if it was a
Lender; PROVIDED that, in the case of Section 2.17, such Participant shall have
complied with the requirements of said Section and PROVIDED, FURTHER, that no
Participant shall be entitled to receive any greater amount pursuant to any such
Section than the transferor Lender would have been entitled to receive in
respect of the amount of the participation transferred by such transferor Lender
to such Participant had no such transfer occurred.
69
(c) Any Lender (an "ASSIGNOR") may, in accordance with applicable law,
at any time and from time to time assign to any Lender or any affiliate thereof
or, with the consent of the Borrower and the Administrative Agent (which, in
each case, shall not be unreasonably withheld or delayed), to an additional
bank, financial institution or other entity (an "ASSIGNEE") all or any part of
its rights and obligations under this Agreement pursuant to an Assignment and
Acceptance, executed by such Assignee, such Assignor and any other Person whose
consent is required pursuant to this paragraph, and delivered to the
Administrative Agent for its acceptance and recording in the Register; PROVIDED
that no such assignment to an Assignee (other than any Lender or any affiliate
thereof) shall be in an aggregate principal amount of less than $5,000,000
(other than in the case of an assignment of all of a Lender's interests under
this Agreement), unless otherwise agreed by the Borrower and the Administrative
Agent. Any such assignment need not be ratable as among the Facilities. Upon
such execution, delivery, acceptance and recording, from and after the effective
date determined pursuant to such Assignment and Acceptance, (x) the Assignee
thereunder shall be a party hereto and, to the extent provided in such
Assignment and Acceptance, have the rights and obligations of a Lender hereunder
with a Commitment and/or Loans as set forth therein, and (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor's rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto).
Notwithstanding any provision of this Section 10.6, the consent of the Borrower
shall not be required for any assignment that occurs when an Event of Default
pursuant to Section 8(f) shall have occurred and be continuing with respect to
the Borrower.
(d) The Administrative Agent shall, on behalf of the Borrower,
maintain at its address referred to in Section 10.2 a copy of each Assignment
and Acceptance delivered to it and a register (the "REGISTER") for the
recordation of the names and addresses of the Lenders and the Commitment of, and
the principal amount of the Loans owing to, each Lender from time to time. The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, each other Loan Party, the Administrative Agent and the
Lenders shall treat each Person whose name is recorded in the Register as the
owner of the Loans and any Notes evidencing the Loans recorded therein for all
purposes of this Agreement. Any assignment of any Loan, whether or not
evidenced by a Note, shall be effective only upon appropriate entries with
respect thereto being made in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of a Loan evidenced by a
Note shall be registered on the Register only upon surrender for registration of
assignment or transfer of the Note evidencing such Loan, accompanied by a duly
executed Assignment and Acceptance, and thereupon one or more new Notes shall be
issued to the designated Assignee.
(e) Upon its receipt of an Assignment and Acceptance executed by an
Assignor, an Assignee and any other Person whose consent is required by Section
10.6(c), together with payment to the Administrative Agent of a registration and
processing fee of $4,000, the Administrative Agent shall (i) promptly accept
such Assignment and Acceptance and (ii) record the information contained therein
in the Register on the effective date determined pursuant thereto.
(f) For avoidance of doubt, the parties to this Agreement acknowledge
that the provisions of this Section 10.6 concerning assignments of Loans and
Notes relate only to absolute assignments and that such provisions do not
prohibit assignments creating security interests,
70
including any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.
(g) The Borrower, upon receipt of written notice from the relevant
Lender, agrees to issue Notes to any Lender requiring Notes to facilitate
transactions of the type described in paragraph (f) above.
10.7 ADJUSTMENTS; SET-OFF. (a) Except to the extent that this
Agreement expressly provides for payments to be allocated to a particular Lender
or to the Lenders under a particular Facility, if any Lender (a "BENEFITTED
LENDER") shall receive any payment of all or part of the Obligations owing to
it, or receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of the Obligations owing to such other Lender, such Benefitted Lender shall
purchase for cash from the other Lenders a participating interest in such
portion of the Obligations owing to each such other Lender, or shall provide
such other Lenders with the benefits of any such collateral, as shall be
necessary to cause such Benefitted Lender to share the excess payment or
benefits of such collateral ratably with each of the Lenders; PROVIDED, HOWEVER,
that if all or any portion of such excess payment or benefits is thereafter
recovered from such Benefitted Lender, such purchase shall be rescinded, and the
purchase price and benefits returned, to the extent of such recovery, but
without interest.
(b) In addition to any rights and remedies of the Lenders provided by
law, each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise) and
beyond any grace period applicable thereto, to set off and appropriate and apply
against such amount any and all deposits (general or special, time or demand,
provisional or final), in any currency, and any other credits, indebtedness or
claims, in any currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by such Lender or
any branch or agency thereof to or for the credit or the account of the
Borrower, as the case may be. Each Lender agrees promptly to notify the
Borrower and the Administrative Agent after any such setoff and application made
by such Lender, PROVIDED that the failure to give such notice shall not affect
the validity of such setoff and application.
10.8 COUNTERPARTS. This Agreement may be executed by one or more of
the parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement by
facsimile transmission shall be effective as delivery of a manually executed
counterpart hereof. A set of the copies of this Agreement signed by all the
parties shall be lodged with the Borrower and the Administrative Agent.
10.9 SEVERABILITY. Any provision of this Agreement that is prohibited
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof, and any such
71
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
10.10 INTEGRATION. This Agreement and the other Loan Documents and
the Fee Letter represent the agreement of the Borrower, the Administrative Agent
and the Lenders with respect to the subject matter hereof, and there are no
promises, undertakings, representations or warranties by the Administrative
Agent or any Lender relative to subject matter hereof not expressly set forth or
referred to herein or in the other Loan Documents.
10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS OF
THE PARTIES UNDER THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.
10.12 SUBMISSION TO JURISDICTION; WAIVERS. The Borrower hereby
irrevocably and unconditionally:
(a) submits for itself and its property in any legal action or
proceeding relating to this Agreement and the other Loan Documents to which
it is a party, or for recognition and enforcement of any judgment in
respect thereof, to the non-exclusive general jurisdiction of the courts of
the State of New York, the courts of the United States for the Southern
District of New York, and appellate courts from any thereof;
(b) consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the
venue of any such action or proceeding in any such court or that such
action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same;
(c) agrees that service of process in any such action or proceeding
may be effected by mailing a copy thereof by registered or certified mail
(or any substantially similar form of mail), postage prepaid, to the
Borrower, as the case may be at its address set forth in Section 10.2 or at
such other address of which the Administrative Agent shall have been
notified pursuant thereto;
(d) agrees that nothing herein shall affect the right to effect
service of process in any other manner permitted by law or shall limit the
right to xxx in any other jurisdiction; and
(e) waives, to the maximum extent not prohibited by law, any right it
may have to claim or recover in any legal action or proceeding referred to
in this Section any special, exemplary, punitive or consequential damages.
10.13 ACKNOWLEDGEMENTS. The Borrower hereby acknowledges that:
(a) it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;
72
(b) neither the Administrative Agent nor any Lender has any fiduciary
relationship with or duty to the Borrower arising out of or in connection
with this Agreement or any of the other Loan Documents, and the
relationship between Administrative Agent and Lenders, on one hand, and the
Borrower, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor; and
(c) no joint venture is created hereby or by the other Loan Documents
or otherwise exists by virtue of the transactions contemplated hereby among
the Lenders or among the Borrower and the Lenders.
10.14 CONFIDENTIALITY. Each of the Administrative Agent and each
Lender agrees to keep confidential all non-public information provided to it by
any Loan Party pursuant to this Agreement; PROVIDED that nothing herein shall
prevent the Administrative Agent or any Lender from disclosing any such
information (a) to the Administrative Agent, any other Lender or any affiliate
of any Lender, (b) to any Transferee or prospective Transferee that agrees to
comply with the provisions of this Section, (c) to its employees, directors,
agents, attorneys, accountants and other professional advisors or those of any
of its affiliates each of whom shall be required to comply with the provisions
of this Section, (d) upon the request or demand of any Governmental Authority,
(e) in response to any order of any court or other Governmental Authority or as
may otherwise be required pursuant to any Requirement of Law, (f) if requested
or required to do so in connection with any litigation or similar proceeding,
(g) that has been publicly disclosed, (h) to the National Association of
Insurance Commissioners or any similar organization or any nationally recognized
rating agency that requires access to information about a Lender's investment
portfolio in connection with ratings issued with respect to such Lender, or (i)
in connection with the exercise of any remedy hereunder or under any other Loan
Document.
73
10.15 WAIVERS OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT
AND THE LENDERS HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN
ANY LEGAL ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.
74
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed and delivered by their proper and duly authorized officers as
of the day and year first above written.
DAMES & XXXXX GROUP
By: XXXX X. XXXXX
-------------------------------
Title: Executive Vice President
and Chief Financial
Officer
CANADIAN IMPERIAL BANK OF
COMMERCE, as Administrative Agent
and as Lender
By: XXXXXXX XXXXX
-------------------------------
Executive Director
CIBC INC., as Lender
By: XXXXX XxXXXXXXXX
-------------------------------
Executive Director
ANNEX A
PRICING GRID FOR REVOLVING LOANS,
TERM LOANS AND COMMITMENT FEES
-----------------------------------------------------------------------------
Consolidated Leverage Applicable Margin Applicable Commitment
Ratio for Eurodollar Margin for Base Fee Rate
Loans Rate Loans
-----------------------------------------------------------------------------
greater than or equal to 1.75% .75% .45%
3.75:1
-----------------------------------------------------------------------------
greater than or equal to 1.50% .50% .375%
3.00:1 but less than
3.75:1
-----------------------------------------------------------------------------
greater than or equal to 1.25% .25% .375%
2.50:1 but less than
3.00:1
-----------------------------------------------------------------------------
less than 2.50:1 1.00% 0.0% .30%
-----------------------------------------------------------------------------
Changes in the Applicable Margin or in the Commitment Fee Rate
resulting from changes in the Consolidated Leverage Ratio shall become effective
on the date (the "ADJUSTMENT DATE") on which financial statements are delivered
to the Lenders pursuant to Section 6.1 (but in any event not later than the 45th
day after the end of each of the first three quarterly periods of each fiscal
year or the 90th day after the end of each fiscal year, as the case may be) and
shall remain in effect until the next change to be effected pursuant to this
paragraph. If any financial statements referred to above are not delivered
within the time periods specified above, then, until such financial statements
are delivered, the Consolidated Leverage Ratio as at the end of the fiscal
period that would have been covered thereby shall for the purposes of this
definition be deemed to be greater than 3.75 to 1.0. If on any Adjustment Date
the Consolidated Leverage Ratio would result in different Applicable Margins or
Commitment Fee Rates, the higher Applicable Margin or Commitment Fee Rate shall
govern. Each determination of the Consolidated Leverage Ratio pursuant to this
pricing grid shall be made with respect to the period of four consecutive fiscal
quarters of the Borrower ending at the end of the period covered by the relevant
financial statements.
SCHEDULE 1.1A
COMMITMENTS
--------------------------------------------------
REVOLVING COMMITMENT TERM COMMITMENT
-----------------------------------------------------------------------------
Canadian Imperial Bank $58,455,882 $206,544,118
of Commerce
-----------------------------------------------------------------------------
CIBC Inc. $16,544,118 $58,455,882
-----------------------------------------------------------------------------
