U.S. $575,000,000
CREDIT AGREEMENT,
dated as of August __, 1997,
among
DECISIONONE CORPORATION
as the Borrower,
VARIOUS FINANCIAL INSTITUTIONS,
as the Lenders,
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent for the Lenders,
NATIONSBANK, N.A.
as the Administrative Agent for the Lenders,
and
BANKBOSTON, N.A.,
as the Documentation Agent for the Lenders.
ARRANGED BY
XXXXXXXXX, XXXXXX & XXXXXXXX SECURITIES CORPORATION
TABLE OF CONTENTS
Section Page
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1. Defined Terms................................................................3
1.2. Use of Defined Terms........................................................37
1.3. Cross-References............................................................37
1.4. Accounting and Financial Determinations.....................................37
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES,
NOTES AND LETTERS OF CREDIT
2.1. Commitments.................................................................38
2.1.1. Term Loan Commitments.......................................................38
2.1.2. Revolving Loan Commitment and Swing Line Loan Commitment....................39
2.1.3. Letter of Credit Commitment.................................................40
2.1.4. Lenders Not Permitted or Required to Make the Loans.........................41
2.1.5. Issuer Not Permitted or Required to Issue Letters of Credit.................41
2.2. Reduction of the Commitment Amounts.........................................41
2.2.1. Optional....................................................................41
2.2.2. Mandatory...................................................................42
2.3. Borrowing Procedures and Funding Maintenance................................42
2.3.1. Term Loans and Revolving Loans..............................................42
2.3.2. Swing Line Loans............................................................42
2.4. Continuation and Conversion Elections.......................................44
2.5. Funding.....................................................................44
2.6. Issuance Procedures.........................................................44
2.6.1. Other Lenders' Participation................................................45
2.6.2. Disbursements; Conversion to Revolving Loans................................45
2.6.3. Reimbursement...............................................................46
2.6.4. Deemed Disbursements........................................................46
2.6.5. Nature of Reimbursement Obligations.........................................47
2.7. Register; Notes.............................................................48
2.8. Registered Notes............................................................49
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
3.1. Repayments and Prepayments; Application.....................................50
3.1.1. Repayments and Prepayments..................................................50
3.1.2. Application.................................................................54
3.2. Interest Provisions.........................................................55
3.2.1. Rates.......................................................................55
3.2.2. Post-Maturity Rates.........................................................55
3.2.3. Payment Dates...............................................................55
3.3. Fees........................................................................56
3.3.1. Commitment Fee..............................................................56
3.3.2. Administrative Agent Fee....................................................56
3.3.3. Letter of Credit Fee........................................................57
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
4.1. LIBO Rate Lending Unlawful..................................................57
4.2. Deposits Unavailable........................................................57
4.3. Increased LIBO Rate Loan Costs, etc.........................................58
4.4. Funding Losses..............................................................58
4.5. Increased Capital Costs.....................................................58
4.6. Taxes.......................................................................59
4.7. Payments, Computations, etc.................................................61
4.8. Sharing of Payments.........................................................61
4.9. Setoff......................................................................62
4.10. Mitigation..................................................................62
4.11. Replacement of Lenders......................................................63
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
5.1. Initial Credit Extension....................................................63
5.1.1. Resolutions, etc............................................................63
5.1.2. Transaction Documents.......................................................64
5.1.3. Consummation of Merger......................................................64
5.1.4. Closing Date Certificate....................................................64
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5.1.5. Delivery of Notes...........................................................64
5.1.6. [Intentionally Omitted].....................................................64
5.1.7. Pledge Agreements...........................................................64
5.1.8. Security Agreement..........................................................65
5.1.9. Financial Information, etc..................................................65
5.1.10. Solvency, etc...............................................................66
5.1.11. Equity Issuance, Discount Debenture Issuance, Subordinated Debt
Issuance and Intercompany Loan...........................................66
5.1.12. Litigation..................................................................66
5.1.13. Material Adverse Change.....................................................66
5.1.14. Reliance Letters............................................................66
5.1.15. Opinions of Counsel.........................................................67
5.1.16. Insurance...................................................................67
5.1.17. Perfection Certificate......................................................67
5.1.18. Closing Fees, Expenses, etc.................................................67
5.1.19. Satisfactory Legal Form.....................................................67
5.2. All Credit Extensions.......................................................67
5.2.1. Compliance with Warranties, No Default, etc.................................67
5.2.2. Credit Extension Request....................................................68
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
6.1. Organization, etc...........................................................68
6.2. Due Authorization, Non-Contravention, etc...................................69
6.3. Government Approval, Regulation, etc........................................69
6.4. Validity, etc...............................................................69
6.5. Financial Information.......................................................69
6.6. No Material Adverse Change..................................................70
6.7. Litigation, Labor Controversies, etc........................................70
6.8. Subsidiaries................................................................70
6.9. Ownership of Properties.....................................................70
6.10. Taxes.......................................................................70
6.11. Pension and Welfare Plans...................................................70
6.12. Environmental Matters.......................................................71
6.13. Regulations G, U and X......................................................72
6.14. Accuracy of Information.....................................................72
6.15. Solvency....................................................................72
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ARTICLE VII
COVENANTS
7.1. Affirmative Covenants.......................................................73
7.1.1. Financial Information, Reports, Notices, etc................................73
7.1.2. Compliance with Laws, etc...................................................75
7.1.3. Maintenance of Properties...................................................75
7.1.4. Insurance...................................................................75
7.1.5. Books and Records...........................................................75
7.1.6. Environmental Covenant......................................................76
7.1.7. Future Subsidiaries; Material Subsidiaries..................................76
7.1.8. Future Leased Property and Future Acquisitions of Real Property;
Future Acquisition of Other Property.....................................77
7.1.9. Use of Proceeds, etc........................................................79
7.1.10. Hedging Obligations.........................................................79
7.1.11. Undertaking.................................................................79
7.2. Negative Covenants..........................................................79
7.2.1. Business Activities.........................................................79
7.2.2. Indebtedness................................................................80
7.2.3. Liens.......................................................................81
7.2.4. Financial Covenants.........................................................83
7.2.5. Investments.................................................................84
7.2.6. Restricted Payments, etc....................................................85
7.2.7. Capital Expenditures, etc...................................................88
7.2.8. Consolidation, Merger, etc..................................................89
7.2.9. Asset Dispositions, etc.....................................................90
7.2.10. Modification of Certain Agreements..........................................91
7.2.11. Transactions with Affiliates................................................91
7.2.12. Negative Pledges, Restrictive Agreements, etc...............................91
7.2.13. Stock of Subsidiaries.......................................................92
7.2.14. Sale and Leaseback..........................................................92
ARTICLE VIII
EVENTS OF DEFAULT
8.1. Listing of Events of Default................................................92
8.1.1. Non-Payment of Obligations..................................................92
8.1.2. Breach of Warranty..........................................................92
8.1.3. Non-Performance of Certain Covenants and Obligations........................93
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8.1.4. Non-Performance of Other Covenants and Obligations..........................93
8.1.5. Default on Other Indebtedness...............................................93
8.1.6. Judgments...................................................................93
8.1.7. Pension Plans...............................................................93
8.1.8. Change in Control...........................................................93
8.1.9. Bankruptcy, Insolvency, etc.................................................93
8.1.10. Impairment of Security, etc.................................................94
8.1.11. Subordinated Notes..........................................................95
8.2. Action if Bankruptcy, etc...................................................95
8.3. Action if Other Event of Default............................................95
ARTICLE IX
THE AGENTS
9.1. Actions.....................................................................96
9.2. Funding Reliance, etc.......................................................96
9.3. Exculpation.................................................................97
9.4. Successor...................................................................97
9.5. Credit Extensions by each Agent.............................................98
9.6. Credit Decisions............................................................98
9.7. Copies, etc.................................................................98
9.8. The Syndication Agent, the Documentation Agent and the
Administrative Agent.....................................................98
ARTICLE X
MISCELLANEOUS PROVISIONS
10.1. Waivers, Amendments, etc....................................................99
10.2. Notices....................................................................100
10.3. Payment of Costs and Expenses..............................................100
10.4. Indemnification............................................................101
10.5. Survival...................................................................103
10.6. Severability...............................................................103
10.7. Headings...................................................................103
10.8. Execution in Counterparts, Effectiveness, etc..............................103
10.9. Governing Law; Entire Agreement............................................103
10.10. Successors and Assigns.....................................................103
10.11. Sale and Transfer of Loans and Notes; Participations in Loans and Notes....104
10.11.1. Assignments................................................................104
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10.11.2. Participations.............................................................106
10.11.3. Assignment of Registered Notes.............................................106
10.12. Other Transactions.........................................................107
10.13. Forum Selection and Consent to Jurisdiction................................107
10.14. Waiver of Jury Trial.......................................................108
10.15. Confidentiality............................................................108
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages and Administrative Information
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Term-A Note
EXHIBIT A-3 - Form of Term-B Note
EXHIBIT A-4 - Form of Term-C Note
EXHIBIT A-5 - Form of Registered Note
EXHIBIT A-6 - Form of Swing Line Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Borrowing Base Certificate
EXHIBIT B-3 - Form of Issuance Request
EXHIBIT C - Form of Continuation/Conversion Notice
EXHIBIT D - Form of Closing Date Certificate
EXHIBIT E - Form of Compliance Certificate
EXHIBIT F-1 - Form of Borrower Security Agreement
EXHIBIT F-2 - Form of Subsidiary Security Agreement
EXHIBIT G-1 - Form of Holdings Guaranty and Pledge Agreement
EXHIBIT G-2 - Form of Borrower Pledge Agreement
EXHIBIT G-3 - Form of Subsidiary Pledge Agreement
EXHIBIT H - Form of Subsidiary Guaranty
EXHIBIT I - Form of Perfection Certificate
EXHIBIT J - Form of Lender Assignment Agreement
EXHIBIT K-1 - Form of New York Counsel Opinion
EXHIBIT K-2 - Form of [Local] Counsel Opinion
EXHIBIT K-3 - Form of Assistant General Counsel Opinion
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of August __, 1997, is among
DecisionOne Corporation, a Delaware corporation (the "Borrower" ), the various
financial institutions as are or may become parties hereto (collectively, the
"Lenders"), DLJ Capital Funding, Inc. ("DLJ"), as syndication agent (the
"Syndication Agent") for the Lenders, NationsBank, N.A., as administrative
agent (the "Administrative Agent") for the Lenders and BankBoston, N.A., as
documentation agent (the "Documentation Agent") for the Lenders (the
Syndication Agent and the Administrative Agent are sometimes referred to
herein as the "Agents" and each as an "Agent").
W I T N E S S E T H:
WHEREAS, DLJ Merchant Banking Xxxxxxxx XX, X.X., XXX Xxxxxxxx
Xxxxxxxx XX, X.X., XXX Diversified Partners, L.P., DLJMB Funding II, Inc., UK
Investment Plan 1997 Partners and DLJ First ESC LLC own all of the issued and
outstanding capital stock of Quaker Holding Co., a newly-formed Delaware
corporation ("MergerSub");
WHEREAS, DLJ Merchant Banking Xxxxxxxx XX, X.X., XXX Xxxxxxxx
Xxxxxxxx XX, X.X., XXX Diversified Partners. L.P., DLJMB Funding II, Inc., DLJ
Merchant Banking Partners II-A, L.P., DLJ Diversified Partners-A L.P., DLJ
Millennium Partners, L.P., DLJ Millennium Partners-A, L.P., UK Investment Plan
1997 Partners, DLJ EAB Partners, L.P. and DLJ First ESC LLC (collectively, the
"DLJMB Entities") and certain institutional investors (whose aggregate
investments will not cause the fully diluted holdings of Voting Stock in
MergerSub (each as defined below) of the DLJMB Entities to be less than 51%)
(such institutional investors, together with the DLJMB Entities, the "Equity
Investors") intend to consummate a merger and recapitalization of DecisionOne
Holdings Corp., a Delaware corporation ("DOH"), whereby, among other things,
MergerSub will be merged (the "Merger") with and into DOH (such
recapitalization, Merger and all transactions related thereto, including those
described in the recitals hereto, being herein collectively referred to as the
"Transaction"), with DOH being the surviving corporation;
WHEREAS, the Borrower is a wholly-owned Subsidiary of DOH and, after
giving effect to the Merger, will be a wholly-owned Subsidiary of the
corporation surviving such Merger (DOH, at all times prior to the consummation
of the Merger, and such surviving corporation, at all times after the
consummation of the Merger, being herein collectively referred to as
"Holdings");
WHEREAS, in connection with the Transaction, and pursuant to the
Transaction Documents, the following capital-raising transactions will occur
prior to or contemporaneously with the consummation of the Merger and the
making of the initial Credit Extensions hereunder:
(a) MergerSub shall receive cash proceeds of approximately
$225,000,000 from the issuance of common stock (and warrants, if
warrants are issued, to purchase common stock (the "Warrants"))
representing in excess of 85% of the fully diluted Capital Stock of
Holdings (exclusive of management shares, incentives and options) to
the Equity Investors (the "Equity Issuance");
(b) MergerSub shall receive gross cash proceeds of not less
than $85,000,000 from the issuance of its senior discount debentures
and warrants to purchase common stock (the "Discount Debentures",
with the issuance thereof being herein referred to as the "Discount
Debenture Issuance"); and
(c) the Borrower will issue not more than $150,000,000 in
principal amount of its senior subordinated notes (the "Subordinated
Notes", with the issuance thereof being herein referred to as the
"Subordinated Debt Issuance");
WHEREAS, in connection with the Transaction and the ongoing working
capital and general corporate needs of the Borrower and its Subsidiaries, the
Borrower desires to obtain the following financing facilities from the
Lenders:
(a) a Term-A Loan Commitment, a Term-B Loan Commitment and a
Term-C Loan Commitment pursuant to which Borrowings of Term Loans
will be made to the Borrower on the Closing Date in a maximum,
original principal amount of $195,000,000 (in the case of Term-A
Loans), $150,000,000 (in the case of Term-B Loans) and $125,000,000
(in the case of Term-C Loans);
(b) a Revolving Loan Commitment (to include availability for
Revolving Loans, Swing Line Loans and Letters of Credit) pursuant to
which Borrowings of Revolving Loans, in a maximum aggregate principal
amount (together with all Swing Line Loans and Letter of Credit
Outstandings) not to exceed $105,000,000 will be made to the Borrower
from time to time on and subsequent to the Closing Date but prior to
the Revolving Loan Commitment Termination Date; provided, however,
that not more than $10,000,000 of the proceeds from Revolving Loans
may be used for purposes of consummating the Transaction, including
the payment of related costs and expenses;
(c) a Letter of Credit Commitment pursuant to which the
Issuer will issue Letters of Credit for the account of the Borrower
and its Subsidiaries from time to time on and subsequent to the
Closing Date but prior to the Revolving Loan Commitment Termination
Date in a maximum aggregate Stated Amount at any one time outstanding
2
not to exceed $25,000,000 (provided, that the aggregate outstanding
principal amount of Revolving Loans, Swing Line Loans and Letter of
Credit Outstandings at any time shall not exceed the then existing
Revolving Loan Commitment Amount); and
(d) a Swing Line Loan Commitment pursuant to which Borrowings
of Swing Line Loans in an aggregate outstanding principal amount not
to exceed $10,000,000 will be made on and subsequent to the Closing
Date but prior to the Revolving Loan Commitment Termination Date
(provided, that the aggregate outstanding principal amount of such
Swing Line Loans, together with Revolving Loans and Letter of Credit
Outstandings, at any time shall not exceed the then existing
Revolving Loan Commitment Amount);
WHEREAS, on the Closing Date, contemporaneously with the consummation
of the Merger, the Discount Debenture Issuance, the Subordinated Debt Issuance
and the initial Borrowing of Term Loans and Revolving Loans hereunder, the
Borrower shall distribute to Holdings as a dividend (the "Closing Date
Dividend") and/or make an intercompany loan (the "Intercompany Loan") in an
amount equal to all of the net proceeds of the Subordinated Debt Issuance and
the initial Borrowing of Term Loans and Revolving Loans (other than any such
proceeds used by the Borrower to repay existing Indebtedness of the Borrower
and its Subsidiaries and to pay fees and expenses related to the Transaction)
for purposes of consummating the Merger, which Intercompany Loan shall be
evidenced by a promissory note issued by Holdings to the Borrower (the
"Intercompany Note");
WHEREAS, the Lenders are willing, on the terms and subject to the
conditions hereinafter set forth (including Article V), to extend the
Commitments and make the Loans described herein to the Borrower and issue (or
participate in) Letters of Credit for the account of the Borrower and its
Subsidiaries;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following
meanings (such meanings to be equally applicable to the singular and plural
forms thereof):
3
"Account" means any account (as that term is defined in Section 9-106
of the UCC) of the Borrower or any of its wholly-owned U.S. Subsidiaries
arising from the sale or lease of goods or the rendering of services.
"Account Debtor" is defined in clause (b) of the definition of
"Eligible Account".
"Adjusted EBITDA" means, for any applicable period, the sum (without
duplication) for the Borrower and its Restricted Subsidiaries on a
consolidated basis of
(a) Net Income,
plus
(b) the amount deducted in determining Net Income representing
non-cash charges or expenses, including depreciation and
amortization (excluding any non-cash charges representing (i) an
accrual of or reserve for cash charges in any future period, (ii)
amortization of a prepaid cash expense paid in a prior period or
(iii) amortization in respect of repairable parts which have been
capitalized in accordance with GAAP),
plus
(c) the amount deducted in determining Net Income representing
income taxes (whether paid or deferred),
plus
(d) the amount deducted in determining Net Income representing
Interest Expense and fees, expenses, management bonuses (to the
extent paid at or prior to the Closing Date), and financing costs,
plus
(e) the amount deducted in determining Net Income representing
any net loss realized in connection with any sale, lease, conveyance
or other disposition of any asset (other than in the ordinary course
of business or from the Borrower or any of its Restricted
Subsidiaries to the Borrower or any of its Restricted Subsidiaries)
or any extraordinary or non-recurring loss,
minus
(f) Restricted Payments of the type referred to in clause
(c)(i) of Section 7.2.6 made during such period.
4
"Administrative Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Administrative Agent pursuant to Section 9.4.
"Administrative Agent's Fee Letter" means ______________________.
"Affiliate" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding any trustee under, or any committee with responsibility for
administering, any Plan). A Person shall be deemed to be "controlled by" any
other Person if such other Person possesses, directly or indirectly, power (i)
to vote 10% or more of the securities (on a fully diluted basis) having
ordinary voting power for the election of directors or managing general
partners, or (ii) to direct or cause the direction of the management and
policies of such Person whether by contract or otherwise.
"Agents" means, collectively, the Administrative Agent and the
Syndication Agent.
"Agreement" means, on any date, this Credit Agreement as originally
in effect on the Closing Date and as thereafter from time to time amended,
supplemented, amended and restated, or otherwise modified and in effect on
such date.
*"Alternate Base Rate" means, for any day and with respect to all
Base Rate Loans, the higher of: (a) 0.50% per annum above the latest Federal
Funds Rate; and (b) the rate of interest in effect for such day as most
recently publicly announced or established by the Administrative Agent in
, , as its "[base] [reference] [prime] rate." (The "[base]
[reference] [prime] rate" is a rate set by the Administrative Agent based upon
various factors including the Administrative Agent's costs and desired return,
general economic conditions and other factors, and is used as a reference
point for pricing some loans, which may be priced at, above or below such
announced rate.) Any change in the reference rate established or announced by
the Administrative Agent shall take effect at the opening of business on the
day of such establishment or announcement.
"Annualized" means (i) with respect to the end of the first Fiscal
Quarter of the Borrower ending after the Closing Date, the applicable amount
for such Fiscal Quarter multiplied by four, (ii) with respect to the second
Fiscal Quarter of the Borrower ending after the Closing Date, the applicable
amount for such Fiscal Quarter and the immediately preceding Fiscal Quarter
multiplied by two, and (iii) with respect to the third Fiscal Quarter of the
Borrower ending after the Closing Date, the applicable amount for such Fiscal
Quarter and the immediately preceding two Fiscal Quarters multiplied by one
and one-third.
--------
* NationsBank has been requested to provide details to complete this
definition.
5
"Applicable Commitment Fee" means, (i) for each day from the Closing
Date through (but excluding) the last day of the second full Fiscal Quarter
ending after the Closing Date, a fee which shall accrue at a rate of 1/2 of 1%
per annum, and (ii) for each day thereafter, a fee which shall accrue at the
applicable rate per annum set forth below under the column entitled
"Applicable Commitment Fee", determined by reference to the applicable
Leverage Ratio referred to below:
APPLICABLE
LEVERAGE RATIO COMMITMENT FEE
-------------- --------------
GREATER THAN OR
EQUAL TO 5.0:1 0.500%
GREATER THAN OR
EQUAL TO 4.0:1 AND
LESS THAN 5.0:1 0.375%
GREATER THAN OR
EQUAL TO 3.0:1 AND
LESS THAN 4.0:1 0.300%
LESS THAN 3.0:1 0.250%
The Leverage Ratio used to compute the Applicable Commitment Fee for
any day referred to in clause (ii) above shall be the Leverage Ratio set forth
in the Compliance Certificate most recently delivered by the Borrower to the
Administrative Agent on or prior to such day pursuant to clause (c) of Section
7.1.1. Changes in the Applicable Commitment Fee (i) in respect of the period
set forth in clause (i) above or (ii) as a result of a change in the Leverage
Ratio used to compute the Applicable Commitment Fee for any day referred to in
clause (ii) above shall become effective (as of the first day following the
Fiscal Quarter in respect of which such Compliance Certificate was required to
be delivered) upon delivery by the Borrower to the Administrative Agent of a
Compliance Certificate pursuant to clause (c) of Section 7.1.1. In the event
such Compliance Certificate indicates a Leverage Ratio that would result in an
Applicable Commitment Fee which is greater or lesser than the Applicable
Commitment Fee theretofore in effect, then (A) such greater or lesser
Applicable Commitment Fee shall be deemed to have been in effect for all
purposes of this Agreement from the first day following the Fiscal Quarter in
respect of which such Compliance Certificate was required to be delivered by
the Borrower to the Administrative Agent pursuant to clause (c) of Section
7.1.1 and (B) if the Borrower shall have theretofore made any payment of
Commitment Fees in respect of the period from the first day following the
Fiscal Quarter in respect of which such Compliance Certificate was required to
be delivered to the actual date of delivery of such Compliance Certificate,
then, on the next Quarterly Payment Date, either (x) if the new Applicable
Commitment Fee rate is greater than the Applicable Commitment Fee rate
theretofore in effect, the Borrower shall pay, as a
6
supplemental payment of Commitment Fees, an amount which equals the difference
between the amount of Commitment Fees that would otherwise have been paid
based on such new Leverage Ratio and the amount of such Commitment Fees
actually so paid, or, (y) if the new Applicable Commitment Fee rate is less
than the Applicable Commitment Fee rate theretofore in effect, an amount shall
be deducted from the interest on Revolving Loans and Commitment Fees and
Letter of Credit fees under the first sentence of Section 3.3.3 then otherwise
payable in an amount which equals the difference between the amount of
Commitment Fees so paid and the amount of Commitment Fees that would otherwise
have been paid based on such new Leverage Ratio (or, if no such payment is
owed by the Borrower to the Revolving Lenders on such next Quarterly Payment
Date, or if such amount owed by the Borrower is less than such difference, the
Revolving Lenders shall pay to the Borrower on such next Quarterly Payment
Date the amount of such difference less the amount, if any, owed by the
Borrower to such Lenders on such Quarterly Payment Date).
"Applicable Margin" means at all times during the applicable periods
set forth below,
(a) with respect to the unpaid principal amount of each
Term-B Loan maintained as a (i) Base Rate Loan, 1.50% per annum and
(ii) LIBO Rate Loan, 2.75% per annum;
(b) with respect to the unpaid principal amount of each
Term-C Loan maintained as a (i) Base Rate Loan, 1.75% per annum, and
(ii) LIBO Rate Loan, 3.0% per annum; and
(c) from the Closing Date through (but excluding) the last
day of the second full Fiscal Quarter ending after the Closing Date,
with respect to the unpaid principal amount of each (i) Swing Line
Loan (each of which shall be borrowed and maintained only as a Base
Rate Loan) and each Revolving Loan and Term-A Loan maintained as a
Base Rate Loan, 1.25% per annum, and (ii) Revolving Loan and Term-A
Loan maintained as a LIBO Rate Loan, 2.50% per annum; and
(d) at all times after the date of such delivery of the
Compliance Certificate described in clause (c) above, with respect to
the unpaid principal amount of each Swing Line Loan (each of which
shall be borrowed and maintained only as a Base Rate Loan) and each
Revolving Loan and Term-A Loan, by reference to the applicable
Leverage Ratio and at the applicable percentage per annum set forth
below under the column entitled "Applicable Margin for Base Rate
Loans", in the case of Base Rate Loans, or by reference to the
Leverage Ratio and at the applicable percentage per annum set forth
below under the column entitled "Applicable Margin for LIBO Rate
Loans" in the case of LIBO Rate Loans:
7
APPLICABLE MARGIN FOR REVOLVING LOANS AND TERM-A LOANS
APPLICABLE APPLICABLE
MARGIN FOR BASE MARGIN FOR LIBO
LEVERAGE RATIO RATE LOANS RATE LOANS
-------------- ---------- ----------
GREATER THAN OR EQUAL TO 5.0:1 1.25% 2.50%
GREATER THAN OR EQUAL TO 4.0:1
AND LESS THAN 5.0:1 0.75% 2.00%
GREATER THAN OR EQUAL TO 3.0:1
AND LESS THAN 4.0:1 0.25% 1.50%
LESS THAN 3.0:1 0.00% 1.00%
The Leverage Ratio used to compute the Applicable Margin for Swing
Line Loans, Revolving Loans and Term-A Loans for any day referred to in clause
(d) above shall be the Leverage Ratio set forth in the Compliance Certificate
most recently delivered by the Borrower to the Administrative Agent on or
prior to such day pursuant to clause (c) of Section 7.1.1. Changes in the
Applicable Margin for Swing Line Loans, Revolving Loans and Term-A Loans (i)
in respect of the period set forth in clause (c) above or (ii) as a result of
a change in the Leverage Ratio used to compute the Applicable Margin for Swing
Line Loans, Revolving Loans and Term-A Loans for any day referred to in clause
(d) above shall become effective (as the first day following the Fiscal
Quarter in respect of which such Compliance Certificate was required to be
delivered) upon delivery by the Borrower to the Administrative Agent of a
Compliance Certificate pursuant to clause (c) of Section 7.1.1. In the event
such Compliance Certificate indicates a Leverage Ratio that would result in an
Applicable Margin which is greater or lesser than the Applicable Margin
theretofore in effect, then (A) such greater or lesser Applicable Margin shall
be deemed to be in effect for all purposes of this Agreement from the first
day following the Fiscal Quarter in respect of which such Compliance
Certificate was required to be delivered by the Borrower to the Administrative
Agent pursuant to clause (c) of Section 7.1.1 and (B) if the Borrower shall
have theretofore made any payment of interest in respect of Swing Line Loans,
Revolving Loans or Term-A Loans, or of Letter of Credit fees pursuant to the
first sentence of Section 3.3.3, in any such case in respect of the period
from the first day following the Fiscal Quarter in respect of which such
Compliance Certificate was required to be delivered to the actual date of
delivery of such Compliance Certificate, then, on the next Quarterly Payment
Date, either (x) if the new Applicable Margin rate is greater than the
Applicable Margin rate theretofore in effect, the Borrower shall pay as a
supplemental payment of interest and/or Letter of Credit fees, an amount which
equals the difference between the amount of interest and Letter of Credit fees
that would otherwise have been paid based on such new Leverage Ratio and the
amount of such interest and Letter of Credit fees actually so paid, or, (y) if
the new
8
Applicable Margin rate is less than the Applicable Margin rate theretofore in
effect, an amount shall be deducted from the interest on Revolving Loans,
Commitment Fees and Letter of Credit fees (in the case of differences in
respect of interest on Revolving Loans and Letter of Credit fees) or from the
interest on Term-A Loans (in the case of differences in respect of interest on
Term-A Loans) thereafter payable by the Borrower in an amount which equals the
difference between the amount of interest and Letter of Credit fees so paid
and the amount of interest and Letter of Credit fees that would otherwise have
been paid based on such new Leverage Ratio (or, if no such payment by the
Borrower to the Revolving Lenders or Term-A Lenders, as the case may be, will
thereafter accrue hereunder, or if the amount that so accrues is less than
such difference, the Revolving Lenders or the Term-A Lenders, as the case may
be, will promptly pay to the Borrower an amount equal to such difference less
the amount, if any, of such accrued and unpaid payments).
"Arranger" means Xxxxxxxxx, Xxxxxx & Xxxxxxxx Securities Corporation,
a Delaware corporation.
"Assignee Lender" is defined in Section 10.11.1.
"Assignor Lender" is defined in Section 10.11.1.
"Assumed Indebtedness" means Indebtedness of a Person which is (i) in
existence at the time such Person becomes a Restricted Subsidiary of the
Borrower or (ii) is assumed in connection with an Investment in or acquisition
of such Person, and has not been incurred or created by such Person in
connection with, or in anticipation or contemplation of, such Person becoming
a Restricted Subsidiary of the Borrower.
"Authorized Officer" means, relative to any Obligor, those of its
officers whose signatures and incumbency shall have been certified to the
Administrative Agent and the Lenders pursuant to Section 5.1.1.
"Base Financial Statements" is defined in clause (a) of Section
5.1.9.
"Base Rate Loan" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"Borrower" is defined in the preamble.
"Borrower Pledge Agreement" means the Pledge Agreement executed and
delivered by an Authorized Officer of the Borrower pursuant to clause (b) of
Section 5.1.7, substantially in the form of Exhibit G-2 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
9
"Borrower Security Agreement" means the Security Agreement executed
and delivered by an Authorized Officer of the Borrower pursuant to Section
5.1.8, substantially in the form of Exhibit F-1 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Borrowing" means Loans of the same type and, in the case of LIBO
Rate Loans, having the same Interest Period made by the relevant Lenders on
the same Business Day and pursuant to the same Borrowing Request in accordance
with Section 2.1.
"Borrowing Base Amount" means, at any time, the Net Asset Value of
all Eligible Accounts and Eligible Inventory at such time as determined in
accordance with the definition of "Net Asset Value" and as certified by the
Borrower to the Lenders in the most recently delivered Borrowing Base
Certificate, including the Borrowing Base Certificate delivered on the Closing
Date pursuant to clause (c) of Section 5.1.9.
"Borrowing Base Certificate" means a certificate duly completed and
executed by the president, chief executive officer, treasurer, assistant
treasurer, controller or chief financial Authorized Officer of the Borrower,
substantially in the form of Exhibit B-2 hereto.
"Borrowing Request" means a loan request and certificate duly
executed by an Authorized Officer of the Borrower, substantially in the form
of Exhibit B-1 hereto.
"Business Day" means any day which is neither a Saturday or Sunday
nor a legal holiday on which banks are authorized or required to be closed in
New York City and, with respect to Borrowings of, Interest Periods with
respect to, payments of principal and interest in respect of, and conversions
of Base Rate Loans into, LIBO Rate Loans, on which dealings in Dollars are
carried on in the London interbank market.
"Capital Expenditures" means for any period, the sum, without
duplication, of (i) the aggregate amount of all expenditures of the Borrower
and its Restricted Subsidiaries for fixed or capital assets made during such
period which, in accordance with GAAP, would be classified as capital
expenditures, and (ii) the aggregate amount of the principal component of all
Capitalized Lease Liabilities incurred during such period by the Borrower and
its Restricted Subsidiaries.
"Capital Stock" means, (i) in the case of a corporation, any and all
capital or corporate stock, (ii) in the case of an association or business
entity, any and all shares, interests, participations, rights or other
equivalents (however designated) in respect of corporate stock, (iii) in the
case of a partnership or limited liability company, any and all partnership or
membership interests (whether general or limited) and (iv) any other interest
or participation that confers on a Person the right to receive a share of the
profits and losses of, or distributions of assets of, the issuing Person.
10
"Capitalized Lease Liabilities" means, at the time any determination
thereof is to be made, the amount of the liability in respect of a capital
lease that would at such time be required to be capitalized on a balance sheet
in accordance with GAAP.
"Cash Equivalent Investment" means, at any time:
(a) any evidence of Indebtedness issued directly by the
United States of America or any agency thereof or guaranteed by the
United States of America or any agency thereof;
(b) commercial paper, maturing not more than nine months
from the date of issue, which is issued by (i) a corporation (other
than an Affiliate of any Obligor) organized under the laws of any
state of the United States or of the District of Columbia and rated
at least A-l by S&P or P-l by Xxxxx'x, or (ii) any Lender (or its
holding company);
(c) any time deposit, certificate of deposit or bankers
acceptance, maturing not more than one year after such time,
maintained with or issued by either (i) a commercial banking
institution (including U.S. branches of foreign banking institutions)
that is a member of the Federal Reserve System and has a combined
capital and surplus and undivided profits of not less than
$500,000,000, or (ii) any Lender;
(d) short-term tax-exempt securities rated not lower than
MIG-1/1+ by either Xxxxx'x or S&P with provisions for liquidity or
maturity accommodations of 183 days or less;
(e) repurchase agreements which (i) are entered into with
any entity referred to in clause (b) or (c) above or any other
financial institution whose unsecured long-term debt (or the
unsecured long-term debt of whose holding company) is rated at least
A- or better by S&P or Baa1 or better by Xxxxx'x and maturing not
more than one year after such time, (ii) are secured by a fully
perfected security interest in securities of the type referred to in
clause (a) above and (iii) have a market value at the time of such
repurchase agreement is entered into of not less than 100% of the
repurchase obligation of such counterparty entity with whom such
repurchase agreement has been entered into; or
(f) any money market or similar fund the assets of which are
comprised exclusively of any of the items specified in clauses (a)
through (d) above and as to which withdrawals are permitted at least
every 90 days.
"Casualty Event" means the damage, destruction or condemnation, as
the case may be, of any property of the Borrower or any of its Subsidiaries.
11
"Casualty Proceeds" means, with respect to any Casualty Event, the
amount of any insurance proceeds or condemnation awards received by the
Borrower or any of its Subsidiaries in connection therewith, but excluding any
proceeds or awards required to be paid to a creditor (other than the Lenders)
which holds a first-priority Lien permitted by Section 7.2.3 on the property
which is the subject of such Casualty Event.
"CERCLA" means the Comprehensive Environmental Response, Compensation
and Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"Certificate of Merger" means the Certificate of Merger relating to
the Merger of DOH and MergerSub, as filed with the Secretary of State of
Delaware on August 7, 1997.
"Change in Control" means (i) the failure of Holdings at any time to
own, free and clear of all Liens and encumbrances (other than Liens permitted
to exist under clauses (b), (d) and (g) of Section 7.2.3), all right, title
and interest in 100% of the Capital Stock of the Borrower; (ii) the failure of
the DLJMB Entities at any time to own, free and clear of all Liens and
encumbrances (other than Liens arising under the Investor's Agreement) all
right, title and interest in at least 20% (on a fully diluted basis) of the
economic and voting interest in the Voting Stock of Holdings; or (iii) the
failure of the DLJMB Entities and their Affiliates at any time to have the
right to elect a majority of the Board of Directors of Holdings or the
Borrower.
"Charter Document" means, relative to any Obligor, its certificate of
incorporation, its by-laws and all shareholder agreements, voting trusts and
similar arrangements to which such Obligor is a party applicable to any of its
authorized shares of Capital Stock.
"Closing Date" means the date of the initial Borrowing, not to be
later than August 31, 1997.
"Closing Date Certificate" means a certificate of an Authorized
Officer of the Borrower substantially in the form of Exhibit D hereto,
delivered pursuant to Section 5.1.4.
"Closing Date Dividend" is defined in the sixth recital.
"Code" means the Internal Revenue Code of 1986, as amended.
"Commitment" means, as the context may require, (i) a Lender's Term-A
Loan Commitment, Term-B Loan Commitment, Term-C Loan Commitment, Revolving
Loan Commitment or Letter of Credit Commitment or (ii) the Swing Line Lender's
Swing Line Loan Commitment.
12
"Commitment Amount" means, as the context may require, the Term-A
Loan Commitment Amount, the Term-B Loan Commitment Amount, the Term-C Loan
Commitment Amount, the Revolving Loan Commitment Amount, the Letter of Credit
Commitment Amount or the Swing Line Loan Commitment Amount.
"Commitment Letter" means the commitment letter, dated April 30,
1997, among DLJ Merchant Banking II, Inc., the Arranger and the Syndication
Agent, including all annexes and exhibits thereto.
"Commitment Termination Date" means, as the context may require, the
Revolving Loan Commitment Termination Date or any Term Loan Commitment
Termination Date.
"Commitment Termination Event" means (i) the occurrence of any Event
of Default described in clauses (b) through (d) of Section 8.1.9 with respect
to any Obligor (other than immaterial Subsidiaries), or (ii) the occurrence
and continuance of any other Event of Default and either (x) the declaration
of the Loans to be due and payable pursuant to Section 8.3, or (y) in the
absence of such declaration, the giving of notice to the Borrower by the
Administrative Agent, acting at the direction of the Required Lenders, that
the Commitments have been terminated.
"Compliance Certificate" means a certificate duly completed and
executed by the president, chief executive officer, treasurer, assistant
treasurer, controller or chief financial Authorized Officer of the Borrower,
substantially in the form of Exhibit E hereto.
"Contingent Liability" means any agreement, undertaking or
arrangement by which any Person guarantees, endorses or otherwise becomes or
is contingently liable upon (by direct or indirect agreement, contingent or
otherwise, to provide funds for payment, to supply funds to, or otherwise to
invest in, a debtor, or otherwise to assure a creditor against loss) the
indebtedness, obligation or any other liability of any other Person (other
than by endorsements of instruments in the course of collection), or
guarantees the payment of dividends or other distributions upon the shares of
any other Person. The amount of any Person's obligation under any Contingent
Liability shall (subject to any limitation set forth therein) be deemed to be
the outstanding principal amount of the debt, obligation or other liability
guaranteed thereby.
"Continuation/Conversion Notice" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of the
Borrower, substantially in the form of Exhibit C hereto.
"Controlled Group" means all members of a controlled group of
corporations and all members of a controlled group of trades or businesses
(whether or not incorporated) under common control which, together with the
Borrower, are treated as a single employer under
13
Section 414(b) or 414(c) of the Code or Section 4001 of ERISA, or for purposes
of Section 412 of the Code, Section 414(m) or Section 414(o) of the Code.
"Credit Extension" means, as the context may require, (i) the making
of a Loan by a Lender, or (ii) the issuance of any Letter of Credit, or the
extension of any Stated Expiry Date of any previously issued Letter of Credit,
by the Issuer.
"Credit Extension Request" means, as the context may require, any
Borrowing Request or Issuance Request.
"Current Assets" means, on any date, without duplication, all assets
which, in accordance with GAAP, would be included as current assets on a
consolidated balance sheet of the Borrower and its Restricted Subsidiaries at
such date as current assets (excluding, however, amounts due and to become due
from Affiliates of the Borrower which have arisen from transactions which are
other than arm's-length and in the ordinary course of its business).
"Current Liabilities" means, on any date, without duplication, all
amounts which, in accordance with GAAP, would be included as current
liabilities on a consolidated balance sheet of the Borrower and its Restricted
Subsidiaries at such date, excluding current maturities of Debt.
"Debt" means, without duplication, the outstanding principal amount
of all Indebtedness of the Borrower and its Restricted Subsidiaries that (i)
is of the type referred to in clause (a), (b) (other than undrawn commercial
letters of credit and undrawn letters of credit in respect of workers'
compensation, insurance, performance and surety bonds and similar obligations,
in each case incurred in the ordinary course of business) or (c) of the
definition of "Indebtedness" and (ii) any Contingent Liability in respect of
any of the foregoing types of Indebtedness.
"DecisionOne Business" is defined in Section 7.2.1.
"Default" means any Event of Default or any condition, occurrence or
event which, after notice or lapse of time or both, would, unless cured or
waived, constitute an Event of Default.
"Disbursement" is defined in Section 2.6.2.
"Disbursement Date" is defined in Section 2.6.2.
"Disbursement Due Date" is defined in Section 2.6.2.
"Disclosure Schedule" means the Disclosure Schedule attached hereto
as Schedule I, as it may be amended, supplemented or otherwise modified from
time to time by the Borrower with the written consent of the Required Lenders.
14
"Discount Debenture" is defined in clause (b) of the fourth recital.
"Discount Debenture Issuance" is defined in clause (b) of the fourth
recital.
"DLJ" is defined in the preamble.
"DLJMB Entities" is defined in the second recital.
"Documentation Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Documentation Agent pursuant to Section 9.4.
"DOH" is defined in the second recital.
"Dollar" and the sign "$" mean lawful money of the United States.
"Eligible Account" means, with respect to the Borrower and any of its
wholly-owned U.S. Subsidiaries that are Material Subsidiaries at time of
determination thereof, any Account as to which each of the following
requirements has been fulfilled to the reasonable satisfaction of the
Administrative Agent:
(a) the Borrower or such Subsidiary owns such Account free
and clear of all Liens other than any Lien permitted to exist under
clause (a), (c), (d) or (f) of Section 7.2.3;
(b) such Account is a legal, valid, binding and enforceable
obligation of the Person obligated under such Account (the "Account
Debtor");
(c) such Account is not, in the case of any Account in
excess of $250,000, subject to any bona fide dispute, setoff,
counterclaim or other right, claim or defense on the part of the
Account Debtor or any other Person denying liability under such
Account; provided, however, that any such Account shall constitute an
Eligible Account to the extent it is not subject to any such dispute,
setoff, counterclaim or other claim or defense;
(d) the Borrower or such Subsidiary has the full and
unqualified right to assign and xxxxx x Xxxx on such Account to the
Administrative Agent, for its benefit and that of the Lenders, as
security for the Obligations (and the Administrative Agent shall have
a perfected, first-priority (other than inchoate statutory Liens
otherwise permitted by Section 7.2.3) Lien on such Account);;
(e) such Account is evidenced by an invoice rendered to the
Account Debtor (which shall include computer records) or is reflected
by computer records maintained by
15
the Borrower or such Subsidiary evidencing such Account and is not
evidenced by any instrument or chattel paper (as the terms
"instrument" and "chattel paper" are defined in Section 9-105 of the
UCC), unless such instrument or chattel paper has been delivered to
the Administrative Agent;
(f) such Account arose from the sale of goods or services by
the Borrower or such Subsidiary in the ordinary course of the
Borrower's or such Subsidiary's business;
(g) with respect to such Account, no Account Debtor is (i) an
Affiliate of the Borrower or any of its Subsidiaries, or (ii) the
subject of any reorganization, bankruptcy, receivership,
custodianship, insolvency or other condition analogous with respect
to such Account Debtor to those described in clauses (a) through (d)
of Section 8.1.9;
(h) such Account is not outstanding more than 120 days from
the original invoice date for such Account;
(i) such Account is not, in the case of any Account in
excess of $250,000, an Account owing by an Account Debtor having, at
the time of any determination of Eligible Accounts, in excess of 10%
of the aggregate outstanding amount of all Accounts of such Account
Debtor (other than any Accounts which are the subject of bona fide
disputes between such Account Debtor and the Borrower or such
Subsidiary, as the case may be) outstanding more than 90 days past
the original date of shipment, in the case of goods, or, in the case
of services, from the date when such services have been rendered in
full, in each case for such Account; and
(j) the Account Debtor in respect of such Account is located
within the United States, Puerto Rico or Canada unless the
obligations (or that portion of such obligations which is acceptable
to the Administrative Agent) of an Account Debtor not located within
the United States, Puerto Rico or Canada are secured by a letter of
credit, guaranty or eligible bankers' acceptance having terms, and
from such issuers and confirmation banks, as are acceptable to the
Administrative Agent.
"Eligible Inventory" means, with respect to the Borrower and any of
its wholly-owned U.S. Subsidiaries that are Material Subsidiaries, at the time
of any determination thereof, any Inventory arising in the ordinary course of
business and as to which each of the following requirements has been fulfilled
to the reasonable satisfaction of the Agents:
(a) such Inventory is located in the United States
(including Puerto Rico);
(b) the Borrower or its wholly-owned U.S. Subsidiary that
is a Material Subsidiary owning such Inventory, as the case may
be, has full and unqualified right to
16
assign and xxxxx x Xxxx in such Inventory to the Administrative
Agent, for the benefit of the Agents and the Lenders, as
security for the Obligations;
(c) the Borrower or one of its wholly-owned U.S.
Subsidiaries that are Material Subsidiaries owns such Inventory
free and clear of all Liens in favor of any Person other than
any Lien permitted to exist under clause (a), (c), (d) or (f)
of Section 7.2.3; and
(d) none of such Inventory (in the case of Inventory other
than repairable parts) is obsolete, unsaleable, damaged,
otherwise unfit for sale or consumption or further processing
or unusable in support of customer maintenance contracts.
"Environmental Laws" means all applicable federal, state or local
statutes, laws, ordinances, codes, rules and regulations (including consent
decrees and administrative orders) relating to public health and safety and
protection of the environment.
"Equity Investors" is defined in the second recital.
"Equity Issuance" is defined in clause (a) of the fourth recital.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Event of Default" is defined in Section 8.1.
"Excess Cash Flow" means, for any applicable period, the excess (if
any), of
(a) Adjusted EBITDA for such applicable period;
over
(b) the sum, without duplication (for such applicable period) of
(i) the cash portion of Interest Expense for such applicable
period;
plus
(ii) scheduled payments and mandatory prepayments, to the
extent actually made, of the principal amount of the Term Loans or
any other funded Debt (including Capitalized Lease Liabilities) and
mandatory prepayments of the principal amount of the Revolving Loans
pursuant to clause (b) or (g) of Section 3.1.1 in connection with a
reduction of the Revolving Loan Commitment Amount, in each case for
such applicable period;
17
plus
(iii) all federal, state and foreign income taxes
actually paid in cash by the Borrower and its Restricted
Subsidiaries for such applicable period;
plus
(iv) Capital Expenditures actually made during such
applicable period pursuant to clause (a) of Section 7.2.7
(excluding Capital Expenditures constituting Capitalized
Lease Liabilities and by way of the incurrence of
Indebtedness permitted pursuant to Section 7.2.2(c) to a
vendor of any assets permitted to be acquired pursuant to
Section 7.2.7 to finance the acquisition of such assets);
plus
(v) the amount of the net increase (if any) of
Current Assets, other than cash and Cash Equivalent
Investments, over Current Liabilities of the Borrower and
its Restricted Subsidiaries for such applicable period;
plus
(vi) Investments permitted and actually made, in
cash, pursuant to clause (k) of Section 7.2.5 during such
applicable period;
plus
(vii) the amount of the net increase of Inventory
constituting repairable parts which are not classified as
Current Assets on the balance sheet of the Borrower and its
Restricted Subsidiaries for such applicable period;
plus
(viii) Restricted Payments of the type described in
clauses (c)(ii), (c)(iii) and (c)(iv) of Section 7.2.6 made
during such period;
plus
(ix) gains on sales of assets (other than sales
permitted under clause (a) of Section 7.2.9).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
18
"Federal Funds Rate" means, for any period, a fluctuating interest
rate per annum equal for each day during such period to (i) the weighted
average of the rates on overnight federal funds transactions with members of
the Federal Reserve System arranged by federal funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or (ii) if such rate is
not so published for any day which is a Business Day, the average of the
quotations for such day on such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.
"Fee Letter" means the confidential fee letter, dated as of April 30,
1997, among DLJ Merchant Banking II, Inc., the Arranger and the Syndication
Agent.
"Fiscal Quarter" means any fiscal quarter of a Fiscal Year.
"Fiscal Year" means any twelve-month period ending on June 30 of any
calendar year.
"Fixed Charge Coverage Ratio" means, at the end of any Fiscal
Quarter, subject to clause (b) of Section 1.4, the ratio computed for the
period consisting of such Fiscal Quarter and each of the three immediately
prior Fiscal Quarters of
(a) Adjusted EBITDA for all such Fiscal Quarters
to
(b) the sum (without duplication) of
(i) Capital Expenditures actually made during all
such Fiscal Quarters pursuant to clause (a) of Section 7.2.7
(excluding Capital Expenditures constituting Capitalized
Lease Liabilities and by way of the incurrence of
Indebtedness permitted pursuant to Section 7.2.2(b)(ii) to a
vendor of any assets permitted to be acquired pursuant to
Section 7.2.7 to finance the acquisition of such assets);
plus
(ii) the cash portion of Interest Expense for all
such Fiscal Quarters, provided that for the first three
Fiscal Quarters ending after the Closing Date, Interest
Expense shall be determined on an Annualized basis;
plus
(iii) all scheduled payments of principal of the
Term Loans and other funded Debt (including the principal
portion of any Capitalized Lease Liabilities)
19
during all such Fiscal Quarters, provided that for the
first three Fiscal Quarters ending after the Closing Date,
such payments shall be determined on an Annualized basis;
plus
(iv) Restricted Payments permitted pursuant to
clauses (c)(i) and (d) of Section 7.2.6 made during such
period;
plus
(v) all federal, state and foreign income taxes
actually paid in cash by the Borrower and its Restricted
Subsidiaries and Restricted Payments made by the Borrower
pursuant to clause (c)(ii) of Section 7.2.6 during such
period.
"F.R.S. Board" means the Board of Governors of the Federal Reserve
System or any successor thereto.
"GAAP" is defined in Section 1.4.
"Hazardous Material" means
(a) any "hazardous substance", as defined by CERCLA;
(b) any "hazardous waste", as defined by the Resource
Conservation and Recovery Act, as amended;
(c) any petroleum product; or
(d) any pollutant or contaminant or hazardous, dangerous or
toxic chemical, material or substance within the meaning of any other
applicable Environmental Law.
"Hedging Obligations" means, with respect to any Person, all
liabilities of such Person under interest rate swap agreements, interest rate
cap agreements and interest rate collar agreements, and all other agreements
or arrangements designed to protect such Person against fluctuations in
interest rates or currency exchange rates.
"herein", "hereof", "hereto", "hereunder" and similar terms contained
in this Agreement or any other Loan Document refer to this Agreement or such
other Loan Document, as the case may be, as a whole and not to any particular
Section, paragraph or provision of this Agreement or such other Loan Document.
20
"Holdings" is defined in the third recital.
"Holdings Guaranty and Pledge Agreement" means the Guaranty and
Pledge Agreement executed and delivered by an Authorized Officer of Holdings
pursuant to clause (a) of Section 5.1.7, substantially in the form of Exhibit
G-1 hereto, as amended, supplemented, amended and restated or otherwise
modified from time to time.
"Impermissible Qualification" means, relative to the opinion or
certification of any independent public accountant as to any financial
statement of any Obligor, any qualification or exception to such opinion or
certification (i) which is of a "going concern" or similar nature, (ii) which
relates to the limited scope of examination of matters relevant to such
financial statement (except, in the case of matters relating to any acquired
business or assets, in respect of the period prior to the acquisition by such
Obligor of such business or assets), or (iii) which relates to the treatment
or classification of any item in such financial statement and which, as a
condition to its removal, would require an adjustment to such item the effect
of which would be to cause such Obligor to be in default of any of its
obligations under Section 7.2.4.
"including" means including without limiting the generality of any
description preceding such term, and, for purposes of this Agreement and each
other Loan Document, the parties hereto agree that the rule of ejusdem generis
shall not be applicable to limit a general statement, which is followed by or
referable to an enumeration of specific matters, to matters similar to the
matters specifically mentioned.
"Indebtedness" of any Person means, without duplication:
(a) all obligations of such Person for borrowed money or for
the deferred purchase price of property or services (exclusive of
deferred purchase price arrangements in the nature of open or other
accounts payable owed to suppliers on normal terms in connection with
the purchase of goods and services in the ordinary course of
business) and all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative to
the face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all Capitalized Lease Liabilities;
(d) net liabilities of such Person under all Hedging
Obligations;
(e) whether or not so included as liabilities in accordance
with GAAP, all Indebtedness of the types referred to in clauses (a)
through (d) above (excluding prepaid
21
interest thereon) secured by a Lien on property owned or being
purchased by such Person (including Indebtedness arising under
conditional sales or other title retention agreements), whether or
not such Indebtedness shall have been assumed by such Person or is
limited in recourse; provided, however, that, to the extent such
Indebtedness is limited in recourse to the assets securing such
Indebtedness, the amount of such Indebtedness shall be limited to
the fair market value of such assets; and
(f) all Contingent Liabilities of such Person in respect of
any of the foregoing.
For all purposes of this Agreement, the Indebtedness of any Person shall
include the Indebtedness of any partnership or joint venture in which such
Person is a general partner or a joint venturer (to the extent such Person is
liable for such Indebtedness).
"Indemnified Liabilities" is defined in Section 10.4.
"Indemnified Parties" is defined in Section 10.4.
"Initial Public Offering" mean for any Person, any sale of the
Capital Stock of such Person to the public pursuant to an initial primary
offering registered under the Securities Act of 1933.
"Intercompany Loan" is defined in the sixth recital.
"Intercompany Note" is defined in the sixth recital.
"Interest Coverage Ratio" means, at the end of any Fiscal Quarter,
subject to clause (b) of Section 1.4, the ratio computed for the period
consisting of such Fiscal Quarter and each of the three immediately prior
Fiscal Quarters of:
(a) Adjusted EBITDA (for all such Fiscal Quarters)
to
(b) the cash portion of Interest Expense (for all such
Fiscal Quarters; provided that for the first three Fiscal Quarters
ending after the Closing Date, Interest Expense shall be determined
on an Annualized basis).
"Interest Expense" means, for any applicable period, the aggregate
consolidated interest expense of the Borrower and its Restricted Subsidiaries
for such applicable period, as determined in accordance with GAAP, including
the portion of any payments made in respect of Capitalized Lease Liabilities
allocable to interest expense, but excluding (to the extent included in
interest expense) up-front fees and expenses and the amortization of all
deferred financing costs.
22
"Interest Period" means, as to any LIBO Rate Loan, the period
commencing on the Borrowing date of such Loan or on the date on which the Loan
is converted into or continued as a LIBO Rate Loan, and ending on the date
one, two, three, six or, if available in the Administrative Agent's reasonable
determination, nine or twelve months thereafter as selected by the Borrower in
its Borrowing Request or its Conversion/Continuation Notice; provided however
that:
(i) if any Interest Period would otherwise end on a day that
is not a Business Day, that Interest Period shall be extended to the
following 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 preceding Business Day;
(ii) 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 the
calendar month at the end of such Interest Period;
(iii) no Interest Period for any Loan shall extend beyond
the Stated Maturity Date for such Loan;
(iv) no Interest Period applicable to a Term Loan or portion
thereof shall extend beyond any date upon which is due any scheduled
principal payment in respect of the Term Loans unless the aggregate
principal amount of Term Loans represented by Base Rate Loans, or by
LIBO Rate Loans having Interest Periods that will expire on or
before such date, equals or exceeds the amount of such principal
payment; and
(v) there shall be no more than twenty Interest Periods in
effect at any one time;
provided that with respect to the initial Borrowing, Interest Period means the
period commencing on (and including) the Business Day on which the Borrowing
is made and ending on (and including) the last Business Day of the month
following the month in which such initial Borrowing is made.
"Inventory" means, any "inventory" (as that term is defined in
Section 9-109(4) of the UCC) of the Borrower or any of its wholly owned U.S.
Subsidiaries.
"Investment" means, relative to any Person, (i) any loan or advance
made by such Person to any other Person (excluding commission, travel and
similar advances to officers, directors and employees (or individuals acting
in similar capacities) made in the ordinary course of business), and (ii) any
ownership or similar interest (in the nature of Capital Stock) held by such
Person in any other Person. The amount of any Investment shall be the original
principal or capital amount thereof less all returns of principal or equity
thereon (and without adjustment by reason of the
23
financial condition of such other Person) and shall, if made by the transfer
or exchange of property other than cash, be deemed to have been made in an
original principal or capital amount equal to the fair market value of such
property at the time of such transfer or exchange.
"Investor's Agreement" means the Investor's Agreement, dated as of
August __, 1997, among the DLJ Merchant Banking Partners II, L.P., DLJ
Merchant Banking Partners XX-X, X.X., XXX Xxxxxxxx Xxxxxxxx, X.X., XXX
Merchant Banking Funding, Inc., DLJ Offshore Partners II, C.V., DLJ
Diversified Partners, L.P., DLJ Diversified Partners-A. L.P., DLJ Millennium
Partners, L.P., DLJ Millennium-A, L.P., DLJMB Funding II, Inc., DLJ EAB
Partners, L.P., DLJ First ESC LLC, UK Investment Plan 1997 Partners, MergerSub
and certain other stockholders listed on the signature pages thereof (as
amended or otherwise modified from time to time in accordance with Section
7.2.10).
"IPO Subsidiary" means Properties Holding Corporation, a Delaware
corporation, a direct, wholly-owned Subsidiary of the Borrower.
"Issuance Request" means a Letter of Credit request and certificate
duly executed by an Authorized Officer of the Borrower, substantially in the
form of Exhibit B-3 hereto.
"Issuer" means the Administrative Agent in its capacity as issuer of
Letters of Credit and any Lender as may be designated by the Borrower (and
consented to by the Agents and such Lender, such consent by the Agents not to
be unreasonably withheld) in its capacity as issuer of Letters of Credit.
"Lender Assignment Agreement" means a Lender Assignment Agreement
substantially in the form of Exhibit J hereto.
"Lenders" is defined in the preamble.
"Letter of Credit" is defined in Section 2.1.3.
"Letter of Credit Commitment" means, with respect to the Issuer, the
Issuer's obligation to issue Letters of Credit pursuant to Section 2.1.3 and,
with respect to each of the other Lenders that has a Revolving Loan
Commitment, the obligation of each such Lender to participate in such Letters
of Credit pursuant to Section 2.6.1.
"Letter of Credit Commitment Amount" means, on any date, a maximum
amount of $25,000,000, as such amount may be reduced from time to time
pursuant to Section 2.2.
"Letter of Credit Outstandings" means, on any date, an amount equal
to the sum of
24
(a) the then aggregate amount which is undrawn and available
under all issued and outstanding Letters of Credit,
plus
(b) the then aggregate amount of all unpaid and outstanding
Reimbursement Obligations in respect of such Letters of Credit.
"Leverage Ratio" means, at the end of any Fiscal Quarter, subject to
clause (b) of Section 1.4, the ratio of
(a) total Debt less cash and Cash Equivalent Investments of the
Borrower and its Restricted Subsidiaries on a consolidated basis
outstanding at such time;
to
(b) Adjusted EBITDA for the period of four consecutive Fiscal
Quarters ended on such date.
"LIBO Rate" means, relative to any Interest Period for LIBO Rate
Loans, the rate of interest per annum determined by the Administrative Agent
to be the arithmetic mean (rounded upward to the next 1/100th of 1%) of the
rates of interest per annum at which dollar deposits in the approximate amount
of the Loan to be made or continued as, or converted into, a LIBO Rate Loan by
the Administrative Agent and having a maturity comparable to such Interest
Period would be offered to the Administrative Agent in the London interbank
market at its request at approximately 11:00 a.m. (London time) two Business
Days prior to the commencement of such Interest Period.
"LIBO Rate Loan" means a Loan bearing interest, at all times during
an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to the LIBO Rate (Reserve Adjusted).
"LIBO Rate (Reserve Adjusted)" means, relative to any Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, the rate of interest per annum (rounded upwards to the next
1/100th of 1%) determined by the Administrative Agent as follows:
LIBO Rate = LIBO Rate
(Reserve Adjusted) -------------------------------
1.00 - LIBOR Reserve Percentage
25
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO
Rate Loans will be adjusted automatically as to all LIBO Rate Loans then
outstanding as of the effective date of any change in the LIBOR Reserve
Percentage.
"LIBOR Office" means, relative to any Lender, the office of such
Lender designated as such on Schedule II hereto or designated in the Lender
Assignment Agreement pursuant to which such Lender became a Lender hereunder
or such other office of a Lender as shall be so designated from time to time
by notice from such Lender to the Borrower and the Administrative Agent, which
shall be making or maintaining LIBO Rate Loans of such Lender hereunder.
"LIBOR Reserve Percentage" means, relative to any Interest Period for
LIBO Rate Loans, the percentage (expressed as a decimal, rounded upward to the
next 1/100th of 1%) in effect on such day (whether or not applicable to any
Lender) under regulations issued from time to time by the F.R.S. Board for
determining the maximum reserve requirement (including any emergency,
supplemental or other marginal reserve requirement) with respect to
Eurocurrency funding (currently referred to as "Eurocurrency Liabilities" in
Regulation D of the F.R.S. Board).
"Lien" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or any filing or recording of any
instrument or document in respect of the foregoing, to secure payment of a
debt or performance of an obligation or any other priority or preferential
treatment of any kind or nature whatsoever that has the practical effect of
creating a security interest in property.
"Loan" means, as the context may require, a Revolving Loan, a Term-A
Loan, a Term-B Loan, a Term-C Loan or a Swing Line Loan, of any type.
"Loan Document" means this Agreement, the Notes, the Letters of
Credit, each Rate Protection Agreement under which the counterparty to such
agreement is (or at the time such Rate Protection Agreement was entered into,
was) a Lender or an Affiliate of a Lender relating to Hedging Obligations of
the Borrower or any of its Subsidiaries, each Borrowing Request, each Issuance
Request, each Borrowing Base Certificate, the Fee Letter, the Administrative
Agent's Fee Letter, each Pledge Agreement, the Subsidiary Guaranty, each
Mortgage (upon execution and delivery thereof), each Security Agreement and
each other agreement, document or instrument delivered in connection with this
Agreement or any other Loan Document, whether or not specifically mentioned
herein or therein.
"Material Adverse Effect" means (a) a material adverse effect on the
financial condition, operations, assets, business or properties of the
Borrower and its Restricted Subsidiaries, taken as a whole, (b) a material
impairment of the ability of the Borrower or any other Obligor to perform its
respective material obligations under the Loan Documents to which it is or
will be a party, or (c) an impairment of the validity or enforceability of, or
a material impairment of the rights,
26
remedies or benefits available to the Issuer, the Agents, the Arranger or the
Lenders under, this Agreement or any other Loan Document.
["Material Documents" means the Merger Agreement, the Investor's
Agreement, the Tax Sharing Agreement and the Borrower's Articles of
Incorporation, each as amended or otherwise modified from time to time as
permitted in accordance with the terms hereof or of any other Loan Document.]
"Material Subsidiary" means (i) any direct or indirect Restricted
Subsidiary of the Borrower which holds, owns or contributes, as the case may
be, 5% or more of the gross revenues or assets of the Borrower and its
Restricted Subsidiaries, on a consolidated basis, and (ii) any Restricted
Subsidiary of the Borrower designated by the Borrower as a Material
Subsidiary. The Borrower shall designate one or more Restricted Subsidiaries
of the Borrower as Material Subsidiaries if, in the absence of such
designation, the aggregate gross revenues or assets of all Restricted
Subsidiaries of the Borrower that are not Material Subsidiaries would exceed
5% of the gross revenues or assets of the Borrower and its Restricted
Subsidiaries, on a consolidated basis.
"Merger" is defined in the second recital.
"Merger Agreement" means the Agreement and Plan of Merger, dated as
of May 4, 1997 and amended on July 15, 1997 (as amended, or otherwise modified
from time to time in accordance with Section 7.2.10) between DOH and
MergerSub.
"MergerSub" is defined in the first recital.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Mortgage" means, collectively, each Mortgage or Deed of Trust
executed and delivered pursuant to the terms of this Agreement, including
Section 7.1.8(b) or 7.1.12, in form and substance reasonably satisfactory to
the Agents.
"Net Asset Value" means, at any time of any determination, (i) with
respect to Eligible Accounts, 85% of an amount equal to (x) the book value of
all Eligible Accounts as reflected on the books of the Borrower and its
Material Subsidiaries in accordance with GAAP, net of (y) all credits,
discounts and allowances (and net of all unissued credits in the form of
competitive allowances or otherwise) in respect of such Eligible Accounts and
(ii) with respect to Eligible Inventory, an amount equal to (x) in the case of
Eligible Inventory that is classified as a Current Asset on the balance sheet
of the Borrower or applicable Material Subsidiary in accordance with GAAP, 50%
of, and (y) in the case of Eligible Inventory that is classified as repairable
parts on the balance sheet of the Borrower or applicable Material Subsidiary
in accordance with GAAP, 30% of, in each case net book value (determined on a
weighted average cost basis) of all such
27
Eligible Inventory as reflected on the books of the Borrower and its U.S.
Subsidiaries that are Material Subsidiaries as at such time, valued in
accordance with GAAP.
"Net Debt Proceeds" means, with respect to the incurrence, sale or
issuance by the Borrower or any of its Restricted Subsidiaries of any Debt
(other than Debt incurred as part of the Transaction and other Debt permitted
by Section 7.2.2 as in effect on the date hereof), the excess of:
(a) the gross cash proceeds received by the Borrower or any of
its Restricted Subsidiaries from such incurrence, sale or issuance,
over
(b) all reasonable and customary underwriting commissions and
legal, investment banking, brokerage and accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually
incurred in connection with such incurrence, sale or issuance.
"Net Disposition Proceeds" means, with respect to any sale, transfer
or other disposition of any assets of the Borrower or any of its Restricted
Subsidiaries (other than transfers made as part of the Transaction and other
sales permitted pursuant to clause (a) or clause (b) of Section 7.2.9), the
excess of
(a) the gross cash proceeds received by the Borrower or any of
its Restricted Subsidiaries from any such sale, transfer or other
disposition and any cash payments received in respect of promissory
notes or other non-cash consideration delivered to the Borrower or
such Restricted Subsidiary in respect thereof,
less
(b) the sum (without duplication) of (i) all reasonable and
customary fees and expenses with respect to legal, investment
banking, brokerage, accounting and other professional fees, sales
commissions and disbursements and all other reasonable fees,
expenses and charges, in each case actually incurred in connection
with such sale, transfer or other disposition, (ii) all taxes and
other governmental costs and expenses actually paid or estimated by
the Borrower (in good faith) to be payable in cash in connection
with such sale, transfer or other disposition, and (iii) payments
made by the Borrower or any of its Restricted Subsidiaries to retire
Indebtedness (other than the Loans) of the Borrower or any of its
Restricted Subsidiaries where payment of such Indebtedness is
required in connection with such sale, transfer or other
disposition;
28
provided, however, that if, after the payment of all taxes with respect to
such sale, transfer or other disposition, the amount of estimated taxes, if
any, pursuant to clause (b)(ii) above exceeded the tax amount actually paid in
cash in respect of such sale, transfer or other disposition, the aggregate
amount of such excess shall, at such time, constitute Net Disposition
Proceeds.
"Net Equity Proceeds" means with respect to the sale or issuance by
the Borrower or Holdings to any Person of any of its capital stock or any
warrants or options with respect to its capital stock or the exercise of any
such warrants or options after the Closing Date (other than pursuant to (i)
capital contributions or capital stock issuances (from other than one or more
public offerings of common stock of Holdings pursuant to an effective
registration statement under the Securities Act of 1933, as amended, or
widely-distributed private offerings exempted from the registration
requirements of Section 5 of the Securities Act of 1933, as amended ), (ii)
any subscription agreement, incentive plan or similar arrangement with any
officer, employee or director of Holdings, the Borrower or any Subsidiary of
the Borrower, (iii) any loan by the Borrower or Holdings, to such officer,
employee or director solely for the purpose of purchasing such shares pursuant
to clause (h) of Section 7.2.5, (iv) proceeds from the sale of any capital
stock to any officer, director or employee of Holdings, the Borrower or any
Subsidiary of the Borrower in an aggregate amount not to exceed $15,000,000
after the Closing Date or (v) the Equity Issuance or (vi) the exercise of the
Warrants, any warrants sold to the purchasers of Discount Debentures in
connection with the Discount Debenture Issuance or any options or warrants
issued to any officer, employee or director of Holdings, the Borrower or any
Subsidiary of the Borrower), the excess of:
(a) the gross cash proceeds received by Holdings, the
Borrower and the Borrower's Restricted Subsidiaries from such sale,
exercise or issuance,
over
(b) all reasonable and customary underwriting commissions
and legal, investment banking, brokerage, accounting and other
professional fees, sales commissions and disbursements and all other
reasonable fees, expenses and charges, in each case actually incurred
in connection with such sale or issuance.
"Net Income" means, for any period, the net income of the Borrower
and its Subsidiaries for such period on a consolidated basis, excluding
extraordinary or non-recurring gains; provided, however, that the Net Income
or loss of any Person that is not a Restricted Subsidiary or that is accounted
for by the equity method of accounting shall be included only to the extent of
the amount of dividends or distributions paid to the Borrower or a Restricted
Subsidiary in cash.
"Non-Recourse Debt" means Indebtedness (i) no default with respect to
which (including any rights that the holders thereof may have to take
enforcement action against an Unrestricted Subsidiary) would permit (upon
notice, lapse of time or both) any holder of any other
29
Indebtedness of the Borrower or any of its Restricted Subsidiaries to declare
a default on such other Indebtedness or cause the payment thereof to be
accelerated or payable prior to its stated maturity, and (ii) as to which the
Lenders have been notified in writing that they will not have any recourse to
the stock or assets of the Borrower or any of its Restricted Subsidiaries;
provided, however, that in no event shall Indebtedness of any Unrestricted
Subsidiary fail to be Non-Recourse Debt solely as a result of any default
provisions contained in a guarantee thereof by the Borrower or any of its
Restricted Subsidiaries if the Borrower or such Restricted Subsidiary was
otherwise permitted to incur such guarantee under this Agreement.
"Non-U.S. Lender" means any Lender (including each Assignee Lender)
that is not (i) a citizen or resident of the United States, (ii) a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any state thereof, or (iii) an estate or trust
that is subject to U.S. Federal income taxation regardless of the source of
its income.
"Non-U.S. Subsidiary" means a Subsidiary of the Borrower that is not
a U.S. Subsidiary.
"Note" means, as the context may require, a Revolving Note, a
Registered Note, a Term-A Note, a Term-B Note, a Term-C Note or a Swing Line
Note.
"Obligations" means all obligations (monetary or otherwise) of the
Borrower and each other Obligor arising under or in connection with this
Agreement, any Rate Protection Agreement, the Notes, each Letter of Credit and
each other Loan Document.
"Obligor" means the Borrower or any other Person (other than any
Agent, the Documentation Agent, the Arranger, the Issuer, the Swing Line
Lender or any Lender) obligated under any Loan Document.
"Participant" is defined in Section 10.11.2.
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor entity.
"Pension Plan" means a "pension plan", as such term is defined in
section 3(2) of ERISA, which is subject to Title IV of ERISA (other than a
multiemployer plan as defined in section 4001(a)(3) of ERISA), and to which
the Borrower or any corporation, trade or business that is, along with the
Borrower, a member of a Controlled Group, has or within the prior six years
has had any liability, including any liability by reason of having been a
substantial employer within the meaning of section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under section 4069 of ERISA.
"Percentage" means, relative to any Lender, the applicable percentage
relating to Term-A Loans, Term-B Loans, Term-C Loans or Revolving Loans, as
the case may be, as set forth opposite its name on Schedule II hereto under
the applicable column heading or set forth in
30
Lender Assignment Agreement(s) under the applicable column heading, as such
percentage may be adjusted from time to time pursuant to Lender Assignment
Agreement(s) executed by such Lender and its Assignee Lender(s) and delivered
pursuant to Section 10.11 or, in the case of a Lender's Percentage relating to
Revolving Loans, pursuant to clause (c) of Section 2.1.2. A Lender shall not
have any Commitment to make Revolving Loans, Term-A Loans, Term-B Loans or
Term-C Loans (as the case may be) if its percentage under the respective
column heading is zero.
"Perfection Certificate" means the Perfection Certificate executed
and delivered by an Authorized Officer of the Borrower pursuant to Section
5.1.18, substantially in the form of Exhibit I hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Person" means any natural person, corporation, partnership, firm,
association, trust, government, governmental agency, limited liability company
or any other entity, whether acting in an individual, fiduciary or other
capacity.
"Plan" means any Pension Plan or Welfare Plan.
"Pledge Agreement" means, as the context may require, the Borrower
Pledge Agreement, the Holdings Guaranty and Pledge Agreement or the Subsidiary
Pledge Agreement.
"Principals" means the DLJ Entities and their respective controlled
affiliates.
"Pro Forma Balance Sheet" is defined in clause (b) of Section 5.1.9.
"Quarterly Payment Date" means the last day of each of March, June,
September and December, or, if any such day is not a Business Day, the next
succeeding Business Day, commencing with September 30, 1997.
"Rate Protection Agreement" means, collectively, any interest rate
swap, cap, collar or similar agreement entered into by the Borrower pursuant
to the terms of this Agreement under which the counterparty to such agreement
is (or at the time such Rate Protection Agreement was entered into, was) a
Lender or an Affiliate of a Lender.
"Refunded Swing Line Loans" is defined in clause (b) of Section 2.3.2.
"Register" is defined in clause (b) of Section 2.7.
"Registered Note" means a promissory note of the Borrower payable to
any Registered Noteholder, in the form of Exhibit A-5 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the
31
Borrower to such Lender resulting from outstanding Loans, and also means all
other promissory notes accepted from time to time in substitution therefor or
renewal thereof.
"Registered Noteholder" means any Lender that has been issued a
Registered Note.
"Reimbursement Obligation" is defined in Section 2.6.3.
"Release" means a "release", as such term is defined in CERCLA.
"Replacement Notice" is defined in Section 4.11.
"Replacement Lender" is defined in Section 4.11.
"Required Lenders" means, at any time, (i) prior to the date of the
making of the initial Credit Extension hereunder, Lenders having at least 51%
of the sum of the Revolving Loan Commitments, Term-A Loan Commitments, Term-B
Loan Commitments and Term-C Loan Commitments, and (ii) on and after the date
of the initial Credit Extension, Lenders holding at least 51% of the Total
Exposure Amount.
"Resource Conservation and Recovery Act" means the Resource
Conservation and Recovery Act, 42 U.S.C. Section 6901, et seq., as in effect
from time to time.
"Restricted Payments" is defined in Section 7.2.6.
"Restricted Subsidiary" means any Subsidiary of the Borrower other
than an Unrestricted Subsidiary.
"Revolving Loan" is defined in Section 2.1.2.
"Revolving Loan Commitment" is defined in Section 2.1.2.
"Revolving Loan Commitment Amount" means, on any date, $105,000,000,
as such amount may be increased from time to time pursuant to clause (c) of
Section 2.1.2 or reduced from time to time pursuant to Section 2.2.
"Revolving Loan Commitment Termination Date" means the earliest of
(i) August 31, 1997 if the Term Loans have not been made on or prior to such
date, (ii) the sixth anniversary of the Closing Date, (iii) the date on which
the Revolving Loan Commitment Amount is terminated in full or reduced to zero
pursuant to Section 2.2, and (iv) the date on which any Commitment Termination
Event occurs.
32
"Revolving Note" means a promissory note of the Borrower payable to
any Lender, substantially in the form of Exhibit A-1 hereto (as such
promissory note may be amended, endorsed or otherwise modified from time to
time), evidencing the aggregate Indebtedness of the Borrower to such Lender
resulting from outstanding Revolving Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or
renewal thereof.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw
Hill, Inc.
"Security Agreement" means, as the context may require, the Borrower
Security Agreement or the Subsidiary Security Agreement.
"Solvent" means, with respect to any Person on a particular date,
that on such date (a) the fair value of the property of such Person is greater
than the total amount of liabilities, including contingent liabilities, of
such Person, (b) the present fair salable value of the assets of such Person
is not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and matured, (c)
such Person does not intend to, and does not believe that it will, incur debts
or liabilities beyond such Person's ability to pay as such debts and
liabilities mature, and (d) such Person is not engaged in business or a
transaction, and such person is not about to engage in business or a
transaction, for which such Person's property would constitute an unreasonably
small capital. The amount of contingent liabilities at any time shall be
computed as the amount that, in light of all the facts and circumstances
existing at such time, can reasonably be expected to become an actual or
matured liability.
"Stated Amount" of each Letter of Credit means the total amount
available to be drawn under such Letter of Credit upon the issuance thereof.
"Stated Expiry Date" is defined in Section 2.6.
"Stated Maturity Date" means (i) in the case of any Revolving Loan,
the sixth anniversary of the Closing Date, (ii) in the case of any Term-A
Loan, the sixth anniversary of the Closing Date, (iii) in the case of any
Term-B Loan, the seventh anniversary of the Closing Date, and (iv) in the case
of any Term-C Loan, the eighth anniversary of the Closing Date or, in the case
of any such day that is not a Business Day, the first Business Day following
such day.
"Subordinated Debt Issuance" is defined in clause (c) of the fourth
recital.
"Subordinated Notes" is defined in clause (c) of the fourth recital.
"Subsidiary" means, with respect to any Person, any corporation,
partnership or other business entity of which more than 50% of the outstanding
Capital Stock (or other ownership interest) having ordinary voting power to
elect a majority of the board of directors, managers or other voting members
of the governing body of such entity (irrespective of whether at the time
33
Capital Stock (or other ownership interests) of any other class or classes of
such entity shall or might have voting power upon the occurrence of any
contingency) is at the time directly or indirectly owned by such Person, by
such Person and one or more other Subsidiaries of such Person, or by one or
more other Subsidiaries of such Person.
"Subsidiary Guarantor" means each Material Subsidiary of the Borrower
that is a U.S. Subsidiary that is required, pursuant to clause (a) of Section
7.1.7, to execute and deliver a Subsidiary Guaranty.
"Subsidiary Guaranty" means the Guaranty, if any, executed and
delivered by an Authorized Officer of a Subsidiary Guarantor pursuant to
Section 7.1.7, substantially in the form of Exhibit H hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Pledge Agreement" means the Pledge Agreement, if any,
executed and delivered by an Authorized Officer of certain Material
Subsidiaries of the Borrower that are U.S. Subsidiaries pursuant to Section
7.1.7, substantially in the form of Exhibit G-3 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Subsidiary Security Agreement" means the Security Agreement, if any,
executed and delivered by an Authorized Officer of certain Material
Subsidiaries of the Borrower that are U.S. Subsidiaries pursuant to Section
7.1.7, substantially in the form of Exhibit F-2 hereto, as amended,
supplemented, amended and restated or otherwise modified from time to time.
"Swing Line Lender" means the Administrative Agent in its capacity as
Swing Line Lender hereunder.
"Swing Line Loan" is defined in clause (b) of Section 2.1.2.
"Swing Line Loan Commitment" is defined in clause (b) of Section 2.1.2.
"Swing Line Loan Commitment Amount" means, on any date, $10,000,000,
as such amount may be reduced from time to time pursuant to Section 2.2.
"Swing Line Note" means a promissory note of the Borrower payable to
the Swing Line Lender, in the form of Exhibit A-6 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to the Swing Line Lender
resulting from outstanding Swing Line Loans, and also means all other
promissory notes accepted from time to time in substitution therefor or
renewal thereof.
"Syndication Agent" is defined in the preamble and includes each
other Person as shall have subsequently been appointed as the successor
Syndication Agent pursuant to Section 9.4.
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"Tax Sharing Agreement" means the Tax Sharing Agreement, dated as of
__________, 1997, among the Borrower, Holdings, DecisionOne Supplies, Inc.,
the IPO Subsidiary, IC Properties Corporation, the Trademark Subsidiary and
Decision Data Investment Corporation, as the same may be amended, supplemented
or otherwise modified from time to time in accordance with Section 7.2.10.
"Taxes" is defined in Section 4.6.
"Term-A Loan" is defined in clause (a) of Section 2.1.1.
"Term-A Loan Commitment" is defined in clause (a) of Section 2.1.1.
"Term-A Loan Commitment Amount" means $195,000,000.
"Term-A Loan Commitment Termination Date" means the earliest of (i)
August 31, 1997, if the Term-A Loans have not been made on or prior to such
date, (ii) the Closing Date (immediately after the making of the Term-A Loans
on such date), and (iii) the date on which any Commitment Termination Event
occurs.
"Term-A Note" means a promissory note of the Borrower payable to the
order of any Lender, in the form of Exhibit A-2 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from outstanding Term-A Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"Term-B Loan" is defined in clause (b) of Section 2.1.1.
"Term-B Loan Commitment" is defined in clause (b) of Section 2.1.1.
"Term-B Loan Commitment Amount" means $150,000,000.
"Term-B Loan Commitment Termination Date" means the earliest of (i)
August 31, 1997, if the Term-B Loans have not been made on or prior to such
date, (ii) the Closing Date (immediately after the making of the Term-B Loans
on such date), and (iii) the date on which any Commitment Termination Event
occurs.
"Term-B Note" means a promissory note of the Borrower payable to the
order of any Lender, in the form of Exhibit A-3 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from outstanding Term-B Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
35
"Term-C Loan" is defined in clause (c) of Section 2.1.1.
"Term-C Loan Commitment" is defined in clause (c) of Section 2.1.1.
"Term-C Loan Commitment Amount" means $125,000,000.
"Term-C Loan Commitment Termination Date" means the earliest of (i)
August 31, 1997, if the Term-C Loans have not been made on or prior to such
date, (ii) the Closing Date (immediately after the making of the Term-C Loans
on such date), and (iii) the date on which any Commitment Termination Event
occurs.
"Term-C Note" means a promissory note of the Borrower payable to the
order of any Lender, in the form of Exhibit A-4 hereto (as such promissory
note may be amended, endorsed or otherwise modified from time to time),
evidencing the aggregate Indebtedness of the Borrower to such Lender resulting
from outstanding Term-C Loans, and also means all other promissory notes
accepted from time to time in substitution therefor or renewal thereof.
"Term Loan Commitment Termination Date" means, as the context may
require, the Term-A Loan Commitment Termination Date, the Term-B Loan
Commitment Termination Date or the Term-C Loan Commitment Termination Date.
"Term Loans" means collectively, the Term-A Loans, the Term-B Loans
and the Term-C Loans.
"Total Exposure Amount" means, on any date of determination, the then
outstanding principal amount of all Term Loans and the then effective
Revolving Loan Commitment Amount.
"Trademark Subsidiary" means Properties Development Corporation, a
Delaware corporation, which is a direct, wholly-owned Subsidiary of the
Borrower.
"Tranche" means, as the context may require, the Loans constituting
Term-A Loans, Term-B Loans, Term-C Loans, Revolving Loans or Swing Line Loans.
"Transaction" is defined in the second recital.
"Transaction Documents" means each of the Material Documents and all
other agreements, documents, instruments, certificates, filings, consents,
approvals, board of directors resolutions and opinions furnished pursuant to
or in connection with the Merger, the Equity Issuance, the Discount Debenture
Issuance, the Subordinated Debt Issuance, the Intercompany Loan and the
transactions contemplated hereby or thereby, each as amended, supplemented,
36
amended and restated or otherwise modified from time to time as permitted in
accordance with the terms hereof or of any other Loan Document.
"type" means, relative to any Loan, the portion thereof, if any,
being maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to
time in the State of New York.
"United States" or "U.S." means the United States of America, its
fifty states and the District of Columbia.
"U.S. Subsidiary" means any Subsidiary of the Borrower that is
incorporated or organized in or under the laws of the United States or any
state thereof.
"Unrestricted Subsidiary" means any Subsidiary of the Borrower that
is designated by a resolution of the Board of Directors of the Borrower as an
Unrestricted Subsidiary, but only to the extent that such Subsidiary: (i) has
no Indebtedness other than Non-Recourse Debt; (ii) is not party to any
agreement, contract, arrangement or understanding with the Borrower or any
Restricted Subsidiary of the Borrower unless the terms of any such agreement,
contract, arrangement or understanding are no less favorable to the Borrower
or such Restricted Subsidiary than those that might be obtained at the time
from Persons who are not Affiliates of the Borrower; (iii) is a Person with
respect to which neither the Borrower nor any of its Restricted Subsidiaries
has any direct or indirect obligation (a) to subscribe for additional Capital
Stock or warrants, options or other rights to acquire Capital Stock or (b) to
maintain or preserve such Person's financial condition or to cause such Person
to achieve any specified levels of operating results; and (iv) has not
guaranteed or otherwise directly or indirectly provided credit support for any
Indebtedness of the Borrower or any of its Restricted Subsidiaries. If, at any
time, any Unrestricted Subsidiary would fail to meet the foregoing
requirements as an Unrestricted Subsidiary, it shall thereafter cease to be an
Unrestricted Subsidiary for purposes hereof. The Board of Directors of the
Borrower may at any time designate any Unrestricted Subsidiary to be a
Restricted Subsidiary; provided that such designation shall be deemed to be an
incurrence of Indebtedness by a Restricted Subsidiary of the Borrower of any
outstanding Indebtedness of such Unrestricted Subsidiary and such designation
shall only be permitted if no Default or Event of Default would be in
existence following such designation.
"Voting Stock" means any class or classes of Capital Stock pursuant
to which the holders thereof have the general voting power under ordinary
circumstances to elect at least a majority of the board of directors, managers
or trustees of any Person (irrespective of whether or not, at the time, stock
of any other class or classes shall have, or might have, voting power by
reason of the happening of any contingency).
37
"Waiver" means an agreement in favor of the Agents for the benefit of
the Lenders in form and substance reasonably satisfactory to the Agents.
"Warrants" is defined in clause (a) of the fourth recital.
"Welfare Plan" means a "welfare plan", as such term is defined in
section 3(1) of ERISA, and to which the Borrower has any liability.
"wholly-owned Subsidiary" shall mean, with respect to any Person, any
Subsidiary of such Person all of the Capital Stock (and all rights and options
to purchase such Capital Stock) of which, other than directors' qualifying
shares, are owned, beneficially and of record, by such Person and/or one or
more wholly-owned Subsidiaries of such Person.
SECTION 1.2. Use of Defined Terms. Unless otherwise defined or the
context otherwise requires, terms for which meanings are provided in this
Agreement shall have such meanings when used in the Disclosure Schedule and in
each other Loan Document, notice and other communication delivered from time
to time in connection with this Agreement or any other Loan Document.
SECTION 1.3. Cross-References. Unless otherwise specified, references
in this Agreement and in each other Loan Document to any Article or Section
are references to such Article or Section of this Agreement or such other Loan
Document, as the case may be, and, unless otherwise specified, references in
any Article, Section or definition to any clause are references to such clause
of such Article, Section or definition.
SECTION 1.4. Accounting and Financial Determinations.
(a) Unless otherwise specified, all accounting terms used herein or
in any other Loan Document shall be interpreted, all accounting determinations
and computations hereunder or thereunder (including under Section 7.2.4) shall
be made, and all financial statements required to be delivered hereunder or
thereunder shall be prepared in accordance with, those generally accepted
accounting principles ("GAAP"), as in effect on June 30, 1996 and, unless
otherwise expressly provided herein, shall be computed or determined on a
consolidated basis and without duplication.
(b) For purposes of computing the Fixed Charge Coverage Ratio,
Interest Coverage Ratio and Leverage Ratio as of the end of any Fiscal
Quarter, (i) the Adjusted EBITDA (determined without regard to this clause
(b)) for the period of four Fiscal Quarters ending at the end of such Fiscal
Quarter shall include (a) Adjusted EBITDA for such period of four Fiscal
Quarters plus or minus (b) with respect to any business or assets that have
been acquired by the Borrower or any of its Restricted Subsidiaries, including
through mergers or consolidations, after the first day of such period of four
Fiscal Quarters and prior to the end of such period, the result of (1)
Adjusted
38
EBITDA of such business or assets for the most recent three-month period prior
to such acquisition for which internal financial statements in respect of such
acquired business or assets are available times four multiplied by (2) a
fraction the numerator of which is 365 (or, in the case of a leap year, 366)
minus the number of days during the relevant period of four Fiscal Quarters
for which the results of operations of such business or assets were included
in clause (a) of this sentence and the denominator of which is 365 (or, in the
case of a leap year, 366), (ii) the acquisition of any business or assets that
has been made by the Borrower or any of its Restricted Subsidiaries, including
through mergers or consolidations and including any related financing
transactions after the first day of the applicable period of four Fiscal
Quarters and on or prior to the end of such period, shall give pro forma
effect to financing transactions (including the incurrence of Assumed Debt) in
connection with the acquisition of such business or assets, as if such
acquisition had occurred at the beginning of the applicable period of four
Fiscal Quarters and (iii) Adjusted EBITDA and expenses attributable to
discounted operations as determined in accordance with GAAP, and operations,
businesses and assets disposed of prior to the end of such period of four
Fiscal Quarters, shall be excluded. For purposes of the foregoing clause (i),
Adjusted EBITDA attributable to any business or assets acquired by the
Borrower or any Restricted Subsidiary shall be calculated utilizing the actual
revenues attributable to such business or assets for the applicable
three-month period and the expenses that would have been attributable to such
business or assets had the Borrower acquired such business or assets at the
beginning of the applicable three-month period, as determined in good faith by
the Borrower, taking into account the Borrower's historical expenses in
connection with the provision of similar services for similar equipment under
similar contracts. If since the beginning of the applicable period of four
Fiscal Quarters any Person (that subsequently becomes a Restricted Subsidiary
or was merged with or into the Borrower or any Restricted Subsidiary since the
beginning of such period) shall have made or engaged in any Investment,
disposition of operations, businesses or assets, or merger or consolidation,
or shall have discontinued any operations or acquired any business or assets
that would have required adjustment of the Fixed Charge Ratio, Interest
Coverage Ratio or Leverage Ratio pursuant to this subsection (b) had such
Person been a Restricted Subsidiary at the time of such Investment,
disposition, merger, consolidation, discontinued operation or acquisition,
then the Fixed Charge Coverage Ratio, Interest Coverage Ratio and Leverage
Rates shall be calculated giving pro forma effect thereto for such period as
if such Investment, acquisition, disposition, merger, consolidation or
discontinued operation had occurred at the beginning of the applicable period
of four Fiscal Quarters.
39
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES,
NOTES AND LETTERS OF CREDIT
SECTION 2.1. Commitments. On the terms and subject to the conditions
of this Agreement (including Sections 2.1.5, 2.1.6 and Article V),
(a) each Lender severally agrees to make Loans (other than
Swing Line Loans) pursuant to the Commitments and the Swing Line
Lender agrees to make Swing Line Loans pursuant to the Swing Line
Loan Commitment, in each case as described in this Section 2.1; and
(b) each Issuer severally agrees that it will issue Letters
of Credit pursuant to Section 2.1.3, and each other Lender that has a
Revolving Loan Commitment severally agrees that it will purchase
participation interests in such Letters of Credit pursuant to Section
2.6.1.
SECTION 2.1.1. Term Loan Commitments. Subject to compliance by the
Borrower with the terms of Sections 2.1.5, 5.1 and 5.2, on (but solely on) the
Closing Date (which shall be a Business Day), each Lender that has a
Percentage in excess of zero of the Term-A Loan Commitment, the Term-B Loan
Commitment or the Term-C Loan Commitment, as applicable,
(a) will make loans (relative to such Lender, its "Term-A
Loans") to the Borrower equal to such Lender's Percentage of the
aggregate amount of the Borrowing or Borrowings of Term-A Loans
requested by the Borrower to be made on the Closing Date (with the
commitment of each such Lender described in this clause (a) herein
referred to as its "Term-A Loan Commitment");
(b) will make loans (relative to such Lender, its "Term-B
Loans") to the Borrower equal to such Lender's Percentage of the
aggregate amount of the Borrowing or Borrowings of Term-B Loans
requested by the Borrower to be made on the Closing Date (with the
commitment of each such Lender described in this clause (b) herein
referred to as its "Term-B Loan Commitment"); and
(c) will make loans (relative to such Lender, its "Term-C
Loans") to the Borrower equal to such Lender's Percentage of the
aggregate amount of the Borrowing or Borrowings of Term-C Loans
requested by the Borrower to be made on the Closing Date (with the
commitment of each such Lender described in this clause (c) herein
referred to as its "Term-C Loan Commitment").
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No amounts paid or prepaid with respect to Term-A Loans, Term-B Loans or
Term-C Loans may be reborrowed.
SECTION 2.1.2. Revolving Loan Commitment and Swing Line Loan
Commitment. Subject to compliance by the Borrower with the terms of Section
2.1.5, Section 5.1 and Section 5.2, from time to time on any Business Day
occurring concurrently with (or after) the making of the Term Loans but prior
to the Revolving Loan Commitment Termination Date,
(a) each Lender that has a Percentage of the Revolving Loan
Commitment in excess of zero will make loans (relative to such
Lender, its "Revolving Loans") to the Borrower equal to such Lender's
Percentage of the aggregate amount of the Borrowing or Borrowings of
Revolving Loans requested by the Borrower to be made on such day. The
Commitment of each Lender described in this Section 2.1.2 is herein
referred to as its "Revolving Loan Commitment". On the terms and
subject to the conditions hereof, the Borrower may from time to time
borrow, prepay and reborrow Revolving Loans.
(b) the Swing Line Lender will make a loan (a "Swing Line
Loan") to the Borrower equal to the principal amount of the Swing
Line Loan requested by the Borrower to be made on such day. The
Commitment of the Swing Line Lender described in this clause (b) is
herein referred to as its "Swing Line Loan Commitment". On the terms
and subject to the conditions hereof, the Borrower may from time to
time borrow, prepay and reborrow Swing Line Loans.
(c) At any time that no Default has occurred and is
continuing, the Borrower may notify the Agents that the Borrower is
requesting that, on the terms and subject to the conditions contained
in this Agreement, the Lenders and/or other lenders not then a party
to this Agreement provide up to an aggregate amount of $50,000,000 in
additional Revolving Loan Commitments. Upon receipt of such notice,
the Syndication Agent shall use its best commercially reasonable
efforts to arrange for the Lenders or other financial institutions to
provide such additional Revolving Loan Commitments; provided that the
Syndication Agent will first offer each of the Lenders that then has
a Percentage of the Revolving Loan Commitment a pro rata portion of
any such additional Revolving Loan Commitment. Alternatively, any
Lender may commit to provide the full amount of the requested
additional Revolving Loan Commitment and then offer portions of such
additional Revolving Loan Commitment to the other Lenders or other
financial institutions, subject to the proviso to the immediately
preceding sentence. Nothing contained in this clause (c) or otherwise
in this Agreement is intended to commit any Lender or any Agent to
provide any portion of any such additional Revolving Loan
Commitments. If and to the extent that any Lenders and/or other
lenders agree, in their sole discretion, to provide any such
additional Revolving Loan Commitments, (i) the Revolving Loan
Commitment Amount shall be increased by the amount of the additional
Revolving Loan Commitments agreed to be so provided, (ii) the
Percentages of the
41
respective Lenders in respect of the Revolving Loan Commitment shall
be proportionally adjusted, (iii) at such time and in such manner as
the Borrower and the Syndication Agent shall agree (it being
understood that the Borrower and the Agents will use their best
commercially reasonable efforts to avoid the prepayment or
assignment of any LIBO Rate Loan on a day other than the last day of
the Interest Period applicable thereto), the Lenders shall assign
and assume outstanding Revolving Loans and participations in
outstanding Letters of Credit so as to cause the amounts of such
Revolving Loans and participations in Letters of Credit held by each
Lender to conform to the respective Percentages of the Revolving
Loan Commitment of the Lenders and (iv) the Borrower shall execute
and deliver any additional Notes or other amendments or
modifications to this Agreement or any other Loan Document as the
Agents may reasonably request.
SECTION 2.1.3. Letter of Credit Commitment. Subject to compliance by
the Borrower with the terms of Section 2.1.6, Section 5.1 and Section 5.2,
from time to time on any Business Day occurring concurrently with (or after)
the Closing Date but prior to the Revolving Loan Commitment Termination Date,
the Issuer will (i) issue one or more standby or commercial letters of credit
(each referred to as a "Letter of Credit") for the account of the Borrower in
the Stated Amount requested by the Borrower on such day, or (ii) extend the
Stated Expiry Date of an existing standby or commercial Letter of Credit
previously issued hereunder to a date not later than the earlier of (x) the
sixth anniversary of the Closing Date and (y) one year from the date of such
extension; provided that, notwithstanding the terms of clause (ii) above, a
Letter of Credit may, if required by the beneficiary thereof, contain
"evergreen" provisions pursuant to which the Stated Expiry Date shall be
automatically extended, unless notice to the contrary shall have been given to
the beneficiary by the Issuer or the account party more than a specified
period prior to the then existing Stated Expiry Date.
SECTION 2.1.4. Lenders Not Permitted or Required to Make the Loans.
No Lender shall be permitted or required to, and the Borrower shall not
request any Lender to, make
(a) any Term-A Loan, Term-B Loan or Term-C Loan (as the case
may be) if, after giving effect thereto, the aggregate original
principal amount of all the Term-A Loans, Term-B Loans or Term-C
Loans (as the case may be) of such Lender would exceed such Lender's
Percentage of the Term-A Loan Commitment Amount (in the case of
Term-A Loans), the Term-B Loan Commitment Amount (in the case of
Term-B Loans) or the Term-C Loan Commitment Amount (in the case of
Term-C Loans);
(b) any Revolving Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all the Revolving Loans of
such Lender, together with such Lender's Percentage of the aggregate
amount of all Letter of Credit Outstandings, and such Lender's
Percentage of the outstanding principal amount of all Swing Line
Loans, would exceed such Lender's Percentage of the lesser of (x) the
Revolving Loan Commitment Amount and (y) the then applicable
Borrowing Base Amount; or
42
(c) any Swing Line Loan if, after giving effect thereto, the
aggregate outstanding principal amount of all Swing Line Loans would
exceed the Swing Line Loan Commitment Amount.
SECTION 2.1.5. Issuer Not Permitted or Required to Issue Letters of
Credit. No Issuer shall be permitted or required to issue any Letter of Credit
if, after giving effect thereto, (a) the aggregate amount of all Letter of
Credit Outstandings would exceed the Letter of Credit Commitment Amount or (b)
the sum of the aggregate amount of all Letter of Credit Outstandings plus the
aggregate principal amount of all Revolving Loans and Swing Line Loans then
outstanding would exceed the lesser of (x) the Revolving Loan Commitment
Amount and (y) the then applicable Borrowing Base Amount.
SECTION 2.2. Reduction of the Commitment Amounts. The Commitment
Amounts are subject to reductions from time to time pursuant to this Section
2.2.
SECTION 2.2.1. Optional. The Borrower may, from time to time on any
Business Day occurring after the time of the initial Credit Extension
hereunder, voluntarily reduce the Revolving Loan Commitment Amount; provided,
however, that all such reductions shall require at least three Business Days'
prior notice to the Administrative Agent and be permanent, and any partial
reduction of any Commitment Amount shall be in an aggregate amount of $500,000
or any larger integral multiple of $100,000. Any such reduction of the
Revolving Loan Commitment Amount which reduces the Revolving Loan Commitment
Amount below the Letter of Credit Commitment Amount or the Swing Line Loan
Commitment Amount shall result in an automatic and corresponding reduction of
the Letter of Credit Commitment Amount or the Swing Line Loan Commitment
Amount, as the case may be, to an aggregate amount not in excess of the
Revolving Loan Commitment Amount, as so reduced, without any further action on
the part of the Issuer or the Swing Line Lender.
SECTION 2.2.2. Mandatory. Following the prepayment in full of the
Term Loans, the Revolving Loan Commitment Amount shall, without any further
action, automatically and permanently be reduced on the date the Term Loans
would otherwise have been required to be prepaid on account of any Net
Disposition Proceeds, Net Debt Proceeds, Excess Cash Flow, Net Equity Proceeds
or Casualty Proceeds, in an amount equal to the amount by which the Term Loans
would otherwise have been required to be prepaid if Term Loans had been
outstanding. Any such reduction of the Revolving Loan Commitment Amount which
reduces the Revolving Loan Commitment Amount below the Letter of Credit
Commitment Amount or the Swing Line Loan Commitment Amount shall result in an
automatic and corresponding reduction of the Letter of Credit Commitment
Amount or the Swing Line Loan Commitment Amount, as the case may be, to an
aggregate amount not in excess of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of the Issuer or the Swing
Line Lender.
43
SECTION 2.3. Borrowing Procedures and Funding Maintenance. Loans
(other than Swing Line Loans) shall be made by the Lenders in accordance with
Section 2.3.1, and Swing Line Loans shall be made by the Swing Line Lender in
accordance with Section 2.3.2.
SECTION 2.3.1. Term Loans and Revolving Loans. By delivering a
Borrowing Request to the Administrative Agent on or before 12:00 noon, New
York time, on a Business Day, the Borrower may from time to time irrevocably
request, on not less than one Business Day's notice (in the case of Base Rate
Loans) or three Business Days' notice (in the case of LIBO Rate Loans) nor
more than five Business Days' notice (in the case of any Loans), that a
Borrowing be made in an aggregate amount of $500,000 or any larger integral
multiple of $100,000, or in the unused amount of the applicable Commitment. No
Borrowing Request shall be required, and the minimum aggregate amounts
specified under this Section 2.3.1 shall not apply, in the case of Revolving
Loans made under clause (b) of Section 2.3.2 to refund Refunded Swing Line
Loans or deemed made under Section 2.6.2 in respect of unreimbursed
Disbursements. On the terms and subject to the conditions of this Agreement,
each Borrowing shall be comprised of the type of Loans, and shall be made on
the Business Day, specified in such Borrowing Request. On or before 11:00
a.m., New York time, on such Business Day each Lender shall deposit with the
Administrative Agent same day funds in an amount equal to such Lender's
Percentage of the requested Borrowing. Such deposit will be made to an account
which the Administrative Agent shall specify from time to time by notice to
the Lenders. To the extent funds are received from the Lenders, the
Administrative Agent shall make such funds available to the Borrower by wire
transfer to the accounts the Borrower shall have specified in its Borrowing
Request. No Lender's obligation to make any Loan shall be affected by any
other Lender's failure to make any Loan.
SECTION 2.3.2. Swing Line Loans. (a) By telephonic notice, promptly
followed (within one Business Day) by the delivery of a confirming Borrowing
Request, to the Swing Line Lender on or before 1:00 p.m., New York City time,
on the Business Day the proposed Swing Line Loan is to be made, the Borrower
may from time to time irrevocably request that a Swing Line Loan be made by
the Swing Line Lender in a minimum principal amount of $50,000 or any larger
integral multiple of $10,000. All Swing Line Loans shall be made as Base Rate
Loans and shall not be entitled to be converted into LIBO Rate Loans. The
proceeds of each Swing Line Loan shall be made available by the Swing Line
Lender, by 2:00 p.m., New York City time, on the Business Day telephonic
notice is received by it as provided in this clause (a), to the Borrower by
wire transfer to the account the Borrower shall have specified in its notice
therefor.
(b) If (i) any Swing Line Loan shall be outstanding for more than
four Business Days or (ii) any Default shall occur and be continuing, each
Lender with a Revolving Loan Commitment (other than the Swing Line Lender)
irrevocably agrees that it will, at the request of the Swing Line Lender and
upon notice from the Administrative Agent, unless such Swing Line Loan shall
have been earlier repaid in full, make a Revolving Loan (which shall initially
be funded as a Base Rate Loan) in an amount equal to such Lender's Percentage
of the aggregate principal amount of
44
all such Swing Line Loans then outstanding (such outstanding Swing Line Loans
hereinafter referred to as the "Refunded Swing Line Loans"); provided, that
the Swing Line Lender shall not request, and no Lender with a Revolving Loan
Commitment shall make, any Refunded Swing Line Loan if, after giving effect to
the making of such Refunded Swing Line Loan, the sum of all Swing Line Loans
and Revolving Loans made by such Lender, plus such Lender's Percentage of the
aggregate amount of all Letter of Credit Outstandings, would exceed such
Lender's Percentage of the then existing Revolving Loan Commitment Amount. On
or before 12:00 noon (New York time) on the first Business Day following
receipt by each Lender of a request to make Revolving Loans as provided in the
preceding sentence, each such Lender with a Revolving Loan Commitment shall
deposit in an account specified by the Swing Line Lender the amount so
requested in same day funds and such funds shall be applied by the Swing Line
Lender to repay the Refunded Swing Line Loans. At the time the aforementioned
Lenders make the above referenced Revolving Loans, the Swing Line Lender shall
be deemed to have made, in consideration of the making of the Refunded Swing
Line Loans, a Revolving Loan in an amount equal to the Swing Line Lender's
Percentage of the aggregate principal amount of the Refunded Swing Line Loans.
Upon the making (or deemed making, in the case of the Swing Line Lender) of
any Revolving Loans pursuant to this clause (b), the amount so funded shall
become outstanding under such Lender's Revolving Note and shall no longer be
owed under the Swing Line Note. All interest payable with respect to any
Revolving Loans made (or deemed made, in the case of the Swing Line Lender)
pursuant to this clause (b) shall be appropriately adjusted to reflect the
period of time during which the Swing Line Lender had outstanding Swing Line
Loans in respect of which such Revolving Loans were made. Each Lender's
obligation (in the case of Lenders with a Revolving Loan Commitment) to make
the Revolving Loans referred to in this clause (b) shall be absolute and
unconditional and shall not be affected by any circumstance, including,
without limitation, (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swing Line Lender, the
Borrower or any other Person for any reason whatsoever; (ii) the occurrence or
continuance of any Default; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) the acceleration or maturity of
any Loans or the termination of any Commitment after the making of any Swing
Line Loan; (v) any breach of this Agreement or any other Loan Document by the
Borrower or any Lender; or (vi) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.
SECTION 2.4. Continuation and Conversion Elections. By delivering a
Continuation/Conversion Notice to the Administrative Agent on or before 12:00
noon, New York time, on a Business Day, the Borrower may from time to time
irrevocably elect, on not less than one Business Day's notice (in the case of
a conversion of LIBO Rate Loans to Base Rate Loans) or three Business Days'
notice (in the case of a continuation of LIBO Rate Loans or a conversion of
Base Rate Loans into LIBO Rate Loans) nor more than five Business Days' notice
(in the case of any Loans) that all, or any portion in a minimum amount of
$500,000 or any larger integral multiple of $100,000, be, in the case of Base
Rate Loans, converted into LIBO Rate Loans or, in the case of LIBO Rate Loans,
converted into Base Rate Loans or continued as
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LIBO Rate Loans (in the absence of delivery of a Continuation/Conversion
Notice with respect to any LIBO Rate Loan at least three Business Days before
the last day of the then current Interest Period with respect thereto, such
LIBO Rate Loan shall, on such last day, automatically convert to a Base Rate
Loan); provided, however, that (x) each such conversion or continuation shall
be pro rated among the applicable outstanding Loans of the relevant Lenders,
and (y) no portion of the outstanding principal amount of any Loans may be
continued as, or be converted into, LIBO Rate Loans when any Default has
occurred and is continuing.
SECTION 2.5. Funding. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing
one of its foreign branches or Affiliates (or an international banking
facility created by such Lender) to make or maintain such LIBO Rate Loan, so
long as such action does not result in increased costs to the Borrower;
provided, however, that such LIBO Rate Loan shall nonetheless be deemed to
have been made and to be held by such Lender, and the obligation of the
Borrower to repay such LIBO Rate Loan shall nevertheless be to such Lender for
the account of such foreign branch, Affiliate or international banking
facility; and provided, further, however, that, except for purposes of
determining whether any such increased costs are payable by the Borrower, such
Lender shall cause such foreign branch, Affiliate or international banking
facility to comply with the applicable provisions of clause (b) of Section 4.6
with respect to such LIBO Rate Loan. In addition, the Borrower hereby consents
and agrees that, for purposes of any determination to be made for purposes of
Section 4.1, 4.2, 4.3 or 4.4, it shall be conclusively assumed that each
Lender elected to fund all LIBO Rate Loans by purchasing Dollar deposits in
its LIBOR Office's interbank Eurodollar market.
SECTION 2.6. Issuance Procedures. By delivering to the Administrative
Agent an Issuance Request on or before 12:00 noon, New York time, on a
Business Day, the Borrower may, from time to time irrevocably request, on not
less than three nor more than ten Business Days' notice (or such shorter or
longer notice as may be acceptable to the Issuer), in the case of an initial
issuance of a Letter of Credit, and not less than three nor more than ten
Business Days' notice (unless a shorter or longer notice period is acceptable
to the Issuer) prior to the then existing Stated Expiry Date of a Letter of
Credit, in the case of a request for the extension of the Stated Expiry Date
of a Letter of Credit, that the Issuer issue, or extend the Stated Expiry Date
of, as the case may be, an irrevocable Letter of Credit on behalf of the
Borrower (whether issued for the account of or on behalf of the Borrower or
any of its Subsidiaries) in such form as may be requested by the Borrower and
approved by the Issuer, for the purposes described in Section 7.1.9.
Notwithstanding anything to the contrary contained herein or in any separate
application for any Letter of Credit, the Borrower hereby acknowledges and
agrees that it shall be obligated to reimburse the Issuer upon each
Disbursement paid under a Letter of Credit, and it shall be deemed to be the
obligor for purposes of each such Letter of Credit issued hereunder (whether
the account party on such Letter of Credit is the Borrower or a Subsidiary of
the Borrower). Upon receipt of an Issuance Request, the Administrative Agent
shall promptly notify the Issuer and each Lender thereof. Each Letter of
Credit shall by its terms be stated to expire on
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a date (its "Stated Expiry Date") no later than the earlier to occur of (i)
the sixth anniversary of the Closing Date or (ii) one year from the date of
its issuance; provided that, notwithstanding the terms of clause (ii) above, a
Letter of Credit may, if required by the beneficiary thereof, contain
"evergreen" provisions pursuant to which the Stated Expiry Date shall be
automatically extended, unless notice to the contrary shall have been given to
the beneficiary by the Issuer or the account party more than a specified
period prior to the then existing Stated Expiry Date. The Issuer will make
available to the beneficiary thereof the original of each Letter of Credit
which it issues hereunder.
SECTION 2.6.1. Other Lenders' Participation. Upon the issuance of
each Letter of Credit issued by the Issuer pursuant hereto, and without
further action, each Lender (other than the Issuer) that has a Revolving Loan
Commitment shall be deemed to have irrevocably purchased from the Issuer, to
the extent of its Percentage in respect of Revolving Loans, and the Issuer
shall be deemed to have irrevocably granted and sold to such Lender a
participation interest in such Letter of Credit (including the Contingent
Liability and any Reimbursement Obligation and all rights with respect
thereto), and such Lender shall, to the extent of its Percentage in respect of
Revolving Loans, be responsible for reimbursing promptly (and in any event
within one Business Day) the Issuer for Reimbursement Obligations which have
not been reimbursed by the Borrower in accordance with Section 2.6.3. In
addition, such Lender shall, to the extent of its Percentage in respect of
Revolving Loans, be entitled to receive a ratable portion of the Letter of
Credit fees payable pursuant to Section 3.3.3 with respect to each Letter of
Credit and of interest payable pursuant to Section 3.2 with respect to any
Reimbursement Obligation. To the extent that any Lender has reimbursed the
Issuer for a Disbursement as required by this Section, such Lender shall be
entitled to receive its ratable portion of any amounts subsequently received
(from the Borrower or otherwise) in respect of such Disbursement.
SECTION 2.6.2. Disbursements; Conversion to Revolving Loans. The
Issuer will notify the Borrower and the Administrative Agent promptly of the
presentment for payment of any drawing under any Letter of Credit issued by
the Issuer, together with notice of the date (the "Disbursement Date") such
payment shall be made (each such payment, a "Disbursement"). Subject to the
terms and provisions of such Letter of Credit and this Agreement, the Issuer
shall make such payment to the beneficiary (or its designee) of such Letter of
Credit. Prior to 12:30 p.m., New York time, on the first Business Day
following the Disbursement Date (the "Disbursement Due Date"), the Borrower
will reimburse the Administrative Agent, for the account of the Issuer, for
all amounts which the Issuer has disbursed under such Letter of Credit,
together with interest thereon at the rate per annum otherwise applicable to
Revolving Loans (made as Base Rate Loans) from and including the Disbursement
Date to but excluding the Disbursement Due Date and, thereafter (unless such
Disbursement is converted into a Base Rate Loan on the Disbursement Due Date),
at a rate per annum equal to the rate per annum then in effect with respect to
overdue Revolving Loans (made as Base Rate Loans) pursuant to Section 3.2.2
for the period from the Disbursement Due Date through the date of such
reimbursement; provided, however, that, if no Default shall have then occurred
and be continuing, unless the
47
Borrower has notified the Administrative Agent no later than one Business
Day prior to the Disbursement Due Date that it will reimburse the Issuer for
the applicable Disbursement, then the amount of the Disbursement shall be
deemed to be a Borrowing of Revolving Loans constituting Base Rate Loans and
following the giving of notice thereof by the Administrative Agent to the
Lenders, each Lender with a Revolving Loan Commitment (other than the Issuer)
will deliver to the Issuer on the Disbursement Due Date immediately available
funds in an amount equal to such Lender's Percentage of such Borrowing. Each
conversion of Disbursement amounts into Revolving Loans shall constitute a
representation and warranty by the Borrower that on the date of the making of
such Revolving Loans all of the statements set forth in Section 5.2.1 are true
and correct.
SECTION 2.6.3. Reimbursement. The obligation (a "Reimbursement
Obligation") of the Borrower under Section 2.6.2 to reimburse the Issuer with
respect to each Disbursement (including interest thereon) not converted into a
Base Rate Loan pursuant to Section 2.6.2, and, upon the Borrower failing or
electing not to reimburse the Issuer and the giving of notice thereof by the
Administrative Agent to the Lenders, each Lender's (to the extent it has a
Revolving Loan Commitment) obligation under Section 2.6.1 to reimburse the
Issuer or fund its Percentage of any Disbursement converted into a Base Rate
Loan, shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment which the
Borrower or such Lender, as the case may be, may have or have had against the
Issuer or any such Lender, including any defense based upon the failure of any
Disbursement to conform to the terms of the applicable Letter of Credit (if,
in the Issuer's good faith opinion, such Disbursement is determined to be
appropriate) or any non-application or misapplication by the beneficiary of
the proceeds of such Letter of Credit; provided, however, that after paying in
full its Reimbursement Obligation hereunder, nothing herein shall adversely
affect the right of the Borrower or such Lender, as the case may be, to
commence any proceeding against the Issuer for any wrongful Disbursement made
by the Issuer under a Letter of Credit as a result of acts or omissions
constituting gross negligence or willful misconduct on the part of the Issuer.
SECTION 2.6.4. Deemed Disbursements. Upon the occurrence and during
the continuation of any Event of Default of the type described in clauses (b)
through (d) of Section 8.1.9 with respect to any Obligor (other than
immaterial Subsidiaries) or, with notice from the Administrative Agent acting
at the direction of the Required Lenders, upon the occurrence and during the
continuation of any other Event of Default,
(a) an amount equal to that portion of all Letter of Credit
Outstandings attributable to the then aggregate amount which is
undrawn and available under all Letters of Credit issued and
outstanding shall, without demand upon or notice to the Borrower or
any other Person, be deemed to have been paid or disbursed by the
Issuer under such Letters of Credit (notwithstanding that such
amount may not in fact have been so paid or disbursed); and
48
(b) upon notification by the Administrative Agent to the
Borrower of its obligations under this Section, the Borrower shall
be immediately obligated to reimburse the Issuer for the amount
deemed to have been so paid or disbursed by the Issuer.
Any amounts so payable by the Borrower pursuant to this Section shall be
deposited in cash with the Administrative Agent and held as collateral
security for the Obligations in connection with the Letters of Credit issued
by the Issuer. At such time as the Events of Default giving rise to the deemed
disbursements hereunder shall have been cured or waived, the Administrative
Agent shall return to the Borrower all amounts then on deposit with the
Administrative Agent pursuant to this Section, together with accrued interest
at the Federal Funds Rate, which have not been applied to the satisfaction of
such Obligations.
SECTION 2.6.5. Nature of Reimbursement Obligations. The Borrower and,
to the extent set forth in Section 2.6.1, each Lender with a Revolving Loan
Commitment, shall assume all risks of the acts, omissions or misuse of any
Letter of Credit by the beneficiary thereof. The Issuer (except to the extent
of its own gross negligence or willful misconduct) shall not be responsible
for:
(a) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any Letter of Credit or any document submitted by
any party in connection with the application for and issuance of a
Letter of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness
or legal effect of any instrument transferring or assigning or
purporting to transfer or assign a Letter of Credit or the rights or
benefits thereunder or the proceeds thereof in whole or in part,
which may prove to be invalid or ineffective for any reason;
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission
or delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or
(e) any loss or delay in the transmission or otherwise of
any document or draft required in order to make a Disbursement under
a Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of
the rights or powers granted to the Issuer or any Lender with a Revolving Loan
Commitment hereunder. In furtherance and extension and not in limitation or
derogation of any of the foregoing, any action taken or omitted to be taken by
the Issuer in good faith (and not constituting gross negligence or willful
misconduct) shall be binding upon the Borrower, each Obligor and each such
Lender, and
49
shall not put the Issuer under any resulting liability to the Borrower, any
Obligor or any such Lender, as the case may be.
SECTION 2.7. Register; Notes.
(a) Each Lender may maintain in accordance with its usual
practice an account or accounts evidencing the Indebtedness of the
Borrower to such Lender resulting from each Loan made by such Lender,
including the amounts of principal and interest payable and paid to
such Lender from time to time hereunder. In the case of a Lender that
does not request, pursuant to clause (b)(ii) below, execution and
delivery of a Note evidencing the Loans made by such Lender to the
Borrower, such account or accounts shall, to the extent not
inconsistent with the notations made by the Administrative Agent in
the Register, be conclusive and binding on the Borrower absent
manifest error; provided, however, that the failure of any Lender to
maintain such account or accounts shall not limit or otherwise affect
any Obligations of the Borrower or any other Obligor.
(b)(i) The Borrower hereby designates the Administrative
Agent to serve as the Borrower's agent, solely for the purpose of
this clause (b), to maintain a register (the "Register") on which the
Administrative Agent will record each Administrative Lender's
Commitment, the Loans made by each Lender and each repayment in
respect of the principal amount of the Loans of each Lender and
annexed to which the Administrative Agent shall retain a copy of each
Lender Assignment Agreement delivered to the Administrative Agent
pursuant to Section 10.11.1. Failure to make any recordation, or any
error in such recordation, shall not affect the Borrower's obligation
in respect of such Loans. The entries in the Register shall be
conclusive, in the absence of manifest error, and the Borrower, the
Administrative Agent and the Lenders shall treat each Person in whose
name a Loan (and as provided in clause (ii) the Note evidencing such
Loan, if any) is registered as the owner thereof for all purposes of
this Agreement, notwithstanding notice or any provision herein to the
contrary. A Lender's Commitment and the Loans made pursuant thereto
may be assigned or otherwise transferred in whole or in part only by
registration of such assignment or transfer in the Register. Any
assignment or transfer of a Lender's Commitment or the Loans made
pursuant thereto shall be registered in the Register only upon
delivery to the Administrative Agent of a Lender Assignment Agreement
duly executed by the assignor thereof. No assignment or transfer of a
Lender's Commitment or the Loans made pursuant thereto shall be
effective unless such assignment or transfer shall have been recorded
in the Register by the Administrative Agent as provided in this
Section.
(ii) The Borrower agrees that, upon the request to the
Administrative Agent by any Lender, the Borrower will execute and
deliver to such Lender, as applicable, a Revolving Note, a Term-A
Note, a Term-B Note, a Term-C Note and a Swing Line Note evidencing
the Loans made by such Lender. The Borrower hereby irrevocably
authorizes
50
each Lender to make (or cause to be made) appropriate notations on
the grid attached to such Lender's Notes (or on any continuation of
such grid), which notations, if made, shall evidence, inter alia,
the date of, the outstanding principal amount of, and the interest
rate and Interest Period applicable to the Loans evidenced thereby.
Such notations shall, to the extent not inconsistent with the
notations made by the Administrative Agent in the Register, be
conclusive and binding on the Borrower absent manifest error;
provided, however, that the failure of any Lender to make any such
notations shall not limit or otherwise affect any Obligations of the
Borrower or any other Obligor. The Loans evidenced by any such Note
and interest thereon shall at all times (including after assignment
pursuant to Section 10.11.1) be represented by one or more Notes
payable to the order of the payee named therein and its registered
assigns. A Note and the obligation evidenced thereby may be assigned
or otherwise transferred in whole or in part only by registration of
such assignment or transfer of such Note and the obligation
evidenced thereby in the Register (and each Note shall expressly so
provide). Any assignment or transfer of all or part of an obligation
evidenced by a Note shall be registered in the Register only upon
surrender for registration of assignment or transfer of the Note
evidencing such obligation, accompanied by a Lender Assignment
Agreement duly executed by the assignor thereof, and thereupon, if
requested by the assignee, one or more new Notes shall be issued to
the designated assignee and the old Note shall be returned by the
Administrative Agent to the Borrower marked "exchanged". No
assignment of a Note and the obligation evidenced thereby shall be
effective unless it shall have been recorded in the Register by the
Administrative Agent as provided in this Section.
SECTION 2.8. Registered Notes. (a) Any Non-U.S. Lender that could
become completely exempt from withholding of any Taxes in respect of payment
of any interest due to such Non-U.S. Lender under this Agreement if the Notes
held by such Lender were in registered form for U.S. Federal income tax
purposes may request the Borrower (through the Administrative Agent), and the
Borrower agrees (i) to exchange for any Notes held by such Lender, or (ii) to
issue to such Lender on the date it becomes a Lender, promissory notes(s)
registered as provided in clause (b) of this Section 2.8 (each, a "Registered
Note", to be in substantially the form of Exhibit A-6 hereto). Registered
Notes may not be exchanged for Notes that are not Registered Notes.
(b) The Administrative Agent shall enter in the Register the name of
the registered owner of the Non-U.S. Lender's Obligation(s) evidenced by a
Registered Note.
(c) The Register shall be available for inspection by the Borrower
and any Lender at any reasonable time upon reasonable prior notice.
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ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application.
SECTION 3.1.1. Repayments and Prepayments. The Borrower shall repay
in full the unpaid principal amount of each Loan upon the Stated Maturity Date
therefor. Prior thereto, the Borrower
(a) may, from time to time on any Business Day, make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any
(i) Loans (other than Swing Line Loans); provided,
however, that
(A) any such prepayment of the Term-A Loans, Term-B
Loans or Term-C Loans shall be made pro rata among Term-A
Loans, Term-B Loans and Term-C Loans, as applicable, of
the same type and, if applicable, having the same Interest
Period of all Lenders that have made such Term-A Loans,
Term-B Loans or Term-C Loans, and any such prepayment of
Revolving Loans shall be made pro rata among the Revolving
Loans of the same type and, if applicable, having the same
Interest Period of all Lenders that have made such
Revolving Loans;
(B) the Borrower shall comply with Section 4.4 in the
event that any LIBO Rate Loan is prepaid on any day other
than the last day of the Interest Period for such Loan;
(C) all such voluntary prepayments shall require at
least one Business Day's notice in the case of Base Rate
Loans, three Business Days' notice in the case of LIBO
Rate Loans, but no more than five Business Days' notice in
the case of any Loans, in each case in writing to the
Administrative Agent; and
(D) all such voluntary partial prepayments shall be
in an aggregate amount of $500,000 or any larger integral
multiple of $100,000 or in the aggregate principal amount
of all Loans of the applicable Tranche and type then
outstanding; or
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(ii) Swing Line Loans, provided that
(A) all such voluntary prepayments shall require
prior telephonic notice to the Swing Line Lender on or
before 1:00 p.m., New York City time, on the day of such
prepayment (such notice to be confirmed in writing by the
Borrower within 24 hours thereafter); and
(B) all such voluntary partial prepayments shall be
in an aggregate amount of $50,000 and an integral multiple
of $10,000 or in the aggregate principal amount of all
Swing Line Loans then outstanding;
(b) shall, on each date when any reduction in the then
applicable Borrowing Base Amount shall become effective, make a
mandatory prepayment of Revolving Loans or all Swing Line Loans (or
both) and (if necessary) deposit with the Administrative Agent cash
collateral for Letter of Credit Outstandings, in an aggregate amount
equal to the excess, if any, of the sum of (i) the aggregate
outstanding principal amount of all Revolving Loans and Swing Line
Loans and (ii) the aggregate amount of all Letter of Credit
Outstandings over the then applicable Borrowing Base Amount;
(c) shall, no later than five Business Days following the
delivery by the Borrower of its annual audited financial reports
required pursuant to clause (b) of Section 7.1.1 (beginning with the
financial reports delivered in respect of the 1998 Fiscal Year),
deliver to the Administrative Agent a calculation of the Excess Cash
Flow for the Fiscal Year (or, in the case of the 1998 Fiscal Year,
the period from August 31, 1997 through June 30, 1998) last ended
and, no later than five Business Days following the delivery of such
calculation, make a mandatory prepayment of the Term Loans in an
amount equal to (i) 50% of the Excess Cash Flow (if any) for such
Fiscal Year (or period) less (ii) the aggregate amount of all
voluntary prepayments of the principal of the Term Loans actually
made in such Fiscal Year pursuant to clause (a) of Section 3.1.1, to
be applied as set forth in Section 3.1.2; provided, however, that no
such prepayment shall be required to be made to the extent that the
Leverage Ratio is less than 3.50:1 as of the end of the immediately
preceding Fiscal Quarter;
(d) shall, not later than one Business Day following the
receipt of any Net Disposition Proceeds or Net Debt Proceeds by the
Borrower or any of its Restricted Subsidiaries, deliver to the
Administrative Agent a calculation of the amount of such Net
Disposition Proceeds or Net Debt Proceeds, as the case may be, and,
to the extent the amount of such Net Disposition Proceeds or Net Debt
Proceeds, as the case may be, exceeds $2,500,000, make a mandatory
prepayment of the Term Loans in an amount equal to 100% of such Net
Disposition Proceeds or Net Debt Proceeds, as the case may be, to be
applied as set forth in Section 3.1.2; provided, that no mandatory
prepayment on account of such Net Disposition Proceeds shall be
required under this clause if the
53
Borrower informs the Agents no later than 30 days following the
receipt of any Net Disposition Proceeds of its or its Restricted
Subsidiary's good faith intention to apply such Net Disposition
Proceeds to the acquisition of other assets or property consistent
with the DecisionOne Business (including by way of merger or
investment) within 365 days following the receipt of such Net
Disposition Proceeds, with the amount of such Net Disposition
Proceeds unused after such 365 day period being applied to the Loans
as set forth in Section 3.1.2;
(e) shall, concurrently with the receipt of any Net Equity
Proceeds by the Borrower or any of its Restricted Subsidiaries,
deliver to the Administrative Agent a calculation of the amount of
such Net Equity Proceeds, and no later than five Business Days
following the delivery of such calculation, and, to the extent that
the amount of such Net Equity Proceeds exceeds $2,500,000, make a
mandatory prepayment of the Term Loans in an amount equal to 50% of
such Net Equity Proceeds to be applied as set forth in Section 3.1.2;
(f) shall, concurrently with the receipt by the Borrower or
any of its Restricted Subsidiaries of any Casualty Proceeds in excess
of $2,500,000 (individually or in the aggregate over the course of a
Fiscal Year), deposit such Casualty Proceeds in an account maintained
with the Administrative Agent and within 60 days following the
receipt by the Borrower or any of its Restricted Subsidiaries of such
Casualty Proceeds, direct the Administrative Agent to apply such
Casualty Proceeds to prepay the Term Loans in an amount equal to 100%
of such Casualty Proceeds, to be applied as set forth in Section
3.1.2; provided, that no mandatory prepayment on account of Casualty
Proceeds shall be required under this clause if the Borrower informs
the Agents no later than 60 days following the occurrence of the
Casualty Event resulting in such Casualty Proceeds of its or its
Restricted Subsidiary's good faith intention to apply such Casualty
Proceeds to the rebuilding or replacement of the damaged, destroyed
or condemned assets or property and in fact uses such Casualty
Proceeds to rebuild or replace the damaged, destroyed or condemned
assets or property within 365 days following the receipt of such
Casualty Proceeds, with the amount of such Casualty Proceeds unused
after such 365 day period being applied to the Loans pursuant to
Section 3.1.2;
(g) shall, on each date when any reduction in the Revolving
Loan Commitment Amount shall become effective, including pursuant to
Section 3.1.2, make a mandatory prepayment of Revolving Loans and (if
necessary) deposit with the Administrative Agent cash collateral for
Letter of Credit Outstandings in an aggregate amount equal to the
excess, if any, of the sum of (i) the aggregate outstanding principal
amount of all Revolving Loans and Swing Line Loans and (ii) the
aggregate amount of all Letter of Credit Outstandings over the
Revolving Loan Commitment Amount as so reduced;
54
(h) shall, on the Stated Maturity Date and on each Quarterly
Payment Date occurring during any period set forth below, make a
scheduled repayment of the outstanding principal amount, if any, of
Term-A Loans in an aggregate amount equal to the amount set forth
below opposite such Stated Maturity Date or period, as applicable (as
such amounts may have otherwise been reduced pursuant to this
Agreement):
SCHEDULED
PRINCIPAL
PERIOD REPAYMENT
------------------------------------- --------------------------
7/1/98 to 9/30/99 $1,950,000
------------------------------------- --------------------------
10/1/99 to 9/30/00 $4,875,000
------------------------------------- --------------------------
10/1/00 to 9/30/01 $9,750,000
------------------------------------- --------------------------
10/1/01 to 9/30/02 $12,187,500
------------------------------------- --------------------------
10/1/02 to the Sixth
Anniversary of the Closing
Date $19,500,000
------------------------------------- --------------------------
(i) shall, on the Stated Maturity Date and on each Quarterly
Payment Date occurring during any period set forth below, make a
scheduled repayment of the outstanding principal amount, if any, of
Term-B Loans in an aggregate amount equal to the amount set forth
below opposite such Stated Maturity Date or period, as applicable (as
such amounts may have otherwise been reduced pursuant to this
Agreement):
SCHEDULED
PRINCIPAL
PERIOD REPAYMENT
10/1/97 to 9/30/03 $375,000
-------------------------------------- -------------------
10/1/03 to the Seventh
Anniversary of the
Closing Date $35,250,000
-------------------------------------- -------------------
(j) shall on the Stated Maturity Date and on each Quarterly
Payment Date occurring during any period set forth below, make a
scheduled repayment of the outstanding principal amount, if any, of
Term-C Loans in an aggregate amount equal to
55
the amount set forth below opposite such Stated Maturity Date or
period, as applicable (as such amounts may have otherwise been
reduced pursuant to this Agreement):
SCHEDULED
PRINCIPAL
PERIOD REPAYMENT
-------------------------------- ------------------------------
10/1/97 to 9/30/04 $312,500
-------------------------------- ------------------------------
10/1/04 to the Eighth $29,062,500
Anniversary of the
Closing Date
-------------------------------- ------------------------------
(k) shall, immediately upon any acceleration of the Stated
Maturity Date of any Loans or Obligations pursuant to Section 8.2 or
Section 8.3, repay all outstanding Loans and other Obligations,
unless, pursuant to Section 8.3, only a portion of all Loans and
other Obligations are so accelerated (in which case the portion so
accelerated shall be so prepaid).
Each prepayment of any Loans made pursuant to this Section shall be
without premium or penalty, except as may be required by Section 4.4. No
prepayment of principal of any Revolving Loans or Swing Line Loans pursuant to
clause (a), (b) or (k) of this Section 3.1.1 shall cause a reduction in the
Revolving Loan Commitment Amount or the Swing Line Loan Commitment Amount, as
the case may be.
SECTION 3.1.2. Application. (a) Subject to clause (b) below, each
prepayment or repayment of principal of the Loans of any Tranche shall be
applied, to the extent of such prepayment or repayment, first, to the
principal amount thereof being maintained as Base Rate Loans, and second, to
the principal amount thereof being maintained as LIBO Rate Loans.
(b) Each prepayment of Term Loans made pursuant to clauses (a), (c),
(d), (e), and (f) of Section 3.1.1 shall be applied, (i) on a pro rata basis,
to the outstanding principal amount of all remaining Term-A Loans, Term-B
Loans and Term-C Loans and (ii) in respect of each Tranche of Term Loans, in
direct order of maturity of the remaining scheduled quarterly amortization
payments in respect thereof, until all such Term-A Loans, Term-B Loans and
Term-C Loans have been paid in full; provided, however, that if the Borrower
at any time elects in writing, in its sole discretion, to permit any Lender
that has Term-B Loans or Term-C Loans to decline to have such Loans prepaid,
then any Lender having Term-B Loans or Term-C Loans outstanding may, by
delivering a notice to the Agents at least one Business Day prior to the date
that such prepayment is to be made, decline to have such Loans prepaid with
the amounts set forth above, in which case 50% of the amounts that would have
been applied to a prepayment of such Lender's Term-B Loans or Term-C Loans, as
the case may be, shall instead be applied to a
56
prepayment of the Term-A Loans (until paid in full), with the balance being
retained by the Borrower.
SECTION 3.2. Interest Provisions. Interest on the outstanding
principal amount of the Loans shall accrue and be payable in accordance with
this Section 3.2.
SECTION 3.2.1. Rates.
(a) Each Base Rate Loan shall accrue interest on the unpaid
principal amount thereof for each day from and including the day upon which
such Loan was made or converted to a Base Rate Loan to but excluding the date
such Loan is repaid or converted to a LIBO Rate Loan at a rate per annum equal
to the sum of the Alternate Base Rate for such day plus the Applicable Margin
for such Loan on such day.
(b) Each LIBO Rate Loan shall accrue interest on the unpaid principal
amount thereof for each day during each Interest Period applicable thereto at
a rate per annum equal to the sum of the LIBO Rate (Reserve Adjusted) for such
Interest Period plus the Applicable Margin for such Loan on such day.
All LIBO Rate Loans shall bear interest from and including the first day of
the applicable Interest Period to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBO
Rate Loan.
SECTION 3.2.2. Post-Maturity Rates. After the date any principal
amount of any Loan shall have become due and payable (whether on the
applicable Stated Maturity Date, upon acceleration or otherwise), or any other
monetary Obligation (other than overdue Reimbursement Obligations which shall
bear interest as provided in Section 2.6.2) of the Borrower shall have become
due and payable, the Borrower shall pay, but only to the extent permitted by
law, interest (after as well as before judgment) on such amounts at a rate per
annum equal to (a) in the case of any overdue principal of Loans, overdue
interest thereon, overdue commitment fees or other overdue amounts in respect
of Loans or other obligations (or the related Commitments) under a particular
Tranche, the rate that would otherwise be applicable to Base Rate Loans under
such Tranche pursuant to Section 3.2.1 plus 2% and (b) in the case of other
overdue monetary Obligations, the rate that would otherwise be applicable to
Revolving Loans that were Base Rate Loans plus 2%.
SECTION 3.2.3. Payment Dates. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Stated Maturity Date therefor;
57
(b) in the case of a LIBO Rate Loan, on the date of any
payment or prepayment, in whole or in part, of principal outstanding
on such Loan, to the extent of the unpaid interest accrued through
such date on the principal so paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly
Payment Date occurring after the date of the initial Borrowing
hereunder;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, at intervals of three months after the first day of
such Interest Period);
(e) with respect to the principal amount of any Base Rate
Loans converted into LIBO Rate Loans on a day when interest would not
otherwise have been payable pursuant to clause (c), on the date of
such conversion; and
(f) on that portion of any Loans the Stated Maturity Date of
which is accelerated pursuant to Section 8.2 or Section 8.3,
immediately upon such acceleration.
Interest accrued on Loans, Reimbursement Obligations or other monetary
Obligations arising under this Agreement or any other Loan Document after the
date such amount is due and payable (whether on the Stated Maturity Date, upon
acceleration or otherwise) shall be payable upon demand.
SECTION 3.3. Fees. The Borrower agrees to pay the fees set forth in
this Section 3.3. All such fees shall be non-refundable.
SECTION 3.3.1. Commitment Fee. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender that has a Revolving Loan
Commitment, for each day during the period (including any portion thereof when
any of the Lenders' Revolving Loan Commitments are suspended by reason of the
Borrower's inability to satisfy any condition of Article V) commencing on the
Closing Date and continuing to but excluding the Revolving Loan Commitment
Termination Date, a commitment fee on such Lender's Percentage of the unused
portion, whether or not then available, of the Revolving Loan Commitment
Amount (net of Letter of Credit Outstandings) for such day at a rate per annum
equal to the Applicable Commitment Fee for such day. Such commitment fee shall
be payable by the Borrower in arrears on each Quarterly Payment Date,
commencing with the first such day following the Closing Date, and on the
Revolving Loan Commitment Termination Date. The making of Swing Line Loans
shall not constitute usage of the Revolving Loan Commitment with respect to
the calculation of commitment fees to be paid by the Borrower to the Lenders.
Any term or provision hereof to the contrary notwithstanding, commitment fees
payable for any period prior to the Closing Date shall be payable in
accordance with the Fee Letter. Payments by the Borrower to the Swing Line
Lender in respect of accrued interest on Swing Line Loans shall be
58
net of the commitment fee payable in respect of the Swing Line Lender's
Revolving Loan Commitment.
SECTION 3.3.2. Administrative Agent Fee. The Borrower agrees to pay
an annual administration fee to the Administrative Agent, for its own account,
in the amount set forth in the Administrative Agent's Fee Letter, payable in
advance on the Closing Date and quarterly thereafter.
SECTION 3.3.3. Letter of Credit Fee. The Borrower agrees to pay to
the Administrative Agent, for the pro rata account of the Issuer and each
other Lender that has a Revolving Loan Commitment, a Letter of Credit fee for
each day on which there shall be any Letters of Credit outstanding in an
amount equal to (i) with respect to each standby Letter of Credit, a rate per
annum equal to the then Applicable Margin for Revolving Loans maintained as
LIBO Rate Loans, minus 1/8 of 1% per annum, multiplied by the Stated Amount of
each such Letter of Credit; and (ii) with respect to each documentary Letter
of Credit, 1.25% per annum multiplied by the Stated Amount of each such Letter
of Credit, such fees being payable quarterly in arrears on each Quarterly
Payment Date. The Borrower further agrees to pay to the Issuer quarterly in
arrears on each Quarterly Payment Date, an issuance fee as specified in the
Administrative Agent's Fee Letter.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful. If any Lender shall
determine (which determination shall, upon notice thereof to the Borrower and
the Lenders, be conclusive and binding on the Borrower) that the introduction
of or any change in or in the interpretation of any law, in each case after
the date upon which such Lender shall have become a Lender hereunder, makes it
unlawful, or any central bank or other governmental authority asserts, after
such date, that it is unlawful, for such Lender to make, continue or maintain
any Loan as, or to convert any Loan into, a LIBO Rate Loan, the obligations of
such Lender to make, continue, maintain or convert any Loans as or to LIBO
Rate Loans shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing
such suspension no longer exist (with the date of such notice being the
"Reinstatement Date"), and (i) all LIBO Rate Loans previously made by such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such
law or assertion and (ii) all Loans thereafter made by such Lender and
outstanding prior to the Reinstatement Date shall be made as Base Rate Loans,
with interest thereon being payable on the same date that interest is payable
with respect to the corresponding Borrowing of LIBO Rate Loans made by Lenders
not so affected.
59
SECTION 4.2. Deposits Unavailable. If the Administrative Agent shall
have determined that (i) Dollar deposits in the relevant amount and for the
relevant Interest Period are not available to the Administrative Agent in its
relevant market, or (ii) by reason of circumstances affecting the
Administrative Agent's relevant market, adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBO Rate Loans, then,
upon notice from the Administrative Agent to the Borrower and the Lenders, the
obligations of all Lenders under Section 2.3 and Section 2.4 to make or
continue any Loans as, or to convert any Loans into, LIBO Rate Loans shall
forthwith be suspended until the Administrative Agent shall notify the
Borrower and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 4.3. Increased LIBO Rate Loan Costs, etc. The Borrower agrees
to reimburse each Lender for any increase in the cost to such Lender of, or
any reduction in the amount of any sum receivable by such Lender in respect
of, making, continuing or maintaining (or of its obligation to make, continue
or maintain) any Loans as, or of converting (or of its obligation to convert)
any Loans into, LIBO Rate Loans (excluding any amounts, whether or not
constituting Taxes, referred to in Section 4.6) arising as a result of any
change in, or the introduction, adoption, effectiveness, interpretation,
reinterpretation or phase-in of, any law or regulation, directive, guideline,
decision or request (whether or not having the force of law) of any court,
central bank, regulator or other governmental authority that occurs after the
date upon which such Lender became a Lender hereunder. Such Lender shall
promptly notify the Administrative Agent and the Borrower in writing of the
occurrence of any such event, such notice to state, in reasonable detail, the
reasons therefor and the additional amount required fully to compensate such
Lender for such increased cost or reduced amount. Such additional amounts
shall be payable by the Borrower directly to such Lender within five days of
its receipt of such notice, and such notice shall, in the absence of manifest
error, be conclusive and binding on the Borrower.
SECTION 4.4. Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such Lender
to make, continue or maintain any portion of the principal amount of any Loan
as, or to convert any portion of the principal amount of any Loan into, a LIBO
Rate Loan, but excluding any loss of margin after the date of any such
conversion, repayment, prepayment or failure to borrow, continue or convert)
as a result of (i) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loans on a date other than the scheduled last day of
the Interest Period applicable thereto, whether pursuant to Section 3.1 or
otherwise, (ii) any Loans not being borrowed as LIBO Rate Loans in accordance
with the Borrowing Request therefor, or (iii) any Loans not being continued
as, or converted into, LIBO Rate Loans in accordance with the Continuation/
Conversion Notice therefor, then, upon the written notice of such Lender to
the Borrower (with a copy to the Administrative Agent), the Borrower shall,
within five days of its receipt thereof, pay directly to such Lender such
amount as will (in the reasonable determination of such Lender) reimburse such
Lender for such loss or
60
expense. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and binding on
the Borrower.
SECTION 4.5. Increased Capital Costs. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any court, central bank, regulator
or other governmental authority, in each case occurring after the applicable
Lender becomes a Lender hereunder, affects or would affect the amount of
capital required or expected to be maintained by any Lender or any Person
controlling such Lender, and such Lender determines (in its sole and absolute
discretion) that the rate of return on its or such controlling Person's
capital as a consequence of its Commitments, participation in Letters of
Credit or the Loans made by such Lender is reduced to a level below that which
such Lender or such controlling Person could have achieved but for the
occurrence of any such circumstance, then, in any such case upon notice from
time to time by such Lender to the Borrower, the Borrower shall immediately
pay directly to such Lender additional amounts sufficient to compensate such
Lender or such controlling Person for such reduction in rate of return. A
statement of such Lender as to any such additional amount or amounts
(including calculations thereof in reasonable detail) shall, in the absence of
manifest error, be conclusive and binding on the Borrower. In determining such
amount, such Lender may use any method of averaging and attribution that it
(in its sole and absolute discretion) shall deem applicable; provided, that
such Lender may not impose materially greater costs on the Borrower than on
other similarly situated borrowers by virtue of any such averaging or
attribution method.
SECTION 4.6. Taxes. (a) All payments by the Borrower of principal of,
and interest on, the Loans and all other amounts payable hereunder (including
Reimbursement Obligations, fees and expenses) shall be made free and clear of
and without deduction for any present or future income, excise, stamp or
franchise taxes and other taxes, fees, duties, withholdings or other charges
of any nature whatsoever imposed by any taxing authority, but excluding (i)
any income, excise, stamp or franchise taxes and other similar taxes, fees,
duties, withholdings or other charges imposed on either of the Agents as a
result of a present or former connection between the applicable lending office
(or office through which it performs any of its actions as Agent) of such
Agent, and any income, excise, stamp or franchise taxes and other similar
taxes, fees, duties, withholdings or other charges imposed on any Lender as a
result of a present or former connection between the applicable lending office
of such Lender, in each case, 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 such
Agent or such Lender having executed, delivered or performed its obligations
or received a payment under, or taken any action to enforce, this Agreement
and any Note) or (ii) any income, excise, stamp or franchise taxes and other
similar taxes, fees, duties, withholdings or other charges to the extent that
they are in effect and would apply as of the date any Person becomes a Lender
or Assignee Lender, or as of the date that any Lender changes its applicable
lending office, to the extent such taxes become applicable as a result of such
change (other than a change
61
in an applicable lending office made pursuant to Section 4.10 below) (such
non-excluded items being called "Taxes"). In the event that any withholding or
deduction from any payment to be made by the Borrower hereunder is required in
respect of any Taxes pursuant to any applicable law, rule or regulation, then
the Borrower will (i) pay directly to the relevant taxing authority the full
amount required to be so withheld or deducted, (ii) promptly forward to the
Administrative Agent an official receipt or other documentation available to
the Borrower reasonably satisfactory to the Administrative Agent evidencing
such payment to such authority, and (iii) pay to the Administrative Agent for
the account of the Lenders such additional amount or amounts as is necessary
to ensure that the net amount actually received by each Lender will equal the
full amount such Lender would have received had no such withholding or
deduction been required, provided, however, that the Borrower shall not be
required to pay any such additional amounts in respect of amounts payable to
any Lender that is not organized under the laws of the United States or a
state thereof if such Lender fails to comply with the requirements of clause
(b) of Section 4.6.
Moreover, if any Taxes are directly asserted against either of the
Agents or any Lender with respect to any payment received by such Agents or
such Lender hereunder, such Agents or such Lender may pay such Taxes and the
Borrower will promptly pay to such Person such additional amount (including
any penalties, interest or expenses) as is necessary in order that the net
amount received by such Person (including any Taxes on such additional amount)
shall equal the amount of such Taxes paid by such Person; provided, however,
that the Borrower shall not be obligated to make payment to the Lenders or the
Agents (as the case may be) pursuant to this sentence in respect of penalties
or interest attributable to any Taxes, if written demand therefor has not been
made by such Lenders or the Agents within 60 days from the date on which such
Lenders or the Agents knew of the imposition of Taxes by the relevant taxing
authority or for any additional imposition which may arise from the failure of
the Lenders or the Agents to apply payments in accordance with the tax law
after the Borrower has made the payments required hereunder; provided,
further, that the Borrower shall not be required to pay any such additional
amounts in respect of any amounts payable to any Lender or the Agent (as the
case may be) that is not organized under the laws of the United States or a
state thereof to the extent the related Tax is imposed as a result of such
Lender failing to comply with the requirements of clause (b) of Section 4.6.
After the Lenders or the Agents (as the case may be) learn of the imposition
of Taxes, such Lenders and the Agents will act in good faith to notify the
Borrower of its obligations hereunder as soon as reasonably possible.
If the Borrower fails to pay any Taxes when due to the appropriate
taxing authority or fails to remit to the Administrative Agent, for the
account of the respective Lenders, the required receipts or other required
documentary evidence, the Borrower shall indemnify the Lenders for any
incremental Taxes, interest or penalties that may become payable by any Lender
as a result of any such failure.
62
(b) Each Non-U.S. Lender shall, (i) on or prior to the date of the
execution and delivery of this Agreement, in the case of each Lender listed on
the signature pages hereof, or, in the case of an Assignee Lender, on or prior
to the date it becomes a Lender, execute and deliver to the Borrower and the
Administrative Agent, two or more (as the Borrower or the Agents may
reasonably request) United States Internal Revenue Service Forms 4224 or Forms
1001 or, solely if such Lender is claiming exemption from United States
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", United States Internal Revenue Service Forms
W-8 and a certificate signed by a duly authorized officer of such Lender
representing that such Lender is not a "bank" within the meaning of Section
881(c)(3)(A) of the Code, or such other forms or documents (or successor forms
or documents), appropriately completed, establishing that payments to such
Lender are exempt from withholding or deduction of Taxes; and (ii) deliver to
the Borrower and the Administrative Agent two further copies of any such form
or documents on or before the date that any such form or document expires or
becomes obsolete and after the occurrence of any event requiring a change in
the most recent such form or document previously delivered by it to the
Borrower.
(c) If the Borrower determines in good faith that a reasonable basis
exists for contesting the imposition of a Tax with respect to a Lender or
either of the Agents, the relevant Lender or Agent, as the case may be, shall
cooperate with the Borrower in challenging such Tax at the Borrower's expense
if requested by the Borrower.
(d) If a Lender or an Agent shall receive a refund (including any
offset or credits from a taxing authority (as a result of any error in the
imposition of Taxes by such taxing authority)) of any Taxes paid by the
Borrower pursuant to subsection 4.6(a) above, such Lender or the Agent (as the
case may be) shall promptly pay the Borrower the amount so received, with
interest from the taxing authority with respect to such refund.
(e) Each Lender and each Agent agrees, to the extent reasonable and
without material cost to it, to cooperate with the Borrower to minimize any
amounts payable by the Borrower under this Section 4.6.
SECTION 4.7. Payments, Computations, etc. Unless otherwise expressly
provided, all payments by or on behalf of the Borrower pursuant to this
Agreement, the Notes or any other Loan Document shall be made by the Borrower
to the Administrative Agent for the pro rata account of the Lenders, Agents or
Arranger, as applicable, entitled to receive such payment. All such payments
required to be made to the Administrative Agent shall be made, without setoff,
deduction or counterclaim, not later than 1:00 p.m., New York time, on the
date due, in same day or immediately available funds, to such account as the
Administrative Agent shall specify from time to time by notice to the
Borrower. Funds received after that time shall be deemed to have been received
by the Administrative Agent on the next succeeding Business Day. The
Administrative Agent shall promptly remit in same day funds to each Lender,
Agent or Arranger, as the case may be, its share, if any, of such payments
received by the Administrative Agent for
63
the account of such Lender, Agent or Arranger, as the case may be. All
interest and fees shall be computed on the basis of the actual number of days
(including the first day but excluding the last day) occurring during the
period for which such interest or fee is payable over a year comprised of 360
days (or, in the case of interest on a Base Rate Loan, 365 days or, if
appropriate, 366 days). Whenever any payment to be made shall otherwise be due
on a day which is not a Business Day, such payment shall (except as otherwise
required by clause (i) of the definition of the term "Interest Period") be
made on the next succeeding Business Day and such extension of time shall be
included in computing interest and fees, if any, in connection with such
payment.
SECTION 4.8. Sharing of Payments. If any Lender shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Loan or Reimbursement Obligations
(other than pursuant to the terms of Sections 4.3, 4.4 and 4.5) in excess of
its pro rata share of payments then or therewith obtained by all Lenders
entitled thereto, such Lender shall purchase from the other Lenders such
participation in the Credit Extensions made by them as shall be necessary to
cause such purchasing Lender to share the excess payment or other recovery
ratably with each of them; provided, however, that if all or any portion of
the excess payment or other recovery is thereafter recovered from such
purchasing Lender, the purchase shall be rescinded and each Lender which has
sold a participation to the purchasing Lender shall repay to the purchasing
Lender the purchase price to the ratable extent of such recovery together with
an amount equal to such selling Lender's ratable share (according to the
proportion of (i) the amount of such selling Lender's required repayment to
the purchasing Lender in respect of such recovery, to (ii) the total amount so
recovered from the purchasing Lender) of any interest or other amount paid or
payable by the purchasing Lender in respect of the total amount so recovered.
The Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section may, to the fullest extent permitted by law,
exercise all its rights of payment (including pursuant to Section 4.9) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrower in the amount of such participation. If under any
applicable bankruptcy, insolvency or other similar law, any Lender receives a
secured claim in lieu of a setoff to which this Section applies, such Lender
shall, to the extent practicable, exercise its rights in respect of such
secured claim in a manner consistent with the rights of the Lenders entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION 4.9. Setoff. Each Lender shall, upon the occurrence of any
Event of Default described in clauses (b) through (d) of Section 8.1.9 with
respect to any Obligor (other than immaterial Subsidiaries) or, with the
consent of the Required Lenders, upon the occurrence of any other Event of
Default, to the fullest extent permitted by law, have the right to appropriate
and apply to the payment of the Obligations then due to it, and (as security
for such Obligations) the Borrower hereby grants to each Lender a continuing
security interest in, any and all balances, credits, deposits, accounts or
moneys of the Borrower then or thereafter maintained with or otherwise held by
such Lender; provided, however, that any such appropriation and application
shall be subject to the provisions of Section 4.8. Each Lender agrees promptly
to notify the
64
Borrower and the Administrative Agent after any such setoff and application
made by such Lender; provided, however, that the failure to give such notice
shall not affect the validity of such setoff and application. The rights of
each Lender under this Section are in addition to other rights and remedies
(including other rights of setoff under applicable law or otherwise) which
such Lender may have.
SECTION 4.10. Mitigation. Each Lender agrees that if it makes any
demand for payment under Sections 4.3, 4.4, 4.5, or 4.6, or if any adoption or
change of the type described in Section 4.1 shall occur with respect to it, it
will use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions and so long as such efforts would not be
disadvantageous to it, as determined in its sole discretion) to designate a
different lending office if the making of such a designation would reduce or
obviate the need for the Borrower to make payments under Section 4.3, 4.4,
4.5, or 4.6, or would eliminate or reduce the effect of any adoption or change
described in Section 4.1.
SECTION 4.11. Replacement of Lenders. Each Lender hereby severally
agrees as set forth in this Section. If any Lender (a "Subject Lender") makes
demand upon the Borrower for (or if the Borrower is otherwise required to pay)
amounts pursuant to Section 4.3, 4.5 or 4.6, or gives notice pursuant to
Section 4.1 requiring a conversion of such Subject Lender's LIBO Rate Loans to
Base Rate Loans or suspending such Lender's obligation to make Loans as, or to
convert Loans into, LIBO Rate Loans, the Borrower may, within 90 days of
receipt by the Borrower of such demand or notice (or the occurrence of such
other event causing the Borrower to be required to pay such compensation), as
the case may be, give notice (a "Replacement Notice") in writing to the Agents
and such Subject Lender of its intention to replace such Subject Lender with a
financial institution (a "Replacement Lender") designated in such Replacement
Notice. If the Agents shall, in the exercise of their reasonable discretion
and within 30 days of their receipt of such Replacement Notice, notify the
Borrower and such Subject Lender in writing that the designated financial
institution is satisfactory to the Agents (such consent not being required
where the Replacement Lender is already a Lender), then such Subject Lender
shall, subject to the payment of any amounts due pursuant to Section 4.4,
assign, in accordance with Section 10.11.1, all of its Commitments, Loans,
Notes and other rights and obligations under this Agreement and all other Loan
Documents (including, without limitation, Reimbursement Obligations) to such
designated financial institution; provided, however, that (i) such assignment
shall be without recourse, representation or warranty and shall be on terms
and conditions reasonably satisfactory to such Subject Lender and such
designated financial institution and (ii) the purchase price paid by such
designated financial institution shall be in the amount of such Subject
Lender's Loans and its Percentage of outstanding Reimbursement Obligations,
together with all accrued and unpaid interest and fees in respect thereof,
plus all other amounts (including the amounts demanded and unreimbursed under
Sections 4.3, 4.5 and 4.6), owing to such Subject Lender hereunder. Upon the
effective date of an assignment described above, the Borrower shall issue a
replacement Note or Notes, as the case may be, to
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such designated financial institution or Replacement Lender, as applicable,
and such institution shall become a "Lender" for all purposes under this
Agreement and the other Loan Documents.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension. The obligations of the Lenders
and, if applicable, the Issuer to fund the initial Credit Extension shall be
subject to the prior or concurrent satisfaction of each of the conditions
precedent set forth in this Section 5.1.
SECTION 5.1.1. Resolutions, etc. The Agents shall have received from
each Obligor a certificate, dated the date of the initial Credit Extension, of
its Secretary or Assistant Secretary as to (i) resolutions of its Board of
Directors then in full force and effect authorizing the execution, delivery
and performance of each Loan Document to be executed by it, and (ii) the
incumbency and signatures of those of its officers authorized to act with
respect to each Loan Document executed by it, upon which certificate each
Agent and each Lender may conclusively rely until it shall have received a
further certificate of the Secretary or Assistant Secretary of such Obligor
canceling or amending such prior certificate.
SECTION 5.1.2. Transaction Documents. The Agents shall have received
(with copies for each Lender that shall have expressly requested copies
thereof) copies of fully executed versions of the Transaction Documents,
certified to be true and complete copies thereof by an Authorized Officer of
the Borrower. The Merger Agreement shall be in full force and effect and shall
not have been modified or waived in any material respect, nor shall there have
been any forbearance to exercise any material rights with respect to any of
the terms or provisions relating to the conditions to the consummation of the
Merger set forth in the Merger Agreement unless otherwise agreed to by the
Required Lenders.
SECTION 5.1.3. Consummation of Merger. The Agents shall have received
evidence satisfactory to each of them that all actions necessary to consummate
the Merger (including the filing of the Certificate of Merger with the
Secretary of State of the State of Delaware) shall have been taken in
accordance with Section 251 of the Delaware General Corporation Law.
SECTION 5.1.4. Closing Date Certificate. Each of the Agents shall
have received, with counterparts for each Lender, the Closing Date
Certificate, substantially in the form of Exhibit D hereto, dated the date of
the initial Credit Extension and duly executed and delivered by the chief
executive, financial or accounting (or equivalent) Authorized Officer of the
Borrower, in which certificate the Borrower shall agree and acknowledge that
the statements made therein shall be deemed to be true and correct
representations and warranties of the Borrower made as of such
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date under this Agreement, and, at the time such certificate is delivered,
such statements shall in fact be true and correct.
SECTION 5.1.5. Delivery of Notes. The Agents shall have received, for
the account of each Lender, a Note of each applicable Tranche duly executed
and delivered by the Borrower.
SECTION 5.1.6. [Intentionally Omitted].
SECTION 5.1.7. Pledge Agreements. The Agents shall have received
executed counterparts of
(a) the Holdings Guaranty and Pledge Agreement, dated as of
the date hereof, duly executed by an Authorized Officer of Holdings,
together with the certificates evidencing all of the issued and
outstanding shares of Capital Stock of the Borrower which shall be
pledged pursuant to the Holdings Guaranty and Pledge Agreement, which
certificates shall in each case be accompanied by undated stock
powers duly executed in blank; and
(b) the Borrower Pledge Agreement, dated as of the date
hereof, duly executed by the Borrower together with (i) the
certificates evidencing all of the issued and outstanding shares of
Capital Stock of each Material Subsidiary of the Borrower which
shall be pledged pursuant to the Borrower Pledge Agreement, which
certificates shall in each case be accompanied by undated stock
powers duly executed in blank and (ii) the Intercompany Note duly
indorsed to the order of the Administrative Agent;
provided, however, that neither the Borrower nor any of its Subsidiaries shall
be required to pledge in excess of 65% of the outstanding voting stock of any
Non-U.S. Subsidiary. If any securities pledged pursuant to a Pledge Agreement
are uncertificated securities or are held through a financial intermediary,
the Administrative Agent shall have received confirmation and evidence
satisfactory to it that appropriate book entries have been made in the
relevant books or records of a financial intermediary or the issuer of such
securities, as the case may be, or other appropriate steps have been taken
under applicable law resulting in the perfection of the security interest
granted in favor of the Administrative Agent in such securities pursuant to
the terms of the applicable Pledge Agreement.
SECTION 5.1.8. Security Agreement. The Agents shall have received
executed counterparts of the Borrower Security Agreement, dated as of the date
hereof, duly executed by the Borrower or the relevant Material Subsidiaries of
the Borrower, together with
(a) executed Uniform Commercial Code financing statements
(Form UCC-1) naming the Borrower as the debtor and the Administrative
Agent as the secured party, or other similar instruments or
documents, to be filed under the Uniform Commercial Code
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of all jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the security interest of
the Administrative Agent pursuant to the Security Agreements
(provided that perfection of security interests in (i) motor vehicles
shall not be required and (ii) certain intellectual property
collateral owned as of the Closing Date by the Borrower or any of its
Subsidiaries shall be completed in accordance with Section 7.1.11);
and
(b) certified copies of Uniform Commercial Code Requests for
Information or Copies (Form UCC-11), or a similar search report
certified by a party acceptable to the Agents, dated a date
reasonably near to the date of the initial Credit Extension, listing
all effective financing statements which name the Borrower (under its
present name and any previous names) as the debtor and which are
filed in the jurisdictions in which filings were made pursuant to
clause (a) above, together with copies of such financing statements.
SECTION 5.1.9. Financial Information, etc. The Agents shall have
received, with counterparts for each Lender,
(a) the (i) audited consolidated balance sheets of DOH and its
Subsidiaries as at June 30, 1995 and June 30, 1996 and the audited
consolidated statements of operations, cash flows and stockholders'
equity for the fiscal years ended June 30, 1994, June 30, 1995 and
June 30, 1996 and (ii) unaudited consolidated balance sheet of DOH
and its Subsidiaries as at March 31, 1997 and unaudited consolidated
statements of operations, cash flows and stockholders' equity for
the nine months then ended (collectively, the "Base Financial
Statements");
(b) a pro forma consolidated balance sheet of the Borrower and
its Subsidiaries, as of March 31, 1997 (the "Pro Forma Balance
Sheet"), certified by the chief financial or accounting Authorized
Officer of the Borrower, giving effect to the consummation of the
Transaction and the contribution by Holdings of certain of its
Subsidiaries to the Borrower on May 29, 1997 and reflecting the
proposed legal and capital structure of the Borrower, which legal
and capital structure shall be satisfactory in all respects to the
Arranger and the Syndication Agent; and
(c) a Borrowing Base Certificate, dated the date of the initial
Credit Extension and calculated as of June 30, 1997, duly executed
(with all schedules thereto completed) and delivered by an
Authorized Officer of the Borrower.
SECTION 5.1.10. Solvency, etc. The Agents shall have received a
solvency certificate from the chief financial Authorized Officer of the
Borrower, dated the date of the initial Borrowing, in form and substance
satisfactory to the Agents.
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SECTION 5.1.11. Equity Issuance, Discount Debenture Issuance,
Subordinated Debt Issuance and Intercompany Loan. The Agents shall have
received evidence satisfactory to each of them that (i) the Equity Issuance
shall have been effected as described in clause (a) of the fourth recital,
(ii) MergerSub received not less than $85,000,000 in gross cash proceeds from
the Discount Debenture Issuance, (iii) the Borrower received not less than
$150,000,000 in gross cash proceeds from the Subordinated Debt Issuance, (iv)
the Borrower made Closing Date Dividend and/or the Intercompany Loan to
Holdings and (v) Holdings shall have applied the proceeds of the Equity
Issuance, the Discount Debenture Issuance and the Closing Date Dividend and/or
the Intercompany Loan to pay the cash portion of the consideration payable to
existing shareholders of DOH in connection with the Merger and related fees
and expenses or, in each case, that arrangements satisfactory to the Agents
for the making and receipt of such payments shall have been made.
SECTION 5.1.12. Litigation. There shall exist no pending or
threatened material litigation, proceedings or investigations which (x)
contests the consummation of the Transaction or (y) could reasonably be
expected to have a material adverse effect on the financial condition,
operations, assets, businesses, properties or prospects of Holdings, the
Borrower, or any of their respective Subsidiaries, taken as a whole.
SECTION 5.1.13. Material Adverse Change. There shall have occurred no
material adverse change in the financial condition, operations, assets,
business, properties or prospects of Holdings and its Subsidiaries, taken as a
whole, since June 30, 1996.
SECTION 5.1.14. Reliance Letters. The Agents shall, unless otherwise
agreed, have received reliance letters, dated the date of the making of the
initial Credit Extension and addressed to each Lender and each Agent, in
respect of each of the legal opinions (other than "disclosure" and other
similar opinions) delivered in connection with the Transaction.
SECTION 5.1.15. Opinions of Counsel. The Agents shall have received
opinions, dated the date of the initial Credit Extension and addressed to the
Agents and all Lenders from
(a) Xxxxx Xxxx & Xxxxxxxx, special New York counsel to each of
the Obligors, in substantially the form of Exhibit K-1 hereto;
(b) _________________________, special [local] counsel to the
Obligors, in substantially the form of Exhibit K-2 hereto; and
(c) __________________________, [Assistant] General Counsel of
the Borrower, in substantially the form of Exhibit K-3 hereto.
SECTION 5.1.16. Insurance. The Agents shall have received
satisfactory evidence of the existence of insurance in compliance with Section
7.1.4 (including all endorsements included
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therein), and the Administrative Agent shall be named additional insured or
loss payee, on behalf of the Lenders, pursuant to documentation reasonably
satisfactory to the Agents and the Borrower.
SECTION 5.1.17. Perfection Certificate. The Administrative Agent
shall have received the Perfection Certificate, dated as of the date of the
initial Credit Extension, duly executed and delivered by an Authorized Officer
of the Borrower.
SECTION 5.1.18. Closing Fees, Expenses, etc. The Agents and the
Arranger shall have received, each for its own respective account, or, in the
case of the Administrative Agent, for the account of each Lender, as the case
may be, all fees, costs and expenses due and payable pursuant to Sections 3.3
and 10.3, if then invoiced.
SECTION 5.1.19. Satisfactory Legal Form. All documents executed or
submitted pursuant hereto by or on behalf of the Borrower or any of its
Subsidiaries or any other Obligors shall be reasonably satisfactory in form
and substance to the Agents and their counsel; the Agents and their counsel
shall have received all information, approvals, opinions, documents or
instruments as the Agents or their counsel may reasonably request.
SECTION 5.2. All Credit Extensions. The obligation of each Lender
and, if applicable, the Issuer, to make any Credit Extension (including its
initial Credit Extension) shall be subject to the satisfaction of each of the
conditions precedent set forth in this Section 5.2.
SECTION 5.2.1. Compliance with Warranties, No Default, etc. Both
before and after giving effect to any Credit Extension the following
statements shall be true and correct:
(a) the representations and warranties set forth in Article
VI and in each other Loan Document shall, in each case, be true and
correct in all material respects with the same effect as if then made
(unless stated to relate solely to an earlier date, in which case
such representations and warranties shall be true and correct in all
material respects as of such earlier date);
(b) the sum of (i) the aggregate outstanding principal
amount of all Revolving Loans and Swing Line Loans, plus (ii) the
aggregate amount of all Letter of Credit Outstandings, does not
exceed the lesser of (x) the then existing Revolving Loan Commitment
Amount and (y) the then applicable Borrowing Base Amount; and
(c) no Default shall have then occurred and be continuing.
SECTION 5.2.2. Credit Extension Request. The Agents shall have
received a Borrowing Request if Loans are being requested, or an Issuance
Request if a Letter of Credit is being requested or extended. Each of the
delivery of a Borrowing Request or Issuance Request and the
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acceptance by the Borrower of proceeds of any Credit Extension shall
constitute a representation and warranty by the Borrower that on the date of
such Credit Extension (both immediately before and after giving effect thereto
and the application of the proceeds thereof) the statements made in Section
5.2.1 are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lenders, the Issuer and the Agents to enter
into this Agreement and to make Credit Extensions hereunder, the Borrower
represents and warrants unto the Agents, the Issuer and each Lender as set
forth in this Article VI.
SECTION 6.1. Organization, etc. The Borrower and each of its
Subsidiaries (a) is a corporation validly organized and existing and in good
standing to the extent required under the laws of the jurisdiction of its
incorporation, is duly qualified to do business and is in good standing as a
foreign corporation to the extent required under the laws of each jurisdiction
where the nature of its business requires such qualification, except to the
extent that the failure to qualify would not reasonably be expected to result
in a Material Adverse Effect, and (b) has full power and authority and holds
all requisite governmental licenses, permits and other approvals to (i) enter
into and perform its Obligations in connection with the Transaction and under
this Agreement, the Notes and each other Loan Document to which it is a party
and (ii) own and hold under lease its property and to conduct its business
substantially as currently conducted by it except, in the case of this clause
(b)(ii), where the failure to do so could not reasonably be expected to result
in a Material Adverse Effect.
SECTION 6.2. Due Authorization, Non-Contravention, etc. The
execution, delivery and performance by the Borrower of this Agreement, the
Notes and each other Loan Document executed or to be executed by it, and the
execution, delivery and performance by each other Obligor of each Loan
Document executed or to be executed by it and the Borrower's and, where
applicable, each such other Obligor's participation in the consummation of the
Transaction, are within the Borrower's and each such Obligor's corporate
powers, have been duly authorized by all necessary corporate action, and do
not (i) contravene the Borrower's or any such Obligor's Charter Documents,
(ii) contravene any contractual restriction, law or governmental regulation or
court decree or order binding on or affecting the Borrower or any such
Obligor, where such contravention, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect, or (iii) result in,
or require the creation or imposition of, any Lien on any of the Borrower's or
any other Obligor's properties, except pursuant to the terms of a Loan
Document.
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SECTION 6.3. Government Approval, Regulation, etc. No authorization
or approval or other action by, and no notice to or filing with, any
governmental authority or regulatory body or other Person, is required for the
due execution, delivery or performance by the Borrower or any other Obligor of
this Agreement, the Notes or any other Loan Document to which it is a party,
or for the Borrower's and each such other Obligor's participation in the
consummation of the Transaction, except as have been duly obtained or made and
are in full force and effect or those which the failure to obtain or make
could not reasonably be expected to have a Material Adverse Effect. None of
the Borrower or any other Obligor, or any of the Borrower's Subsidiaries is an
"investment company" within the meaning of the Investment Company Act of 1940,
as amended, or a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
SECTION 6.4. Validity, etc. This Agreement constitutes, and the Notes
and each other Loan Document executed by the Borrower will, on the due
execution and delivery thereof, constitute, the legal, valid and binding
obligations of the Borrower enforceable in accordance with their respective
terms; and each Loan Document executed pursuant hereto by each other Obligor
will, on the due execution and delivery thereof by such Obligor, be the legal,
valid and binding obligation of such Obligor enforceable in accordance with
its terms, in each case with respect to this Section 6.4 subject to the
effects of bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and other similar laws relating to or affecting creditors' rights
generally, general equitable principles (whether considered in a proceeding in
equity or at law) and an implied covenant of good faith and fair dealing.
SECTION 6.5. Financial Information. The Borrower has delivered to the
Agents and each Lender copies of each of (i) the Base Financial Statements,
and (ii) a Pro Forma Balance Sheet. Each of the financial statements described
above has been prepared (in the case of clause (i) in accordance with GAAP
consistently applied) and, in the case of clause (ii), on a basis
substantially consistent with the basis used to prepare the financial
statements referred to in clause (i), and (in the case of clause (i)) present
fairly the consolidated financial condition of the corporations covered
thereby as at the date thereof and the results of their operations for the
periods then ended and (in the case of clause (ii)) include appropriate pro
forma adjustments to give pro forma effect to the Transaction.
SECTION 6.6. No Material Adverse Change. Since June 30, 1996, there
has been no material adverse change in the financial condition, operations,
assets, business, properties or prospects of the Borrower and its Restricted
Subsidiaries, taken as a whole.
SECTION 6.7. Litigation, Labor Controversies, etc. There is no
pending or, to the knowledge of the Borrower, threatened litigation, action,
proceeding, labor controversy, arbitration or governmental investigation
affecting any Obligor, or any of their respective properties, businesses,
assets or revenues, which could reasonably be expected to result in a
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Material Adverse Effect except as disclosed in Item 6.7 ("Litigation") of the
Disclosure Schedule. No material adverse development has occurred in any
litigation, action, labor controversy, arbitration or governmental
investigation or other proceeding disclosed in Item 6.7 ("Litigation") of the
Disclosure Schedule.
SECTION 6.8. Subsidiaries. The Borrower has only those Subsidiaries
(i) which are identified in Item 6.8 ("Existing Subsidiaries") of the
Disclosure Schedule, or (ii) which are permitted to have been acquired in
accordance with Section 7.2.5 or 7.2.8.
SECTION 6.9. Ownership of Properties. Except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, the Borrower and each of its Subsidiaries owns good title to, or
leasehold interests in, all of its properties and assets (other than
insignificant properties and assets), real and personal, tangible and
intangible, of any nature whatsoever (including patents, trademarks, trade
names, service marks and copyrights), free and clear of all Liens or material
claims (including material infringement claims with respect to patents,
trademarks, copyrights and the like), except as permitted pursuant to Section
7.2.3.
SECTION 6.10. Taxes. Each of Holdings, the Borrower and each of the
Borrower's Restricted Subsidiaries has filed all Federal, State and other
material tax returns required by law to have been filed by it and has paid all
taxes and governmental charges thereby shown to be owing, except any such
taxes or charges which are being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books.
SECTION 6.11. Pension and Welfare Plans. During the
twelve-consecutive-month period prior to the date of the execution and
delivery of this Agreement, no steps have been taken to terminate any Pension
Plan, and no contribution failure has occurred with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA, which,
in either case, is reasonably expected to lead to a liability to such Pension
Plan in excess of $10,000,000. No condition exists or event or transaction has
occurred with respect to any Pension Plan which could reasonably be expected
to result in the incurrence by the Borrower or any member of the Controlled
Group of any material liability, fine or penalty other than such condition,
event or transaction which would not reasonably be expected to have a Material
Adverse Effect. Except as disclosed in Item 6.11 ("Employee Benefit Plans") of
the Disclosure Schedule or otherwise approved by the Agents (such approval not
to be unreasonably withheld or delayed), since the date of the last financial
statement the Borrower has not increased any contingent liability with respect
to any post-retirement benefit under a Welfare Plan, other than liability for
continuation coverage described in Part 6 of Subtitle B of Title I of ERISA,
except as would not have Material Adverse Effect.
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SECTION 6.12. Environmental Matters. Except as set forth in Item 6.12
("Environmental Matters") of the Disclosure Schedule or as, individually or in
the aggregate, could not reasonably be expected to have a Material Adverse
Effect:
(a) all facilities and property (including underlying
groundwater) owned or leased by the Borrower or any of its
Subsidiaries are, and continue to be, owned or leased by the Borrower
and its Subsidiaries in compliance with all Environmental Laws;
(b) there have been no past, and there are no pending or
threatened (i) written claims, complaints, notices or requests for
information received by the Borrower or any of its Subsidiaries with
respect to any alleged violation of any Environmental Law, or (ii)
written complaints, notices or inquiries to the Borrower or any of
its Subsidiaries regarding potential liability under any
Environmental Law;
(c) to the best knowledge of the Borrower, there have been
no Releases of Hazardous Materials at, on or under any property now
or previously owned or leased by the Borrower or any of its
Subsidiaries;
(d) the Borrower and its Subsidiaries have been issued and
are in compliance with all permits, certificates, approvals, licenses
and other authorizations relating to environmental matters and
necessary or desirable for their businesses;
(e) no property now or, to the best knowledge of the
Borrower, previously owned or leased by the Borrower or any of its
Subsidiaries is listed or, to the knowledge of the Borrower or any of
its Subsidiaries, proposed for listing (with respect to owned
property only) on the National Priorities List pursuant to CERCLA, on
the CERCLIS or on any similar state list of sites requiring
investigation or clean-up;
(f) to the best knowledge of the Borrower, there are no
underground storage tanks, active or abandoned, including petroleum
storage tanks, on or under any property now or previously owned or
leased by the Borrower or any of its Subsidiaries;
(g) to the best knowledge of the Borrower, the Borrower and
its Subsidiaries have not directly transported or directly arranged
for the transportation of any Hazardous Material to any location
which is listed or to the knowledge of the Borrower or any of its
Subsidiaries, proposed for listing on the National Priorities List
pursuant to CERCLA, on the CERCLIS or on any similar state list;
(h) to the best knowledge of the Borrower, there are no
polychlorinated biphenyls or friable asbestos present in a manner or
condition at any property now or previously owned or leased by the
Borrower or any Subsidiary of the Borrower; and
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(i) to the best knowledge of the Borrower, no conditions
exist at, on or under any property now or previously owned or leased
by the Borrower or any of its Subsidiaries which, with the passage of
time, or the giving of notice or both, would give rise to liability
to the Borrower or any of its Subsidiaries under any Environmental
Law.
SECTION 6.13. Regulations G, U and X. Neither the Borrower nor
Holdings is engaged in the business of extending credit for the purpose of
purchasing or carrying margin stock, and no proceeds of any Credit Extension
will be used to acquire any "margin stock". Terms for which meanings are
provided in F.R.S. Board Regulation G, U or X or any regulations substituted
therefor, as from time to time in effect, are used in this Section with such
meanings.
SECTION 6.14. Accuracy of Information. All material factual
information concerning the financial condition, operations or prospects of
Holdings, the Borrower, and the Borrower's Restricted Subsidiaries heretofore
or contemporaneously furnished by or on behalf of the Borrower in writing to
the Agents, the Arranger, the Issuer or any Lender for purposes of or in
connection with this Agreement or any transaction contemplated hereby or with
respect to the Transaction is, and all other such factual information
hereafter furnished by or on behalf of the Borrower, or any of its Restricted
Subsidiaries to the Agents, the Arranger, the Issuer or any Lender will be,
taken as a whole, true and accurate in every material respect on the date as
of which such information is dated or certified and such information is not,
or shall not be, taken as a whole, as the case may be, incomplete by omitting
to state any material fact necessary to make such information not misleading.
Any term or provision of this Section to the contrary
notwithstanding, insofar as any of the factual information described above
includes assumptions, estimates, projections or opinions, no representation or
warranty is made herein with respect thereto; provided, however, that to the
extent any such assumptions, estimates, projections or opinions are based on
factual matters, the Borrower has reviewed such factual matters and nothing
has come to its attention in the context of such review which would lead it to
believe that such factual matters were not or are not true and correct in all
material respects or that such factual matters omit to state any material fact
necessary to make such assumptions, estimates, projections or opinions not
misleading in any material respect.
SECTION 6.15. Solvency. The Transaction (including, among other
things, the incurrence of the initial Credit Extension hereunder, the
incurrence by the Borrower of the Indebtedness represented by the Notes and
the Subordinated Notes, the execution and delivery by the Subsidiary
Guarantors, if any, of a Subsidiary Guaranty, the consummation of the Discount
Debenture Issuance and the application of the proceeds of the Credit
Extensions), will not involve or result in any fraudulent transfer or
fraudulent conveyance under the provisions of Section 548 of the Bankruptcy
Code (11 U.S.C. ss.101 et seq., as from time to time hereafter amended, and
any successor or similar statute) or any applicable state law respecting
fraudulent
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transfers or fraudulent conveyances. On the Closing Date, after giving effect
to the Transaction, the Borrower is Solvent.
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants. The Borrower agrees with the
Agents, the Issuer and each Lender that, until all Commitments have terminated
and all Obligations have been paid and performed in full, the Borrower will
perform the obligations set forth in this Section 7.1.
SECTION 7.1.1. Financial Information, Reports, Notices, etc. The
Borrower will furnish, or will cause to be furnished, to each Lender and each
Agent copies of the following financial statements, reports, notices and
information:
(a) as soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal
Year of the Borrower (or, if the Borrower is required to file such
information on a Form 10-Q with the Securities and Exchange
Commission, promptly following such filing), a consolidated balance
sheet of the Borrower and its Subsidiaries as of the end of such
Fiscal Quarter, together with the related consolidated statements of
operations and cash flows for such Fiscal Quarter and for the period
commencing at the end of the previous Fiscal Year and ending with
the end of such Fiscal Quarter (it being understood that the
foregoing requirement may be satisfied by delivery of the Borrower's
report to the Securities and Exchange Commission on Form 10-Q, if
any), certified by the president, chief executive officer,
treasurer, assistant treasurer, controller or chief financial
Authorized Officer of the Borrower;
(b) as soon as available and in any event within 105 days after
the end of each Fiscal Year of the Borrower (or, if the Borrower is
required to file such information on a Form 10-K with the Securities
and Exchange Commission, promptly following such filing), a copy of
the annual audit report for such Fiscal Year for the Borrower and
its Subsidiaries, including therein a consolidated balance sheet for
the Borrower and its Subsidiaries as of the end of such Fiscal Year,
together with the related consolidated statements of operations and
cash flows for such Fiscal Year (it being understood that the
foregoing requirement may be satisfied by delivery of the Borrower's
report to the Securities and Exchange Commission on Form 10-K, if
any), in each case certified (without any Impermissible
Qualification) by Deloitte & Touche LLP or another "Big Six" firm of
independent public accountants, together with a certificate from
such accountants as to whether, in making the examination necessary
for the signing of such annual report by such accountants, they have
not become aware of any Default that has
76
occurred and is continuing or, if in the opinion of such accounting
firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof;
(c) together with the delivery of the financial information
required pursuant to clauses (a) and (b), a Compliance Certificate,
in substantially the form of Exhibit E, executed by the president,
chief executive officer, treasurer, assistant treasurer, controller
or chief financial Authorized Officer of the Borrower, showing (in
reasonable detail and with appropriate calculations and computations
in all respects satisfactory to the Agents) compliance with the
financial covenants set forth in Section 7.2.4;
(d) as soon as possible and in any event within five
Business Days after obtaining knowledge of the occurrence of any
Default, if such Default is then continuing, a statement of the
president, chief executive officer, treasurer, assistant treasurer,
controller or chief financial Authorized Officer of the Borrower
setting forth details of such Default and the action which the
Borrower has taken or proposes to take with respect thereto;
(e) as soon as possible and in any event within ten Business
Days after (x) the occurrence of any material adverse development
with respect to any litigation, action, proceeding or labor
controversy described in Section 6.7 or (y) the commencement of any
labor controversy, litigation, action, proceeding of the type
described in Section 6.7, notice thereof and of the action which the
Borrower has taken or proposes to take with respect thereto;
(f) promptly after the sending or filing thereof, copies of
all reports and registration statements (other than exhibits thereto
and any registration statement on Form S-8 or its equivalent) which
the Borrower or any of its Subsidiaries files with the Securities and
Exchange Commission or any national securities exchange;
(g) as soon as practicable after the chief financial officer
or the chief executive officer of the Borrower or a member of the
Borrower's Controlled Group becomes aware of (i) formal steps in
writing to terminate any Pension Plan or (ii) the occurrence of any
event with respect to a Pension Plan which, in the case of (i) or
(ii), could reasonably be expected to result in a contribution to
such Pension Plan by (or a liability to) the Borrower or a member of
the Borrower's Controlled Group in excess of $10,000,000, (iii) the
failure to make a required contribution to any Pension Plan if such
failure is sufficient to give rise to a Lien under section 302(f) of
ERISA in an amount in excess of $10,000,000, (iv) the taking of any
action with respect to a Pension Plan which could reasonably be
expected to result in the requirement that the Borrower furnish a
bond to the PBGC or such Pension Plan in an amount in excess of
$10,000,000 or (v) any material increase in the contingent liability
of the Borrower with respect to any post-retirement Welfare Plan
benefit, notice thereof and copies of all documentation relating
thereto;
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(h) within 25 days after the end of each calendar month, a
Borrowing Base Certificate that is calculated as of the last day of
such calendar month; and
(i) such other information respecting the condition or
operations, financial or otherwise, of the Borrower or any of its
Subsidiaries as any Lender through the Administrative Agent may from
time to time reasonably request.
SECTION 7.1.2. Compliance with Laws, etc. The Borrower will, and will
cause each of its Subsidiaries to, comply in all material respects with all
applicable laws, rules, regulations and orders, such compliance to include
(without limitation) (i) except as permitted under Section 7.2.8, the
maintenance and preservation of its corporate existence and qualification as a
foreign corporation, except where the failure to so qualify could not
reasonably be expected to have a Material Adverse Effect, and (ii) the
payment, before the same become delinquent, of all material taxes, assessments
and governmental charges imposed upon it or upon its property except to the
extent being contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 7.1.3. Maintenance of Properties. Except to the extent that
the failure to do so could not reasonably be expected to have a Material
Adverse Effect, the Borrower will, and will cause each of its Subsidiaries to,
maintain, preserve, protect and keep its properties (other than insignificant
properties) in good repair, working order and condition (ordinary wear and
tear excepted), and make necessary and proper repairs, renewals and
replacements so that its business carried on in connection therewith may be
properly conducted at all times unless the Borrower determines in good faith
that the continued maintenance of any of its properties is no longer
economically desirable.
SECTION 7.1.4. Insurance. The Borrower will, and will cause each of
its Restricted Subsidiaries to, maintain or cause to be maintained with
responsible insurance companies insurance with respect to its properties and
business against such casualties and contingencies and of such types and in
such amounts as is customary in the case of similar businesses and with such
provisions and endorsements as the Agents may reasonably request and will,
upon request of the Agents, furnish to the Agents and each Lender a
certificate of an Authorized Officer of the Borrower setting forth the nature
and extent of all insurance maintained by the Borrower and its Restricted
Subsidiaries in accordance with this Section.
SECTION 7.1.5. Books and Records. The Borrower will, and will cause
each of its Restricted Subsidiaries to, keep books and records which
accurately reflect in all material respects all of its business affairs and
transactions and permit the Agents, the Issuer and each Lender or any of their
respective representatives, at reasonable times and intervals, and upon
reasonable notice, but, unless an Event of Default shall have occurred and be
continuing, not more frequently than once in each Fiscal Year, to visit its
corporate offices, to discuss its financial matters with its officers and,
only in the presence of a representative of the Borrower
78
(whose attendance at such discussion cannot be unreasonably refused), its
independent public accountants (and the Borrower hereby authorizes such
independent public accountants to discuss the Borrower's financial matters
with the Issuer and each Lender or its representatives, so long as a
representative of the Borrower is present) and to examine any of its books or
other financial records. The cost and expense of each such visit shall be
borne by the applicable Agent or Lender.
SECTION 7.1.6. Environmental Covenant. The Borrower will and will
cause each of its Subsidiaries to,
(a) use and operate all of its facilities and properties in
compliance with all Environmental Laws, keep all necessary permits,
approvals, certificates, licenses and other authorizations relating
to environmental matters in effect and remain in compliance
therewith, and handle all Hazardous Materials in compliance with all
applicable Environmental Laws, in each case except where the failure
to comply with the terms of this clause could not reasonably be
expected to have a Material Adverse Effect;
(b) promptly notify the Agents and provide copies of all
written claims, complaints, notices or inquiries relating to the
condition of its facilities and properties or compliance with
Environmental Laws which would have, or would reasonably be expected
to have, a Material Adverse Effect, and promptly cure and have
dismissed with prejudice any material actions and proceedings
relating to compliance with Environmental Laws, except to the extent
being diligently contested in good faith by appropriate proceedings
and for which adequate reserves in accordance with GAAP have been set
aside on its books; and
(c) provide such information and certifications which the
Agents may reasonably request from time to time to evidence
compliance with this Section 7.1.6.
SECTION 7.1.7. Future Subsidiaries; Material Subsidiaries. The
Borrower hereby covenants and agrees as follows:
(a) Upon any Person (other than the Trademark Subsidiary and
the IPO Subsidiary) becoming, after the Closing Date, a Material
Subsidiary of the Borrower that is a U.S. Subsidiary, or (in the case
of clause (a)(ii) below only) upon the Borrower or any Material
Subsidiary of the Borrower that is a U.S. Subsidiary (other than the
Trademark Subsidiary and the IPO Subsidiary) acquiring additional
Capital Stock of any existing Subsidiary (other than the Trademark
Subsidiary and the IPO Subsidiary), the Borrower shall notify the
Agents of such acquisition, and
(i) the Borrower shall promptly cause such Material
Subsidiary to execute and deliver to the Administrative
Agent, with counterparts for each Lender, a
79
Subsidiary Security Agreement (or a supplement thereto) (and, if
such Material Subsidiary owns any real property, a Mortgage),
together with Uniform Commercial Code financing statements (form
UCC-1) executed and delivered by the Material Subsidiary naming the
Material Subsidiary as the debtor and the Administrative Agent as
the secured party, or other similar instruments or documents, in
appropriate form for filing under the Uniform Commercial Code and
any other applicable recording statutes, in the case of real
property, of all jurisdictions as may be necessary or, in the
opinion of the Administrative Agent, desirable to perfect the
security interest of the Administrative Agent pursuant to the
Subsidiary Security Agreement or a Mortgage, as the case may be
(other than the perfection of security interests in motor vehicles);
and
(ii) the Borrower shall promptly deliver, or cause to be
delivered, to the Administrative Agent under a Pledge Agreement (or
a supplement thereto) certificates (if any) representing all of the
issued and outstanding shares of Capital Stock of such Subsidiary
(other than the Trademark Subsidiary and the IPO Subsidiary) owned
by the Borrower or any Material Subsidiary of the Borrower that is a
U.S. Subsidiary, as the case may be, along with undated stock powers
for such certificates, executed in blank, or, if any securities
subject thereto are uncertificated securities or are held through a
financial intermediary, confirmation and evidence satisfactory to
the Agents that appropriate book entries have been made in the
relevant books or records of a financial intermediary or the issuer
of such securities, as the case may be, or other appropriate steps
shall have been taken under applicable law resulting in the
perfection of the security interest granted in favor of the
Administrative Agent pursuant to the terms of a Pledge Agreement;
together, in each case, with such opinions, in form and substance and from
counsel satisfactory to the Agents, as the Agents may reasonably require;
provided, however, that notwithstanding the foregoing, no Non-U.S. Subsidiary
shall be required to execute and deliver a Mortgage or a Subsidiary Security
Agreement (or a supplement thereto), nor will the Borrower or any Subsidiary
of the Borrower be required to deliver in pledge pursuant to a Pledge
Agreement in excess of 65% of the total combined voting power of all classes
of Capital Stock of a Non-U.S. Subsidiary entitled to vote.
(b) Upon any Person (other than the Trademark Subsidiary and the IPO
Subsidiary) becoming, after the Closing Date, a Material Subsidiary of the
Borrower that is a U.S. Subsidiary, the Borrower shall notify the Agents of
such event, and the Borrower shall promptly cause such Material Subsidiary to
execute and deliver to the Administrative Agent, with counterparts for each
Lender, a Subsidiary Guaranty together with such opinions, in form and
substance and from counsel satisfactory to the Agents, as the Agents may
reasonably require.
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SECTION 7.1.8. Future Leased Property and Future Acquisitions of Real
Property; Future Acquisition of Other Property.
(a) Prior to entering into any new lease of real property or
renewing any existing lease of real property following the Closing
Date, the Borrower shall, and shall cause each of its U.S.
Subsidiaries (other than the Trademark Subsidiary and the IPO
Subsidiary) that is a Restricted Subsidiary to, use its (and their)
best efforts (which shall not require the expenditure of cash or the
making of any material concessions under the relevant lease) to
deliver to the Administrative Agent a Waiver executed by the lessor
of any real property that is to be leased by the Borrower or such
U.S. Subsidiary for a term in excess of one year in any state which
by statute grants such lessor a "landlord's" (or similar) Lien which
is superior to the Administrative Agent's, to the extent the value
of any personal property of the Borrower or its U.S. Subsidiaries to
be held at such leased property exceeds (or it is anticipated that
the value of such personal property will, at any point in time
during the term of such leasehold term, exceed) $10,000,000.
(b) In the event that the Borrower or any of its U.S.
Subsidiaries that is a Restricted Subsidiary shall acquire any real
property having a value as determined in good faith by the
Administrative Agent in excess of $5,000,000 in the aggregate, the
Borrower or the applicable U.S. Subsidiary shall, promptly after
such acquisition, execute a Mortgage and provide the Administrative
Agent with (i) evidence of the completion (or satisfactory
arrangements for the completion) of all recordings and filings of
such Mortgage as may be necessary or, in the reasonable opinion of
the Administrative Agent, desirable effectively to create a valid,
perfected, first priority Lien, subject to Liens permitted by
Section 7.2.3, against the properties purported to be covered
thereby, (ii) mortgagee's title insurance policies in favor of the
Agents and the Lenders in amounts and in form and substance and
issued by insurers, reasonably satisfactory to the Agents, with
respect to the property purported to be covered by such Mortgage,
insuring that title to such property is marketable and that the
interests created by the Mortgage constitute valid first Liens
thereon free and clear of all defects and encumbrances other than as
approved by the Agents, and such policies shall also include a
revolving credit endorsement and such other endorsements as the
Agents shall request and shall be accompanied by evidence of the
payment in full of all premiums thereon, and (iii) such other
approvals, opinions, or documents as the Agents may reasonably
request.
(c) In accordance with the terms and provisions of the Security
Documents, the Borrower and each Material Subsidiary that is a U.S.
Subsidiary (other than the Trademark Subsidiary and the IPO
Subsidiary) shall provide the Agents with evidence of all recordings
and filings as may be necessary or, in the reasonable opinion of the
Administrative Agent, desirable to create a valid, perfected first
priority Lien, subject to the Liens permitted by Section 7.2.3,
against all property acquired after the Closing Date (excluding
motor vehicles
81
and (except to the extent required under clause (b) of Section
7.1.8) fee interests in real property).
SECTION 7.1.9. Use of Proceeds, etc. The Borrower shall
(a) apply the proceeds of the Loans
(i) to pay, in part, through the Closing Date
Dividend and/or the Intercompany Loan to Holdings, the cash
portion of the obligations of Holdings in connection with
the Transaction and to pay the transaction fees and expenses
associated with the Transaction; provided, that not more
than $10,000,000 of the proceeds from Revolving Loans may be
used to finance the consummation of Transaction (including
reasonably related transaction fees and expenses); and
(ii) in the case of Revolving Loans and Swing Line
Loans, for working capital and general corporate purposes of
the Borrower and its Subsidiaries; and
(b) use Letters of Credit only for purposes of supporting
working capital and general corporate purposes of the Borrower and
its Subsidiaries.
SECTION 7.1.10. Hedging Obligations. Within six months following the
Closing Date, the Administrative Agent shall have received evidence
satisfactory to it that the Borrower has entered into interest rate swap, cap,
collar or similar arrangements designed to protect the Borrower against
fluctuations in interest rates with respect to at least 50% of the aggregate
principal amount of the Term Loans for a period of at least three years from
the date the initial interest rate protection arrangement was obtained, with
terms reasonably satisfactory to the Borrower and the Agents.
SECTION 7.1.11. Undertaking. The Borrower will deliver to the Agents
no later than 60 days after the Closing Date instruments or documents, in
appropriate form for filing with the United States Patent and Trademark
Office, sufficient to create and perfect a security interest in intellectual
property owned as of the Closing Date by the Borrower or any of its
Subsidiaries..
SECTION 7.2. Negative Covenants. The Borrower agrees with the Agents
and each Lender that, until all Commitments have terminated, and all
Obligations have been paid and performed in full, the Borrower will perform
the obligations set forth in this Section 7.2.
SECTION 7.2.1. Business Activities. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, engage in any business
activity, except the equipment maintenance and support services businesses and
any businesses reasonably ancillary or related thereto (the "DecisionOne
Business"); provided, however, that, any term or provision hereof (including
this Section 7.2) to the contrary notwithstanding, (i) the Trademark
Subsidiary shall conduct no
82
business activity other than that directly connected with the ownership or
licensing of trademarks, trade names, trade secrets, trade dress, service
marks, patents, copyrights, mask works and other intellectual property
associated with the DecisionOne Business and the licensing of such trademarks,
trade names, trade secrets, trade dress, service marks, patents, copyrights,
mask works and other intellectual property associated with the DecisionOne
Business to Holdings and its Restricted Subsidiaries and the lending of the
proceeds thereof to the Borrower and its Restricted Subsidiaries and (ii) the
IPO Subsidiary shall conduct no business activity other than holding the
promissory note issued by the Borrower to the IPO Subsidiary in the amount of
$106,000,000, representing proceeds received from the April, 1996 Initial
Public Offering, plus accrued interest thereon (including interest added to
the principal thereof).
SECTION 7.2.2. Indebtedness. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, create, incur, assume or suffer
to exist or otherwise become or be liable in respect of any Indebtedness,
other than, without duplication, the following:
(a) Indebtedness outstanding on the Closing Date and identified
in Item 7.2.2(a) ("Ongoing Indebtedness") of the Disclosure
Schedule, and refinancings and replacements thereof in a principal
amount not exceeding the principal amount of the Indebtedness so
refinanced or replaced and with an average life to maturity of not
less than the then average life to maturity of the Indebtedness so
refinanced or replaced;
(b) Indebtedness in respect of the Credit Extensions and other
Obligations;
(c) Indebtedness incurred by the Borrower or any of its
Restricted Subsidiaries that is represented by Capitalized Lease
Liabilities, mortgage financings or purchase money obligations (but
only to the extent otherwise permitted by Section 7.2.7); provided,
that the maximum aggregate amount of all Indebtedness permitted
under this clause (c) shall not at any time exceed $25,000,000;
(d) Hedging Obligations of the Borrower or any of its
Restricted Subsidiaries in respect of the Credit Extensions;
(e) intercompany Indebtedness of (x) any Restricted Subsidiary
of the Borrower owing to the Borrower or any of its Restricted
Subsidiaries or (y) the Borrower to any of its Restricted
Subsidiaries, which Indebtedness (i) shall be evidenced by one or
more promissory notes in form and substance satisfactory to the
Agents which (except in the case of any such notes held by a
Non-U.S. Subsidiary, a Subsidiary that is not a Material Subsidiary,
the Trademark Subsidiary or the IPO Subsidiary) have been duly
executed and delivered to (and indorsed to the order of) the
Administrative Agent in pledge pursuant to a Pledge Agreement, and
(ii) shall not be forgiven or otherwise discharged for any
consideration other than payment (Dollar for Dollar) in cash unless
the Agents otherwise consent;
83
(f) Indebtedness evidenced by any Subordinated Note and
guarantees thereof in an aggregate outstanding principal amount not
to exceed $150,000,000;
(g) Assumed Indebtedness of the Borrower and its Restricted
Subsidiaries in an aggregate principal amount not to exceed
$25,000,000 at any time outstanding;
(h) unsecured Indebtedness of the Borrower and its Restricted
Subsidiaries in an aggregate amount not to exceed $25,000,000
incurred in connection with any acquisition;
(i) Indebtedness of Non-U.S. Subsidiaries of the Borrower in an
aggregate principal amount not to exceed $5,000,000 at any time
outstanding; and
(j) other unsecured Indebtedness of the Borrower and its
Restricted Subsidiaries in an aggregate amount at any time
outstanding not to exceed $50,000,000 plus the unutilized and
available amounts under clause (h) above plus the difference between
the maximum amount of additional Revolving Loan Commitments provided
under clause (c) of Section 2.1.2 and the then outstanding amount of
additional Revolving Loans made pursuant to clause (c) of Section
2.1.2;
provided, however, that (i) no Indebtedness otherwise permitted hereunder
(other than Indebtedness permitted under clause (e)) may be incurred by the
Trademark Subsidiary or the IPO Subsidiary, (ii) no Indebtedness otherwise
permitted by clause (c), (e), (g), (h) or (j) may be incurred if, after giving
effect to the incurrence thereof, any Default shall have occurred and be
continuing, and (iii) that all such Indebtedness of the type described in
clause (e)(y) above that is owed to Subsidiaries which are not party to a
Subsidiary Guaranty shall be subordinated, in writing, to the Obligations upon
terms satisfactory to the Agents.
SECTION 7.2.3. Liens. The Borrower will not, and will not permit any
of its Restricted Subsidiaries to, create, incur, assume or suffer to exist
any Lien upon any of its property, revenues or assets, whether now owned or
hereafter acquired, except:
(a) Liens existing on the Closing Date and identified in Item
7.2.2(b) ("Ongoing Liens") of the Disclosure Schedule;
(b) Liens securing payment of the Obligations or any obligation
under any Rate Protection Agreement, granted pursuant to any Loan
Document;
(c) Liens granted to secure payment of Indebtedness of the type
permitted and described in clause (c) of Section 7.2.2;
(d) Liens for taxes, assessments or other governmental charges
or levies, including Liens pursuant to Section 107(l) of CERCLA or
other similar law, not at the
84
time delinquent or thereafter payable without penalty or being
contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside
on its books;
(e) Liens of carriers, warehousemen, mechanics, repairmen,
materialmen, contractors, laborers and landlords or other like Liens
incurred in the ordinary course of business for sums not overdue for
a period of more than 30 days or being diligently contested in good
faith by appropriate proceedings and for which adequate reserves in
accordance with GAAP shall have been set aside on its books;
(f) Liens incurred in the ordinary course of business in
connection with workmen's compensation, unemployment insurance or
other forms of governmental insurance or benefits, or to secure
performance of tenders, bids, statutory or regulatory obligations,
insurance obligations, leases and contracts (other than for borrowed
money) entered into in the ordinary course of business or to secure
obligations on surety or appeal bonds;
(g) judgment Liens in existence less than 30 days after the
entry thereof or with respect to which execution has been stayed or
the payment of which is covered in full by a bond or (subject to a
customary deductible) by insurance maintained with responsible
insurance companies;
(h) Liens with respect to minor imperfections of title and
easements, rights-of-way, restrictions, reservations, permits,
servitudes and other similar encumbrances on real property and
fixtures which do not materially detract from the value or materially
impair the use by the Borrower or any such Restricted Subsidiary in
the ordinary course of their business of the property subject
thereto;
(i) leases or subleases granted by the Borrower or any of its
Restricted Subsidiaries to any other Person in the ordinary course
of business;
(j) Liens in the nature of trustees' Liens granted pursuant to
any indenture governing any Indebtedness permitted by Section 7.2.2,
in each case in favor of the trustee under such indenture and
securing only obligations to pay compensation to such trustee, to
reimburse its expenses and to indemnify it under the terms thereof;
(k) Liens of sellers of goods to the Borrower and its
Restricted Subsidiaries arising under Article 2 of the U.C.C. or
similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
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(l) Liens securing Assumed Indebtedness of the Borrower and its
Subsidiaries permitted pursuant to clause (g) of Section 7.2.2;
provided, however, that (i) any such Liens attach only to the
property of the Subsidiary acquired, or the property acquired, in
connection with such Assumed Indebtedness and shall not attach to
any assets of the Borrower or any of its Restricted Subsidiaries
theretofore existing or which arise after the date thereof and (ii)
the Assumed Indebtedness and other secured Indebtedness of the
Borrower and its Restricted Subsidiaries secured by any such Lien
shall not exceed 100% of the fair market value of the assets being
acquired in connection with such Assumed Indebtedness; and
(m) Liens on assets of Non-U.S. Subsidiaries of the Borrower
securing Indebtedness permitted pursuant to clause (i) of Section
7.2.2;
provided, however, that no Liens otherwise permitted by clause (c), (e), (f),
(h), (i), (j), (k), (l) or (m) may be created, incurred, assumed or otherwise
permitted to exist upon any property, revenues or assets of the Trademark
Subsidiary or the IPO Subsidiary.
SECTION 7.2.4. Financial Covenants.
(a) Adjusted EBITDA. The Borrower will not permit Adjusted
EBITDA for the period of four consecutive Fiscal Quarters ending on
the last day of any Fiscal Quarter occurring during any period set
forth below to be less than the amount set forth opposite such
period:
Period Adjusted EBITDA
Closing Date to 6/30/98 $105,000,000
7/1/98 to 6/30/99 $110,000,000
7/1/99 to 6/30/00 $120,000,000
7/1/00 to 6/30/01 $135,000,000
7/1/01 to 6/30/02 $160,000,000
7/1/02 to 6/30/03 $180,000,000
7/1/03 and thereafter $200,000,000
(b) Leverage Ratio. The Borrower will not permit the
Leverage Ratio as of the end of any Fiscal Quarter occurring during
any period set forth below to be greater than the ratio set forth
opposite such period:
Period Leverage Ratio
------ --------------
Closing Date to 6/30/98 6.00:1
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7/1/98 to 6/30/99 5.50:1
7/1/99 to 6/30/00 5.00:1
7/1/00 to 6/30/01 4.50:1
7/1/01 to 6/30/02 3.50:1
7/1/02 and thereafter 3.00:1
(c) Interest Coverage Ratio. The Borrower will not permit
the Interest Coverage Ratio as of the end of any Fiscal Quarter
ending after the Closing Date and occurring during any period set
forth below to be less than the ratio set forth opposite such period:
Interest Coverage
Period Ratio
------ -----
Closing Date to 6/30/98 1.75:1
7/1/98 to 6/30/99 1.85:1
7/1/99 to 6/30/00 2.00:1
7/1/00 to 6/30/01 2.25:1
7/1/01 to 6/30/02 2.50:1
7/1/02 to 6/30/03 3.00:1
7/1/03 and thereafter 3.50:1
(d) Fixed Charge Coverage Ratio. The Borrower will not
permit the Fixed Charge Coverage Ratio as of the end of any Fiscal
Quarter ending after the Closing Date to be less than 1.10:1.
SECTION 7.2.5. Investments. The Borrower will not, and will not
permit any of its Restricted Subsidiaries to, make, incur, assume or suffer to
exist any Investment in any other Person, except:
(a) Investments existing on the Closing Date and identified in
Item 7.2.5(a) ("Ongoing Investments") of the Disclosure Schedule;
(b) Cash Equivalent Investments;
(c) without duplication, Investments permitted as Indebtedness
pursuant to Section 7.2.2;
(d) without duplication, Investments permitted as Capital
Expenditures pursuant to Section 7.2.7;
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(e) Investments by the Borrower in any of its Restricted
Subsidiaries, or by any such Restricted Subsidiary in any Restricted
Subsidiary of the Borrower, by way of contributions to capital;
(f) additional Investments by the Borrower or any of its
Restricted Subsidiaries from capital contributions by Holdings to
the Borrower, sales of Capital Stock by the Borrower to Holdings or
repayments of the Intercompany Loan by Holdings to the Borrower, in
each case after the Closing Date for the purpose of making an
Investment identified in a notice to the Agents on or prior to the
date such contribution, sale or repayment is made, which Investments
shall result in the Borrower or such Restricted Subsidiary acquiring
a majority controlling interest in the Person in which such
Investment was made or increasing any such controlling interest
already maintained by it;
(g) Investments to the extent the consideration received
pursuant to clause (d)(i) of Section 7.2.9 is not all cash;
(h) Investments in the form of loans to officers, directors and
employees of the Borrower and its Restricted Subsidiaries for the
sole purpose of purchasing Holdings common stock (or purchases of
such loans made by others) in an aggregate amount at any time
outstanding not to exceed $5,000,000;
(i) the Intercompany Loan;
(j) Investments in Unrestricted Subsidiaries of the Borrower in
an aggregate amount at any time outstanding not to exceed
$15,000,000; or
(k) other Investments (including Assumed Indebtedness) made by
the Borrower or any of its Restricted Subsidiaries in an aggregate
amount not to exceed $50,000,000 in any single transaction or series
of related transactions or $150,000,000 in the aggregate, which
Investments shall result in the Borrower or the relevant Subsidiary
acquiring (subject to Section 7.2.1) a majority controlling interest
in the Person in which such Investment was made or increasing any
such controlling interest maintained by it in such Person;
provided, however, that
(l) any Investment which when made complies with the
requirements of the definition of the term "Cash Equivalent
Investment" may continue to be held notwithstanding that such
Investment if made thereafter would not comply with such
requirements;
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(m) no Investment otherwise permitted (i) hereunder (other
than Investments consisting of Indebtedness permitted under clause
(e) of Section 7.2.2) shall be permitted to be made by the Trademark
Subsidiary or the IPO Subsidiary or (ii) by clause (c) (except to the
extent permitted under Section 7.2.2), (e), (f), (h), (j) or (k))
shall be permitted to be made if, immediately before or after giving
effect thereto, any Default shall have occurred and be continuing.
SECTION 7.2.6. Restricted Payments, etc. On and at all times after
the date hereof:
(a) the Borrower will not, and will not permit any of its
Restricted Subsidiaries to, declare, pay or make any payment,
dividend, distribution or exchange (in cash, property or
obligations) on or in respect of any shares of any class of Capital
Stock (now or hereafter outstanding) of the Borrower or on any
warrants, options or other rights with respect to any shares of any
class of Capital Stock (now or hereafter outstanding) of the
Borrower (other than (i) dividends or distributions payable in its
common stock or warrants to purchase its common stock and (ii)
splits or reclassifications of its stock into additional or other
shares of its common stock) or apply, or permit any of its
Restricted Subsidiaries to apply, any of its funds, property or
assets to the purchase, redemption, exchange, sinking fund or other
retirement of, or agree or permit any of its Restricted Subsidiaries
to purchase, redeem or exchange, any shares of any class of Capital
Stock (now or hereafter outstanding) of the Borrower, warrants,
options or other rights with respect to any shares of any class of
Capital Stock (now or hereafter outstanding) of the Borrower;
(b) the Borrower will not, and will not permit any of its
Restricted Subsidiaries to, (i) make any payment or prepayment of
principal of, or make any payment of interest on, any Subordinated
Note or Discount Debenture on any day other than the stated,
scheduled date for such payment or prepayment set forth in the
documents and instruments memorializing such Subordinated Note or
Discount Debenture, or which would violate the subordination
provisions of such Subordinated Note or Discount Debenture, or (ii)
redeem, purchase or defease any Subordinated Note or Discount
Debenture (the foregoing prohibited acts referred to in clauses (a)
and (b) above are herein collectively referred to as "Restricted
Payments");
provided, however, that
(c) notwithstanding the provisions of clause (a) above, the
Borrower shall be permitted to make Restricted Payments to Holdings
to the extent necessary to enable Holdings to
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(i) pay its overhead expenses in an amount not to exceed
$2,000,000 in the aggregate in any Fiscal Year (exclusive of
advisory fees in an amount not to exceed $500,000 in the aggregate
in any Fiscal Year);
(ii) pay taxes in an amount not to exceed the amount provided
in the Tax Sharing Agreement; provided, however, that in no event
shall the amount permitted to be paid by the Borrower to Holdings
pursuant to this clause (c)(ii) in respect of the Borrower's
obligations under the Tax Sharing Agreement in any Fiscal Year
exceed the amount of federal, state and local taxes that the
Borrower and its Subsidiaries (on a consolidated basis) would be
required to pay for such Fiscal Year if they did not file a
consolidated income tax return with Holdings for such Fiscal Year;
(iii) make payments in respect of statutory appraisal rights
(and any settlement thereof) exercised by holders of outstanding
Capital Stock of DOH in connection with the Merger; and
(iv) so long as (A) no Default shall have occurred and be
continuing on the date such Restricted Payment is declared or to be
made, nor would a Default result from the making of such Restricted
Payment, (B) after giving effect to the making of such Restricted
Payment, the Borrower shall be in pro forma compliance with the
covenants set forth in Section 7.2.4 for the most recent full Fiscal
Quarter immediately preceding the date of the making of such
Restricted Payment for which the relevant financial information has
been delivered pursuant to clause (a) or clause (b) of Section
7.1.1, and (C) an Authorized Officer of the Borrower shall have
delivered a certificate to the Administrative Agent in form and
substance satisfactory to the Administrative Agent (including a
calculation of the Borrower's compliance with the covenants set
forth in Section 7.2.4 in reasonable detail) certifying as to the
accuracy of clauses (c)(iv)(A) and (c)(iv)(B) above,
(x) repurchase, redeem or otherwise acquire or retire for
value any Capital Stock of Holdings, or any warrant, option or
other right to acquire Capital Stock of Holdings, held by any
member of the Borrower's or any of the Borrower's Restricted
Subsidiaries' management pursuant to any management equity
subscription agreement or stock option agreement; provided that
(A) the aggregate price paid for all such repurchased,
redeemed, acquired or retired Capital Stock, warrants, options
and other rights shall not exceed (I) $5,000,000 in any
calendar year (with unused amounts in any calendar year being
carried forward to succeeding calendar years subject to a
maximum (without giving effect to the following clause (II)) of
$10,000,000 in any calendar year) plus (II) the aggregate cash
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proceeds received by the Borrower during such calendar year
from any reissuance of Capital Stock of Holdings, and warrants,
options and other rights to acquire Capital Stock of Holdings,
by Holdings or the Borrower to members of management of the
Borrower and its Restricted Subsidiaries and (B) no Default or
Event of Default shall have occurred and be continuing
immediately after such transaction; or
(y) pay for the repurchase, retirement or other
acquisition or retirement for value of Capital Stock of
Holdings or options, warrants or other rights to acquire
Capital Stock of Holdings outstanding on the date of this
Agreement and which are not held by the Equity Investors or any
member of management of Holdings or any of its Subsidiaries on
the date of this Agreement (including any Capital Stock,
options, warrants or rights issued in respect of such Capital
Stock, options, warrants or rights as a result of a stock
split, recapitalization, merger, combination, consolidation or
otherwise, but excluding any Capital Stock, options, warrants
or rights issued pursuant to any management equity plan or
stock option plan or similar agreement) in an aggregate amount
not to exceed (I) $10,000,000 and (II) an incremental
$20,000,000 in each succeeding calendar year so long as (A)
after giving effect to the making of such Restricted Payment,
the Leverage Ratio shall be less than 4.0:1.0 on a pro forma
basis for the most recent full Fiscal Quarter immediately
preceding the date of the making of such Restricted Payment for
which the relevant financial information has been delivered
pursuant to clause (a) or clause (b) of Section 7.1.1, (B) an
Authorized Officer of the Borrower shall have delivered a
certificate to the Administrative Agent in form and substance
satisfactory to the Administrative Agent (including a
calculation of the Leverage Ratio in reasonable detail)
certifying to the accuracy of clause (A) above and certifying
that no Default shall have occurred and be continuing on the
date such Restricted Payment is made, nor would a Default
result from the making of such Restricted Payment, and (C) the
amount of such Restricted Payment shall not exceed 25% of the
Excess Cash Flow for the period from August 31, 1997 through
the most recently ended Fiscal Quarter;
(d) notwithstanding the provisions of clauses (a) and (b)
above, the Borrower and its Restricted Subsidiaries shall be
permitted to pay dividends to Holdings to enable Holdings to
pay cash interest on Indebtedness of Holdings in accordance
with the terms of each of such Indebtedness in an aggregate
amount not to exceed 25% of Excess Cash Flow for the period
from August 31, 1997 through the most recently ended Fiscal
Quarter (net of amounts in respect of clause (c)(iv)(y) above)
so long as (A) after giving effect to the making of such
Restricted Payment, (i) the Leverage Ratio shall be less than
4.0:1.0
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on a pro forma basis and (ii) the Borrower shall be in pro
forma compliance with the Fixed Charge Coverage Ratio covenant set
forth in clause (d) of Section 7.2.4, in each case for the most
recent full Fiscal Quarter immediately preceding the date of the
making of such Restricted Payment for which the relevant financial
information has been delivered pursuant to clause (a) or clause (b)
of Section 7.1.1 and (B) an Authorized Officer of the Borrower shall
have delivered a certificate to the Administrative Agent in form and
substance satisfactory to the Administrative Agent (including a
calculation of the Leverage Ratio and Fixed Charge Coverage Ratio in
reasonable detail) certifying to the accuracy of clause (A) above
and certifying that no Default shall have occurred and be continuing
on the date such Restricted Payment is made, nor would a Default
result from the making of such Restricted Payment;
(e) notwithstanding the provisions of clauses (a) and (b)
above, the Borrower and its Subsidiaries shall be permitted to make
the Restricted Payments included in the Transaction; and
(f) notwithstanding the provisions of clauses (a) and (b)
above, the Borrower may pay a dividend to Holdings consisting solely
of a transfer of all or a portion of the Intercompany Loan.
SECTION 7.2.7. Capital Expenditures, etc. With respect to Capital
Expenditures, the parties covenant and agree as follows:
(a) The Borrower will not, and will not permit any of its
Restricted Subsidiaries to, make or commit to make Capital
Expenditures in any Fiscal Year, except Capital Expenditures of the
Borrower and its Restricted Subsidiaries (other than the Trademark
Subsidiary and the IPO Subsidiary) which do not aggregate in excess
of (x) in the case of Fiscal Years ending on or prior to June 30,
2000, $20,000,000 in such Fiscal Year or (y) in the case of any
Fiscal Year thereafter, $25,000,000 in such Fiscal Year; provided,
however, that, to the extent the amount of Capital Expenditures
permitted to be made in any Fiscal Year pursuant to this Section
exceeds the aggregate amount of Capital Expenditures actually made
during such Fiscal Year, such excess amount (up to an aggregate of
50% of the amount of Capital Expenditures permitted for such Fiscal
Year, without giving effect to this proviso) may be carried forward
to (but only to) the next succeeding Fiscal Year (any such amount to
be certified by the Borrower to the Agents in the Compliance
Certificate delivered for the last Fiscal Quarter of such Fiscal
Year, and any such amount carried forward to a succeeding Fiscal
Year shall be deemed to be used prior to the Borrower and its
Subsidiaries using the amount of Capital Expenditures permitted by
this Section in such succeeding Fiscal Year, without giving effect
to such carry-forward).
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(b) The parties acknowledge and agree that the permitted
Capital Expenditure level set forth in clause (a) above shall be
exclusive of (i) the amount of Capital Expenditures actually made
with cash capital contributions made, directly or indirectly, to the
Borrower or any of its Restricted Subsidiaries by Holdings, the
proceeds of equity issuances made by the Borrower or any of its
Restricted Subsidiaries, directly or indirectly, to Holdings, and
repayments by Holdings of the Intercompany Loan, in each case after
the Closing Date and specifically identified in a certificate
delivered by an Authorized Office of the Borrower to the Agents on or
about the time such capital contribution or equity issuance is made
and (ii) that portion of any acquisition that is permitted under
Section 7.2.5 (other than pursuant to clause (d) thereof) that is
accounted for as a Capital Expenditure.
SECTION 7.2.8. Consolidation, Merger, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, liquidate or dissolve,
consolidate with, or merge into or with, any other corporation, or purchase or
otherwise acquire all or substantially all of the assets of any Person (or of
any division thereof) except
(a) any such Restricted Subsidiary may liquidate or dissolve
voluntarily into, and may merge with and into, the Borrower (so long
as the Borrower is the surviving corporation of such combination or
merger) or any other Subsidiary, and the assets or stock of any
Restricted Subsidiary may be purchased or otherwise acquired by the
Borrower or any other Restricted Subsidiary; provided, that
notwithstanding the above, a Restricted Subsidiary may only
liquidate or dissolve into, or merge with and into, another
Restricted Subsidiary of the Borrower if, after giving effect to
such combination or merger, the Borrower continues to own (directly
or indirectly), and the Administrative Agent continues to have
pledged to it pursuant to a Pledge Agreement, a percentage of the
issued and outstanding shares of Capital Stock (on a fully diluted
basis) of the Restricted Subsidiary surviving such combination or
merger that is equal to or in excess of the percentage of the issued
and outstanding shares of Capital Stock (on a fully diluted basis)
of the Restricted Subsidiary that does not survive such combination
or merger that was (immediately prior to the combination or merger)
owned by the Borrower or pledged to the Administrative Agent;
(b) so long as no Default has occurred and is continuing or
would occur after giving effect thereto, the Borrower or any of its
Restricted Subsidiaries (other than the Trademark Subsidiary and the
IPO Subsidiary) may purchase all or substantially all of the assets
of any Person (or any division thereof) not then a Subsidiary, or
acquire such Person by merger, if permitted (without duplication)
pursuant to Section 7.2.7 or clause (f), (j) or (k) of Section
7.2.5;
(c) the Borrower and its Restricted Subsidiaries may consummate
the Transaction.
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SECTION 7.2.9. Asset Dispositions, etc. The Borrower will not, and
will not permit any of its Restricted Subsidiaries to, sell, transfer, lease,
contribute or otherwise convey, or grant options, warrants or other rights
with respect to, all or any part of its assets, whether now owned or hereafter
acquired (including accounts receivable and Capital Stock of Restricted
Subsidiaries) to any Person, unless (with respect to the Borrower and each
Restricted Subsidiary other than the Trademark Subsidiary, as to intellectual
property acquired after the Closing Date, and the IPO Subsidiary):
(a) such sale, transfer, lease, contribution or conveyance
of such assets is (i) in the ordinary course of its business (and
does not constitute a sale, transfer, lease, contribution or other
conveyance of all or a substantial part of the Borrower's and its
Restricted Subsidiaries' assets, taken as a whole) or is of obsolete
or worn out property, (ii) permitted by Section 7.2.8, or (iii)
between the Borrower and one of its Subsidiaries or between
Subsidiaries of the Borrower;
(b) such sale, transfer, lease, contribution or conveyance
constitutes (i) an Investment permitted under Section 7.2.5, (ii) a
Lien permitted under Section 7.2.3, or (iii) a Restricted Payment
permitted under Section 7.2.6;
(c) (i) such sale, transfer, lease, contribution or conveyance
of such assets is for fair market value and the consideration
consists of no less than 75% in cash, (ii) the Net Disposition
Proceeds received from such assets, together with the Net
Disposition Proceeds of all other assets sold, transferred, leased,
contributed or conveyed pursuant to this clause (c) since the
Closing Date, does not exceed (individually or in the aggregate)
$75,000,000 over the term of this Agreement and (iii) an amount
equal to the Net Disposition Proceeds generated from such sale,
transfer, lease, contribution or conveyance is reinvested in the
business of the Borrower and its Restricted Subsidiaries, or, to the
extent required thereunder, is applied to prepay the Loans pursuant
to the terms of Section 3.1.1 and Section 3.1.2.
SECTION 7.2.10. Modification of Certain Agreements. Without the prior
written consent of the Required Lenders, the Borrower will not, and will not
permit any of its Restricted Subsidiaries to, consent to any amendment,
supplement, amendment and restatement, waiver or other modification of any of
the terms or provisions contained in, or applicable to, the Discount
Debentures, any Subordinated Note (including any agreement or indenture
related thereto or to the Subordinated Debt Issuance) or any Material Document
or any schedules, exhibits or agreements related thereto, in each case which
would materially adversely affect the rights or remedies of the Lenders, or
the Borrower's or any other Obligor's ability to perform hereunder or under
any Loan Document or which would increase the cash consideration payable in
respect of the Merger or, in the case of the Merger Agreement, which would
increase the Borrower's or any of its Restricted Subsidiaries' obligations or
liabilities, contingent or otherwise (other than
94
adjustments to the cash consideration payable in respect of the Merger made
pursuant to the terms of the Merger Agreement).
SECTION 7.2.11. Transactions with Affiliates. The Borrower will not,
and will not permit any of its Restricted Subsidiaries to, enter into, or
cause, suffer or permit to exist any arrangement or contract with any of its
other Affiliates (other than any Obligor or any other Restricted Subsidiary of
the Borrower) unless such arrangement or contract is fair and equitable to the
Borrower or such Restricted Subsidiary and is an arrangement or contract of
the kind which would be entered into by a prudent Person in the position of
the Borrower or such Subsidiary with a Person which is not one of its
Affiliates; provided, however that the Borrower and its Restricted
Subsidiaries shall be permitted to (i) enter into and perform their
obligations, or take any other actions contemplated under the Transaction
Documents, (ii) make any Restricted Payment permitted under Section 7.2.6 and
(iii) enter into and perform their obligations under arrangements with DLJ and
its Affiliates for underwriting, investment banking and advisory services
referred to in Section 7.2.6 on usual and customary terms.
SECTION 7.2.12. Negative Pledges, Restrictive Agreements, etc. The
Borrower will not, and will not permit any of its Restricted Subsidiaries to,
enter into any agreement prohibiting
(a) the (i) creation or assumption of any Lien upon its
properties, revenues or assets, whether now owned or hereafter
acquired (other than, in the case of any assets acquired with the
proceeds of any Indebtedness permitted under Section 7.2.2(c),
customary limitations and prohibitions contained in such Indebtedness
and in the case of any Indebtedness permitted under clause (h) of
Section 7.2.2, customary limitations in respect of the Non-U.S.
Subsidiaries of the Borrower that shall have incurred such
Indebtedness and their assets), or (ii) ability of the Borrower or
any other Obligor to amend or otherwise modify this Agreement or any
other Loan Document; or
(b) any Restricted Subsidiary from making any payments,
directly or indirectly, to the Borrower by way of dividends,
advances, repayments of loans or advances, reimbursements of
management and other intercompany charges, expenses and accruals or
other returns on investments, or any other agreement or arrangement
which restricts the ability of any such Restricted Subsidiary to make
any payment, directly or indirectly, to the Borrower (other than any
limitations or prohibitions existing in any Indebtedness permitted
under clause (a) of Section 7.2.2 or any Lien permitted under clause
(a) of Section 7.2.3 or customary limitations and prohibitions in any
Indebtedness permitted under clause (h) of Section 7.2.2 that are
applicable to the Non-U.S. Subsidiaries of the Borrower that have
incurred such Indebtedness and their assets).
SECTION 7.2.13. Stock of Subsidiaries. The Borrower will not permit
any Restricted Subsidiary to issue any Capital Stock (whether for value or
otherwise) to any Person other than the Borrower or another wholly-owned
Subsidiary of the Borrower.
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SECTION 7.2.14. Sale and Leaseback. The Borrower will not, and will
not permit any of its Restricted Subsidiaries to, enter into any agreement or
arrangement with any other Person providing for the leasing by the Borrower or
any of its Restricted Subsidiaries of real or personal property which has been
or is to be sold or transferred by the Borrower or any of its Restricted
Subsidiaries to such other 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 any of its Restricted Subsidiaries.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default. Each of the following
events or occurrences described in this Section 8.1 shall constitute an "Event
of Default".
SECTION 8.1.1. Non-Payment of Obligations. (a) The Borrower shall
default in the payment or prepayment of any principal of any Loan when due or
any Reimbursement Obligations or any deposit of cash for collateral purposes
pursuant to Section 2.6.2 or Section 2.6.4, as the case may be, or (b) any
Obligor (including the Borrower) shall default (and such default shall
continue unremedied for a period of three Business Days) in the payment when
due of any interest or commitment fee with respect to the Loans or Commitments
or of any other monetary Obligation.
SECTION 8.1.2. Breach of Warranty. Any representation or warranty of
the Borrower or any other Obligor made or deemed to be made hereunder or in
any other Loan Document executed by it or any other writing or certificate
(including the Closing Date Certificate) furnished by or on behalf of the
Borrower or any other Obligor to the Agents, the Issuer, the Arranger or any
Lender for the purposes of or in connection with this Agreement or any such
other Loan Document (including any certificates delivered pursuant to Article
V) is or shall be incorrect when made in any material respect.
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations.
The Borrower shall default in the due performance and observance of any of its
obligations under Sections 7.1.9, 7.1.10 or 7.2 (other than Section 7.2.1).
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations.
Any Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrower by the Administrative Agent at
the direction of the Required Lenders.
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SECTION 8.1.5. Default on Other Indebtedness. A default shall occur
(i) in the payment when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any Indebtedness, other than Indebtedness
described in Section 8.1.1, of the Borrower or any of its Restricted
Subsidiaries or Holdings having a principal amount, individually or in the
aggregate, in excess of $10,000,000, or (ii) a default shall occur in the
performance or observance of any obligation or condition with respect to such
Indebtedness having a principal amount, individually or in the aggregate, in
excess of $10,000,000 if the effect of such default is to accelerate the
maturity of any such Indebtedness or such default shall continue unremedied
for any applicable period of time sufficient to permit the holder or holders
of such Indebtedness, or any trustee or agent for such holders, to cause such
Indebtedness to become due and payable prior to its expressed maturity.
SECTION 8.1.6. Judgments. Any judgment or order for the payment of
money in excess of $10,000,000 (not covered by insurance from a responsible
insurance company that is not denying its liability with respect thereto)
shall be rendered against the Borrower or any of its Restricted Subsidiaries
or Holdings and remain unpaid and either (i) enforcement proceedings shall
have been commenced by any creditor upon such judgment or order, or (ii) there
shall be any period of 30 consecutive days during which a stay of enforcement
of such judgment or order, by reason of a pending appeal or otherwise, shall
not be in effect.
SECTION 8.1.7. Pension Plans. Any of the following events shall occur
with respect to any Pension Plan (i) the termination of any Pension Plan if,
as a result of such termination, the Borrower would be required to make a
contribution to such Pension Plan, or would reasonably expect to incur a
liability or obligation to such Pension Plan, in excess of $10,000,000, or
(ii) a contribution failure occurs with respect to any Pension Plan sufficient
to give rise to a Lien under section 302(f) of ERISA in an amount in excess of
$10,000,000.
SECTION 8.1.8. Change in Control. Any Change in Control shall occur.
SECTION 8.1.9. Bankruptcy, Insolvency, etc. The Borrower or any of
its Restricted Subsidiaries (other than immaterial Subsidiaries) or any other
Obligor shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness to pay, its debts as they
become due;
(b) apply for, consent to, or acquiesce in, the appointment
of a trustee, receiver, sequestrator or other custodian for the
Borrower or any of such Restricted Subsidiaries or any other Obligor
or any property of any thereof, or make a general assignment for the
benefit of creditors;
(c) in the absence of such application, consent,
acquiescence or assignment, permit or suffer to exist the appointment
of a trustee, receiver, sequestrator or other
97
custodian for the Borrower or any of its Restricted Subsidiaries (other
than immaterial Subsidiaries) or any other Obligor or for a substantial
part of the property of any thereof, and such trustee, receiver,
sequestrator or other custodian shall not be discharged within 60 days,
provided that the Borrower, each such Restricted Subsidiary and each
other Obligor hereby expressly authorizes the Agents, the Issuer and each
Lender to appear in any court conducting any relevant proceeding during
such 60-day period to preserve, protect and defend their rights under the
Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect of the Borrower or any of its
Restricted Subsidiaries (other than immaterial Subsidiaries) or any other
Obligor, and, if any such case or proceeding is not commenced by the
Borrower or such Restricted Subsidiary or such other Obligor, such case
or proceeding shall be consented to or acquiesced in by the Borrower or
such Restricted Subsidiary or such other Obligor or shall result in the
entry of an order for relief or shall remain for 60 days undismissed,
provided that the Borrower, each such Restricted Subsidiary and each
other Obligor hereby expressly authorizes the Agents, the Issuer and each
Lender to appear in any court conducting any such case or proceeding
during such 60-day period to preserve, protect and defend their rights
under the Loan Documents; or
(e) take any action (corporate or otherwise) authorizing, or in
furtherance of, any of the foregoing.
SECTION 8.1.10. Impairment of Security, etc. Any Loan Document, or
any Lien granted thereunder, shall (except in accordance with its terms), in
whole or in part, terminate, cease to be in full force and effect or cease to
be the legally valid, binding and enforceable obligation of any Obligor party
thereto; the Borrower or any other Obligor shall, directly or indirectly,
contest in any manner the effectiveness, validity, binding nature or
enforceability thereof; or any Lien securing any Obligation shall, in whole or
in part, cease to be a perfected first priority Lien, subject only to those
exceptions expressly permitted by the Loan Documents, except to the extent any
event referred to above (a) relates to assets of the Borrower or any of its
Subsidiaries which are immaterial, (b) results from the failure of the
Administrative Agent to maintain possession of certificates representing
securities pledged under any Pledge Agreement or to file continuation
statements under the Uniform Commercial Code of any applicable jurisdiction or
(c) is covered by a lender's title insurance policy and the relevant insurer
promptly after the occurrence thereof shall have acknowledged in writing that
the same is covered by such title insurance policy.
SECTION 8.1.11. Subordinated Notes. The subordination provisions
relating to the Subordinated Notes (the "Subordination Provisions") shall fail
to be enforceable by the Lenders (which have not effectively waived the
benefits thereof) in accordance with the terms thereof, or
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the principal or interest on any Loan, Reimbursement Obligation or other
Obligations shall fail to constitute "Senior Debt" (as defined in any
Subordinated Note) or "senior indebtedness" (or any other similar term)); or
the Borrower or any of its Subsidiaries shall, directly or indirectly, disavow
or contest in any manner (i) the effectiveness, validity or enforceability of
any of the Subordination Provisions, or (ii) that any of such Subordination
Provisions exist for the benefit of the Agents and the Lenders.
SECTION 8.2. Action if Bankruptcy, etc. If any Event of Default
described in clauses (b), (c) and (d) of Section 8.1.9 shall occur with
respect to any Obligor (other than immaterial Subsidiaries) the Commitments
(if not theretofore terminated) shall automatically terminate and the
outstanding principal amount of all outstanding Loans and all other
Obligations (including Reimbursement Obligations) shall automatically be and
become immediately due and payable, without notice or demand and the Borrower
shall automatically and immediately be obligated to deposit with the
Administrative Agent cash collateral in an amount equal to all Letter of
Credit Outstandings.
SECTION 8.3. Action if Other Event of Default. If any Event of
Default (other than an Event of Default described in clauses (b), (c) and (d)
of Section 8.1.9 with respect to any Obligor (other than immaterial
Subsidiaries)) shall occur for any reason, whether voluntary or involuntary,
and be continuing, the Administrative Agent, upon the direction of the
Required Lenders, shall by notice to the Borrower declare all or any portion
of the outstanding principal amount of the Loans and other Obligations
(including Reimbursement Obligations) to be due and payable, require the
Borrower to provide cash collateral to be deposited with the Administrative
Agent in an amount equal to the undrawn amount of all Letters of Credit
outstanding and/or declare the Commitments (if not theretofore terminated) to
be terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate and the Borrower
shall deposit with the Administrative Agent cash collateral in an amount equal
to all Letters of Credit Outstandings.
ARTICLE IX
THE AGENTS
SECTION 9.1. Actions. Each Lender hereby appoints DLJ as its
Syndication Agent and NationsBank as its Administrative Agent under and for
purposes of this Agreement, the Notes and each other Loan Document. Each
Lender authorizes the Agents to act on behalf of such Lender under this
Agreement, the Notes and each other Loan Document and, in the absence of other
written instructions from the Required Lenders received from time to time by
the Agents (with respect to which each of the Agents agrees that it will
comply, except as otherwise
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provided in this Section or as otherwise advised by counsel), to exercise such
powers hereunder and thereunder as are specifically delegated to or required
of the Agents by the terms hereof and thereof, together with such powers as
may be reasonably incidental thereto. Each Lender hereby indemnifies (which
indemnity shall survive any termination of this Agreement) the Agents, ratably
in accordance with their respective Term Loans outstanding and Commitments
(or, if no Term Loans or Commitments are at the time outstanding and in
effect, then ratably in accordance with the principal amount of Term Loans
held by such Lender, and their respective Commitments as in effect in each
case on the date of the termination of this Agreement), from and against any
and all liabilities, obligations, losses, damages, claims, costs or expenses
of any kind or nature whatsoever which may at any time be imposed on, incurred
by, or asserted against, either of the Agents in any way relating to or
arising out of this Agreement, the Notes and any other Loan Document,
including reasonable attorneys' fees, and as to which any Agent is not
reimbursed by the Borrower or any other Obligor (and without limiting the
obligation of the Borrower or any other Obligor to do so); provided, however,
that no Lender shall be liable for the payment of any portion of such
liabilities, obligations, losses, damages, claims, costs or expenses which are
determined by a court of competent jurisdiction in a final proceeding to have
resulted solely from such Agent's gross negligence or willful misconduct. The
Agents shall not be required to take any action hereunder, under the Notes or
under any other Loan Document, or to prosecute or defend any suit in respect
of this Agreement, the Notes or any other Loan Document, unless it is
indemnified hereunder to its satisfaction. If any indemnity in favor of either
of the Agents shall be or become, in such Agent's determination, inadequate,
the Agent may call for additional indemnification from the Lenders and cease
to do the acts indemnified against hereunder until such additional indemnity
is given.
SECTION 9.2. Funding Reliance, etc. Unless the Administrative Agent
shall have been notified by telephone, confirmed in writing, by any Lender by
5:00 p.m., New York time, on the day prior to a Borrowing or disbursement with
respect to a Letter of Credit pursuant to Section 2.6.2 that such Lender will
not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent
and, in reliance upon such assumption, make available to the Borrower a
corresponding amount. If and to the extent that such Lender shall not have
made such amount available to the Administrative Agent, such Lender severally
agrees and the Borrower agrees to repay the Administrative Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date the Administrative Agent made such amount available to the
Borrower to the date such amount is repaid to the Administrative Agent, at the
interest rate applicable at the time to Loans comprising such Borrowing.
SECTION 9.3. Exculpation. None of the Agents or the Arranger nor any
of their respective directors, officers, employees or agents shall be liable
to any Lender for any action taken or omitted to be taken by it under this
Agreement or any other Loan Document, or in connection herewith or therewith,
except for its own willful misconduct or gross negligence, nor
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responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of this Agreement or
any other Loan Document, nor for the creation, perfection or priority of any
Liens purported to be created by any of the Loan Documents, or the validity,
genuineness, enforceability, existence, value or sufficiency of any collateral
security, nor to make any inquiry respecting the performance by the Borrower
of its obligations hereunder or under any other Loan Document. Any such
inquiry which may be made by any Agent or the Issuer shall not obligate it to
make any further inquiry or to take any action. The Agents and the Issuer
shall be entitled to rely upon advice of counsel concerning legal matters and
upon any notice, consent, certificate, statement or writing which the Agents
or the Issuer, as applicable, believe to be genuine and to have been presented
by a proper Person.
SECTION 9.4. Successor. The Syndication Agent may resign as such upon
one Business Day's notice to the Borrower and the Administrative Agent. The
Administrative Agent may resign as such at any time upon at least 30 days'
prior notice to the Borrower and all Lenders. If the Administrative Agent at
any time shall resign, the Required Lenders may, with the prior consent of the
Borrower (which consent shall not be unreasonably withheld), appoint another
Lender as a successor Administrative Agent which shall thereupon become the
Administrative Agent hereunder. If no successor Administrative Agent shall
have been so appointed by the Required Lenders, and shall have accepted such
appointment, within 30 days after the retiring Administrative Agent's giving
notice of resignation, then the retiring Administrative Agent may, on behalf
of the Lenders, appoint a successor Administrative Agent, which shall be one
of the Lenders or a commercial banking institution organized under the laws of
the United States or a United States branch or agency of a commercial banking
institution, and having a combined capital and surplus of at least
$500,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall be entitled to receive from the retiring Administrative Agent such
documents of transfer and assignment as such successor Administrative Agent
may reasonably request, and shall thereupon succeed to and become vested with
all rights, powers, privileges and duties of the retiring Administrative
Agent, and the retiring Administrative Agent shall be discharged from its
duties and obligations under this Agreement. After any retiring Administrative
Agent's resignation hereunder as the Administrative Agent, the provisions of
(i) this Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was the Administrative Agent under this
Agreement, and (ii) Section 10.3 and Section 10.4 shall continue to inure to
its benefit.
SECTION 9.5. Credit Extensions by each Agent. Each Agent and the
Issuer shall have the same rights and powers with respect to (x) (i) in the
case of the Agents, the Credit Extensions made by it or any of its Affiliates
and (ii) in the case of the Issuer, the Loans made by it or any of its
Affiliates, and (y) the Notes held by it or any of its Affiliates as any other
Lender and may exercise the same as if it were not an Agent or the Issuer.
Each Agent, the Issuer and each and each of their respective Affiliates may
accept deposits from, lend money to, and
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generally engage in any kind of business with the Borrower or any Subsidiary
or Affiliate of the Borrower as if such Agent or Issuer were not an Agent or
Issuer hereunder.
SECTION 9.6. Credit Decisions. Each Lender acknowledges that it has,
independently of each Agent, the Documentation Agent, the Arranger, the Issuer
and each other Lender, and based on such Lender's review of the financial
information of the Borrower, this Agreement, the other Loan Documents (the
terms and provisions of which being satisfactory to such Lender) and such
other documents, information and investigations as such Lender has deemed
appropriate, made its own credit decision to extend its Commitments. Each
Lender also acknowledges that it will, independently of each Agent, the
Documentation Agent, the Arranger, the Issuer and each other Lender, and based
on such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under this Agreement or any other Loan Document.
SECTION 9.7. Copies, etc. The Administrative Agent shall give prompt
notice to each Lender of each notice or request required or permitted to be
given to the Administrative Agent by the Borrower pursuant to the terms of
this Agreement (unless concurrently delivered to the Lenders by the Borrower).
The Administrative Agent will distribute to each Lender each document or
instrument received for such Lender's account and copies of all other
communications received by the Administrative Agent from the Borrower for
distribution to the Lenders by the Administrative Agent in accordance with the
terms of this Agreement.
SECTION 9.8. The Syndication Agent, the Documentation Agent and the
Administrative Agent. Notwithstanding anything else to the contrary contained
in this Agreement or any other Loan Document, the Agents and the Documentation
Agent, in their respective capacities as such, each in such capacity, shall
have no duties or responsibilities under this Agreement or any other Loan
Document nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities
shall be read into this Agreement or otherwise exist against either Agent or
the Documentation Agent, as applicable, in such capacity except as are
explicitly set forth herein or in the other Loan Documents.
ARTICLE X
MISCELLANEOUS PROVISIONS
SECTION 10.1. Waivers, Amendments, etc. The provisions of this
Agreement and of each other Loan Document may from time to time be amended,
modified or waived, if such amendment, modification or waiver is in writing
and consented to by the Borrower and each Obligor party thereto and by the
Required Lenders; provided, however, that no such amendment, modification or
waiver which would:
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(a) modify any requirement hereunder that any particular
action be taken by all the Lenders or by the Required Lenders shall
be effective unless consented to by each Lender;
(b) modify this Section 10.1, or clause (i) of Section
10.10, change the definition of "Required Lenders", increase any
Commitment Amount or the Percentage of any Lender (other than
pursuant to clause (c) of Section 2.1.2), reduce any fees described
in Section 3.3 (other than the administration fee referred to in
Section 3.3.2), release any Subsidiary Guarantor from its obligations
under the Subsidiary Guaranty, if any, release all or substantially
all of the collateral security (except in each case as otherwise
specifically provided in this Agreement, any such Subsidiary
Guaranty, a Security Agreement or a Pledge Agreement) or extend any
Commitment Termination Date, shall be made without the consent of
each Lender adversely affected thereby;
(c) extend the due date for, or reduce the amount of, any
scheduled repayment of principal of or interest on or fees payable in
respect of any Loan or reduce the principal amount of or rate of
interest on or fees payable in respect of any Loan or any
Reimbursement Obligations (which shall in each case include the
conversion of all or any part of the Obligations into equity of any
Obligor), shall be made without the consent of the holder of the Note
evidencing such Loan or, in the case of a Reimbursement Obligation,
the Issuer owed, and those Lenders participating in, such
Reimbursement Obligation;
(d) affect adversely the interests, rights or obligations of
any Agent, Issuer or Arranger (in its capacity as Agent, Issuer or
Arranger), unless consented to by such Agent, Issuer or Arranger, as
the case may be;
(e) (i) change the definition of "Borrowing Base Amount",
"Eligible Account" or "Net Asset Value" (in each case if the effect
of such change would be to require a Lender to make or participate in
a Credit Extension in an amount that is greater than such Lender
would have had to make or participate in immediately prior to such
change), (ii) amend, modify or waive Section 3.1.1(b) or (iii) have
the effect (either immediately or at some later time) of enabling the
Borrower to satisfy a condition precedent to the making of a
Revolving Loan or the issuance of a Letter of Credit without the
consent of Lenders holding at least 51% of the Revolving Loan
Commitments; or
(f) amend, modify or waive the provisions of clause (a)(i)
of Section 3.1.1 or clause (b) of Section 3.1.2 or effect any
amendment, modification or waiver that by its terms adversely affects
the rights of Lenders participating in any Tranche differently from
those of Lenders participating in other Tranches, without the consent
of the holders of the Notes evidencing at least 51% of the aggregate
amount of Loans outstanding under the Tranche or Tranches affected by
such modification, or, in the case of a modification
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affecting the Revolving Loan Commitment Amount, the Lenders
holding at least 51% of the Revolving Loan Commitments.
No failure or delay on the part of any Agent, the Issuer, any Lender or the
holder of any Note in exercising any power or right under this Agreement or
any other Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No
notice to or demand on the Borrower in any case shall entitle it to any notice
or demand in similar or other circumstances. No waiver or approval by any
Agent, the Issuer, any Lender or the holder of any Note under this Agreement
or any other Loan Document shall, except as may be otherwise stated in such
waiver or approval, be applicable to subsequent transactions. No waiver or
approval hereunder shall require any similar or dissimilar waiver or approval
thereafter to be granted hereunder.
SECTION 10.2. Notices. All notices and other communications provided
to any party hereto under this Agreement or any other Loan Document shall be
in writing or by facsimile and addressed, delivered or transmitted to such
party at its address or facsimile number set forth on Schedule II hereto or,
in the case of a Lender that becomes a party hereto after the date hereof, as
set forth in the Lender Assignment Agreement pursuant to which such Lender
becomes a Lender hereunder or at such other address or facsimile number as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid or if properly addressed
and sent by pre-paid courier service, shall be deemed given when received; any
notice, if transmitted by facsimile, shall be deemed given when transmitted
(and telephonic confirmation of receipt thereof has been received).
SECTION 10.3. Payment of Costs and Expenses. The Borrower agrees to
pay on demand all reasonable expenses of each of the Agents (including the
reasonable fees and out-of-pocket expenses of a single counsel to the Agents
and of local or foreign counsel, if any, who may be retained by counsel to the
Agents) in connection with
(a) the syndication by the Syndication Agent and the Arranger
of the Loans, the negotiation, preparation, execution and delivery
of this Agreement and of each other Loan Document, including
schedules and exhibits, and any amendments, waivers, consents,
supplements or other modifications to this Agreement or any other
Loan Document as may from time to time hereafter be required,
whether or not the transactions contemplated hereby are consummated;
(b) the filing, recording, refiling or rerecording of each
Mortgage, each Pledge Agreement and each Security Agreement and/or
any Uniform Commercial Code financing statements relating thereto
and all amendments, supplements and modifications to any thereof and
any and all other documents or instruments of further assurance
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required to be filed or recorded or refiled or rerecorded by the
terms hereof or of such Mortgage, Pledge Agreement or Security
Agreement; and
(c) the preparation and review of the form of any document
or instrument relevant to this Agreement or any other Loan Document.
The Borrower further agrees to pay, and to save the Agents, the Issuer and the
Lenders harmless from all liability for, any stamp or other similar taxes
which may be payable in connection with the execution or delivery of this
Agreement, the Credit Extensions made hereunder or the issuance of the Notes
or Letters of Credit or any other Loan Documents. The Borrower also agrees to
reimburse each Agent, the Issuer and each Lender upon demand for all
reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses) incurred by such Agent, the Issuer or such Lender in
connection with (x) the negotiation of any restructuring or "work-out",
whether or not consummated, of any Obligations and (y) the enforcement of any
Obligations.
SECTION 10.4. Indemnification. In consideration of the execution and
delivery of this Agreement by each Lender and the extension of the
Commitments, the Borrower hereby, to the fullest extent permitted under
applicable law, indemnifies, exonerates and holds each Agent, the
Documentation Agent, the Issuer, the Arranger and each Lender and each of
their respective Affiliates, and each of their respective partners, officers,
directors, employees and agents, and each other Person controlling any of the
foregoing within the meaning of either Section 15 of the Securities Act of
1933, as amended, or Section 20 of the Securities Exchange Act of 1934, as
amended (collectively, the "Indemnified Parties"), free and harmless from and
against any and all actions, causes of action, suits, losses, costs,
liabilities and damages, and expenses actually incurred in connection
therewith (irrespective of whether any such Indemnified Party is a party to
the action for which indemnification hereunder is sought), including
reasonable attorneys' fees and disbursements (collectively, the "Indemnified
Liabilities"), incurred by the Indemnified Parties or any of them as a result
of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension;
(b) the entering into and performance of this Agreement and any
other Loan Document by any of the Indemnified Parties (excluding any
successful action brought by or on behalf of the Borrower as the
result of any failure by any Lender to make any Credit Extension
hereunder);
(c) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by the Borrower or any of its
Subsidiaries of all or any portion of the stock or assets of any
Person, whether or not such Agent, such Documentation Agent, such
Issuer, such Arranger or such Lender is party thereto;
105
(d) any investigation, litigation or proceeding related to any
environmental cleanup, audit, compliance or other matter relating to
the Borrower's or any of its Subsidiaries' compliance with or
liability under Environmental Law or the Release by the Borrower or
any of its Subsidiaries of any Hazardous Material; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission or release from, any real property
owned or operated by the Borrower or any Subsidiary thereof of any
Hazardous Material present on or under such property in a manner
giving rise to liability at or prior to the time the Borrower or
such Subsidiary owned or operated such property (including any
losses, liabilities, damages, injuries, costs, expenses or claims
asserted or arising under any Environmental Law), regardless of
whether caused by, or within the control of, the Borrower or such
Subsidiary,
except for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the relevant Indemnified Party's
gross negligence or willful misconduct or any Hazardous Materials that are
first manufactured, emitted, generated, treated, released, stored or disposed
of on any real property of the Borrower or any of its Subsidiaries or any
violation of Environmental Law that first occurs on or with respect to any
real property of the Borrower or any of its Subsidiaries after such real
property is transferred to any Indemnified Person or its successor by
foreclosure sale, deed in lieu of foreclosure, or similar transfer, except to
the extent such manufacture, emission, release, generation, treatment, storage
or disposal or violation is actually caused by Holdings, the Borrower or any
of the Borrower's Subsidiaries. The Borrower and its permitted successors and
assigns hereby waive, release and agree not to make any claim, or bring any
cost recovery action against, any Agent, the Issuer, the Documentation Agent,
the Arranger or any Lender under CERCLA or any state equivalent, or any
similar law now existing or hereafter enacted, except to the extent arising
out of the gross negligence or willful misconduct of any Indemnified Party. It
is expressly understood and agreed that to the extent that any of such Persons
is strictly liable under any Environmental Laws, the Borrower's obligation to
such Person under this indemnity shall likewise be without regard to fault on
the part of the Borrower, to the extent permitted under applicable law, with
respect to the violation or condition which results in liability of such
Person. Notwithstanding anything to the contrary herein, each Agent, the
Documentation Agent, the Issuer, the Arranger and each Lender shall be
responsible with respect to any Hazardous Materials that are first
manufactured, emitted, generated, treated, released, stored or disposed of on
any real property of the Borrower or any of its Subsidiaries or any violation
of Environmental Law that first occurs on or with respect to any such real
property after such real property is transferred to any Agent, Documentation
Agent, Issuer, Arranger or Lender to its successor by foreclosure sale, deed
in lieu of foreclosure, or similar transfer, except to the extent such
manufacture, emission, release, generation, treatment, storage or disposal or
violation is actually caused by Holdings, the Borrower or any of the
Borrower's Subsidiaries. If and to the extent that the foregoing undertaking
may be unenforceable for any reason, the Borrower hereby agrees to make the
maximum contribution to
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the payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 10.5. Survival. The obligations of the Borrower under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4, and the obligations of the Lenders
under Sections 4.8 and 9.1, shall in each case survive any termination of this
Agreement, the payment in full of all Obligations and the termination of all
Commitments. The representations and warranties made by the Borrower and each
other Obligor in this Agreement and in each other Loan Document shall survive
the execution and delivery of this Agreement and each such other Loan
Document.
SECTION 10.6. Severability. Any provision of this Agreement or any
other Loan Document which is prohibited or unenforceable in any jurisdiction
shall, as to such provision and such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions of this Agreement or such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 10.7. Headings. The various headings of this Agreement and of
each other Loan Document are inserted for convenience only and shall not
affect the meaning or interpretation of this Agreement or such other Loan
Document or any provisions hereof or thereof.
SECTION 10.8. Execution in Counterparts, Effectiveness, etc. This
Agreement may be executed by the parties hereto in several counterparts, each
of which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.
SECTION 10.9. Governing Law; Entire Agreement. THIS AGREEMENT, THE
NOTES AND, EXCEPT TO THE EXTENT OTHERWISE EXPRESSLY PROVIDED THEREIN, EACH
OTHER LOAN DOCUMENT SHALL EACH BE DEEMED TO BE A CONTRACT MADE UNDER AND
GOVERNED BY THE INTERNAL LAWS OF THE STATE OF NEW YORK. This Agreement, the
Notes and the other Loan Documents constitute the entire understanding among
the parties hereto with respect to the subject matter hereof and supersede any
prior agreements, written or oral, with respect thereto. Upon the execution
and delivery of this Agreement by the parties hereto, all obligations and
liabilities of DLJ Merchant Banking II, Inc. under or relating or with respect
to the Commitment Letter shall be terminated and of no further force or
effect.
SECTION 10.10. Successors and Assigns. This Agreement shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and assigns; provided, however, that (i) the Borrower
may not assign or transfer its rights or obligations hereunder without the
prior written consent of each of the Agents and all Lenders, and (ii) the
rights of sale, assignment and transfer of the Lenders are subject to Section
10.11.
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SECTION 10.11. Sale and Transfer of Loans and Notes; Participations
in Loans and Notes. Each Lender may assign, or sell participations in, its
Loans and Commitments to one or more other Persons, on a non pro rata basis
(except as provided below), in accordance with this Section 10.11.
SECTION 10.11.1. Assignments. Any Lender (the "Assignor Lender"),
(a) with the written consents of the Borrower, the Agents
and (in the case of any assignment of participations in Letters of
Credit or Revolving Loan Commitments) the Issuer (which consents
shall not be unreasonably delayed or withheld and which consents of
the Agents and the Issuer shall not be required in the case of
assignments made by DLJ or any of its Affiliates), may at any time
assign and delegate to one or more commercial banks or other
financial institutions, and
(b) with notice to the Borrower, the Agents, and (in the
case of any assignment of participations in Letters of Credit or
Revolving Loan Commitments) the Issuer, but without the consent of
the Borrower, the Agents or the Issuer, may assign and delegate to
any of its Affiliates or to any other Lender
(each Person described in either of the foregoing clauses as being the Person
to whom such assignment and delegation is to be made, being hereinafter
referred to as an "Assignee Lender"), all or any fraction of such Lender's
total Loans, participations in Letters of Credit and Letter of Credit
Outstandings with respect thereto and Commitments (which assignment and
delegation shall be, as among Revolving Loan Commitments, Revolving Loans and
participations in Letters of Credit, of a constant, and not a varying,
percentage) in a minimum aggregate amount of (i) $5,000,000 or (ii) the then
remaining amount of such Lender's Loans and Commitments; provided, however,
that any such Assignee Lender will comply, if applicable, with the provisions
contained in Section 4.6 and the Borrower, each other Obligor and the Agents
shall be entitled to continue to deal solely and directly with such Lender in
connection with the interests so assigned and delegated to an Assignee Lender
until
(c) written notice of such assignment and delegation,
together with payment instructions, addresses and related information
with respect to such Assignee Lender, shall have been given to the
Borrower and the Agents by such Lender and such Assignee Lender;
(d) such Assignee Lender shall have executed and delivered
to the Borrower and the Agents a Lender Assignment Agreement,
accepted by the Agents; and
(e) the processing fees described below shall have been paid.
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From and after the date that the Agents accept such Lender Assignment
Agreement, (x) the Assignee Lender thereunder shall be deemed automatically to
have become a party hereto and to the extent that rights and obligations
hereunder have been assigned and delegated to such Assignee Lender in
connection with such Lender Assignment Agreement, shall have the rights and
obligations of a Lender hereunder and under the other Loan Documents, and (y)
the Assignor Lender, to the extent that rights and obligations hereunder have
been assigned and delegated by it in connection with such Lender Assignment
Agreement, shall be released from its obligations hereunder and under the
other Loan Documents. Within ten Business Days after its receipt of notice
that the Administrative Agent has received an executed Lender Assignment
Agreement, the Borrower shall execute and deliver to the Administrative Agent
(for delivery to the relevant Assignee Lender) new Notes evidencing such
Assignee Lender's assigned Loans and Commitments and, if the Assignor Lender
has retained Loans and Commitments hereunder, replacement Notes in the
principal amount of the Loans and Commitments retained by the Assignor Lender
hereunder (such Notes to be in exchange for, but not in payment of, those
Notes then held by such Assignor Lender). Each such Note shall be dated the
date of the predecessor Notes. The Assignor Lender shall xxxx the predecessor
Notes "exchanged" and deliver them to the Borrower. Accrued interest on that
part of the predecessor Notes evidenced by the new Notes, and accrued fees,
shall be paid as provided in the Lender Assignment Agreement. Accrued interest
on that part of the predecessor Notes evidenced by the replacement Notes shall
be paid to the Assignor Lender. Accrued interest and accrued fees shall be
paid at the same time or times provided in the predecessor Notes and in this
Agreement. Such Assignor Lender or such Assignee Lender (unless the Assignor
Lender or the Assignee Lender is DLJ or one of its Affiliates) must also pay a
processing fee to the Administrative Agent upon delivery of any Lender
Assignment Agreement in the amount of $1,500, unless such assignment and
delegation is by a Lender to its Affiliate or if such assignment and
delegation is by a Lender to a Federal Reserve Bank, as provided below or is
otherwise consented to by the Administration Agent. Any attempted assignment
and delegation not made in accordance with this Section 10.11.1 shall be null
and void. Nothing contained in this Section 10.11.1 shall prevent or prohibit
any Lender from pledging its rights (but not its obligations to make Loans or
participate in Letters of Credit of Letter of Credit Outstandings) under this
Agreement and/or its Loans and/or its Notes hereunder to a Federal Reserve
Bank in support of borrowings made by such Lender from such Federal Reserve
Bank. In the event that S&P, Xxxxx'x or Xxxxxxxx'x BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are insurance
companies (or Best's Insurance Reports, if such insurance company is not rated
by Insurance Watch Ratings Service)) shall, after the date that any Lender
with a Commitment to make Revolving Loans or participate in Letters of Credit
becomes a Lender, downgrade the long-term certificate of deposit rating or
long-term senior unsecured debt rating of such Lender, and the resulting
rating shall be below BBB-, Baa3 or C (or BB, in the case of Lender that is an
insurance company (or B, in the case of an insurance company not rated by
InsuranceWatch Ratings Service)) respectively, then the Issuer or the Borrower
(with the consent of the Agents and the Issuer) shall have the right, but not
the obligation, upon notice to such Lender and the Agents, to replace such
Lender with an Assignee Lender in accordance with and subject to the
restrictions contained in this Section, and
109
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in this Section) all
its interests, rights and obligations in respect of its Revolving Loan
Commitment under this Agreement to such Assignee Lender; provided, however,
that (i) no such assignment shall conflict with any law, rule, regulation or
order of any governmental authority and (ii) such Assignee Lender shall pay to
such Lender in immediately available funds on the date of such assignment the
principal of and interest and fees (if any) accrued to the date of payment on
the Loans made, and Letters of Credit participated in, by such Lender
hereunder and all other amounts accrued for such Lender's account or owed to
it hereunder.
SECTION 10.11.2. Participations. Any Lender may at any time sell to
one or more commercial banks or other Persons (each such commercial bank and
other Person being herein called a "Participant") participating interests in
any of the Loans, Commitments, participations in Letters of Credit and Letters
of Credit Outstandings or other interests of such Lender hereunder; provided,
however, that
(a) no participation contemplated in this Section shall relieve
such Lender from its Commitments or its other obligations hereunder
or under any other Loan Document;
(b) such Lender shall remain solely responsible for the
performance of its Commitments and such other obligations;
(c) the Borrower and each other Obligor and the Agents shall
continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under this Agreement and
each of the other Loan Documents;
(d) no Participant, unless such Participant is an Affiliate of
such Lender, or is itself a Lender, shall be entitled to require
such Lender to take or refrain from taking any action hereunder or
under any other Loan Document, except that such Lender may agree
with any Participant that such Lender will not, without such
Participant's consent, agree to (i) any reduction in the interest
rate or amount of fees that such Participant is otherwise entitled
to, (ii) a decrease in the principal amount, or an extension of the
final Stated Maturity Date, of any Loan in which such Participant
has purchased a participating interest or (iii) a release of all or
substantially all of the collateral security under the Loan
Documents or any Subsidiary Guarantor under any Subsidiary Guaranty,
if any, in each case except as otherwise specifically provided in a
Loan Document; and
(e) the Borrower shall not be required to pay any amount under
Sections 4.3, 4.4, 4.5, 4.6, 10.3 and 10.4 that is greater than the
amount which it would have been required to pay had no participating
interest been sold.
110
The Borrower acknowledges and agrees, subject to clause (e) above, that, to
the fullest extent permitted under applicable law, each Participant, for
purposes of Sections 4.3, 4.4, 4.5, 4.6, 4.8, 4.9, 10.3 and 10.4, shall be
considered a Lender.
SECTION 10.11.3. Assignment of Registered Notes. A Registered Note
and the Obligations evidenced thereby may be assigned or otherwise transferred
in whole or in part pursuant to the terms of Section 10.11.1 and only by
registration of such assignment or transfer of such Registered Note and the
Obligations evidenced thereby on the Register (and each Registered Note shall
expressly so provide). Any assignment or transfer of all or part of such
Obligations and the Registered Note(s) evidencing the same shall be registered
on the Register only upon surrender for registration of assignment or transfer
of the Registered Note(s) evidencing such Obligations, duly endorsed by (or
accompanied by a written instrument of assignment or transfer duly executed
by) the Registered Noteholder thereof, and thereupon one or more new
Registered Note(s) in the same aggregate principal amount shall be issued to
the designated Assignee Lender, and the old Registered Note(s) shall be
returned by the Administrative Agent to the Borrower marked "canceled." Prior
to the due presentment for registration of assignment or transfer of any
Registered Note, the Borrower and the Agents shall treat the Person in whose
name such Obligations and the Registered Note(s) evidencing the same is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding any notice to the
contrary.
SECTION 10.12. Other Transactions. Nothing contained herein shall
preclude any Agent or any other Lender from engaging in any transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Affiliates in which the Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 10.13. Forum Selection and Consent to Jurisdiction. ANY
LITIGATION BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF
DEALING, STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE
LENDERS, THE ISSUER OR THE BORROWER RELATING THERETO SHALL BE BROUGHT AND
MAINTAINED EXCLUSIVELY (TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) IN THE
COURTS OF THE STATE OF NEW YORK, NEW YORK COUNTY, OR IN THE UNITED STATES
DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT
ANY SUIT SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE
BROUGHT, AT THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY
JURISDICTION WHERE SUCH COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE
BORROWER HEREBY EXPRESSLY AND IRREVOCABLY SUBMITS TO THE JURISDICTION OF THE
COURTS OF THE STATE OF NEW YORK, NEW
000
XXXX XXXXXX, XXX XX XXX XXXXXX XXXXXX DISTRICT COURT FOR THE SOUTHERN
DISTRICT OF NEW YORK FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE
AND IRREVOCABLY AGREES TO BE BOUND BY ANY JUDGMENT RENDERED THEREBY IN
CONNECTION WITH SUCH LITIGATION. THE BORROWER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE
WITHIN OR WITHOUT THE STATE OF NEW YORK. THE BORROWER HEREBY EXPRESSLY AND
IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION
WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF ANY SUCH
LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY
SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE EXTENT THAT
THE BORROWER HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM JURISDICTION OF
ANY COURT OF FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE,
ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE)
WITH RESPECT TO ITSELF OR ITS PROPERTY, THE BORROWER HEREBY IRREVOCABLY WAIVES
(TO THE EXTENT PERMITTED UNDER APPLICABLE LAW) SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.
SECTION 10.14. Waiver of Jury Trial. THE AGENTS, THE ISSUER, THE
LENDERS AND THE BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHTS THEY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER OR IN CONNECTION WITH, THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS
(WHETHER ORAL OR WRITTEN) OR ACTIONS OF THE AGENTS, THE LENDERS OR THE
BORROWER RELATING THERETO. THE BORROWER ACKNOWLEDGES AND AGREES THAT IT HAS
RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND EACH OTHER
PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH IT IS A PARTY) AND THAT THIS
PROVISION IS A MATERIAL INDUCEMENT FOR THE AGENTS AND THE LENDERS ENTERING
INTO THIS AGREEMENT AND EACH SUCH OTHER LOAN DOCUMENT.
SECTION 10.15. Confidentiality. The Agents, the Issuer, the Arranger
and the Lenders shall hold all non-public information obtained pursuant to or
in connection with this Agreement or obtained by them based on a review of the
books and records of the Borrower or any of its Subsidiaries in accordance
with their customary procedures for handling confidential information of this
nature, but may make disclosure to any of their examiners, Affiliates, outside
auditors,
112
counsel and other professional advisors in connection with this Agreement or
as reasonably required by any potential bona fide transferee, participant or
assignee, or in connection with the exercise of remedies under a Loan
Document, or as requested by any governmental agency or representative thereof
or pursuant to legal process; provided, however, that
(a) unless specifically prohibited by applicable law or
court order, each Agent, the Arranger and each Lender shall notify
the Borrower of any request by any governmental agency or
representative thereof (other than any such request in connection
with an examination of the financial condition of such Agent, the
Issuer, Arranger and Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of
such information;
(b) prior to any such disclosure pursuant to this Section
10.15, each Agent, the Issuer, the Arranger and each Lender shall
require any such bona fide transferee, participant and assignee
receiving a disclosure of non-public information to agree in writing
(i) to be bound by this Section 10.15; and
(ii) to require such Person to require any other
Person to whom such Person discloses such non-public
information to be similarly bound by this Section 10.15; and
(c) except as may be required by an order of a court of
competent jurisdiction and to the extent set forth therein, no Lender
shall be obligated or required to return any materials furnished by
the Borrower or any Subsidiary.
113
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be executed by their respective officers thereunto duly authorized as of the
day and year first above written.
DECISIONONE CORPORATION
By:________________________________
Title:
DLJ CAPITAL FUNDING, INC.,
as the Syndication Agent and as
Lender
By:________________________________
Title:
NATIONSBANK, N.A.,
as the Administrative Agent
and as Lender
By: ________________________________
Title:
BANKBOSTON, N.A.,
as the Documentation Agent
and as Lender
By: _________________________________
Title:
114
SCHEDULE I
DISCLOSURE SCHEDULE
ITEM 6.7 Litigation.
Description of Proceeding Action or Claim Sought
ITEM 6.8 Existing Subsidiaries.
ITEM 6.11 Employee Benefit Plans.
ITEM 6.12 Environmental Matters.
ITEM 7.1.11 Mortgaged Properties.
ITEM 7.2.2(a) Ongoing Indebtedness.
ITEM 7.2.2 (b) Ongoing Liens.
ITEM 7.2.5(a) Ongoing Investments.
I-2
SCHEDULE II to
Credit Agreement
PERCENTAGES
REVOLVING Term-A Term-B Term-C
LOAN Loan Loan Loan
COMMITMENT Commitment Commitment Commitment
---------- ---------- ---------- ----------
% % % %
[LENDER] % % % %
ADMINISTRATIVE INFORMATION
Notice Information
Lenders' Domestic and LIBOR Offices
DLJ Capital Funding, Inc.
000 Xxxxxxxxxx Xxxx.
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Contact: ____________
Fax: 000-000-0000
