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EXHIBIT 4.9
[EXECUTION COPY]
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CLIENTLOGIC CORPORATION
(f/k/a ClientLogic Holding Corporation)
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CREDIT AGREEMENT
Dated as of March 10, 2000
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TORONTO DOMINION (TEXAS), INC.
as Agent and Bookrunner
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TABLE OF CONTENTS
This Table of Contents is not part of the Agreement to which it is attached
but is inserted for convenience of reference only.
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Section 1. Definitions and Accounting Matters 1
1.1 Certain Defined Terms 1
1.1.3.1 Accounting Terms and Determinations 14
1.2 Classes and Types of Loans 14
Section 2. Commitments, Loans, Notes and Prepayments 15
2.1 Loans 15
2.2 Borrowings of Loans 15
2.3 Changes of Commitments 15
2.4 Lending Offices 16
2.5 Several Obligations; Remedies Independent 16
2.6 Notes 16
2.7 Optional Prepayments and Conversions or Continuations of Loans 17
2.8 Certain Fees 17
2.9 Commitment Fee 17
2.10 Mandatory Prepayments and Reductions of Commitments 17
Section 3. Payments of Principal and Interest 18
3.1 Repayment of Loans 18
3.2 Interest 18
Section 3.2.2.1 Payments; Pro Rata Treatment; Computations; Etc. 19
3.3 Payments 19
3.4 Pro Rata Treatment 19
3.5 Computations 20
3.6 Minimum Amounts 20
3.7 Certain Notices 20
3.8 Non-Receipt of Funds by the Agent 21
3.8.0.0.0.2.1 Sharing of Payments, Etc. 22
Section 3.8.4.1 Yield Protection, Etc. 23
3.9 Additional Costs 23
3.10 Limitation on Types of Loans 25
3.11 Illegality 25
3.12 Treatment of Affected Loans 25
3.13 Compensation 26
3.14 Replacement Lenders under Certain Circumstances 27
3.15 Foreign Lenders 27
Section 4. Guarantee 28
4.1 The Guarantee 28
4.2 Obligations Unconditional 28
4.3 Reinstatement 29
4.4 Subrogation 29
4.5 Remedies 29
4.6 Continuing Guarantee 29
4.7 Rights of Contribution 30
4.8 General Limitation on Guarantee Obligations 30
Section 5. Conditions Precedent 31
5.1 Conditions for the Initial Loans 31
5.2 Conditions for all Extensions of Credit 32
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Section 5.2.1 Representations and Warranties 32
5.3 Corporate Existence 32
5.4 Financial Condition 32
5.5 Litigation 33
5.6 No Breach 33
5.7 Action 33
5.8 Approvals 34
5.9 Use of Credit 34
5.10 ERISA 34
5.11 Taxes 34
5.12 Investment Company Act 34
5.12.1 Public Utility Holding Company Act 34
5.13 Environmental Matters 34
5.14 Capitalization 35
5.15 True and Complete Disclosure 35
5.16 Year 2000 35
Section 6. Covenants of the Company 35
6.1 Financial Statements, Etc. 35
6.2 Litigation 38
6.3 Existence, Etc. 38
6.4 Insurance 39
6.5 Prohibition of Fundamental Changes 39
6.6 [Reserved] 39
6.7 [Reserved] 39
6.8 [Reserved] 39
6.9 [Reserved] 39
6.10 [Reserved] 39
6.11 Lines of Business 39
6.12 Transactions with Affiliates 39
6.13 Use of Proceeds 39
6.13.1 Total Debt to Cash Flow Ratio 40
6.14 Cash Flow to Debt Service Ratio 40
6.15 Cash Flow to Interest Expense Ratio 40
6.16 Management Fee Payments 40
6.17 Holding Company; Subsidiaries; Etc 40
6.18 Minimum Total Revenue 41
6.19 Minimum Cash Flow 41
6.20 Post-closing Liens 41
Section 6.20.1 Events of Default 42
Section 7. The Agent 44
7.1 Appointment, Powers and Immunities 44
7.2 Reliance by Agent 44
7.3 Defaults 45
7.4 Rights as a Lender 45
7.5 Indemnification 45
7.6 Non-Reliance on Agent and Other Lenders 45
7.7 Failure to Act 46
7.8 Resignation or Removal of Agent 46
7.9 Consents under Other Basic Documents 46
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Section 8. Miscellaneous 47
8.1 Waiver 47
8.2 Notices 47
8.3 Expenses, Etc. 47
8.4 Amendments, Etc. 48
8.5 Successors and Assigns 48
8.6 Assignments and Participations 48
8.7 Survival 50
8.8 Captions 50
8.9 Counterparts 50
8.10 Governing Law; Submission to Jurisdiction 50
8.11 Waiver of Jury Trial 50
8.12 Confidentiality 50
8.13 Senior Credit Agreement Terms 51
SCHEDULE 8.02 - Matters Not Disclosed in December 31, 1998 Financials
SCHEDULE 8.04 - Required Consents
SCHEDULE 8.09 - Certain Tax Matters
SCHEDULE 8.13 - Capitalization
SCHEDULE 8.15 - Year 2000 Compliance Costs
EXHIBIT A-1 - Form of Tranche 1 Note
EXHIBIT A-2 - Form of Tranche 2 Note
EXHIBIT B - Form of Opinion of Counsel to the Obligors
EXHIBIT C - Form of Opinion of Special Counsel to TD
EXHIBIT D - Form of Assignment Agreement
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CREDIT AGREEMENT dated as of March 10, 2000 among:
(a) CLIENTLOGIC CORPORATION, a corporation duly organized and validly
existing under the laws of the State of Delaware (f/k/a ClientLogic Holding
Corporation) (the "Company");
(b) Each of the Subsidiaries of the Company identified under the
caption "Subsidiary Guarantors" on the signature pages hereto (together with
each Subsidiary of the Company that becomes a Subsidiary Guarantor pursuant to
Section 9.18(b) hereof, individually, a "Subsidiary Guarantor" and,
collectively, the "Subsidiary Guarantors", and the Subsidiary Guarantors
collectively with the Company, the "Obligors");
(c) Each of the lenders that is a signatory hereto identified under
the caption "Lenders" on the signature pages hereto or that, pursuant to Section
12.06(b) hereof, shall become a "Lender" hereunder (individually, a "Lender"
and, collectively, the "Lenders"); and
(d) TORONTO DOMINION (TEXAS), INC., as agent for the Lenders (in such
capacity, together with its successors in such capacity, the "Agent").
The Obligors have requested that the Lenders make extensions of credit to
the Company and, to induce the Lenders to make such extensions of credit, the
Obligors propose to enter into this Agreement pursuant to which the Lenders will
make extensions of credit to the Company, and each Subsidiary Guarantor will
guarantee the extensions of credit so made to the Company hereunder.
Accordingly, the parties hereto agree as follows:
Section 1. Definitions and Accounting Matters.
1.1. Certain Defined Terms. As used herein, the following terms shall have
the following meanings (all terms defined in this Section 1.01 or in other
provisions of this Agreement in the singular to have the same meanings when used
in the plural and vice versa):
"Additional Costs" shall have the meaning set forth in Section 5.01(a)
hereof.
"Adjusted Cash Flow" shall mean, for any period, Gross Cash Flow for such
period, reduced by the excess (if any) of:
(a) the aggregate amount of Gross Cash Flow generated by all Foreign
Subsidiaries of the Company for such period, over
(b) an amount equal to 20% of Gross Cash Flow for such period.
"Advance Date" shall have the meaning set forth in Section 4.06 hereof.
"Adverbe" shall mean Groupe Adverbe International S.A., a French
corporation.
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"Affiliate" shall mean any Person that directly or indirectly controls, or
is under common control with, or is controlled by, the Company and, if such
Person is an individual, any member of the immediate family (including parents,
spouse, children and siblings) of such individual and any trust whose principal
beneficiary is such individual or one or more members of such immediate family
and any Person who is controlled by any such member or trust. As used in this
definition, "control" (including, with its correlative meanings, "controlled by"
and "under common control with") shall mean possession, directly or indirectly,
of power to direct or cause the direction of management or policies (whether
through ownership of securities or partnership or other ownership interests, by
contract or otherwise). Notwithstanding the foregoing, (a) no individual shall
be an Affiliate solely by reason of his or her being a director, officer or
employee of the Company or any of its Subsidiaries; (b) none of the Subsidiaries
of the Company shall be Affiliates; and (c) neither the Agent nor any Lender
shall be an Affiliate.
"Agent" shall have the meaning given to that term in the preamble to this
Agreement.
"Agreement" shall mean this Credit Agreement as amended, modified and
supplemented and in effect from time to time.
"Applicable Lending Office" shall mean, for each Lender and for each Type
of Loan, the "Lending Office" of such Lender (or of an affiliate of such Lender)
designated for such Type of Loan on the signature pages hereof or such other
office of such Lender (or of an affiliate of such Lender) as such Lender may
from time to time specify to the Agent and the Company as the office by which
its Loans of such Type are to be made and maintained.
"Applicable Margin" shall mean, for any date occurring:
1.1.1. on and after the Closing Date through and including July 9,
2000, (i) in the case of any Eurodollar Loan, 4.50% per annum, and (ii) in
the case of any Base Rate Loan, 3.50% per annum;
1.1.2. on and after July 10, 2000 through and including September 9,
2000, (i) in the case of any Eurodollar Loan, 5.50% per annum, and (ii) in
the case of any Base Rate Loan, 4.50% per annum; and
1.1.3. on September 10, 2000 and thereafter, (i) in the case of any
Eurodollar Loan, 7.50% per annum, and (ii) in the case of any Base Rate
Loan, 6.50% per annum.
"Bank of Scotland Debt" shall mean Indebtedness of the Cordena Group held
by Bank of Scotland in an aggregate principal amount not to exceed 29,000,000
Dutch guilders.
"Bankruptcy Code" shall mean the Federal Bankruptcy Code of 1978, as
amended from time to time.
"Base Rate" shall mean, for any day, a rate per annum equal to the higher
of (a) the Federal Funds Rate for such day plus 1/2 of 1% and (b) the Prime Rate
for such day. Each change in any interest rate provided for herein based upon
the Base Rate resulting from a change in the Base Rate shall take effect as of
the opening of business on the date on which such change in the Base Rate became
effective.
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"Base Rate Loans" shall mean Loans that bear interest at rates based upon
the Base Rate.
"Basic Documents" shall mean, collectively, this Agreement and the Notes.
"Basle Accord" shall have the meaning given to such term in Section 5.01(c)
hereof.
"Business Day" shall mean (a) any day on which commercial banks are not
authorized or required to close in New York City and (b) if such day relates to
the giving of notices in connection with a borrowing of, a payment or prepayment
of principal of or interest on, a Conversion of or into, or an Interest Period
for, a Eurodollar Loan or a notice by the Company with respect to any such
borrowing, payment, prepayment, Conversion or Interest Period, any day on which
dealings in Dollar deposits are carried out in the London interbank market.
"Capital Expenditures" shall mean, for any period, expenditures (including,
without limitation, the aggregate amount of Capital Lease Obligations incurred
during such period) made by the Company or any of its Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals and
improvements, but excluding replacements and repairs to the extent expensed in
accordance with GAAP) during such period computed in accordance with GAAP.
"Capital Lease Obligations" shall mean, for any Person, all obligations of
such Person to pay rent or other amounts under a lease of (or other agreement
conveying the right to use) Property to the extent such obligations are required
to be classified and accounted for as a capital lease on a balance sheet of such
Person under GAAP, and, for purposes of this Agreement, the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP.
"Cash Flow to Interest Expense Ratio" shall mean, as at any date for the
calculation thereof, the ratio of:
(a) Adjusted Cash Flow for the period of four consecutive fiscal
quarters ending on, or most recently ended prior to, such date; to
(b) Interest Expense (other than any Interest Expense in respect of
the Bank of Scotland Debt or the ING Debt) for the period of four
consecutive fiscal quarters ending on, or most recently ended prior to,
such calculation date.
"Cash Flow to Debt Service Ratio" shall mean, as at any date of the
calculation thereof, the ratio of:
(a) Adjusted Cash Flow for the four consecutive fiscal quarters
ending on, or most recently ended prior to, such date; to
(b) Prospective Debt Service (other than any Prospective Debt Service
in respect of the Bank of Scotland Debt or the ING Debt) for such
calculation date.
"Class" shall have the meaning given to that term in Section 1.03 hereof.
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"Closing Date" shall mean the date upon which the initial Loans hereunder
are made.
"Code" shall mean the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment Percentage" shall mean, with respect to any Tranche 2 Lender,
the ratio of (a) the amount of the Tranche 2 Commitment of such Lender to (b)
the aggregate amount of the Tranche 2 Commitments of all of the Tranche 2
Lenders.
"Commitments" shall mean the Tranche 1 Commitments and the Tranche 2
Commitments.
"Company" shall have the meaning given to that term in the preamble to this
Agreement.
"Continue", "Continuation" and "Continued" shall refer to the continuation
pursuant to Section 2.07 hereof of a Eurodollar Loan as a Eurodollar Loan from
one Interest Period to the next Interest Period.
"Convert", "Conversion" and "Converted" shall refer to a conversion
pursuant to Section 2.07 hereof of one Type of Loans into another Type of Loans.
"Cordena" shall mean Cordena Call Management B.V., a Netherlands Antilles
corporation.
"Cordena Group" shall mean Cordena, Adverbe and their respective
Subsidiaries.
"Debt for Borrowed Money" shall mean, for any Person: (a) obligations
created, issued, assumed or incurred by such Person for borrowed money (whether
by loan, the issuance and sale of debt securities or the sale of Property to
another Person subject to an understanding or agreement, contingent or
otherwise, to repurchase such Property from such Person, and including, without
limitation, all obligations evidenced by a note, bond, debenture or other
similar instrument); and (b) Capital Lease Obligations of such Person.
"Debt Issuance" shall mean an issuance by the Company or any of its
Subsidiaries after the Closing Date of any Debt for Borrowed Money, other than
Debt for Borrowed Money hereunder and under the Senior Credit Agreement and the
Onex Credit Agreement.
"Default" shall mean an Event of Default or an event that with notice or
lapse of time or both would become an Event of Default.
"Dollars" and "$" shall mean lawful money of the United States of America.
"Environmental Claim" shall mean, with respect to any Person, any written
notice, claim, demand or other communication (collectively, a "claim") by any
other Person alleging or asserting such Person's liability for investigatory
costs, cleanup costs, governmental response costs, damages to natural resources
or other Property, personal injuries, fines or penalties arising out of, based
on or resulting from (i) the presence, or Release into the environment, of any
Hazardous Material at any location, whether or not owned by such Person, or (ii)
circumstances forming the basis of
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any violation, or alleged violation, of any Environmental Law. The term
"Environmental Claim" shall include, without limitation, any claim by any
governmental authority for enforcement, cleanup, removal, response, remedial or
other actions or damages pursuant to any applicable Environmental Law, and any
claim by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from the presence of
Hazardous Materials or arising from alleged injury or threat of injury to
health, safety or the environment.
"Environmental Laws" shall mean, to the extent applicable, any and all
present and future federal, state, local and foreign laws, rules or regulations,
and any orders or decrees, in each case as now or hereafter in effect, relating
to the regulation or protection of the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals or toxic
or hazardous substances or wastes into the environment, including, without
limitation, ambient air, soil, surface water, ground water, wetlands, land or
subsurface strata, or otherwise relating to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling of
pollutants, contaminants, chemicals or toxic or hazardous substances or wastes.
"Equity Issuance" shall mean (a) any issuance or sale by the Company or any
of its Subsidiaries after the Closing Date of (i) any capital stock, (ii) any
Equity Rights (other than Equity Rights issued to directors, officers or
employees of the Company or any of its Subsidiaries pursuant to employee benefit
plans established in the ordinary course of business and any capital stock of
the Company issued upon the exercise of such Equity Rights) or (iii) any other
security or instrument representing an equity interest (or the right to obtain
any equity interest) in the Company or any of its Subsidiaries or (b) the
receipt by the Company or any of its Subsidiaries after the Closing Date of any
capital contribution (whether or not evidenced by any equity security issued by
the recipient of such contribution); provided that an Equity Issuance shall not
include (v) any such issuance or sale by any Subsidiary of the Company to the
Company or any Wholly Owned Subsidiary of the Company, (w) any capital
contribution by the Company or any Wholly Owned Subsidiary of the Company to any
Subsidiary of the Company, (x) any capital contribution to the Company or any of
its Subsidiaries made for the purpose of effecting a "Permitted Acquisition" as
such term is defined in the Senior Credit Agreement, (y) any such issuance or
sale in respect of Equity Rights listed on Schedule 8.13 to the Senior Credit
Agreement, and (z) cash payments in lieu of issuing fractional shares in an
aggregate of amount not to exceed $25,000.
"Equity Rights" shall mean, with respect to any Person, any subscriptions,
options, warrants, commitments, preemptive rights or agreements of any kind
(including, without limitation, any stockholders' or voting trust agreements)
for the issuance, sale, registration or voting of, or securities convertible
into, any additional shares of capital stock of any class, or partnership or
other ownership interests of any type in, such Person.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"ERISA Affiliate" shall mean any corporation or trade or business that is a
member of any group of organizations (i) described in Section 414(b) or (c) of
the Code of which the Company is a member and (ii) solely for purposes of
potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of
the Code and the lien created under Section 302(f) of ERISA and Section 412(n)
of the Code, described in Section 414(m) or (o) of the Code of which the Company
is a member.
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"Eurodollar Loans" shall mean Loans that bear interest at rates based on
the Eurodollar Rate.
"Eurodollar Rate" shall mean, with respect to any Eurodollar Loan for any
Interest Period therefor, a rate per annum determined by the Agent to be equal
to:
(a) the rate per annum (rounded upwards, if necessary, to the nearest
1/16 of 1%) quoted at approximately 11:00 a.m. London time (or as soon
thereafter as practicable) on the date two Business Days prior to the first
day of such Interest Period on Dow Xxxxx Telerate Service Page 3750 as the
London interbank offered rate for Dollar deposits having a term comparable
to such Interest Period and in an amount equal to or greater than
$1,000,000, divided by
(b) 1 minus the Reserve Requirement (if any) for such Eurodollar Loan
for such Interest Period.
"Event of Default" shall have the meaning given to that term in Section 10
hereof.
"Excess Cash Flow" shall mean, for any period, the sum of the following for
the Company and its Subsidiaries:
(a) the sum of (i) Gross Cash Flow for such period plus (ii)
decreases in working capital for such period, minus
(b) the sum of the following:
(i) Capital Expenditures made during such period, plus
(ii) Retrospective Debt Service for such period, plus
(iii) Management Fees paid during such period, plus
(iv) taxes paid in cash during such period, plus
(v) increases in working capital during such period.
For purposes of this definition, "working capital" shall have the meaning given
to that term by GAAP, but shall not include (x) any of the Loans, (y) any
current maturities of long-term debt or (z) any cash balances.
"Excess Funding Subsidiary Guarantor" shall have the meaning given to that
term in Section 6.07 hereof.
"Excess Payment" shall have the meaning given to that term in Section 6.07
hereof.
"Federal Funds Rate" shall mean, for any day, the rate per annum (rounded
upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average
of the rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day,
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as published by the Federal Reserve Bank of New York on the Business Day next
succeeding such day, provided that (a) if the day for which such rate is to be
determined is not a Business Day, the Federal Funds Rate for such day shall be
such rate on such transactions on the next preceding Business Day as so
published on the next succeeding Business Day and (b) if such rate is not so
published for any Business Day, the Federal Funds Rate for such Business Day
shall be the average of the rates quoted to the Agent by three federal funds
brokers of recognized standing selected by it.
"Fee Letter" shall mean the confidential fee letter dated as of March 10,
2000 between the Company and TD.
"Foreign Subsidiary" shall have the meaning given to that term in Section
9.18(b) hereof.
"GAAP" shall mean generally accepted accounting principles in the United
States of America as in effect from time to time.
"Gross Cash Flow" shall mean, for any period, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP, and adjusted on a pro form basis as if the Company had
acquired LCS and its Subsidiaries on October 1, 1998), other than, solely for
purposes of the definition of "Adjusted Cash Flow" in this Section 1.01, the
Cordena Group, of the following:
(a) net operating income (calculated before taxes, Interest Expense,
extraordinary and unusual items and income or loss attributable to equity
in Affiliates) for such period plus
(b) depreciation and amortization (to the extent deducted in
determining net operating income) for such period.
"Guarantee" shall mean a guarantee, an endorsement, a contingent agreement
to purchase or to furnish funds for the payment or maintenance of, or otherwise
to be or become contingently liable under or with respect to, the Indebtedness,
other obligations, net worth, working capital or earnings of any Person, or a
guarantee of the payment of dividends or other distributions upon the stock or
equity interests of any Person, or an agreement to purchase, sell or lease (as
lessee or lessor) Property, products, materials, supplies or services primarily
for the purpose of enabling a debtor to make payment of such debtor's
obligations or an agreement to assure a creditor against loss, and including,
without limitation, causing a bank or other financial institution to issue a
letter of credit or other similar instrument for the benefit of another Person,
but excluding endorsements for collection or deposit in the ordinary course of
business. The terms "Guarantee" and "Guaranteed" used as a verb shall have a
correlative meaning.
"Guaranteed Obligations" shall have the meaning given to that term in
Section 6.01 hereof.
"Hazardous Material" shall mean, collectively, (a) any petroleum or
petroleum products, flammable materials, explosives, radioactive materials,
asbestos, urea formaldehyde foam insulation, and transformers or other equipment
that contain polychlorinated biphenyls ("PCB's") at concentrations in excess of
50 parts per million, (b) any chemicals or other materials or substances that
are now or hereafter become defined as "hazardous substances", "hazardous
wastes", "hazardous materials", "extremely hazardous wastes", "restricted
hazardous wastes", "toxic substances", "toxic pollutants", "contaminants",
"pollutants" or words of similar import under any Environmental Law and (c) any
other chemical or other material or substance, exposure to which is now or
hereafter prohibited, limited or regulated under any Environmental Law.
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"Indebtedness" shall mean, for any Person: (a) obligations created, issued,
assumed or incurred by such Person for borrowed money (whether by loan, the
issuance and sale of debt securities or the sale of Property to another Person
subject to an understanding or agreement, contingent or otherwise, to repurchase
such Property from such Person, and including, without limitation, all
obligations evidenced by a note, bond, debenture or other similar instrument);
(b) obligations of such Person to pay the deferred purchase or acquisition price
of Property or services, other than trade accounts payable (other than for
borrowed money) arising, and accrued expenses incurred, in the ordinary course
of business; (c) Indebtedness of others secured by a Lien on the Property of
such Person, whether or not the respective indebtedness so secured has been
assumed by such Person; (d) obligations of such Person in respect of letters of
credit or similar instruments issued or accepted by banks and other financial
institutions for account of such Person; (e) Capital Lease Obligations of such
Person; (f) Indebtedness of others Guaranteed by such Person; and (g) Redeemable
Stock.
"ING Debt" shall mean Indebtedness of the Cordena Group held by ING Bank
N.V. in an aggregate principal amount not to exceed 10,000,000 Dutch guilders.
"InsLogic Holding" shall mean XxxXxxxx.xxx Holding Corporation, a Delaware
corporation.
"Interest Expense" shall mean, for any period, the sum, for the Company and
its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) all interest and fees paid in
respect of Indebtedness (including, without limitation, the interest component
of any payments in respect of Capital Lease Obligations, but excluding all fees
payable on the Closing Date in connection with the execution and delivery of
this Agreement and the other Basic Documents) accrued or capitalized during such
period (whether or not actually paid during such period) plus (b) the net amount
payable (or minus the net amount receivable) under any Interest Rate Protection
Agreement during such period (whether or not actually paid or received during
such period).
"Interest Period" shall mean, with respect to any Eurodollar Loan, each
period commencing on the date such Eurodollar Loan is made or Converted from a
Loan of another Type or the last day of the next preceding Interest Period for
such Loan and ending on the numerically corresponding day in the first, second,
third, sixth, or, subject to availability, twelfth calendar month thereafter, as
the Company may select as provided in Section 4.05 hereof, except that each
Interest Period that commences on the last Business Day of a calendar month (or
on any day for which there is no numerically corresponding day in the
appropriate subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (a) no
Interest Period for any Loan may commence before and end after the Principal
Payment Date; (b) each Interest Period that would otherwise end on a day that is
not a Business Day shall end on the next preceding Business Day; and (c)
notwithstanding paragraphs (a) and (b) above, no Interest Period for any Loan
shall have a duration of less than one month and, if the Interest Period for any
Eurodollar Loan would otherwise be a shorter period, such Loan shall not be
available hereunder for such period.
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"Interest Rate Protection Agreement" shall mean, for any Person, an
interest rate swap, cap or collar agreement or similar arrangement between such
Person and one or more financial institutions providing for the transfer or
mitigation of interest risks either generally or under specific contingencies.
"LCS" shall mean LCS Industries, Inc., a Delaware corporation.
"Lenders" shall have the meaning given to that term in the preamble to this
Agreement.
"Lien" shall mean, with respect to any Property, any mortgage, lien,
pledge, charge, security interest or encumbrance of any kind in respect of such
Property. For purposes of this Agreement and the other Basic Documents, a Person
shall be deemed to own subject to a Lien any Property that it has acquired or
holds subject to the interest of a vendor or lessor under any conditional sale
agreement, capital lease or other title retention agreement (other than an
operating lease) relating to such Property.
"Loans" shall mean, collectively, the Tranche 1 Loans and the Tranche 2
Loans.
"Majority Lenders" shall mean Lenders holding at least more than 50% of the
aggregate amount of the Commitments or, if all of the Commitments shall have
terminated, Lenders holding more than 50% of the sum of the aggregate unpaid
principal amount of the Loans.
"Management Fee" shall mean any management or similar fee paid directly or
indirectly by the Company or any of its Subsidiaries to any Affiliate.
"Margin Stock" shall mean "margin stock" within the meaning of Regulations
U and X.
"Material Adverse Effect" shall mean a material adverse effect on (a) the
Property, business, operations, financial condition or prospects of the Company
and its Subsidiaries taken as a whole, (b) the ability of any Obligor to perform
its obligations under any of the Basic Documents to which it is a party, and (c)
the validity or enforceability of any of the provisions of the Basic Documents
(including the rights and remedies of the Lenders and the Agent thereunder).
"Multiemployer Plan" shall mean a multiemployer plan defined as such in
Section 3(37) of ERISA to which contributions have been made by the Company or
any ERISA Affiliate and that is covered by Title IV of ERISA.
"Net Available Proceeds" shall mean, in the case of any Equity Issuance or
Debt Issuance, the aggregate amount of all cash received by the Company and its
Subsidiaries in respect of such Equity Issuance or Debt Issuance, as the case
may be, net of (a) reasonable expenses incurred by the Company and its
Subsidiaries in connection therewith, and (b) any payments required to be made
by the Company under Section 2.10 of the Senior Credit Agreement and Section
2.05 of the Onex Finance Credit Agreement in connection with such Equity
Issuance or Debt Issuance.
"Non-consenting Lender" shall have the meaning given to that term in
Section 5.06 hereof.
"Non-funding Lender" shall have the meaning given to that term in Section
5.06 hereof.
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"Notes" shall mean, collectively, the Tranche 1 Notes and the Tranche 2
Notes.
"Obligors" shall have the meaning given to that term in the preamble to
this Agreement.
"Onex" shall mean Onex Corporation, a Canadian corporation.
"Onex Finance Credit Agreement" shall mean the Amended and Restated Credit
Agreement dated as of May 25, 1999 between the Obligors, Onex CustomerONE
Finance LLC, as lender and TD, as agent for the lender, as modified and
supplemented and in effect from time to time.
"Participant" shall have the meaning given to such term in Section 12.06(c)
hereof.
"Payor" shall have the meaning given to that term in Section 4.06 hereof.
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Person" shall mean any individual, corporation, company, limited liability
company, voluntary association, partnership, joint venture, trust,
unincorporated organization or government (or any agency, instrumentality or
political subdivision thereof).
"Plan" shall mean an employee benefit or other plan established or
maintained by the Company or any ERISA Affiliate and that is covered by Title IV
of ERISA, other than a Multiemployer Plan.
"Post-Default Rate" shall mean, in respect of any principal of any Loan or
any other amount under this Agreement, any Note or any other Basic Document that
is not paid when due (whether at stated maturity, by acceleration, by mandatory
prepayment or otherwise), a rate per annum equal to 2% plus the Base Rate as in
effect from time to time plus the Applicable Margin for Base Rate Loans
(provided that, if the amount so in default is principal of a Eurodollar Loan
and the due date thereof is a day other than the last day of the Interest Period
therefor, the "Post-Default Rate" for such principal shall be, for the period
from and including such due date to but excluding the last day of such Interest
Period, 2% plus the interest rate for such Loan as provided in Section 3.02
hereof and, thereafter, the rate provided for above in this definition).
"Prime Rate" shall mean the rate of interest from time to time announced by
TD, New York Branch, as its prime commercial lending rate for loans to made in
the United States of America and denominated in Dollars.
"Principal Office" shall mean the principal office of TD, currently located
at 000 Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxx 00000.
"Principal Payment Date" shall mean May 26, 2006.
"Property" shall mean any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible.
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"Pro Rata Share" shall have the meaning given to that term in Section 6.07
hereof.
"Prospective Debt Service" shall mean, as at any date of the calculation
thereof, the sum, for the Company and its Subsidiaries (determined on a
consolidated basis without duplication in accordance with GAAP), of the
following:
(a) the sum of all Interest Expense for the period of four
consecutive fiscal quarters ending on such date, plus
(b) all payments of principal of Debt for Borrowed Money (including,
without limitation, the principal component of any payments in respect of
Capital Lease Obligations but excluding any mandatory prepayments made
pursuant to Section 2.10 hereof and pursuant to Section 2.10 of each of the
Senior Credit Agreement and Section 2.05 of the Onex Finance Credit
Agreement) scheduled to be made during the period of four consecutive
fiscal quarters commencing on the day next following such date.
"Quarterly Dates" shall mean the first Business Day of April, July, October
and January in each year, the first of which shall be July 1, 2000.
"Redeemable Stock" shall mean, for any Person, any capital stock of such
Person that by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable) or otherwise (including upon the
occurrence of an event) matures or is required to be redeemed (pursuant to any
sinking fund obligation or otherwise) or is convertible into or exchangeable for
Indebtedness or is redeemable at the option of the holder thereof, in whole or
in part, at any time on or prior to the Principal Payment Date.
"Regulations A, D, U and X" shall mean, respectively, Regulations A, D, U
and X of the Board of Governors of the Federal Reserve System (or any
successor), as the same may be modified and supplemented and in effect from time
to time.
"Regulatory Change" shall mean, with respect to any Lender, any change
after the date of this Agreement in Federal, state or foreign law or regulations
(including, without limitation, Regulation D) or the adoption or making after
such date of any interpretation, directive or request applying to a class of
banks including such Lender of or under any Federal, state or foreign law or
regulations (whether or not having the force of law and whether or not failure
to comply therewith would be unlawful) by any court or governmental or monetary
authority charged with the interpretation or administration thereof.
"Release" shall mean any release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the environment, including, without limitation, the movement of Hazardous
Materials through ambient air, soil, surface water, ground water, wetlands, land
or subsurface strata.
"Relevant Parties" shall have the meaning given to that term in Section
10(b) hereof.
"Required Payment" shall have the meaning given to that term in Section
4.06 hereof.
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"Reserve Requirement" shall mean, for any Interest Period for any
Eurodollar Loan, the average maximum rate at which reserves (including, without
limitation, any marginal, supplemental or emergency reserves) are required to be
maintained during such Interest Period under Regulation D by member banks of the
Federal Reserve System in New York City with deposits exceeding one billion
Dollars against "Eurocurrency liabilities" (as that term is used in Regulation
D). Without limiting the effect of the foregoing, the Reserve Requirement shall
include any other reserves required to be maintained by such member banks by
reason of any Regulatory Change with respect to (i) any category of liabilities
that includes deposits by reference to which the Eurodollar Rate is to be
determined as provided in the definition of "Eurodollar Rate" in this Section
1.01 or (ii) any category of extensions of credit or other assets that includes
Eurodollar Loans.
"Responsible Officer" shall mean, with respect to any Person, the Chief
Executive Officer, the Chief Financial Officer, the Treasurer, the Controller,
the Chief Operating Officer or any Vice President, of such Person.
"Retrospective Debt Service" shall mean, for any period, the sum, for the
Company and its Subsidiaries (determined on a consolidated basis without
duplication in accordance with GAAP), of the following:
(a) all Interest Expense for such period plus
(b) all payments of principal of Debt for Borrowed Money (including,
without limitation, the principal component of any payments in respect of
Capital Lease Obligations but excluding any mandatory prepayments made
pursuant to Section 2.10 hereof and pursuant to Section 2.10 of each of the
Senior Credit Agreement and Section 2.05 of the Onex Finance Credit
Agreement) scheduled to be made during such period.
"Senior Credit Agreement" shall mean the Credit Agreement dated as of May
25, 1999 between the Obligors, the lenders signatory thereto, and TD as agent
for such lenders, as modified and supplemented and in effect from time to time.
"Subordination Agreement" shall mean the Subordination Agreement dated as
of March 10, 2000 between the Obligors, TD as Agent hereunder, TD as agent for
the lenders or other financial institutions or entities party, as lenders, to
the Senior Credit Agreement, and TD as agent for the lenders or other financial
institutions or entities party, as lenders, to the Onex Finance Credit
Agreement.
"Subsidiary" shall mean, with respect to any Person, any corporation,
partnership or other entity of which at least a majority of the securities or
other ownership interests having by the terms thereof ordinary voting power to
elect a majority of the board of directors or other persons performing similar
functions of such corporation, partnership or other entity (irrespective of
whether or not at the time securities or other ownership interests of any other
class or classes of such corporation, partnership or other entity shall have or
might have voting power by reason of the happening of any contingency) is at the
time directly or indirectly owned or controlled by such Person or one or more
Subsidiaries of such Person or by such Person and one or more Subsidiaries of
such Person. The foregoing provisions of this definition notwithstanding, none
of InsLogic Holding and its Subsidiaries shall be deemed to be
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Subsidiaries of the Company for any purpose of this Agreement and, accordingly,
shall not be, or be required to be, Subsidiary Guarantors or Obligors.
"Subsidiary Guarantor" shall have the meaning given to that term in the
preamble to this Agreement.
"TD" shall mean Toronto Dominion (Texas), Inc.
"Total Debt to Cash Flow Ratio" shall mean, as at any date of the
calculation thereof, the ratio of:
(a) the excess of the following:
(i) all Indebtedness of the Company and its Subsidiaries (other
than the Bank of Scotland Debt and the ING Debt) on such date, over
(ii) the lesser of (x) $1,000,000 and (y) the aggregate amount of
cash on hand and in bank accounts of the Company and its Subsidiaries
on such date; to
(b) Adjusted Cash Flow for the period of four consecutive fiscal
quarters ending on, or most recently ended prior to, such date.
"Total Revenue" shall mean, for any period, the net fee revenue of the
Company and the Subsidiary Guarantors for such period. Except for the exclusion
of net fee revenue of Subsidiaries of the Company that are not Subsidiary
Guarantors, "net fee revenue" shall be calculated in the same manner as the net
fee revenue set forth on the financial statements of the Company as at September
30, 1999 heretofore furnished to the Lenders.
"Tranche 1 Commitment" shall mean, for each Tranche 1 Lender, the
obligation of such Lender to make one or more Tranche 1 Loans in an aggregate
amount at any one time outstanding up to but not exceeding the amount set
opposite the name of such Lender on the signature pages hereof under the caption
"Tranche 1 Commitment". The aggregate amount of the Tranche 1 Commitments on the
Closing Date is $15,000,000.
"Tranche 1 Commitment Termination Date" shall mean the day occurring four
calendar months to the day following the Closing Date.
"Tranche 1 Lenders" shall mean (a) on the date hereof, the Lenders having
Tranche 1 Commitments on the signature pages hereof and (b) thereafter, the
Lenders from time to time holding Tranche 1 Loans and Tranche 1 Commitments
after giving effect to any assignments thereof permitted by Section 12.06(b)
hereof.
"Tranche 1 Loans" shall mean each of the loans provided for in Section
2.01(a) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
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"Tranche 1 Notes" shall mean the promissory notes provided for by Section
2.06(a) hereof and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented and in
effect from time to time.
"Tranche 2 Commitment" shall mean, for each Tranche 2 Lender, the
obligation of such Lender to make one or more Tranche 2 Loans in an aggregate
principal amount up to but not exceeding the amount set opposite the name of
such Lender on the signature pages hereof under the caption "Tranche 2
Commitment". The Tranche 2 Commitments shall be reduced pursuant to Section
2.03(b) hereof. The aggregate amount of the Tranche 2 Commitments on the Closing
Date is $10,000,000.
"Tranche 2 Commitment Termination Date" shall mean the day occurring four
calendar months to the day following the Closing Date.
"Tranche 2 Lenders" shall mean (a) on the date hereof, the Lenders having
Tranche 2 Commitments on the signature pages hereof and (b) thereafter, the
Lenders from time to time holding Tranche 2 Loans and Tranche 2 Commitments
after giving effect to any assignments thereof permitted by Section 12.06(b)
hereof.
"Tranche 2 Loans" shall mean each of the loans provided for in Section
2.01(b) hereof, which may be Base Rate Loans and/or Eurodollar Loans.
"Tranche 2 Notes" shall mean the promissory notes provided for by Section
2.06(b) hereof and all promissory notes delivered in substitution or exchange
therefor, in each case as the same shall be modified and supplemented and in
effect from time to time.
"Type" shall have the meaning given to that term in Section 1.03 hereof.
"Wholly Owned Subsidiary" shall mean, with respect to any Person, any other
Person of which all of the equity securities or other ownership interests (other
than directors' qualifying or nominee shares) are directly or indirectly owned
or controlled by such Person or one or more Wholly Owned Subsidiaries of such
Person or by such Person and one or more Wholly Owned Subsidiaries of such
Person.
1.1.3.1. Accounting Terms and Determinations. For purposes of Sections
9.14, 9.15 and 9.16 hereof (and the related definitions used in those Sections),
all accounting terms shall be interpreted, and all calculations made for the
purpose of determining compliance with such Sections shall be made, in
accordance with generally accepted accounting principles applied on a basis
consistent with those used in the preparation of the December 31, 1998 financial
statements referred to in Section 8.02 hereof.
1.2. Classes and Types of Loans. Loans hereunder are distinguished by
"Class" and by "Type". The "Class" of a Loan (or of a Commitment to make a Loan)
refers to whether such Loan is a Tranche 1 Loan or a Tranche 2 Loan, each of
which constitutes a Class. The "Type" of a Loan refers to whether such Loan is a
Base Rate Loan or a Eurodollar Loan, each of which constitutes a Type. Loans may
be identified by both Class and Type.
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Section 2. Commitments, Loans, Notes and Prepayments.
2.1. Loans.
2.1.1. Tranche 1 Loans. Each Tranche 1 Lender severally agrees, on the
terms and conditions of this Agreement, to make one or more Tranche 1 Loans
to the Company in Dollars during the period from and including the date
hereof to but not including the Tranche 1 Commitment Termination Date in an
aggregate principal amount at any one time outstanding not to exceed the
Tranche 1 Commitment of such Lender as in effect from time to time. During
such period the Company may borrow, repay and reborrow the amount of the
Tranche 1 Commitments and may Convert Tranche 1 Loans of one Type into
Tranche 1 Loans of another Type (as provided in Section 2.07 hereof) or
Continue Tranche 1 Loans of one Type as Tranche 1 Loans of the same Type
(as provided in Section 2.07 hereof).
2.1.2. Tranche 2 Loans. Each Tranche 2 Lender severally agrees, on the
terms and conditions of this Agreement, to make one or more Tranche 2 Loans
to the Company in Dollars during the period from and including the date
hereof to but not including the Tranche 2 Commitment Termination Date in an
aggregate principal amount not to exceed the Tranche 2 Commitment of such
Lender as in effect from time to time. During such period the Company may
borrow, repay and reborrow the amount of the Tranche 2 Commitments and may
Convert Tranche 2 Loans of one Type into Tranche 2 Loans of another Type
(as provided in Section 2.07 hereof) or Continue Tranche 2 Loans of one
Type as Tranche 2 Loans of the same Type (as provided in Section 2.07
hereof).
2.1.3. Limit on Eurodollar Loans. No more than five separate Interest
Periods in respect of Eurodollar Loans may be outstanding at any one time.
2.2. Borrowings of Loans. The Company shall give the Agent notice of each
borrowing hereunder as provided in Section 4.05 hereof. Not later than 1:00 p.m.
New York time on the date specified for each borrowing of Loans hereunder, each
Lender shall make available the amount of the Loan or Loans to be made by it on
such date to the Agent, at an account (designated by the Agent) maintained by
the Agent with TD at the Principal Office, in immediately available funds, for
account of the Company. The amount so received by the Agent shall, subject to
the terms and conditions of this Agreement, be made available to the Company by
depositing the same, in immediately available funds, in an account of the
Company maintained with TD at the Principal Office designated by the Company.
2.3. Changes of Commitments.
2.3.1. The aggregate amount of the Tranche 1 Commitments shall be
automatically reduced to zero on the Tranche 1 Commitment Termination Date.
2.3.2. The aggregate amount of the Tranche 2 Commitments shall be
automatically reduced to zero on the Tranche 2 Commitment Termination Date.
2.3.3. The Company shall have the right at any time or from time to
time to terminate or reduce the aggregate unused amount of the Commitments
of any Class; provided that (i) the
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Company shall give notice of each such termination or reduction as provided
in Section 4.05 hereof and (ii) each partial reduction shall be in an
aggregate amount at least equal to $1,000,000 (or a larger multiple of
$500,000).
2.3.4. The Commitments once terminated or reduced may not be
reinstated.
2.4. Lending Offices. The Loans of each Type made by each Lender shall be
made and maintained at such Lender's Applicable Lending Office for Loans of such
Type.
2.5. Several Obligations; Remedies Independent. The failure of any Lender
to make any Loan to be made by it on the date specified therefor shall not
relieve any other Lender of its obligation to make its Loan on such date, but
neither any Lender nor the Agent shall be responsible for the failure of any
other Lender to make a Loan to be made by such other Lender, and no Lender shall
have any obligation to the Agent or any other Lender for the failure by such
Lender to make any Loan required to be made by such Lender. The amounts payable
by the Company at any time hereunder and under the Notes to each Lender shall be
a separate and independent debt and each Lender shall be entitled to protect and
enforce its rights arising out of this Agreement and the Notes, and it shall not
be necessary for any other Lender or the Agent to consent to, or be joined as an
additional party in, any proceedings for such purposes.
2.6. Notes.
2.6.1. The Tranche 1 Loans made by each Tranche 1 Lender shall, if
such Lender shall have requested the same, be evidenced by a single
promissory note of the Company substantially in the form of Exhibit A-1
hereto, dated the date hereof, payable to such Lender in a principal amount
equal to the amount of its Tranche 1 Commitment as originally in effect and
otherwise duly completed.
2.6.2. The Tranche 2 Loans made by each Tranche 2 Lender shall, if
such Lender shall have requested the same, be evidenced by a single
promissory note of the Company substantially in the form of Exhibit A-2
hereto, dated the date hereof, payable to such Lender in a principal amount
equal to the amount of its Tranche 2 Commitment as originally in effect and
otherwise duly completed.
2.6.3. The date, amount, Type, interest rate and duration of Interest
Period (if applicable) of each Loan of each Class made by each Lender to
the Company, and each payment made on account of the principal thereof,
shall be recorded by such Lender on its books and, prior to any transfer of
the Note evidencing the Loans of such Class held by it, endorsed by such
Lender on the schedule attached to such Note or any continuation thereof;
provided that the failure of such Lender to make any such recordation or
endorsement shall not affect the obligations of the Company to make a
payment when due of any amount owing hereunder or under such Note in
respect of the Loans to be evidenced by such Note.
2.6.4. No Lender shall be entitled to have its Notes subdivided, by
exchange for promissory notes of lesser denominations or otherwise, except
in connection with a permitted assignment of all or any portion of such
Lender's relevant Commitment, Loans and Notes pursuant to Section 12.06(b)
hereof.
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2.7. Optional Prepayments and Conversions or Continuations of Loans.
Subject to Section 4.04 hereof, the Company shall have the right to prepay
Loans, or to Convert Loans of one Type into Loans of another Type or Continue
Loans of one Type as Loans of the same Type, at any time or from time to time,
provided that the Company shall give the Agent notice of each such prepayment,
Conversion or Continuation as provided in Section 4.05 hereof.
2.8. Certain Fees. The Company shall pay the fees set forth in the Fee
Letter, in accordance with the terms thereof. All such fees shall be
non-refundable.
2.9. Commitment Fee. The Company shall pay to the Agent for account of
each Lender a commitment fee on the daily average unused amount (a) of such
Lender's Tranche 1 Commitment and (b) of such Lender's Tranche 2 Commitment, in
either case for the period from and including the date of this Agreement to but
not including the earlier of (i) the date such Tranche 1 Commitment or Tranche 2
Commitment, as applicable, is terminated and (ii) the Tranche 1 Commitment
Termination Date or the Tranche 2 Commitment Termination Date, as applicable, at
a rate per annum equal to 1.25%; provided, however, that no such fee shall
accrue or be payable in respect of such Lender's Tranche 2 Commitment unless and
until the Company has made its initial Borrowing of Tranche 2 Loans. Accrued but
unpaid commitment fees shall be payable on each Quarterly Date and on the
earlier of (i) the date the Tranche 1 Commitments or the Tranche 2 Commitments,
as applicable, are terminated and (ii) the Tranche 1 Commitment Termination Date
or the Tranche 2 Commitment Termination Date, as applicable.
2.10. Mandatory Prepayments and Reductions of Commitments.
2.10.1. Certain Proceeds. The Company shall prepay the Loans, and the
Commitments shall be subject to automatic reduction, in an aggregate amount
equal to 100% of the Net Available Proceeds of any Equity Issuance or Debt
Issuance, such prepayment and reduction to be effected in each case in the
manner and to the extent specified in paragraph (b) of this Section 2.10.
2.10.2. Application. Prepayments and reductions of Commitments
described in paragraph (a) above shall be effected as follows:
(i) first, the Tranche 2 Commitments shall be automatically
reduced in an amount equal to the required prepayment (and to the
extent that, after giving effect to such reduction, the aggregate
principal amount of Tranche 2 Loans would exceed the Tranche 2
Commitments, the Company shall prepay Tranche 2 Loans in an aggregate
amount equal to such excess); and
(ii) second, the Tranche 1 Commitments shall be automatically
reduced by an amount equal to any excess over the amount referred to
in the foregoing clause (i) (and to the extent that, after giving
effect to such reduction, the aggregate principal amount of Tranche 1
Loans would exceed the Tranche 1 Commitments, the Company shall prepay
Tranche 1 Loans in an aggregate amount equal to such excess).
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2.10.3. Avoidance of Broken-funding Costs. If the prepayment of any
Loan would result in an obligation of the Company to pay compensation
pursuant to Section 5.05 hereof, instead of making such prepayment, the
Company may cash collateralize Loans in an account maintained with the
Agent until the last day(s) of the Interest Period(s) to end soonest
thereafter and then to be used to prepay Loans.
Section 3. Payments of Principal and Interest.
3.1. Repayment of Loans.
(a) The Company hereby promises to pay to the Agent for account
of each Lender the outstanding principal amount of the Tranche 1 Loans on
the Principal Payment Date.
(b) The Company hereby promises to pay to the Agent for account
of each Lender the outstanding principal amount of the Tranche 2 Loans on
the Principal Payment Date.
3.2. Interest. The Company hereby promises to pay to the Agent for account
of each Lender interest on the unpaid principal amount of each Loan made by such
Lender for the period from and including the date of such Loan to but excluding
the date such Loan shall be paid in full, at the following rates per annum:
3.2.1. during such periods as such Loan is a Base Rate Loan, the Base
Rate (as in effect from time to time) plus the Applicable Margin; and
3.2.2. during such periods as such Loan is a Eurodollar Loan, for each
Interest Period relating thereto, the Eurodollar Rate for such Loan for
such Interest Period plus the Applicable Margin.
Notwithstanding the foregoing, the Company hereby promises to pay to the Agent
for account of each Lender interest at the applicable Post-Default Rate on any
principal of any Loan made by such Lender and on any other amount payable by the
Company hereunder or under the Notes held by such Lender to or for account of
such Lender, that shall not be paid in full when due (whether at stated
maturity, by acceleration or otherwise), for the period from and including the
due date thereof to but excluding the date the same is paid in full. Accrued
interest on each Loan shall be payable (i) in the case of a Base Rate Loan,
quarterly on the Quarterly Dates, (ii) in the case of a Eurodollar Loan on the
last day of each Interest Period therefor, (and, if such Interest Period has a
duration longer than three months, at three-month intervals following the first
day of such Interest Period) and (iii) in the case of any Loan, upon the payment
or prepayment thereof or the Conversion of such Loan to a Loan of another Type
(but only on the principal amount so paid, prepaid or Converted), except that
interest payable at the Post-Default Rate shall be payable from time to time on
demand. Promptly after the determination of any interest rate provided for
herein or any change therein, the Agent shall give notice thereof to the Lenders
to which such interest is payable and to the Company.
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Section 3.2.2.1. Payments; Pro Rata Treatment; Computations; Etc.
3.3. Payments.
3.3.1. Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Company under this
Agreement and the Notes, and, except to the extent otherwise provided
therein, all payments to be made by the Obligors under any other Basic
Document, shall be made in Dollars, in immediately available funds, without
deduction (other than any deduction for withholding taxes required by
applicable law, provided that such withholding arises from a Lender's
failure or inability to comply with the requirements of Section 5.07
hereof), set-off or counterclaim, to the Agent at an account (designated by
the Agent) maintained by the Agent with TD at the Principal Office, not
later than 1:00 p.m. New York time on the date on which such payment shall
become due (each such payment made after such time on such due date to be
deemed to have been made on the next succeeding Business Day).
3.3.2. Any Lender for whose account any such payment is to be made may
(but shall not be obligated to) debit the amount of any such payment that
is not made by such time to any ordinary deposit account of the Company
with such Lender (with notice to the Company and the Agent).
3.3.3. The Company shall, at the time of making each payment under
this Agreement or any Note for account of any Lender, specify to the Agent
(which shall so notify the intended recipient(s) thereof) the Loans or
other amounts payable by the Company hereunder to which such payment is to
be applied (and in the event that the Company fails to so specify, or if an
Event of Default has occurred and is continuing, the Agent shall distribute
such payment to the Lenders for application, in accordance with Section
4.02 hereof, first to the payment of fees, expenses, indemnities and other
amounts (other than principal and interest) then due and payable hereunder
and under the other Basic Documents, then to interest on the Loans then due
and payable, ratably in accordance with the unpaid amounts thereof, and
finally to principal of the Loans then due and payable, first to Tranche 1
Loans and then ratably in accordance with the unpaid amounts of the other
Loans.
3.3.4. Each payment received by the Agent under this Agreement or any
Note for account of any Lender shall be paid by the Agent promptly to such
Lender, in immediately available funds, for account of such Lender's
Applicable Lending Office for the Loan or other obligation in respect of
which such payment is made.
3.3.5. If the due date of any payment under this Agreement or any Note
would otherwise fall on a day that is not a Business Day, such date shall
be extended to the next succeeding Business Day, and interest shall be
payable for any principal so extended for the period of such extension.
3.4. Pro Rata Treatment. Except to the extent otherwise provided herein:
(a) each borrowing of Loans of a particular Class from the Lenders under Section
2.01 hereof shall be made from the relevant Lenders, each payment of the
commitment fee under Section 2.09 hereof shall be made for account of the
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applicable Lenders, and each termination or reduction of the amount of the
Commitments of a particular Class under Section 2.03 hereof shall be applied to
the respective Commitments of such Class of the relevant Lenders, pro rata
according to the amounts of their respective Commitments of such Class; (b) the
making, Conversion and Continuation of Loans of a particular Class and a
particular Type (other than Conversions provided for by Section 5.04 hereof)
shall be made pro rata among the relevant Lenders according to the amounts of
their respective Commitments of such Class (in the case of making of Loans) or
their respective Loans of such Class (in the case of Conversions and
Continuations of Loans) and the then current Interest Period for each Loan of
such Class and Type shall be coterminous; (c) each payment or prepayment of
principal of Loans of a particular Class by the Company shall be made for
account of the relevant Lenders pro rata in accordance with the respective
unpaid principal amounts of the Loans of such Class held by them; and (d) each
payment of interest on Loans of a particular Class by the Company shall be made
for account of the relevant Lenders pro rata in accordance with the amounts of
interest on such Loans then due and payable to the respective Lenders.
3.5. Computations. Interest on Eurodollar Loans shall be computed on the
basis of a year of 360 days and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable. Interest on
Base Rate Loans shall be computed on the basis of a year of 365 days or 366 days
(as the case may be) and actual days elapsed (including the first day but
excluding the last day) occurring in the period for which payable.
3.6. Minimum Amounts. Except for Conversions or prepayments made pursuant
to Section 5.04 hereof, and except for prepayments made pursuant to Section 2.10
hereof, each borrowing, Conversion and partial prepayment of principal of Loans
shall be in an aggregate amount at least equal to $1,000,000 (or in the case of
Tranche 1 Loans that are Base Rate Loans, $500,000) or a larger multiple of
$500,000 (or in the case of Tranche 1 Loans that are Base Rate Loans, $100,000);
borrowings, Conversions or prepayments of or into Loans of different Types or,
in the case of Eurodollar Loans, having different Interest Periods at the same
time hereunder to be deemed separate borrowings, Conversions and prepayments for
purposes of the foregoing, one for each Type or Interest Period; provided that
the aggregate principal amount of Eurodollar Loans of each Type having the same
Interest Period shall be in an amount at least equal to $1,000,000 or a larger
multiple of $500,000 and, if any Eurodollar Loans would otherwise be in a lesser
principal amount for any period, such Loans shall be Base Rate Loans during such
period.
3.7. Certain Notices. Notices by the Company to the Agent of terminations
or reductions of the Commitments, of borrowings, Conversions, Continuations and
optional prepayments of Loans and of Classes of Loans, of Types of Loans and of
the duration of Interest Periods shall be irrevocable and shall be effective
only if received by the Agent not later than 10:00 a.m. New York time on the
number of Business Days prior to the date of the relevant termination,
reduction, borrowing, Conversion, Continuation or prepayment or the first day of
such Interest Period specified below:
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Notice Number of
------ Business Days
Prior
Termination or reduction of Commitments three
Borrowing or prepayment of Base Rate Loans one
Borrowing or prepayment of, Conversions into, three
Continuations as, or duration of Interest Period for,
Eurodollar Loans
Conversions into Base Rate Loans three
Each such notice of termination or reduction shall specify the amount and the
Class of the Commitments to be terminated or reduced. Each such notice of
borrowing, Conversion, Continuation or optional prepayment shall specify the
Class of Loans to be borrowed, Converted, Continued or prepaid and the amount
(subject to Section 4.04 hereof) and Type of each Loan to be borrowed,
Converted, Continued or prepaid (and, in the case of a Conversion, the Type of
Loan to result from such Conversion) and the date of borrowing, Conversion,
Continuation or optional prepayment (which shall be a Business Day). Each such
notice of the duration of an Interest Period shall specify the Loans to which
such Interest Period is to relate. The Agent shall promptly notify the Lenders
of the contents of each such notice. In the event that the Company fails to
select the Type of Loan, or the duration of any Interest Period for any
Eurodollar Loan, within the time period and otherwise as provided in this
Section 4.05, such Loan (if outstanding as a Eurodollar Loan) will be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for such Loan or (if outstanding as a Base Rate Loan)
will remain as, or (if not then outstanding) will be made as, a Base Rate Loan.
3.8. Non-Receipt of Funds by the Agent. Unless the Agent shall have been
notified by a Lender or the Company (the "Payor") prior to the date on which the
Payor is to make payment to the Agent of (in the case of a Lender) the proceeds
of a Loan to be made by such Lender hereunder or (in the case of the Company) a
payment to the Agent for account of one or more of the Lenders hereunder (such
payment being herein called the "Required Payment"), which notice shall be
effective upon receipt, that the Payor does not intend to make the Required
Payment to the Agent, the Agent may assume that the Required Payment has been
made and may, in reliance upon such assumption (but shall not be required to),
make the amount thereof available to the intended recipient(s) on such date;
and, if the Payor has not in fact made the Required Payment to the Agent, the
recipient(s) of such payment shall, on demand, repay to the Agent the amount so
made available together with interest thereon in respect of each day during the
period commencing on the date (the "Advance Date") such amount was so made
available by the Agent until the date the Agent recovers such amount at a rate
per annum equal to the Federal Funds Rate for such day and, if such recipient(s)
shall fail promptly to make such payment, the Agent shall be entitled to recover
such amount, on demand, from the Payor, together with interest as aforesaid,
provided that if neither the recipient(s) nor the Payor shall return the
Required Payment to the Agent within three Business Days of the Advance Date,
then, retroactively to the Advance Date, the Payor and the recipient(s) shall
each be obligated to pay interest on the Required Payment as follows:
3.8.0.0.0.1. if the Required Payment shall represent a payment to be
made by the Company to the Lenders, the Company and the recipient(s) shall
each be obligated retroactively to the Advance Date to pay interest in
respect of the Required Payment at the Post-Default Rate (and, in case the
recipient(s) shall return the Required Payment to the Agent, without
limiting the
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obligation of the Company under Section 3.02 hereof to pay interest to such
recipient(s) at the Post-Default Rate in respect of the Required Payment)
and
3.8.0.0.0.2. if the Required Payment shall represent proceeds of a
Loan to be made by the Lenders to the Company, the Payor and the Company
shall each be obligated retroactively to the Advance Date to pay interest
in respect of the Required Payment at the rate of interest provided for
such Required Payment pursuant to Section 3.02 hereof (and, in case the
Company shall return the Required Payment to the Agent, without limiting
any claim the Company may have against the Payor in respect of the Required
Payment).
3.8.0.0.0.2.1. Sharing of Payments, Etc.
3.8.1. The Company agrees that, in addition to (and without limitation
of) any right of set-off, Lender's's lien or counterclaim a Lender may
otherwise have, each Lender shall be entitled, at its option, to offset
balances held by it for account of the Company at any of its offices, in
Dollars or in any other currency, against any principal of or interest on
any of such Lender's Loans or any other amount payable to such Lender
hereunder, that is not paid when due (regardless of whether such balances
are then due to the Company), in which case it shall promptly notify the
Company and the Agent thereof, provided that such Lender's failure to give
such notice shall not affect the validity thereof.
3.8.2. If any Lender shall obtain from any Obligor payment of any
principal of or interest on any Loan of any Class owing to it or payment of
any other amount under this Agreement or any other Basic Document through
the exercise of any right of set-off, Lender's lien or counterclaim or
similar right or otherwise (other than from the Agent as provided herein),
and, as a result of such payment, such Lender shall have received a greater
percentage of the principal of or interest on the Loans of such Class or
such other amounts then due hereunder or thereunder by such Obligor to such
Lender than the percentage received by any other Lender, it shall promptly
purchase from such other Lenders participations in (or, if and to the
extent specified by such Lender, direct interests in) the Loans of such
Class or such other amounts, respectively, owing to such other Lenders (or
in interest due thereon, as the case may be) in such amounts, and make such
other adjustments from time to time as shall be equitable, to the end that
all the Lenders shall share the benefit of such excess payment (net of any
reasonable expenses that may be incurred by such Lender in obtaining or
preserving such excess payment) pro rata in accordance with the unpaid
principal of and/or interest on the Loans of such Class or such other
amounts, respectively, owing to each of the Lenders. To such end all the
Lenders shall make appropriate adjustments among themselves (by the resale
of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored.
3.8.3. The Company agrees that any Lender so purchasing such a
participation (or direct interest) may exercise all rights of set-off,
banker's lien, counterclaim or similar rights with respect to such
participation as fully as if such Lender were a direct holder of Loans or
other amounts (as the case may be) owing to such Lender in the amount of
such participation.
3.8.4. Nothing contained herein shall require any Lender to exercise
any such
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right or shall affect the right of any Lender to exercise, and retain the
benefits of exercising, any such right with respect to any other
indebtedness or obligation of any Obligor. If, under any applicable
bankruptcy, insolvency or other similar law, any Lender receives a secured
claim in lieu of a set-off to which this Section 4.07 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 4.07 to share in the benefits of any recovery
on such secured claim.
Section 3.8.4.1. Yield Protection, Etc.
3.9. Additional Costs.
3.9.1. The Company shall pay directly to each Lender from time to time
such amounts as such Lender may reasonably determine to be necessary to
compensate such Lender for any costs that such Lender determines are
attributable to its making or maintaining of any Eurodollar Loans or its
obligation to make any Eurodollar Loans hereunder, or any reduction in any
amount receivable by such Lender hereunder in respect of any of such Loans
or such obligation (such increases in costs and reductions in amounts
receivable being herein called "Additional Costs"), solely to the extent
resulting from any Regulatory Change that:
3.9.1.1. shall subject any Lender (or its Applicable Lending
Office for any of such Loans) to any tax, duty or other charge in
respect of such Loans or its Notes or changes the basis of taxation of
any amounts payable to such Lender under this Agreement or its Notes
in respect of any of such Loans (excluding changes in the rate of tax
on the overall net income of such Lender or of such Applicable Lending
Office by the jurisdiction in which such Lender has its principal
office, such Applicable Lending Office or is otherwise doing
business); provided, however, that the Company shall be entitled to
deduct and withhold taxes on interest payments to any Lender
hereunder, and shall not be required to pay any Additional Costs to
any Lender in respect thereof, to the extent such Additional Costs
arise from such Lender's failure or inability to comply with the
requirements of Section 5.07 hereof; or
3.9.1.2. imposes or modifies any reserve, special deposit or
similar requirements (other than the Reserve Requirement utilized in
the determination of the Eurodollar Rate for such Loan) relating to
any extensions of credit or other assets of, or any deposits with or
other liabilities of, such Lender (including, without limitation, any
of such Loans or any deposits referred to in the definition of
"Eurodollar Rate" in Section 1.01 hereof), or any commitment of such
Lender (including, without limitation, the Commitments of such Lender
hereunder); or
3.9.1.3. imposes any other condition affecting this Agreement or
its Notes (or any of such extensions of credit or liabilities) or its
Commitments.
If any Lender requests compensation from the Company under this Section
5.01(a), the Company may, by notice to such Lender (with a copy to the
Agent), suspend the obligation of such Lender thereafter to make or
Continue Loans of the Type with respect to which such compensation is
requested, or to Convert Loans of any other Type into Loans of such Type,
until the Regulatory Change giving rise to such request ceases to be in
effect (in which case the provisions of
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Section 5.04 hereof shall be applicable), provided that such suspension
shall not affect the right of such Lender to receive the compensation so
requested.
3.9.2. Without limiting the effect of the provisions of paragraph (a)
of this Section 5.01, in the event that, by reason of any Regulatory
Change, any Lender either (i) incurs Additional Costs based on or measured
by the excess above a specified level of the amount of a category of
deposits or other liabilities of such Lender that includes deposits by
reference to which the interest rate on Eurodollar Loans is determined as
provided in this Agreement or a category of extensions of credit or other
assets of such Lender that includes Eurodollar Loans or (ii) becomes
subject to restrictions on the amount of such a category of liabilities or
assets that it may hold, then, if such Lender so elects by notice to the
Company (with a copy to the Agent), the obligation of such Lender to make
or Continue, or to Convert Loans of any other Type into, Loans of such Type
hereunder shall be suspended until such Regulatory Change ceases to be in
effect (in which case the provisions of Section 5.04 hereof shall be
applicable).
3.9.3. Without limiting the effect of the foregoing provisions of this
Section 5.01 (but without duplication), the Company shall pay directly to
each Lender from time to time on request such amounts as such Lender may
determine to be reasonably necessary to compensate such Lender (or, without
duplication, the bank holding company of which such Lender is a subsidiary)
for any costs that it determines are attributable to the maintenance by
such Lender (or its Applicable Lending Office or such bank holding
company), pursuant to any law or regulation or any interpretation,
directive or request (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) of any court or
governmental or monetary authority (i) following any Regulatory Change or
(ii) implementing any risk-based capital guideline or other requirement
(whether or not having the force of law and whether or not the failure to
comply therewith would be unlawful) heretofore or hereafter issued by any
government or governmental or supervisory authority implementing at the
national level the Basle Accord of capital in respect of its Commitments or
Loans (such compensation to include, without limitation, an amount equal to
any reduction of the rate of return on assets or equity of such Lender (or
any Applicable Lending Office or such bank holding company) to a level
below that which such Lender (or any Applicable Lending Office or such bank
holding company) could have achieved but for such law, regulation,
interpretation, directive or request). For purposes of this Section 5.01(c)
and Section 5.06 hereof, "Basle Accord" shall mean the proposals for
risk-based capital framework described by the Basle Committee on Banking
Regulations and Supervisory Practices in its paper entitled "International
Convergence of Capital Measurement and Capital Standards" dated July 1988,
as amended, modified and supplemented and in effect from time to time or
any replacement thereof.
3.9.4. Each Lender shall notify the Company of any event occurring
after the date of this Agreement entitling such Lender to compensation
under paragraph (a) or (c) of this Section 5.01 as promptly as practicable,
but in any event within 30 days, after such Lender obtains actual knowledge
thereof; provided that (i) if any Lender fails to give such notice within
30 days after it obtains actual knowledge of such an event, such Lender
shall, with respect to compensation payable pursuant to this Section 5.01
in respect of any costs resulting from such event, only be entitled to
payment under this Section 5.01 for costs incurred from and after the date
30 days prior to the date that such Lender does give such notice and (ii)
each Lender will designate a
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25
different Applicable Lending Office for the Loans of such Lender affected
by such event if such designation will avoid the need for, or reduce the
amount of, such compensation and will not, in the sole opinion of such
Lender (exercised reasonably), be disadvantageous to such Lender, except
that such Lender shall have no obligation to designate an Applicable
Lending Office located in the United States of America. Each Lender will
furnish to the Company a certificate setting forth the basis and amount of
each request by such Lender for compensation under paragraph (a) or (c) of
this Section 5.01. Determinations and allocations by any Lender for
purposes of this Section 5.01 of the effect of any Regulatory Change
pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect of
capital maintained pursuant to paragraph (c) of this Section 5.01, on its
costs or rate of return of maintaining Loans or its obligation to make
Loans, or on amounts receivable by it in respect of Loans, and of the
amounts required to compensate such Lender under this Section 5.01, shall
be conclusive, provided that such determinations and allocations are made
on a reasonable basis. The notice sent by a Lender to the Company pursuant
to this paragraph (d) shall set forth the amount of requested Additional
Costs and shall include in reasonable detail the calculation of such
Additional Costs.
3.10. Limitation on Types of Loans. Anything herein to the contrary
notwithstanding, if, on or prior to the determination of any Eurodollar Rate for
any Interest Period:
3.10.1. the Agent determines, which determination shall be conclusive,
that quotations of interest rates for the relevant deposits referred to in
the definition of "Eurodollar Rate" in Section 1.01 hereof are not being
provided in the relevant amounts or for the relevant maturities for
purposes of determining rates of interest for any Eurodollar Loans as
provided herein; or
3.10.2. the Majority Lenders determine, which determination shall be
conclusive, and notify the Agent that the relevant rates of interest
referred to in the definition of "Eurodollar Rate" in Section 1.01 hereof
upon the basis of which the rate of interest for Eurodollar Loans for such
Interest Period is to be determined do not adequately cover the cost to
such Lenders (or to such quoting Lender) of making or maintaining such Type
of Loans for such Interest Period;
then the Agent shall give the Company and each Lender prompt notice thereof and,
so long as such condition remains in effect, the Lenders (or such quoting
Lender) shall be under no obligation to make additional Eurodollar Loans, to
Continue Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans,
and the Company shall, on the last day(s) of the then current Interest Period(s)
for the outstanding Loans, either prepay such Loans or Convert such Loans into
Base Rate Loans in accordance with Section 2.07 hereof.
3.11. Illegality. Notwithstanding any other provision of this Agreement,
in the event that it becomes unlawful for any Lender or its Applicable Lending
Office to honor its obligation to make or maintain Eurodollar Loans hereunder,
then such Lender shall promptly notify the Company thereof (with a copy to the
Agent) and such Lender's obligation to make or Continue, or to Convert Base Rate
Loans into, Eurodollar Loans shall be suspended until such time as such Lender
may again make and maintain Eurodollar Loans (in which case the provisions of
Section 5.04 hereof shall be applicable).
3.12. Treatment of Affected Loans. If the obligation of any Lender to make
Eurodollar Loans or to Continue, or to Convert Base Rate Loans into, Eurodollar
Loans shall be suspended pursuant to
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26
Section 5.01 or 5.03 hereof, such Lender's Eurodollar Loans shall be
automatically Converted into Base Rate Loans on the last day(s) of the then
current Interest Period(s) for the Eurodollar Loans (or, in the case of a
Conversion required by Section 5.01(b) or 5.03 hereof, on such earlier date as
such Lender may specify to the Company with a copy to the Agent) and, unless and
until such Lender gives notice as provided below that the circumstances
specified in Section 5.01 or 5.03 hereof that gave rise to such Conversion no
longer exist:
3.12.1. to the extent that such Lender's Eurodollar Loans have been so
Converted, all payments and prepayments of principal that would otherwise
be applied to such Lender's Eurodollar Loans shall be applied instead to
its Base Rate Loans; and
3.12.2. all Loans that would otherwise be made or Continued by such
Lender as Eurodollar Loans shall be made or Continued instead as Base Rate
Loans, and all Loans of such Lender that would otherwise be Converted into
Eurodollar Loans shall be Converted instead into (or shall remain as) Base
Rate Loans;
If such Lender gives notice to the Company with a copy to the Agent that the
circumstances specified in Section 5.01 or 5.03 hereof that gave rise to the
Conversion of such Lender's Eurodollar Loans pursuant to this Section 5.04 no
longer exist (which such Lender agrees to do promptly upon such circumstances
ceasing to exist) at a time when Eurodollar Loans made by other Lenders are
outstanding, such Lender's Base Rate Loans shall be automatically Converted, on
the first day(s) of the next succeeding Interest Period(s) for such outstanding
Eurodollar Loans, to the extent necessary so that, after giving effect thereto
and after giving effect to any Conversion or Continuation request by the Company
pursuant to Section 2.07 hereof, all Loans held by the Lenders holding
Eurodollar Loans and by such Lender are held pro rata (as to principal amounts,
Types and Interest Periods) in accordance with their respective Commitments.
3.13. Compensation. The Company shall pay to the Agent for account of
each Lender, promptly after the request of such Lender through the Agent,
such amount or amounts as shall be sufficient (in the reasonable opinion of
such Lender) to compensate it for any loss, cost or reasonable
out-of-pocket expense that such Lender determines in good faith is
attributable to:
3.13.1. any payment, mandatory or optional prepayment or
Conversion of a Eurodollar Loan made by such Lender for any reason
(including, without limitation, the acceleration of the Loans pursuant
to Section 10 hereof) on a date other than the last day of the
Interest Period for such Loan; or
3.13.2. any failure by the Company for any reason (including,
without limitation, the failure of any of the conditions precedent
specified in Section 7 hereof to be satisfied) to borrow a Eurodollar
Loan from such Lender on the date for such borrowing specified in the
relevant notice of borrowing given pursuant to Section 2.02 hereof.
Without limiting the effect of the preceding sentence, such compensation shall
include an amount equal to the difference, if any, of (i) the amount of interest
that otherwise would have accrued on the principal amount so paid, prepaid,
Converted or not borrowed for the period from the date of such payment,
prepayment, Conversion or failure to borrow to the last day of the then current
Interest Period for such Loan (or, in the case of a failure to borrow, the
Interest Period for such Loan that would have commenced
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27
on the date specified for such borrowing) at the applicable rate of interest for
such Loan provided for herein minus (ii) the amount of interest that otherwise
would have accrued on such principal amount at a rate per annum equal to the
interest component of the amount such Lender would have bid in the London
interbank market for Dollar deposits of leading banks in amounts comparable to
such principal amount and with maturities comparable to such period (as
reasonably determined by such Lender). Upon the request of the Company, any
Lender requesting compensation under this Section 5.05 shall furnish to the
Company a certificate setting forth the amount of such compensation and the
calculation thereof.
3.14. Replacement Lenders under Certain Circumstances. If at any time (a)
the Company becomes obligated to pay Additional Costs pursuant to Section 5.01
hereof or any Lender ceases to make Eurodollar Loans pursuant to Section 5.03
hereof, (b) any Lender becomes insolvent or its assets become subject to a
receiver, liquidator, trustee, custodian or other Person having similar powers,
(c) any Lender becomes a "Non-consenting Lender" (as defined below in this
Section 5.06) or (d) any Lender becomes a "Non-funding Lender" (as defined below
in this Section 5.06), then the Company may, on ten Business Days' prior written
notice to the Agent and such Lender, replace such Lender by causing such Lender
to (and such Lender shall be obligated to) assign, pursuant to Section 12.06
hereof, all of its rights and obligations under this Agreement to a Lender or
other entity selected by the Company and reasonably acceptable to the Agent for
a purchase price equal to the outstanding principal amount of such Lender's
Loans and all accrued interest and fees and other amounts payable hereunder
(including amounts payable under Section 5.05 hereof as though such Loan was
being prepaid instead of being purchased), provided that (i) neither the Agent
nor any Lender shall have any obligation to the Company to find a replacement
Lender or other such entity, and (ii) in no event shall the Lender hereby
replaced be required to pay or surrender to such replacement Lender or other
entity any of the fees received by such Lender hereby replaced pursuant to this
Agreement. In the case of a replacement of a Lender to which the Company becomes
obligated to pay Additional Costs, prior to such Lender being replaced, the
payment of such additional amounts shall be a condition to the replacement of
such Lender. In the event that (x) the Company or the Agent has requested that
the Lenders consent to a departure or waiver of any of the provisions of the
Basic Documents or to agree to any amendment thereto, (y) the consent, waiver or
amendment in question requires the agreement of all Lenders in accordance with
the terms of Section 12.04 hereof and (z) the Majority Lenders have agreed to
such consent, waiver or amendment, then any Lender that does not agree to such
consent, waiver or amendment shall be deemed a "Non-consenting Lender." Any
Lender that has (x) failed to make a Loan required to be made by it hereunder,
or (y) has given notice to the Company or the Agent that it will not make, or
that it has disaffirmed or repudiated any obligation make any Loan, is a
"Non-funding Lender." The Company's right to replace a Non-funding Lender
pursuant to this Section 5.06 is, and shall be, in addition to, and not instead
of, all other rights and remedies available to the Company against such
Non-funding Lender under this Agreement, at law, in equity or by statute.
3.15. Foreign Lenders. Each Lender that is organized under the laws of a
jurisdiction outside of the United States of America shall, on or prior to the
date of its execution and delivery of this Agreement (in the case of a Lender
listed on the signature pages hereto) or on or prior to the date on which it
becomes a Lender hereunder (in the case of any other Lender) and from time to
time thereafter if requested in writing by the Company or the Agent (but only so
long as such Lender is lawfully able to do so), provide to the Company and the
Agent (a) Internal Revenue Service Form W-8ECI or W-8BEN, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying that such
Lender is entitled to benefits under an income tax treaty to which the United
States of America is a party
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that reduces the rate of withholding tax on payments of interest or certifying
that the income receivable pursuant to this Agreement is effectively connected
with the conduct of a trade or business in the United States of America, and (b)
any other form or certificate required by any taxing authority (including any
certificate required by Sections 871(h) and 881(c) of the Code), certifying that
such Lender is entitled to an exemption from or a reduced rate of tax on
payments pursuant to this Agreement or any of the other Basic Documents.
Section 4. Guarantee.
4.1. The Guarantee. The Subsidiary Guarantors hereby jointly and severally
guarantee to each Lender and the Agent and their respective successors and
assigns the prompt payment in full when due (whether at stated maturity, by
acceleration or otherwise) of the principal of and interest on the Loans made by
the Lenders to, and the Notes held by each Lender of, the Company, and all other
amounts from time to time owing to the Lenders or the Agent by the Company under
this Agreement and under the Notes and by any Obligor under any of the other
Basic Documents, in each case strictly in accordance with the terms thereof
(such obligations being herein collectively called the "Guaranteed
Obligations"). The Subsidiary Guarantors hereby further jointly and severally
agree that if the Company shall fail to pay in full when due (whether at stated
maturity, by acceleration or otherwise) any of the Guaranteed Obligations, the
Subsidiary Guarantors will promptly pay the same, and that in the case of any
extension of time of payment or renewal of any of the Guaranteed Obligations,
the same will be promptly paid in full when due (whether at extended maturity,
by acceleration or otherwise) in accordance with the terms of such extension or
renewal.
4.2. Obligations Unconditional. The obligations of the Subsidiary
Guarantors under Section 6.01 hereof are absolute and unconditional, joint and
several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Company under this Agreement, the Notes
or any other agreement or instrument referred to herein or therein, or any
substitution, release or exchange of any other guarantee of or security for any
of the Guaranteed Obligations, and, to the fullest extent permitted by
applicable law, irrespective of any other circumstance whatsoever that might
otherwise constitute a legal or equitable discharge or defense of a surety or
guarantor (other than the defense of payment in full of all of the Guaranteed
Obligations), it being the intent of this Section 6.02 that the obligations of
the Subsidiary Guarantors hereunder shall be absolute and unconditional, joint
and several, under any and all circumstances. Without limiting the generality of
the foregoing, it is agreed that the occurrence of any one or more of the
following shall not alter or impair the liability of the Subsidiary Guarantors
hereunder which shall remain absolute and unconditional as described above:
4.2.0.0.0.1. at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance or
compliance shall be waived;
4.2.0.0.0.2. any of the acts mentioned in any of the provisions of
this Agreement or the Notes or any other agreement or instrument referred
to herein or therein shall be done or omitted;
4.2.0.0.0.3. the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or
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any right under this Agreement or the Notes or any other agreement or
instrument referred to herein or therein shall be waived or any other
guarantee of any of the Guaranteed Obligations or any security therefor
shall be released or exchanged in whole or in part or otherwise dealt with;
or
4.2.0.0.0.4. any lien or security interest granted to, or in favor of,
the Agent or any Lender or Lenders as security for any of the Guaranteed
Obligations, if any, shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Agent or any Lender exhaust any right, power or remedy or proceed against the
Company under this Agreement or the Notes or any other agreement or instrument
referred to herein or therein, or against any other Person under any other
guarantee of, or security for, any of the Guaranteed Obligations.
4.3. Reinstatement. The obligations of the Subsidiary Guarantors under
this Section 6 shall be automatically reinstated if and to the extent that for
any reason any payment by or on behalf of the Company in respect of the
Guaranteed Obligations is rescinded or must be otherwise restored by any holder
of any of the Guaranteed Obligations, whether as a result of any proceedings in
bankruptcy or reorganization or otherwise and the Subsidiary Guarantors jointly
and severally agree that they will indemnify the Agent and each Lender on demand
for all reasonable costs and expenses (including, without limitation, reasonable
fees of counsel in accordance with Section 12.03(a) hereof) incurred by the
Agent or such Lender in connection with such rescission or restoration,
including any such costs and expenses incurred in defending against any claim
alleging that such payment constituted a preference, fraudulent transfer or
similar payment under any bankruptcy, insolvency or similar law.
4.4. Subrogation. The Subsidiary Guarantors hereby jointly and severally
agree that until the payment and satisfaction in full of all Guaranteed
Obligations and the expiration and termination of the Commitments of the Lenders
under this Agreement they shall not exercise any right or remedy arising by
reason of any performance by them of their guarantee in Section 6.01 hereof,
whether by subrogation or otherwise, against the Company or any other guarantor
of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
4.5. Remedies. The Subsidiary Guarantors jointly and severally agree that,
as between the Subsidiary Guarantors and the Lenders, the obligations of the
Company under this Agreement and the Notes may be declared to be forthwith due
and payable as provided in Section 10 hereof (and shall be deemed to have become
automatically due and payable in the circumstances provided in said Section
10(f) hereof or Section 10(g) hereof) for purposes of Section 6.01 hereof
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Company and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Company) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of said Section
6.01.
4.6. Continuing Guarantee. The guarantee in this Section 6 is a continuing
guarantee, and shall apply to all Guaranteed Obligations whenever arising.
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4.7. Rights of Contribution. The Subsidiary Guarantors hereby agree, as
between themselves, that if any Subsidiary Guarantor shall become an Excess
Funding Subsidiary Guarantor (as defined below) by reason of the payment by such
Subsidiary Guarantor of any Guaranteed Obligations, each other Subsidiary
Guarantor shall, on demand of such Excess Funding Subsidiary Guarantor (but
subject to the next sentence), pay to such Excess Funding Subsidiary Guarantor
an amount equal to such Subsidiary Guarantor's Pro Rata Share (as defined below
and determined, for this purpose, without reference to the Properties, debts and
liabilities of such Excess Funding Subsidiary Guarantor) of the Excess Payment
(as defined below) in respect of such Guaranteed Obligations. The payment
obligation of a Subsidiary Guarantor to any Excess Funding Subsidiary Guarantor
under this Section 6.07 shall be subordinate and subject in right of payment to
the prior payment in full of the obligations of such Subsidiary Guarantor under
the other provisions of this Section 6 and such Excess Funding Subsidiary
Guarantor shall not exercise any right or remedy with respect to such excess
until payment and satisfaction in full of all of such obligations. For purposes
of this Section 6.07, (a) "Excess Funding Subsidiary Guarantor" shall mean, in
respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid an
amount in excess of its Pro Rata Share of such Guaranteed Obligations, (b)
"Excess Payment" shall mean, in respect of any Guaranteed Obligations, the
amount paid by an Excess Funding Subsidiary Guarantor in excess of its Pro Rata
Share of such Guaranteed Obligations and (c) "Pro Rata Share" shall mean, for
any Subsidiary Guarantor, the ratio (expressed as a percentage) of (i) the
amount by which the aggregate present fair saleable value of all Properties of
such Subsidiary Guarantor (excluding any shares of stock of any other Subsidiary
Guarantor) exceeds the amount of all the debts and liabilities of such
Subsidiary Guarantor (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of such Subsidiary
Guarantor hereunder and any obligations of any other Subsidiary Guarantor that
have been Guaranteed by such Subsidiary Guarantor) to (ii) the amount by which
the aggregate fair saleable value of all Properties of the Company and all of
the Subsidiary Guarantors exceeds the amount of all the debts and liabilities
(including contingent, subordinated, unmatured and unliquidated liabilities, but
excluding the obligations of the Company and the Subsidiary Guarantors
hereunder) of the Company and all of the Subsidiary Guarantors, all as of the
Closing Date. If any Subsidiary becomes a Subsidiary Guarantor hereunder
subsequent to the Closing Date, then for purposes of this Section 6.07 such
subsequent Subsidiary Guarantor shall be deemed to have been a Subsidiary
Guarantor as of the Closing Date and the aggregate present fair saleable value
of the Properties, and the amount of the debts and liabilities, of such
Subsidiary Guarantor as of the Closing Date shall be deemed to be equal to such
value and amount on the date such Subsidiary Guarantor becomes a Subsidiary
Guarantor hereunder.
4.8. General Limitation on Guarantee Obligations. In any action or
proceeding involving any state corporate law, or any state or federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 6.01 hereof would otherwise, taking into account the provisions of
Section 6.07 hereof, be held or determined to be void, invalid or unenforceable,
or subordinated to the claims of any other creditors, on account of the amount
of its liability under said Section 6.01, then, notwithstanding any other
provision hereof to the contrary, the amount of such liability shall, without
any further action by such Subsidiary Guarantor, any Lender, the Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
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Section 5. Conditions Precedent.
5.1. Conditions for the Initial Loans. The obligation of any Lender to
make the initial Loan hereunder is subject to the conditions precedent that (i)
such Loan shall be made on or before March 31, 2000, and (ii) the Agent shall
have received the following documents, each of which shall be reasonably
satisfactory to the Agent in form and substance:
5.1.1. Corporate Documents. Certified copies of the charter and, to
the extent amended since May 25, 1999, by-laws (or equivalent documents) of
each Obligor and of all corporate authority for each Obligor (including,
without limitation, board of director resolutions and evidence of the
incumbency of officers) with respect to the execution, delivery and
performance of such of the Basic Documents to which such Obligor is
intended to be a party and each other document to be delivered by such
Obligor from time to time in connection herewith and the extensions of
credit hereunder (and the Agent and each Lender may conclusively rely on
such certificate until the Agent or such Lender receives notice from such
Obligor to the contrary).
5.1.2. Officer's Certificates. The following:
(i) A certificate of a Responsible Officer of the Company, dated
the Closing Date, to the effect set forth in the first sentence of
Section 7.02 hereof; and
(ii) A certificate of a Responsible Officer of the Company, dated
the Closing Date, (A) to the effect that no Event of Default has
occurred and is continuing (or, if any Event of Default has occurred
and is continuing, describing the same in reasonable detail and
describing the action that the Company has taken or proposes to take
with respect thereto) and (B) setting forth in reasonable detail the
computations necessary to determine whether the Company is in
compliance with Sections 9.16, 9.19 and 9.20 hereof as of the end of
the respective quarterly fiscal period or fiscal year.
5.1.3. Opinion of Counsel to the Obligors. An opinion, dated the
Closing Date, of Weil, Gotshal & Xxxxxx LLP, counsel to the Obligors,
substantially in the form of Exhibit B hereto and covering such other
matters as the Agent or any Lender may reasonably request (and each Obligor
hereby instructs such counsel to deliver such opinion to the Lenders and
the Agent).
5.1.4. Opinion of Special New York Counsel to TD. An opinion, dated
the Closing Date, of Xxxxx, Xxxxx & Xxxxx, special New York counsel to TD,
substantially in the form of Exhibit C hereto (and TD hereby instructs such
counsel to deliver such opinion to the Lenders).
5.1.5. Notes. The Notes requested by the Lenders, duly completed and
executed.
5.1.6. Subordination Agreement. The Subordination Agreement, duly
executed and delivered by each party thereto.
5.1.7. Amendment to Senior Credit Agreement. An amendment to the
Senior Credit Agreement, dated the Closing Date, duly executed and
delivered by the Persons party to the Senior Credit Agreement and
evidencing such Persons' consent to, and authorization of, the
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execution and delivery by the Company and each Subsidiary signatory hereto
of this Agreement and the incurrence of Indebtedness hereunder.
5.1.8. Amendment to Onex Finance Credit Agreement. An amendment to the
Onex Finance Credit Agreement, dated the Closing Date, duly executed and
delivered by the Persons party to the Onex Finance Credit Agreement and
evidencing such Persons' consent to, and authorization of, the execution
and delivery by the Company and each Subsidiary signatory hereto of this
Agreement and the incurrence of Indebtedness hereunder.
5.1.9. Other Documents. Such other documents as the Agent or any
Lender or special New York counsel to TD may reasonably request.
The obligation of any Lender to make the Loans is also subject to the payment by
the Company of such fees as the Company shall have agreed in writing to pay or
deliver to any Lender or the Agent in connection herewith, including (but not
limited to) pursuant to Section 2.08.
5.2. Conditions for all Extensions of Credit. The obligation of any Lender
to make any Loan or extend any credit hereunder on the occasion of each
borrowing is subject to the further conditions precedent that, both immediately
prior to the making of such Loan or extension of credit and also after giving
effect thereto: (a) no Default shall have occurred and be continuing; and (b)
the representations and warranties made by the Company in Section 8 hereof, and
by each Obligor in each of the other Basic Documents to which such Obligor is a
party, shall be true and complete on and as of the date of the making of such
extension of credit with the same force and effect as if made on and as of such
date (or, if any such representation or warranty is expressly stated to have
been made as of a specific date, as of such specific date). Each notice of
borrowing shall constitute a certification by the Company to the effect set
forth in the preceding sentence as of the date of such borrowing or such
issuance.
Section 5.2.1. Representations and Warranties. The Company represents and
warrants to the Agent and the Lenders that:
5.3. Corporate Existence. Each of the Company and its Subsidiaries: (a) is
a corporation or other entity duly incorporated or formed and validly existing
under the laws of the jurisdiction of its organization or formation; (b) is in
good standing under the laws of the jurisdiction of its organization or
formation , except to the extent that the failure to be in good standing could
not reasonably be expected to have a Material Adverse Effect; (c) has all
requisite corporate power or other requisite power, and has all material
governmental licenses, authorizations, consents and approvals necessary to own
its assets and carry on its business as now being or as proposed to be
conducted, other than those governmental licenses, authorizations, consents and
approvals the failure of which to obtain could not reasonably be expected to
have a Material Adverse Effect; and (d) is qualified to do business and is in
good standing in all jurisdictions in which the nature of the business conducted
by it makes such qualification necessary and where failure so to qualify could
(either individually or in the aggregate) reasonably be expected to have a
Material Adverse Effect.
5.4. Financial Condition. The Company has heretofore furnished to the each
of the Lenders a consolidated balance sheet of the Company and its Subsidiaries
as at December 31, 1998 and the related consolidated statements of income,
retained earnings and cash flow of the Company and its Subsidiaries
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for the fiscal year ended on said date, with the opinion thereon of
PricewaterhouseCoopers. All such financial statements are complete and correct
in all material respects and fairly present the consolidated financial condition
of the Company and its Subsidiaries as at said date and the consolidated results
of their operations for the fiscal year ended on said date, all in accordance
with generally accepted accounting principles and practices applied on a
consistent basis (except to the extent disclosed therein). Neither the Company
nor any of its Subsidiaries has on the date hereof any material contingent
liabilities, liabilities for taxes, unusual forward or long-term commitments or
unrealized or anticipated losses from any unfavorable commitments (in each case,
as determined in accordance with GAAP), except as referred to or reflected or
provided for in said balance sheet as at December 31, 1998 or except as set
forth on Schedule 8.02 hereto. Since December 31, 1998 there has been no
material adverse change in the consolidated financial condition, operations,
business or prospects taken as a whole of the Company and its Subsidiaries from
that set forth in said financial statements as at said date.
5.5. Litigation. There are no legal or arbitral proceedings, or any
proceedings by or before any governmental or regulatory authority or agency, now
pending or (to the knowledge of any Obligor) threatened against the Company or
any of its Subsidiaries that, if adversely determined, could reasonably be
expected (either individually or in the aggregate) to have a Material Adverse
Effect.
5.6. No Breach. None of the execution and delivery of this Agreement, the
Notes, and the other Basic Documents, the consummation of the transactions
herein and therein contemplated or compliance with the terms and provisions
hereof and thereof, will:
(a) conflict with or result in a breach of, or (except as set
forth in Schedule 8.04 hereto) require any consent (except to the extent
such consent is immaterial or has already been obtained) under (i) the
charter or by-laws of any Obligor, (ii) any material applicable law or
regulation, or any order, writ, injunction or decree of any court or
governmental authority or agency, or (iii) any material agreement or
instrument to which the Company and any of its Subsidiaries is a party or
by which any of them or any of their Property is bound or to which any of
them is subject, or constitute a default under any such agreement or
instrument, or
(b) except for Liens permitted by Section 9.06 of the Senior
Credit Agreement, result in the creation or imposition of
any Lien upon any material Property of the Company and any of its
Subsidiaries pursuant to the terms of any such agreement or instrument.
5.7. Action. Each Obligor has all necessary corporate or other requisite
power and authority to execute, deliver and perform its obligations under each
of the Basic Documents to which it is a party; the execution, delivery and
performance by each Obligor of each of the Basic Documents to which it is a
party have been duly authorized by all necessary corporate or other requisite
action on its part (including, without limitation, any required shareholder
approvals); and this Agreement has been duly and validly executed and delivered
by each Obligor and constitutes, and each of the Notes and the other Basic
Documents to which each Obligor is a party when executed and delivered by such
Obligor (in the case of the Notes, for value) will constitute, its legal, valid
and binding obligation, enforceable against such Obligor and in accordance with
its terms, except as such enforceability may be limited by (a) bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights; and (b) the application of
general principles of equity, including principles of commercial reasonableness,
good faith and fair dealing (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
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5.8. Approvals. No authorizations, approvals or consents of, and no
filings or registrations with, any governmental or regulatory authority or
agency, or any securities exchange, are necessary for the execution, delivery or
performance by any Obligor of the Basic Documents to which it is a party or for
the legality, validity or enforceability hereof or thereof, except for
authorizations, approvals, consents, filings and registrations that have already
been obtained or completed.
5.9. Use of Credit. Neither the Company nor any of its Subsidiaries is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying Margin Stock. None of
the proceeds of any Loan will be used for the purpose of (or be made available
by the Company in any manner to any other Person to enable or assist such Person
in), directly or indirectly, purchasing or carrying Margin Stock.
5.10. ERISA. Each Plan, and, to the knowledge of the Obligors, each
Multiemployer Plan, is in compliance in all material respects with, and has been
administered in all material respects in compliance with, the applicable
provisions of ERISA, the Code and any other federal or state law, other than
such non-compliance as could not reasonably be expected to have a Material
Adverse Effect.
5.11. Taxes. Except as set forth in Schedule 8.09 hereto, the Company and
its Subsidiaries have filed all federal income tax returns and all other
material tax returns that are required to be filed by them and have paid all
taxes that are due and payable pursuant to such returns or pursuant to any
assessment received by the Company or any of its Subsidiaries (other than any
immaterial taxes), unless the same are being contested in good faith, with
adequate reserves established therefor. The charges, accruals and reserves on
the books of the Company and its Subsidiaries in respect of taxes and other
governmental charges are in accordance with GAAP.
5.12. Investment Company Act. Neither the Company nor any of its
Subsidiaries is an "investment company", or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
5.12.1. Public Utility Holding Company Act. Neither the Company nor any of
its Subsidiaries is a "holding company", or an "affiliate" of a "holding
company" or a "subsidiary company" of a "holding company", within the meaning of
the Public Utility Holding Company Act of 1935, as amended.
5.13. Environmental Matters. Each of the Company and its Subsidiaries has
obtained all permits, licenses and other authorizations required under all
Environmental Laws to carry on its business as now being or as proposed to be
conducted, except to the extent the failure to have any such permit, license or
authorization could not reasonably be expected to (either individually or in the
aggregate) have a Material Adverse Effect. Each of such permits, licenses and
authorizations is in full force and effect and each of the Company and its
Subsidiaries is in compliance with the terms and conditions thereof, and is also
in compliance with all other applicable limitations, restrictions, conditions,
standards, prohibitions, requirements, obligations, schedules and timetables
contained in any applicable Environmental Law, except to the extent failure to
comply therewith could not reasonably be expected to (either individually or in
the aggregate) have a Material Adverse Effect.
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5.14. Capitalization.
5.14.1. Schedule 8.13 hereto sets forth a list, that is complete and
correct in all material respects, as of the date hereof, of all of the
holders of record of the capital stock of the Company, the class of stock
held by such holders, the numbers of shares held by such holder and the
percentage of Company's voting stock held by such holder.
5.14.2. Except as set forth on Schedule 8.13 hereto, as of the date
hereof, there are no outstanding material Equity Rights with respect to the
Company or any of its Subsidiaries, and there are no outstanding material
obligations of the Company or any of its Subsidiaries to repurchase,
redeem, or otherwise acquire any shares of its capital stock.
5.15. True and Complete Disclosure. The written factual information,
reports, financial statements, exhibits and schedules furnished in writing by or
on behalf of the Obligors to the Agent or any of the Lenders in connection with
the negotiation, preparation or delivery of this Agreement and the other Basic
Documents or included herein or therein or delivered pursuant hereto or thereto,
when taken as a whole do not, in any material respect, contain any untrue
statement of material fact or omit to state any material fact necessary to make
the statements herein or therein, in light of the circumstances under which they
were made, not misleading. All written factual information furnished after the
date hereof by the Obligors to the Agent and the Lenders in connection with this
Agreement and the other Basic Documents and the transactions contemplated hereby
and thereby will be true, complete and accurate in every material respect, or
(in the case of projections) based on reasonable estimates, assumptions or
projections, on the date as of which such information is stated or certified.
There is no fact known to the Company that could have a Material Adverse Effect
that has not been disclosed herein, in the other Basic Documents or in a report,
financial statement, exhibit, schedule, disclosure letter or other writing
furnished to the Lenders for use in connection with the transactions
contemplated hereby or thereby.
5.16. Year 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000, of (a) the computer systems of the
Company and its Subsidiaries and (b) equipment containing embedded microchips
(including systems and equipment supplied by others or with which the systems of
the Company and its Subsidiaries interface) and the testing of all such systems
and equipment, as so reprogrammed, was completed by December 31, 1999, except to
the extent such reprogramming and testing could not be reasonably expected to
have a Material Adverse Effect. Except as otherwise disclosed on Schedule 8.15
hereto, the cost to the Company and its Subsidiaries of such reprogramming and
testing and of the reasonably foreseeable consequence of year 2000 compliance to
the Company and its Subsidiaries could not reasonably be expected to have a
Material Adverse Effect.
Section 6. Covenants of the Company. The Company covenants and agrees with
the Lenders and the Agent that, so long as any Commitment or Loan is outstanding
and until payment in full of all non-contingent amounts payable by the Company
hereunder:
6.1. Financial Statements, Etc. The Company shall deliver to each of the
Lenders (provided, however, that so long as TD is "Agent" under the Senior
Credit Agreement, compliance by the Company with Sections 9.01(a), 9.01(b) and
9.01(c) of the Senior Credit Agreement shall be deemed compliance by the Company
with Sections 9.01(a), 9.01(b) and 9.01(c) hereof):
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6.1.1. As soon as available and in any event within 60 days after the end
of each of the first three fiscal quarters of the Company's fiscal year,
unaudited consolidated and consolidating statements of income, retained earnings
and cash flow of the Company and its Subsidiaries for such period and for the
period from the beginning of the respective fiscal year to the end of such
period, and the related consolidated and consolidating balance sheets of the
Company and its Subsidiaries as at the end of such period, setting forth in each
case in comparative form the corresponding consolidated and consolidating
figures for the corresponding periods in the preceding fiscal year (such
consolidating statements to be in a schedule to the consolidated statements).
The financial information to be provided under this paragraph (a) shall be
accompanied by a certificate of a Responsible Officer of the Company, which
certificate shall (i) state that said consolidated financial statements fairly
present in all material respects the consolidated financial condition and
results of operations of the Company and its Subsidiaries, and said
consolidating financial statements fairly present the respective individual
unconsolidated financial condition and result of operations of the Company and
each of its Subsidiaries, in each case in accordance with GAAP (unless otherwise
noted therein), consistently applied, as at the end of, and for, such period
(subject to normal year-end audit adjustments), (ii) state that no Default has
occurred and is continuing (or, if any Default has occurred and is continuing,
describing the same in reasonable detail and describing the action that the
Company has taken or proposes to take with respect thereto), and (iii) set forth
in reasonable detail the computations necessary to determine whether the Company
is in compliance with Sections 9.14, 9.15, 9.16, 9.19 and 9.20 hereof;
6.1.2. As soon as available and in any event within 120 days after the end
of each fiscal year of the Company, audited consolidated and unaudited
consolidating statements of income, retained earnings and cash flow of the
Company and its Subsidiaries for such fiscal year and the related audited
consolidated and unaudited consolidating balance sheet of the Company and its
Subsidiaries as at the end of such fiscal year, setting forth in each case in
comparative form the corresponding consolidated and consolidating figures for
the preceding fiscal year (such consolidating statements to be in a schedule to
the consolidated statements). The consolidated financial information to be
provided under this paragraph (b) shall be accompanied by (i) an opinion thereon
of independent certified public accountants of recognized national standing,
which opinion shall state that said consolidated financial statements fairly
present in all material respects the consolidated financial condition and
results of operations of the Company and its Subsidiaries as at the end of, and
for, such fiscal year in accordance with GAAP (unless otherwise noted therein),
and a certificate of such accountants stating that, in making the examination
necessary for their opinion, they obtained no knowledge, except as specifically
stated, of any Event of Default under Sections 9.14, 9.15, 9.16, 9.19 and 9.20
hereof (ii) a certificate of a Responsible Officer of the Company, which
certificate shall (x) state that said consolidating financial statements fairly
present in all material respects the consolidating financial condition and
results of operations of the Company and its Subsidiaries, in accordance with
GAAP (unless otherwise noted therein), consistently applied, as at the end of,
and for, such period (subject to normal year-end audit adjustments), (y) state
that no Default has occurred and is continuing (or, if any Default has occurred
and is continuing, describing the same in reasonable detail and describing the
action that the Company has taken or proposes to take with respect thereto), and
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(z) set forth in reasonable detail the computations necessary to determine
whether the Company is in compliance with Sections 9.14, 9.15, 9.16, 9.19 and
9.20 hereof;
6.1.3. As soon as possible, and in any event within ten days after the
Company knows or has reason to believe that any of the events or conditions
specified below with respect to any Plan or Multiemployer Plan has occurred or
exists, a statement signed by a Responsible Officer of the Company stating that
such an event or condition exists and, as soon as possible thereafter, a
statement signed by a Responsible Officer of the Company setting forth details
respecting such event or condition and the action, if any, that the Company or
its ERISA Affiliate proposes to take with respect thereto (and a copy of any
report or notice required to be filed with or given to PBGC by the Company or an
ERISA Affiliate with respect to such event or condition):
6.1.3.1. any reportable event, as defined in Section 4043(b) of ERISA
and the regulations issued thereunder, with respect to a Plan, as to which
PBGC has not by regulation waived the requirement of Section 4043(a) of
ERISA that it be notified within 30 days of the occurrence of such event
(provided that a failure to meet the minimum funding standard of Section
412 of the Code or Section 302 of ERISA, including, without limitation, the
failure to make on or before its due date a required installment under
Section 412(m) of the Code or Section 302(e) of ERISA, shall be a
reportable event regardless of the issuance of any waivers in accordance
with Section 412(d) of the Code); and any request for a waiver under
Section 412(d) of the Code for any Plan;
6.1.3.2. the distribution under Section 4041 of ERISA of a notice of
intent to terminate any Plan that has unfunded accrued pension liabilities
or any action taken by the Company or an ERISA Affiliate to terminate any
Plan that has unfunded accrued pension liabilities;
6.1.3.3. the institution by PBGC of proceedings under Section 4042 of
ERISA for the termination of, or the appointment of a trustee to
administer, any Plan, or the receipt by the Company or any ERISA Affiliate
of a notice from a Multiemployer Plan that such action has been taken by
PBGC with respect to such Multiemployer Plan;
6.1.3.4. the complete or partial withdrawal from a Multiemployer Plan
by the Company or any ERISA Affiliate that results in liability under
Section 4201 or 4204 of ERISA (including the obligation to satisfy
secondary liability as a result of a purchaser default) or the receipt by
the Company or any ERISA Affiliate of notice from a Multiemployer Plan that
it is in reorganization or insolvency pursuant to Section 4241 or 4245 of
ERISA or that it intends to terminate or has terminated under Section 4041A
of ERISA;
6.1.3.4.1. the institution of a proceeding by a fiduciary of any
Multiemployer Plan against the Company or any ERISA Affiliate to enforce
Section 515 of ERISA, which proceeding is not dismissed within 30 days; and
6.1.3.5. the adoption of an amendment to any Plan that, pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the
loss of tax-exempt status of the trust of which such Plan is a part if the
Company or an ERISA
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Affiliate fails to timely provide security to the Plan in accordance with
the provisions of said Sections;
6.1.4. Promptly after the Company knows or has reason to believe that any
Default hereunder or any "Default" as defined in the Senior Credit Agreement has
occurred, a notice of such Default or "Default", as the case may be, describing
the same in reasonable detail and, together with such notice or as soon
thereafter as possible, a description of the action that the Company, as the
case may be, has taken or proposes to take with respect thereto; and
6.1.5. From time to time such other information regarding the financial
condition, operations, business or prospects of the Company or any of its
Subsidiaries as any Lender or the Agent may reasonably request.
The Company will furnish to each Lender, at the time it furnishes each set of
financial statements pursuant to paragraph (a) or (b) above, a certificate of a
Responsible Officer of the Company to the effect that no Default hereunder and
no "Default" as defined in the Senior Credit Agreement has occurred and is
continuing (or, if any Default or "Default", as the case may be, has occurred
and is continuing, describing the same in reasonable detail and describing the
action that the Company has taken or proposes to take with respect thereto).
6.2. Litigation. The Company will promptly give to each Lender notice of
all legal or binding arbitral proceedings, and of all proceedings by or before
any governmental or regulatory authority or agency, and any material development
in respect of such legal or other proceedings, affecting the Company or any of
its Subsidiaries, except proceedings that, if adversely determined, could not
reasonably be expected (either individually or in the aggregate) to have a
Material Adverse Effect.
6.3. Existence, Etc. The Company will, and will cause each of its
Subsidiaries to:
6.3.1. except to the extent permitted by Section 9.05 hereof, preserve
and maintain (i) its legal existence and (ii) except to the extent that
failure to maintain the same could not reasonably be expected to have a
Material Adverse Effect, all of its rights, privileges, licenses and
franchises;
6.3.2. comply with the requirements of all applicable laws, rules,
regulations and orders of governmental or regulatory authorities if failure
to comply with such requirements could not reasonably be expected to
(either individually or in the aggregate) have a Material Adverse Effect;
6.3.3. pay and discharge all federal and all other material taxes,
assessments and governmental charges or levies imposed on it or on its
income or profits or on any of its Property prior to the date on which
penalties (other than interest at an increased rate) attach thereto, except
for any such tax, assessment, charge or levy the payment of which is being
contested in good faith and by proper proceedings and against which
adequate reserves are being maintained;
6.3.3.1. maintain all of its material Properties used or useful in its
business in good working order and condition, ordinary wear and tear
excepted;
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6.3.4. keep adequate records and books of account, in which complete
entries will be made in accordance with generally accepted accounting
principles consistently applied; and
6.3.5. permit representatives of any Lender or the Agent, during
normal business hours (and upon reasonable advance notice), to examine,
copy and make extracts from its books and records, to inspect any of its
Properties, and to discuss its business and affairs with its officers, all
to the extent reasonably requested by such Lender or the Agent (as the case
may be).
To enable the ready and consistent determination of compliance with the
covenants set forth in this Section 9, the Company will not change the last day
of its fiscal year from December 31 of each year, or the last days of the first
three fiscal quarters in each of its fiscal years from March 31, June 30 and
September 30 of each year, respectively.
6.4. Insurance. The Company will, and will cause each of its Subsidiaries
to, maintain insurance with financially sound and reputable insurance companies,
and with respect to Property and risks of a character usually maintained by
Persons engaged in the same or similar business in the locales where the Company
or such Subsidiary conducts business, against loss, damage and liability of the
kinds and in the amounts customarily maintained by such Persons.
6.5. Prohibition of Fundamental Changes. Section 9.05 of the Senior Credit
Agreement is incorporated herein as if set forth fully in this Section 9.05,
mutatis mutandis.
6.6. [Reserved].
6.7. [Reserved].
6.8. [Reserved].
6.9. [Reserved].
6.10. [Reserved].
6.11. Lines of Business. Neither the Company nor any of its Subsidiaries
will engage to any substantial extent in any line or lines of business activity
other than the businesses engaged in by them on the Closing Date and business
activities ancillary to any of the foregoing.
6.12. Transactions with Affiliates. Section 9.12 of the Senior Credit
Agreement is incorporated herein as if set forth fully in this Section 9.12,
mutatis mutandis.
6.13. Use of Proceeds . The Company will use the proceeds of the Tranche 1
Loans and Tranche 2 Loans solely for the Obligors' working capital purposes, in
each case in compliance with all applicable legal and regulatory requirements,
provided that neither the Agent nor any Lender shall have any responsibility as
to the use of any of such proceeds.
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6.13.1. Total Debt to Cash Flow Ratio. The Company will not permit the
Total Debt to Cash Flow Ratio as at the last day of any fiscal quarter of the
Company occurring during any of the periods set forth below to exceed the ratio
set forth below opposite such period:
Period Total Debt to Cash Flow Ratio
------ -----------------------------
January 1, 2001 to December 31, 2001 6.00 to 1
January 1, 2002 and thereafter 4.80 to 1
6.14. Cash Flow to Debt Service Ratio. The Company will not permit the
Cash Flow to Debt Service Ratio as at the last day of any fiscal quarter of the
Company occurring during any of the periods set forth below to be less than the
ratio set forth below opposite such period:
Period Cash Flow to Debt Service Ratio
------ -------------------------------
January 1, 2001 and thereafter 1.00 to 1
6.15. Cash Flow to Interest Expense Ratio. The Company will not permit the
Cash Flow to Interest Expense Ratio as at the last day of any fiscal quarter of
the Company occurring during any of the periods set forth below to be less than
the ratio set forth below opposite such period:
Period Cash Flow to Interest Expense Ratio
------ -----------------------------------
October 1, 1999 to December 31, 2000 0.80 to 1
January 1, 2001 and thereafter 2.00 to 1
6.16. Management Fee Payments. Section 9.17 of the Senior Credit Agreement
is incorporated herein as if set forth fully in this Section 9.17, mutatis
mutandis.
6.17. Holding Company; Subsidiaries; Etc.
(a) The Company will not at any time own at material Property
other than the capital stock of its Subsidiaries. The Company will not at
any time conduct any business other than acting as a holding company and
other activities ancillary thereto.
(b) The Company will take such action, and will cause each of
its Subsidiaries to take such action, from time to time as shall be
necessary to ensure that all Subsidiaries of the Company (other than
Subsidiaries that are organized under the laws of a jurisdiction outside of
the United States of America (each, a "Foreign Subsidiary")) are
"Subsidiary Guarantors" and "Obligors" hereunder and under the other Basic
Documents. Without limiting the generality of the foregoing, in the event
that the Company or any of its Subsidiaries shall form or acquire any such
new Subsidiary, the Company or the respective Subsidiary will (i) cause
such new Subsidiary to become a "Subsidiary Guarantor" hereunder and under
the other Basic Documents pursuant to a written instrument in form and
substance reasonably satisfactory to the Agent and
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(ii) cause such new Subsidiary to deliver such proof of corporate action,
incumbency of officers, opinions of counsel and other documents as is
reasonably requested by the Agent.
6.18. Minimum Total Revenue. The Company will not permit Total Revenue to
be less than the following respective amounts for the following respective
periods:
Period Minimum Amount
------ --------------
January 1, 1999 through December 31, 1999 $114,000,000
January 1, 2000 through March 31, 2000 $ 32,160,000
January 1, 2000 through June 30, 2000 $ 67,680,000
January 1, 2000 through September 30, 2000 $105,200,000
January 1, 2000 through December 31, 2000 $150,880,000
6.19. Minimum Cash Flow. The Company will not permit Adjusted Cash Flow to
be less than the following respective amounts for the following respective
periods:
Period Minimum Amount
------ --------------
January 1, 1999 through December 31, 1999 $ 6,400,000
January 1, 2000 through March 31, 2000 $ 0
January 1, 2000 through June 30, 2000 $ 2,960,000
January 1, 2000 through September 30, 2000 $ 5,480,000
January 1, 2000 through December 31, 2000 $ 12,200,000
6.20. Post-closing Liens. Not later than September 10, 2000 the Company
shall (a) grant, and shall cause each of its Subsidiaries (other than Foreign
Subsidiaries) to grant to the Lenders a Lien providing such Lenders a collateral
security interest in all Property of the Company and such Subsidiaries
(including the capital stock of, or other equity interests in, all such
Subsidiaries; provided that with respect to the capital stock of any Foreign
Subsidiary, only 65% of such capital stock shall be required to be pledged) on
terms and conditions satisfactory to the Lenders in their discretion, and (b)
execute and deliver such amendments to this Agreement and deliver, and cause
each such Subsidiary to deliver, such additional documents evidencing and/or
perfecting such Lien and evidencing proof of corporate action, incumbency of
officers, opinions of counsel and other documents, in each case as is reasonably
requested by the Agent; provided, however, that the granting of such Lien shall
be conditioned upon agreement by the Lenders and Agent not to take any action to
foreclose upon the collateral subject to such Lien unless and until the lenders
or agent then signatory to the Senior Credit Agreement have acted to foreclose
upon such collateral under the terms of the Senior Credit Agreement or any other
"Basic Document" as defined therein.
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Section 6.20.1. Events of Default. If one or more of the following events
(herein called "Events of Default") shall occur and be continuing:
6.20.1. The Company shall: (i) default in the payment of any principal
of any Loan when due (whether at stated maturity or at mandatory or
optional prepayment); or (ii) default in the payment of any interest on any
Loan, any fee or any other amount payable by it hereunder or under any
other Basic Document when due and such default shall continue unremedied
for more than three Business Days; or
6.20.2. (i) The Company or any of its Subsidiaries (the Company and
such Subsidiaries herein collectively called the "Relevant Parties") shall
default in the payment when due of any principal of or interest on any of
its other Indebtedness aggregating $2,500,000 or more, or in the payment
when due of any amount under any Interest Rate Protection Agreement for a
notional principal amount exceeding $2,500,000, or any event specified in
any note, agreement, indenture or other document evidencing or relating to
any such Indebtedness or any event specified in any Interest Rate
Protection Agreement shall occur, and (ii) the effect of such default or
event shall be that such Indebtedness has become due or must be prepaid
immediately in full (whether by redemption, purchase, offer to purchase or
otherwise) prior to its stated maturity or, in the case of an Interest Rate
Protection Agreement, that the payments owing under such Interest Rate
Protection Agreement shall be liquidated; or
6.20.3. Any representation, warranty or certification made or deemed
made herein or in any other Basic Document (or in any modification or
supplement hereto or thereto) by any Obligor, or any certificate furnished
to any Lender or the Agent pursuant to the provisions hereof or thereof,
shall prove to have been false or misleading as of the time made or
furnished in any material respect; or
6.20.4. Any Obligor, as applicable, shall default in the performance
of any of its obligations under any of Sections 9.01(d), 9.05, 9.11, 9.12,
9.13, 9.14, 9.15, 9.16, 9.17, 9.19 or 9.20 hereof; or any Obligor shall
default in the performance of any of its other obligations in this
Agreement or any other Basic Document and such default shall continue
unremedied for a period of more than 30 days after written notice thereof
to the Company by the Agent or any Lender (through the Agent); or
6.20.5. Any Relevant Party shall admit in writing its inability to, or
be generally unable to, pay its debts as such debts become due; or
6.20.6. Any Relevant Party shall (i) apply for or consent to the
appointment of, or the taking of possession by, a receiver, custodian,
trustee, examiner or liquidator of itself or of all or a substantial part
of its Property, (ii) make a general assignment for the benefit of its
creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv)
file a petition seeking to take advantage of any other law relating to
bankruptcy, insolvency, reorganization, liquidation, dissolution,
arrangement or winding-up, or composition or readjustment of debts, (v)
fail to controvert in a timely and appropriate manner, or acquiesce in
writing to, any petition filed against it in an involuntary case under the
Bankruptcy Code, (vi) take any similar action under the
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Canadian Bankruptcy and Insolvency Act or the Canadian Companies Creditors
Arrangements Act, or (vii) take any corporate action to effect of the
foregoing; or
6.20.7. A proceeding or case shall be commenced, without the
application or consent of the affected Relevant Party, in any court of
competent jurisdiction, seeking (i) its reorganization, liquidation,
dissolution, arrangement or winding-up, or the composition or readjustment
of its debts, (ii) the appointment of a receiver, custodian, trustee,
examiner, liquidator or the like of such Relevant Party or of all or any
substantial part of its Property, or (iii) similar relief in respect of
such Relevant Party under any law relating to bankruptcy, insolvency,
reorganization, winding-up, or composition or adjustment of debts
(including, without limitation, the Canadian Bankruptcy and Insolvency Act
or the Canadian Companies Creditors Arrangements Act), and such proceeding
or case shall continue undismissed, or an order, judgment or decree
approving or ordering any of the foregoing shall be entered and continue
unstayed and in effect, for a period of more than 60 days; or an order for
relief against any Relevant Party shall be entered in an involuntary case
under the Bankruptcy Code; or
6.20.8. A final judgment or judgments (exclusive of judgment amounts
to the extent covered by insurance where the insurer has not denied
liability in respect of such judgment) for the payment of money in excess
of $5,000,000 in the aggregate shall be rendered by one or more courts,
administrative tribunals or other bodies having jurisdiction against any
Relevant Party and the same shall not be discharged (or provision shall not
be made for such discharge), or a stay of execution thereof shall not be
procured, within 60 days from the date of entry thereof and such Relevant
Party shall not, within said period of 60 days, or such longer period
during which execution of the same shall have been stayed, appeal therefrom
and cause the execution thereof to be stayed during such appeal; or
6.20.9. An event or condition specified in Section 9.01(c) hereof
shall occur or exist with respect to any Plan or Multiemployer Plan and, as
a result of such event or condition, together with all other such events or
conditions, the Company or any ERISA Affiliate shall incur or be reasonably
likely to incur a liability to a Plan, a Multiemployer Plan or PBGC (or any
combination of the foregoing) that could reasonably be expected (either
individually or in the aggregate) to have a Material Adverse Effect; or
6.20.10. A reasonable basis shall exist for the assertion against the
Company or any of its Subsidiaries, or any predecessor in interest of the
Company or any of its Subsidiaries or Affiliates for which the Company or
any of its Subsidiaries is liable, of (or there shall have been asserted
against the Company or any of its Subsidiaries) an Environmental Claim that
is reasonably likely to be determined adversely to the Company or any of
its Subsidiaries, and the amount thereof (either individually or in the
aggregate) could reasonably be expected to have a Material Adverse Effect
(insofar as such amount is payable by the Company or any of its
Subsidiaries but after deducting any portion thereof that is reasonably
expected to be paid by other creditworthy Persons jointly and severally
liable therefor); or
6.20.11. Onex shall cease to have the right (by virtue of its
ownership, directly or indirectly, of voting shares of the capital stock of
the Company and unfettered (in respect of its control of the board of
directors of the Company) by any contractual arrangements) to appoint a
majority of the members of the board of directors of the Company and
otherwise maintain control of the Company.
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THEREUPON: (1) in the case of an Event of Default other than one referred
to in paragraph (b), (f) or (g) of this Section 10 with respect to any Obligor,
the Agent may and, upon request of the Majority Lenders shall, by notice to the
Company declare the principal amount then outstanding of, and the accrued
interest on, the Loans and all other amounts payable by the Obligors hereunder
and under the Notes (including, without limitation, any amounts payable under
Section 5.05 hereof) to be forthwith due and payable, whereupon such amounts
shall be immediately due and payable without presentment, demand, protest or
other formalities of any kind, all of which are hereby expressly waived by each
Obligor; and (2) in the case of the occurrence of an Event of Default referred
to in paragraph (b), (f) or (g) of this Section 10 with respect to any Obligor,
the Commitments shall automatically be terminated and the principal amount then
outstanding of, and the accrued interest on, the Loans and all other amounts
payable by the Obligors hereunder and under the Notes (including, without
limitation, any amounts payable under Section 5.05 hereof) shall automatically
become immediately due and payable without presentment, demand, protest or other
formalities of any kind, all of which are hereby expressly waived by each
Obligor.
Section 7. The Agent.
7.1. Appointment, Powers and Immunities. Each Lender hereby irrevocably
appoints and authorizes the Agent to act as its agent hereunder and under the
other Basic Documents with such powers as are specifically delegated to the
Agent by the terms of this Agreement and of the other Basic Documents, together
with such other powers as are reasonably incidental thereto. The Agent (which
term as used in this sentence and in Section 11.05 and the first sentence of
Section 11.06 hereof shall include reference to its affiliates and its own and
its affiliates' officers, directors, employees and agents): (a) shall have no
duties or responsibilities except those expressly set forth in this Agreement
and in the other Basic Documents, and shall not by reason of this Agreement or
any other Basic Document be a trustee for any Lender; (b) shall not be
responsible to the Lenders for any recitals, statements, representations or
warranties contained in this Agreement or in any other Basic Document, or in any
certificate or other document referred to or provided for in, or received by any
of them under, this Agreement or any other Basic Document, or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement, any Note or any other Basic Document or any other document referred
to or provided for herein or therein or for any failure by the Company or any
other Person to perform any of its obligations hereunder or thereunder; (c)
shall not be required to initiate or conduct any litigation or collection
proceedings hereunder or under any other Basic Document; and (d) shall not be
responsible for any action taken or omitted to be taken by it hereunder or under
any other Basic Document or under any other document or instrument referred to
or provided for herein or therein or in connection herewith or therewith, except
for its own gross negligence or willful misconduct. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it in good faith.
The Agent may deem and treat the payee of any Note as the holder thereof for all
purposes hereof unless and until a notice of the assignment or transfer thereof
shall have been filed with the Agent.
7.2. Reliance by Agent. The Agent shall be entitled to rely upon any
certification, notice or other communication (including, without limitation, any
thereof by telephone, telecopy, telex, telegram or
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cable) believed by it to be genuine and correct and to have been signed or sent
by or on behalf of the proper Person or Persons, and upon advice and statements
of legal counsel, independent accountants and other experts selected by the
Agent. As to any matters not expressly provided for by this Agreement or any
other Basic Document, the Agent shall in all cases be fully protected in acting,
or in refraining from acting, hereunder or thereunder in accordance with
instructions given by the Majority Lenders or, if provided herein, in accordance
with the instructions given by the Majority Lenders or all of the Lenders as is
required in such circumstance, and such instructions of such Lenders and any
action taken or failure to act pursuant thereto shall be binding on all of the
Lenders.
7.3. Defaults. The Agent shall not be deemed to have knowledge or notice
of the occurrence of a Default unless the Agent has received notice from a
Lender or the Company specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a notice of the
occurrence of a Default, the Agent shall give prompt notice thereof to the
Lenders. The Agent shall (subject to Section 11.07 hereof) take such action with
respect to such Default as shall be directed by the Majority Lenders or all of
the Lenders provided that, unless and until the Agent shall have received such
directions, the Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default as it shall deem
advisable in the best interest of the Lenders except to the extent that this
Agreement expressly requires that such action be taken, or not be taken, only
with the consent or upon the authorization of the Majority Lenders or all of the
Lenders.
7.4. Rights as a Lender. With respect to its Commitments and the Loans
made by it, TD (and any successor acting as Agent) in its capacity as a Lender
hereunder shall have the same rights and powers hereunder as any other Lender
and may exercise the same as though it were not acting as the Agent, and the
term "Lenders" shall, unless the context otherwise indicates, include the Agent
in its individual capacity. TD (and any successor acting as Agent) and its
affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in and generally engage in any
kind of banking, trust or other business with the Obligors (and any of their
Subsidiaries or Affiliates) as if it were not acting as the Agent, and TD and
its affiliates may accept fees and other consideration from the Obligors for
services in connection with this Agreement or otherwise without having to
account for the same to the Lenders.
7.5. Indemnification. The Lenders agree to indemnify the Agent (to the
extent not reimbursed under Section 12.03 hereof, but without limiting the
obligations of the Company under said Section 12.03) ratably in accordance with
their respective Commitments, for any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind and nature whatsoever that may be imposed on, incurred by or
asserted against the Agent (including by any Lender) arising out of or by reason
of any investigation in or in any way relating to or arising out of this
Agreement or any other Basic Document or any other documents contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
(including, without limitation, the costs and expenses that the Company is
obligated to pay under Section 12.03 hereof, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, provided that no Lender
shall be liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the party to be indemnified.
7.6. Non-Reliance on Agent and Other Lenders. Each Lender agrees that it
has, independently and without reliance on the Agent or any other Lender, and
based on such documents and information as
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it has deemed appropriate, made its own credit analysis of the Company and its
Subsidiaries and decision to enter into this Agreement and that it will,
independently and without reliance upon the Agent or any other Lender, and based
on such documents and information as it shall deem appropriate at the time,
continue to make its own analysis and decisions in taking or not taking action
under this Agreement or under any other Basic Document. The Agent shall not be
required to keep itself informed as to the performance or observance by any
Obligor of this Agreement or any of the other Basic Documents or any other
document referred to or provided for herein or therein or to inspect the
Properties or books of the Company or any of its Subsidiaries. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent hereunder, the Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the affairs, financial condition or business of the
Company or any of its Subsidiaries (or any of their affiliates) that may come
into the possession of the Agent or any of its affiliates.
7.7. Failure to Act. Except for action expressly required of the Agent
hereunder and under the other Basic Documents, the Agent shall in all cases be
fully justified in failing or refusing to act hereunder and thereunder unless it
shall receive further assurances to its satisfaction from the Lenders of their
indemnification obligations under Section 11.05 hereof against any and all
liability and expense that may be incurred by it by reason of taking or
continuing to take any such action.
7.8. Resignation or Removal of Agent. Subject to the appointment and
acceptance of a successor Agent as provided below, the Agent may resign at any
time by giving notice thereof to the Lenders. The Agent may be removed at any
time with or without cause by the Majority Lenders, subject to the approval of
the Company. Upon any such resignation or removal, the Majority Lenders shall
(subject to the approval of the Company, such approval not to be unreasonably
withheld or delayed), have the right to appoint a successor Agent. If no
successor Agent shall have been so appointed by the Majority Lenders (with the
Company's consent) and shall have accepted such appointment within 30 days after
the retiring Agent's giving of notice of resignation or the Majority Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lenders, appoint a successor Agent, that shall be a bank that has an office in
New York, New York. Upon the acceptance of any appointment as Agent hereunder by
a successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations
hereunder. After any retiring Agent's resignation or removal hereunder as Agent,
the provisions of this Section 11 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
the Agent.
7.9. Consents under Other Basic Documents. Except as otherwise provided in
Section 12.04 hereof with respect to this Agreement, the Agent may, with the
prior consent of the Majority Lenders (but not otherwise), consent to any
modification, supplement or waiver under any of the Basic Documents, provided
that, without the prior consent of each Lender, the Agent shall not (without
limiting the right of the Majority Lenders to modify the provisions of Section
9.05 hereof) terminate any Lien under any Basic Document providing for
collateral security, or agree to additional obligations being secured by such
collateral security (unless the Lien for such additional obligations shall be
junior to the Lien in favor of the other obligations secured by such Basic
Document), except that no such consent shall be required, and the Agent is
hereby authorized, to release any Lien covering Property that is the subject of
a disposition of Property permitted hereunder or to which the Majority Lenders
have consented.
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Section 8. Miscellaneous.
8.1. Waiver. No failure on the part of the Agent or any Lender to exercise
and no delay in exercising, and no course of dealing with respect to, any right,
power or privilege under this Agreement or any Note shall operate as a waiver
thereof, nor shall any single or partial exercise of any right, power or
privilege under this Agreement or any Note preclude any other or further
exercise thereof or the exercise of any other right, power or privilege. The
remedies provided herein are cumulative and not exclusive of any remedies
provided by law.
8.2. Notices. All notices, requests and other communications provided for
herein (including, without limitation, any modifications of, or waivers,
requests or consents under, this Agreement) shall be given or made in writing
(including, without limitation, by telex or telecopy), delivered to the intended
recipient at the "Address for Notices" specified below its name on the signature
pages hereof (below the name of the Company, in the case of any Subsidiary
Guarantor); or, as to any party, at such other address as shall be designated by
such party in a notice to each other party. Except as otherwise provided in this
Agreement, all such communications shall be deemed to have been duly given when
transmitted by telex or telecopier (with confirmation of receipt) or personally
delivered or, in the case of a mailed notice, upon receipt, in each case given
or addressed as aforesaid.
8.3. Expenses, Etc. The Company agrees to pay or reimburse each of the
Lenders and the Agent for: (a) all reasonable out-of-pocket costs and expenses
of the Agent (including, without limitation, the reasonable fees and expenses of
Xxxxx, Xxxxx & Xxxxx, special New York counsel to TD) in connection with (i) the
negotiation, preparation, execution and delivery of this Agreement and the other
Basic Documents and the Loans hereunder and (ii) the negotiation or preparation
of any modification, supplement or waiver of any of the terms of this Agreement
or any of the other Basic Documents (whether or not consummated); (b) all
reasonable out-of-pocket costs and expenses of the Lenders and the Agent
(including, without limitation, the reasonable fees and expenses of legal
counsel to the Agent and one additional counsel to the Lenders) in connection
with (i) any Default and any enforcement or collection proceedings resulting
therefrom, including, without limitation, all manner of participation in or
other involvement with (x) bankruptcy, insolvency, receivership, foreclosure,
winding up or liquidation proceedings, (y) judicial or regulatory proceedings
and (z) workout, restructuring or other negotiations or proceedings (whether or
not the workout, restructuring or transaction contemplated thereby is
consummated) and (ii) the enforcement of this Section 12.03; (c) all transfer,
stamp, documentary or other similar taxes, assessments or charges levied by any
governmental or revenue authority in respect of this Agreement or any of the
other Basic Documents or any other document referred to herein or therein and
all costs, expenses, taxes, assessments and other charges incurred in connection
with any filing, registration, recording or perfection of any security interest
contemplated by any Basic Document or any other document referred to therein;
and (d) all reasonable out-of-pocket costs and expenses incurred by the Agent in
connection with the syndication of the Loans and the Commitments.
The Company hereby agrees to indemnify the Agent and each Lender and their
respective directors, officers, employees, attorneys and agents from, and hold
each of them harmless against, any and all losses, liabilities, claims, damages
or expenses incurred by any of them (including, without limitation, any and all
losses, liabilities, claims, damages or expenses incurred by the Agent to any
Lender, whether or not the Agent or any Lender is a party thereto, but subject
(in the case of fees and
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expenses of counsel) to the limitations set forth in the immediately preceding
paragraph) arising out of or by reason of any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) relating to the Loans hereunder or any actual or proposed use by
the Company or any of its Subsidiaries of the proceeds of any of the Loans
hereunder, including, without limitation, the reasonable fees and disbursements
of counsel incurred in connection with any such investigation or litigation or
other proceedings (but excluding any such losses, liabilities, claims, damages
or expenses incurred by reason of the gross negligence or willful misconduct of
the Person to be indemnified).
8.4. Amendments, Etc. Except as otherwise expressly provided in this
Agreement, any provision of this Agreement may be modified or supplemented only
by an instrument in writing signed by the Company, the Agent and the Majority
Lenders, or by the Company and the Agent acting with the consent of the Majority
Lenders, and any provision of this Agreement may be waived by the Majority
Lenders or by the Agent acting with the consent of the Majority Lenders;
provided that: (a) no modification, supplement or waiver shall, unless by an
instrument signed by each Lender, or by the Agent acting with the consent of
such Lenders: (i) increase, or extend the term of any of the Commitments, or
extend the time or waive any requirement for the scheduled termination of the
Commitments, (ii) extend any date fixed for any regularly scheduled payment of
principal of the Loan or any date fixed for any payment of interest on any Loan
or any fee hereunder, (iii) reduce the amount of any such regularly scheduled
payment of principal, (iv) reduce the rate at which interest is payable thereon
or any fee is payable hereunder, (v) alter the terms of this Section 12.04, or
(vi) modify the definition of the term "Majority Lenders"; (b) any modification
or supplement of Section 11 hereof shall require the consent of the Agent; and
(c) any modification or supplement of Section 6 hereof shall require the consent
of each Subsidiary Guarantor.
8.5. Successors and Assigns. This Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
permitted assigns.
8.6. Assignments and Participations.
8.6.1. No Obligor may assign any of its rights or obligations hereunder or
under the Notes without the prior consent of all of the Lenders and the Agent.
8.6.2. Each Lender may assign any of its Loans, its Notes and its
Commitments (but only with the consent of the Agent and, so long as no Event of
Default is continuing, the Company (such consent of the Company not to be
unreasonably withheld or delayed)); provided that (i) no such consent by the
Agent shall be required in the case of any assignment to another Lender; and
(ii) any such partial assignment shall be in an amount at least equal to
$10,000,000. Upon execution and delivery by the assignee to the Company and the
Agent of an assignment agreement in the form of Exhibit D hereto pursuant to
which such assignee agrees to become a "Lender" hereunder (if not already a
Lender) having the Commitment(s) and Loans specified in such instrument, and
upon consent thereto by the Agent and (to the extent required above) the
Company, the assignee shall have, to the extent of such assignment (unless
otherwise provided in such assignment with the consent of the Agent), the
obligations, rights and benefits of a Lender hereunder holding the Commitment(s)
and Loans assigned to it (in addition to the Commitment(s) and Loans, if any,
theretofore held by such assignee) and the assigning Lender shall, to the extent
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of such assignment, be released from the Commitment(s) (or portion(s) thereof)
so assigned. Upon each such assignment the assigning Lender shall pay the Agent
an assignment fee of $3,500.
8.6.3. A Lender may sell or agree to sell to one or more other Persons a
participation in all or any part of any Loans held by it, or in its Commitments,
in which event each purchaser of a participation (a "Participant") shall be
entitled to the rights and benefits of the provisions of Section 9.01(g) hereof
with respect to its participation in such Loans and Commitments as if (and the
Company shall be directly obligated to such Participant under such provisions as
if) such Participant were a "Lender" for purposes of said Section 9.01(g), but,
except as otherwise provided in Section 4.07(c) hereof, shall not have any other
rights or benefits under this Agreement or any Note or any other Basic Document
(the Participant's rights against such Lender in respect of such participation
to be those set forth in the agreements executed by such Lender in favor of the
Participant). All amounts payable by the Company to any Lender under Section 5
hereof in respect of Loans and Commitments, shall be determined as if such
Lender had not sold or agreed to sell any participations in such Loans and
Commitments and as if such Lender were funding each of such Loan and Commitments
in the same way that it is funding the portion of such Loan and Commitments in
which no participations have been sold. In no event shall a Lender that sells a
participation agree with the Participant to take or refrain from taking any
action hereunder or under any other Basic Document except that such Lender may
agree with the Participant that it will not, without the consent of the
Participant, agree to (i) increase or extend the term, or extend the time or
waive any requirement for the scheduled termination, of such Lender's related
Commitment, (ii) extend any date fixed for any regularly scheduled payment of
principal of or interest on the related Loan or Loans or any portion of any fee
hereunder payable to the Participant, (iii) reduce the amount of any such
payment of principal, (iv) reduce the rate at which interest is payable thereon,
or any fee hereunder payable to the Participant, to a level below the rate at
which the Participant is entitled to receive such interest or fee, (v) consent
to any modification, supplement or waiver hereof or of any of the other Basic
Documents to the extent that the same, under Section 11.09 or 12.04 hereof,
requires the consent of each Lender.
8.6.4. In addition to the assignments and participations permitted under
the foregoing provisions of this Section 12.06, any Lender may (without notice
to the Company, the Agent or any other Lender and without payment of any fee)
(i) assign and pledge all or any portion of its Loans and its Notes to any
Federal Reserve Bank as collateral security pursuant to Regulation A and any
Operating Circular issued by such Federal Reserve Bank and (ii) assign all or
any portion of its rights under this Agreement and its Loans and its Notes to an
affiliate. No such assignment shall release the assigning Lender from its
obligations hereunder.
8.6.5. A Lender may furnish any information concerning the Company or any
of its Subsidiaries in the possession of such Lender from time to time to
assignees and participants (including prospective assignees and participants),
subject to such assignee or participant agreeing in writing to be bound by the
provisions of Section 12.12 hereof.
8.6.6. Anything in this Section 12.06 to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to the Company or any of its Affiliates or Subsidiaries without the prior
consent of each Lender.
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8.6.7. In connection with any Conversion, a Lender may (at its sole
discretion, but subject to giving prior notice thereof to the Agent) transfer a
Loan from one Applicable Lending Office to another.
8.7. Survival. The obligations of the Company under Sections 5.01, 5.05
and 12.03 hereof, the obligations of each Subsidiary Guarantor under Section
6.03 hereof, and the obligations of the Lenders under Section 11.05 hereof,
shall survive for one year after the repayment of the Loans and the termination
of the Commitments.
8.8. Captions. The table of contents and captions and section headings
appearing herein are included solely for convenience of reference and are not
intended to affect the interpretation of any provision of this Agreement.
8.9. Counterparts. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one and the same
instrument and any of the parties hereto may execute this Agreement by signing
any such counterpart.
8.10. Governing Law; Submission to Jurisdiction. This Agreement and the
Notes shall be governed by, and construed in accordance with, the law of the
State of New York without regard to New York conflicts of laws principles. Each
Obligor hereby submits to the nonexclusive jurisdiction of the United States
District Court for the Southern District of New York and of any New York state
court sitting in New York City for the purposes of all legal proceedings arising
out of or relating to this Agreement or the transactions contemplated hereby.
Each Obligor irrevocably waives, to the fullest extent permitted by applicable
law, any objection that it may now or hereafter have to the laying of the venue
of any such proceeding brought in such a court and any claim that any such
proceeding brought in such a court has been brought in an inconvenient forum.
8.11. Waiver of Jury Trial. EACH OF THE OBLIGORS, THE AGENT AND THE
LENDERS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.
8.12. Confidentiality. Each Lender and the Agent agrees (on behalf of
itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in
accordance with their customary procedures for handling confidential information
of the same nature and in accordance with safe and sound banking practices, any
non-public information supplied to it by any Obligor pursuant to this Agreement
that is identified by such Person as being confidential at the time the same is
delivered to each Lender or the Agent, provided that nothing herein shall limit
the disclosure of any such information (i) to the extent required by statute,
rule, regulation or judicial process, (ii) to counsel for any Lender or the
Agent, (iii) to bank examiners, auditors or accountants, (iv) to the Agent or
any Lender, (v) in connection with any litigation to which any one or more of
the Lenders or the Agent is a party or (v) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) first agrees in writing to be bound by this
Section 12.12.
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8.13. Senior Credit Agreement Terms. Upon termination of the Senior Credit
Agreement, (i) all Sections thereof referenced or incorporated herein and (ii)
Sections 9.06, 9.07, 9.08, 9.09 and 9.10 thereof in each case shall be
incorporated herein as if set forth herein in their entirety (including all
defined terms used in such Sections), mutatis mutandis, as such Sections and
definitions were in effect immediately prior to such termination, and such terms
and conditions thereof shall be terms and conditions hereof and shall be fully
enforceable by the Lenders against the Company.
[The remainder of this page has been left blank intentionally]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
Company
CLIENTLOGIC CORPORATION
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
Address for Notices:
Two American Center
0000 Xxxx Xxx Xxxxxx
Xxxxx 0000
Xxxxxxxxx, Xxxxxxxxx 00000
Attention: Xxxx Xxxxxxx
Telecopier No.: 000-000-0000
Telephone No.: 000-000-0000
Subsidiary Guarantors
LCS INDUSTRIES, INC.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
CATALOG LIQUIDATORS, INC.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
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53
LCS CANADA, INC.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
CATALOG RESOURCES, INC.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
SPEC HOLDINGS, INC.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
THE SPECIALISTS LTD.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
COMPUTER MARKETING
SYSTEMS INC.
By /s/ XXXX X. XXXXXX
----------------------------------------
Name:
Title:
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CLIENTLOGIC OPERATING CORPORATION
By /s/ XXXX X. XXXXXX
---------------------------------------
Name:
Title:
CLIENTLOGIC INTERNATIONAL HOLDING, INC.
By /s/ XXXXXX X. XXXXXXXX
---------------------------------------
Name:
Title:
MARKETVISION, INC.
By /s/ XXXX X. XXXXXX
---------------------------------------
Name:
Title:
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Agent
TORONTO DOMINION (TEXAS), INC.
By /s/ XXXXX XXXXXX
---------------------------------------
Name:
Title:
Address for Notices:
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
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Lenders
Tranche 1 Commitment TORONTO DOMINION (TEXAS), INC.
$15,000,000
Tranche 2 Commitment By /s/ XXXXX XXXXXX
----------------------------------------
$10,000,000 Name:
Title:
Lending Office for all Loans:
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Address for Notices:
000 Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxxxx Xxxxxxxx
Xxxxx Xxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
With a copy to:
Toronto Dominion Bank
Toronto Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxx X0X 0X0
XXXXXX
Attention: Xxxxxxx Xxxxxxx
Xxxxxxxxx XxXxxxxx
Telecopier No.: (000) 000-0000
Telephone No.: (000) 000-0000
(000) 000-0000
