1
EXHIBIT 10.6
================================================================================
CREDIT AGREEMENT
among
UNIVERSAL COMPRESSION HOLDINGS, INC.,
UNIVERSAL COMPRESSION, INC.,
VARIOUS LENDERS,
DEUTSCHE BANK SECURITIES INC.,
as LEAD ARRANGER
and
BANKERS TRUST COMPANY,
as ADMINISTRATIVE AGENT
----------------------------------
Dated as of May 30, 2000
----------------------------------
================================================================================
2
TABLE OF CONTENTS
Page
----
SECTION 1. Amount and Terms of Credit............................................................................1
1.01 The Commitments....................................................................................1
1.02 Minimum Amount of Each Borrowing...................................................................2
1.03 Notice of Borrowing................................................................................3
1.04 Disbursement of Funds..............................................................................3
1.05 Notes..............................................................................................4
1.06 Conversions........................................................................................5
1.07 Pro Rata Borrowings................................................................................5
1.08 Interest...........................................................................................5
1.09 Interest Periods...................................................................................6
1.10 Increased Costs, Illegality, etc...................................................................7
1.11 Compensation.......................................................................................9
1.12 Change of Lending Office...........................................................................9
1.13 Replacement of Lenders............................................................................10
SECTION 2. Letters of Credit....................................................................................11
2.01 Letters of Credit.................................................................................11
2.02 Minimum Stated Amount.............................................................................12
2.03 Letter of Credit Requests.........................................................................12
2.04 Letter of Credit Participations...................................................................13
2.05 Agreement to Repay Letter of Credit Drawings......................................................14
2.06 Increased Costs...................................................................................15
SECTION 3. Commitment Commission; Fees; Reductions of Commitment................................................16
3.01 Fees..............................................................................................16
3.02 Voluntary Termination of Unutilized Commitments...................................................17
3.03 Mandatory Reduction of Commitments................................................................17
SECTION 4. Prepayments; Payments; Taxes.........................................................................18
4.01 Voluntary Prepayments.............................................................................18
4.02 Mandatory Repayments and Commitment Reductions....................................................18
4.03 Method and Place of Payment.......................................................................19
4.04 Net Payments......................................................................................20
SECTION 5. Conditions Precedent to Effectiveness................................................................22
5.01 Execution of Agreement; Notes.....................................................................22
5.02 Officer's Certificate.............................................................................22
5.03 Opinions of Counsel...............................................................................22
(i)
3
Page
----
5.04 Corporate Documents; Proceedings; etc.............................................................22
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Employment Agreements;
Debt Agreements.................................................................................23
5.06 Consummation of the Synthetic Lease Financing; etc................................................23
5.07 Refinancing.......................................................................................24
5.08 Pledge Agreement..................................................................................25
5.09 Security Agreement................................................................................25
5.10 Subsidiaries Guaranty.............................................................................25
5.11 Consent Letter....................................................................................26
5.12 Adverse Change, etc...............................................................................26
5.13 Litigation........................................................................................26
5.14 Fees, etc.........................................................................................27
5.15 Solvency Letter; Insurance Certificate............................................................27
5.16 Financial Statements; Pro Forma Financial Statements; Financial Projections.......................27
5.17 Consummation of the Holdings IPO and the Repurchase...............................................27
SECTION 6. Conditions Precedent to All Credit Events............................................................28
6.01 No Default; Representations and Warranties.......................................................28
6.02 Notice of Borrowing; Letter of Credit Request....................................................28
SECTION 7. Representations, Warranties and Agreements...........................................................28
7.01 Corporate and Other Status........................................................................29
7.02 Corporate and Other Power and Authority...........................................................29
7.03 No Violation......................................................................................29
7.04 Governmental Approvals............................................................................29
7.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc..............30
7.06 Litigation........................................................................................31
7.07 True and Complete Disclosure......................................................................31
7.08 Use of Proceeds; Margin Regulations...............................................................31
7.09 Tax Returns and Payments..........................................................................32
7.10 Compliance with ERISA.............................................................................32
7.11 The Security Documents............................................................................33
7.12 Representations and Warranties in Documents.......................................................34
7.13 Properties........................................................................................34
7.14 Capitalization....................................................................................34
7.15 Subsidiaries......................................................................................34
7.16 Compliance with Statutes, etc.....................................................................34
7.17 Investment Company Act............................................................................35
7.18 Public Utility Holding Company Act................................................................35
7.19 Environmental Matters.............................................................................35
7.20 Labor Relations...................................................................................35
7.21 Patents, Licenses, Franchises and Formulas........................................................36
7.22 Indebtedness......................................................................................36
(ii)
4
Page
----
7.23 Synthetic Lease Financing.........................................................................36
7.24 Holdings IPO and Repurchase.......................................................................36
7.25 Insurance.........................................................................................37
SECTION 8. Affirmative Covenants................................................................................37
8.01 Information Covenants.............................................................................37
8.02 Books, Records and Inspections....................................................................40
8.03 Maintenance of Property; Insurance................................................................40
8.04 Corporate Franchises..............................................................................41
8.05 Compliance with Statutes, etc.....................................................................41
8.06 Compliance with Environmental Laws................................................................41
8.07 ERISA.............................................................................................42
8.08 End of Fiscal Years; Fiscal Quarters..............................................................43
8.09 Performance of Obligations........................................................................43
8.10 Payment of Taxes..................................................................................43
8.11 Additional Security; Further Assurances...........................................................44
8.12 Foreign Subsidiaries Security.....................................................................45
SECTION 9. Negative Covenants...................................................................................46
9.01 Liens.............................................................................................46
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc............................................48
9.03 Dividends.........................................................................................52
9.04 Indebtedness......................................................................................52
9.05 Advances, Investments and Loans...................................................................54
9.06 Transactions with Affiliates......................................................................57
9.07 Capital Expenditures..............................................................................57
9.08 Consolidated EBITDAR to Total Interest Expense....................................................58
9.09 Maximum Leverage Ratio............................................................................59
9.10 Maximum Senior Secured Leverage Ratio.............................................................61
9.11 Limitation on Voluntary Payments and Modifications of Indebtedness; Modifications of
Certificate of Incorporation, By-Laws and Certain Other Agreements; etc........................62
9.12 Limitation on Certain Restrictions on Subsidiaries................................................63
9.13 Limitation on Issuance of Capital Stock...........................................................63
9.14 Business..........................................................................................63
9.15 Limitation on Creation of Subsidiaries and Entering into Partnerships and Joint Ventures..........64
9.16 Special Purpose Corporation.......................................................................64
SECTION 10. Events of Default...................................................................................64
10.01 Payments.........................................................................................64
10.02 Representations, etc.............................................................................64
10.03 Covenants........................................................................................65
10.04 Default Under Other Agreements...................................................................65
(iii)
5
Page
----
10.05 Bankruptcy, etc..................................................................................65
10.06 ERISA............................................................................................66
10.07 Security Documents...............................................................................66
10.08 Subsidiaries Guaranty............................................................................67
10.09 Judgments........................................................................................67
10.10 Change of Control................................................................................67
SECTION 11. Definitions and Accounting Terms....................................................................68
11.01 Defined Terms....................................................................................68
SECTION 12. The Administrative Agent............................................................................90
12.01 Appointment......................................................................................90
12.02 Nature of Duties.................................................................................90
12.03 Lack of Reliance on the Administrative Agent.....................................................91
12.04 Certain Rights of the Administrative Agent.......................................................91
12.05 Reliance.........................................................................................91
12.06 Indemnification..................................................................................92
12.07 The Administrative Agent in its Individual Capacity..............................................92
12.08 Holders..........................................................................................92
12.09 Resignation by the Administrative Agent..........................................................92
SECTION 13. Miscellaneous.......................................................................................93
13.01 Payment of Expenses, etc.........................................................................93
13.02 Right of Setoff..................................................................................94
13.03 Notices..........................................................................................94
13.04 Benefit of Agreement; Assignments; Participations................................................95
13.05 No Waiver; Remedies Cumulative...................................................................96
13.06 Payments Pro Rata................................................................................97
13.07 Calculations; Computations; Accounting Terms.....................................................97
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL...........................98
13.09 Counterparts.....................................................................................99
13.10 Effectiveness....................................................................................99
13.11 Headings Descriptive.............................................................................99
13.12 Amendment or Waiver..............................................................................99
13.13 Survival........................................................................................101
13.14 Domicile of Loans...............................................................................101
13.15 Limitation on Additional Amounts, etc...........................................................101
13.16 Register......................................................................................101
13.17 Confidentiality...............................................................................102
SECTION 14. Holdings Guaranty..................................................................................102
14.01 Guaranty........................................................................................102
14.02 Bankruptcy......................................................................................103
(iv)
6
Page
----
14.03 Nature of Liability.............................................................................103
14.04 Independent Obligation..........................................................................103
14.05 Authorization...................................................................................104
14.06 Reliance........................................................................................105
14.07 Subordination...................................................................................105
14.08 Waiver..........................................................................................105
14.09 Nature of Liability.............................................................................107
SCHEDULE I Commitments
SCHEDULE II ERISA
SCHEDULE III Subsidiaries
SCHEDULE IV Existing Indebtedness
SCHEDULE V Insurance
SCHEDULE VI Existing Liens
SCHEDULE VII Indebtedness to be Refinanced
SCHEDULE VIII Lender Addresses
SCHEDULE IX Existing Investments
SCHEDULE X Existing Letters of Credit
EXHIBIT A Form of Notice of Borrowing
EXHIBIT B-1 Form of Revolving Note
EXHIBIT B-2 Form of Swingline Note
EXHIBIT C Form of Letter of Credit Request
EXHIBIT D Form of Section 4.04(b)(ii) Certificate
EXHIBIT E Form of Opinion of Xxxxxxx Xxxx & Xxxxx LLP,
counsel to each Credit Party
EXHIBIT F Form of Officer's Certificate
EXHIBIT G Form of Pledge Agreement
EXHIBIT H Form of Security Agreement
EXHIBIT I Form of Subsidiaries Guaranty
EXHIBIT J Form of Consent Letter
EXHIBIT K Form of Assignment and Assumption Agreement
EXHIBIT L Form of Intercompany Note
(v)
7
CREDIT AGREEMENT, dated as of May 30, 2000, among UNIVERSAL COMPRESSION
HOLDINGS, INC., a Delaware corporation ("Holdings"), UNIVERSAL COMPRESSION,
INC., a Texas corporation (the "Borrower"), the Lenders party hereto from time
to time, DEUTSCHE BANK SECURITIES INC., as Lead Arranger and BANKERS TRUST
COMPANY, as Administrative Agent (all capitalized terms used herein and defined
in Section 11 are used herein as therein defined).
WITNESSETH:
WHEREAS, subject to and upon the terms and conditions herein set forth,
the Lenders are willing to make available to the Borrower the credit facility
provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1. Amount and Terms of Credit.
1.01 The Commitments. (a) Subject to and upon the terms and conditions
set forth herein, each Lender with a Commitment severally agrees, at any time
and from time to time on and after the Effective Date and prior to the Maturity
Date, to make a revolving loan or revolving loans (each, a "Revolving Loan" and,
collectively, the "Revolving Loans") to the Borrower, which Revolving Loans (i)
shall, at the option of the Borrower, be Base Rate Loans or Eurodollar Loans,
provided that except as otherwise specifically provided in Section 1.10(b), all
Revolving Loans comprising the same Borrowing shall at all times be of the same
Type, (ii) may be repaid and reborrowed in accordance with the provisions
hereof, (iii) shall not exceed for any Lender at any time outstanding that
aggregate principal amount which, when added to the product of (x) such Lender's
Adjusted Percentage and (y) the sum of (I) the aggregate amount of all Letter of
Credit Outstandings (exclusive of Unpaid Drawings which are repaid with the
proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) at such time and (II) the aggregate principal
amount of all Swingline Loans (exclusive of Swingline Loans which are repaid
with the proceeds of, and simultaneously with the incurrence of, the respective
incurrence of Revolving Loans) then outstanding, equals the Commitment of such
Lender at such time and (iv) shall not exceed for all Lenders at any time
outstanding that aggregate principal amount which, when added to (x) the amount
of all Letter of Credit Outstandings (exclusive of Unpaid Drawings which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) at such time and (y) the aggregate
principal amount of all Swingline Loans (exclusive of Swingline Loans which are
repaid with the proceeds of, and simultaneously with the incurrence of, the
respective incurrence of Revolving Loans) then outstanding, equals the Total
Commitment at such time.
(b) Subject to and upon the terms and conditions herein set forth, BTCo
in its individual capacity agrees to make at any time and from time to time on
and after the Effective Date and prior to the Swingline Expiry Date, a revolving
loan or revolving loans (each, a "Swingline Loan" and, collectively, the
"Swingline Loans") to the Borrower, which Swingline
-1-
8
Loans (i) shall be made and maintained as Base Rate Loans, (ii) may be repaid
and reborrowed in accordance with the provisions hereof, (iii) shall not exceed
in aggregate principal amount at any time outstanding, when combined with the
aggregate principal amount of all Revolving Loans made by Non-Defaulting Lenders
then outstanding and the Letter of Credit Outstandings at such time, an amount
equal to the Adjusted Total Commitment at such time (after giving effect to any
reductions to the Adjusted Total Commitment on such date) and (iv) shall not
exceed in aggregate principal amount at any time outstanding the Maximum
Swingline Amount.
(c) On any Business Day, BTCo may, in its sole discretion, give notice
to the Lenders that its outstanding Swingline Loans shall be funded with a
Borrowing of Revolving Loans (provided that such notice shall be deemed to have
been automatically given upon the occurrence of a Default or an Event of Default
under Section 10.05 or upon the exercise of any of the remedies provided in the
last paragraph of Section 10), in which case a Borrowing of Revolving Loans
constituting Base Rate Loans (each such Borrowing, a "Mandatory Borrowing")
shall be made on the immediately succeeding Business Day by all Lenders with a
Commitment (without giving effect to any termination thereof pursuant to the
last paragraph of Section 10) pro rata based on each Lender's Adjusted
Percentage (determined before giving effect to any termination of the
Commitments pursuant to the last paragraph of Section 10) and the proceeds
thereof shall be applied directly to BTCo to repay BTCo for such outstanding
Swingline Loans. Each such Lender hereby irrevocably agrees to make Revolving
Loans upon one Business Day's notice pursuant to each Mandatory Borrowing in the
amount and in the manner specified in the preceding sentence and on the date
specified in writing by BTCo notwithstanding (i) the amount of the Mandatory
Borrowing may not comply with the minimum amount for Borrowings otherwise
required hereunder, (ii) whether any conditions specified in Section 6 are then
satisfied, (iii) whether a Default or an Event of Default then exists, (iv) the
date of such Mandatory Borrowing and (v) the amount of the Total Commitment or
the Adjusted Total Commitment at such time. In the event that any Mandatory
Borrowing cannot for any reason be made on the date otherwise required above
(including, without limitation, as a result of the commencement of a proceeding
under the Bankruptcy Code with respect to the Borrower), then each such Lender
hereby agrees that it shall forthwith purchase (as of the date the Mandatory
Borrowing would otherwise have occurred, but adjusted for any payments received
from the Borrower on or after such date and prior to such purchase) from BTCo
such participations in the outstanding Swingline Loans as shall be necessary to
cause such Lenders to share in such Swingline Loans ratably based upon their
respective Adjusted Percentages (determined before giving effect to any
termination of the Commitments pursuant to the last paragraph of Section 10),
provided that (x) all interest payable on the Swingline Loans shall be for the
account of BTCo until the date as of which the respective participation is
required to be purchased and, to the extent attributable to the purchased
participation, shall be payable to the participant from and after such date and
(y) at the time any purchase of participations pursuant to this sentence is
actually made, the purchasing Lender shall be required to pay BTCo interest on
the principal amount of participation purchased for each day from and including
the day upon which the Mandatory Borrowing would otherwise have occurred to but
excluding the date of payment for such participation, at the overnight Federal
Funds Rate for the first three days and at the rate otherwise applicable to
Revolving Loans maintained as Base Rate Loans hereunder for each day thereafter.
-2-
9
1.02 Minimum Amount of Each Borrowing. The aggregate principal amount
of each Borrowing of Revolving Loans shall not be less than $1,000,000 and, if
greater, shall be in an integral multiple of $100,000; provided that Mandatory
Borrowings shall be made in the amounts required by Section 1.01(c). The
aggregate principal amount of each Borrowing of Swingline Loans shall not be
less than $100,000 and, if greater, shall be in an integral multiple of $50,000.
More than one Borrowing may occur on the same date, but at no time shall there
be outstanding more than ten Borrowings of Eurodollar Loans.
1.03 Notice of Borrowing. (a) Whenever the Borrower desires to make a
Borrowing hereunder (excluding Borrowings of Swingline Loans and Mandatory
Borrowings), it shall give the Administrative Agent at its Notice Office at
least one Business Day's prior notice of each Base Rate Loan and at least three
Business Days' prior notice of each Eurodollar Loan to be made hereunder,
provided that any such notice shall be deemed to have been given on a certain
day only if given before 12:00 Noon (New York time) on such day. Each such
notice (each a "Notice of Borrowing"), except as otherwise expressly provided in
Section 1.10, shall be irrevocable and shall be given by the Borrower in
writing, or by telephone promptly confirmed in writing, in the form of Exhibit
A, appropriately completed to specify the aggregate principal amount of the
Loans to be made pursuant to such Borrowing, the date of such Borrowing (which
shall be a Business Day), whether the Loans being made pursuant to such
Borrowing are to be initially maintained as Base Rate Loans or Eurodollar Loans
and, if Eurodollar Loans, the initial Interest Period to be applicable thereto.
The Administrative Agent shall promptly give each Lender notice of such proposed
Borrowing, of such Lender's proportionate share thereof and of the other matters
required by the immediately preceding sentence to be specified in the Notice of
Borrowing.
(b)(i) Whenever the Borrower desires to make a Borrowing of Swingline
Loans hereunder, it shall give BTCo not later than 12:00 Noon (New York time) on
the date that a Swingline Loan is to be made, written notice or telephonic
notice confirmed in writing of each Swingline Loan to be made hereunder. Each
such notice shall be irrevocable and specify in each case (A) the date of
Borrowing (which shall be a Business Day) and (B) the aggregate principal amount
of the Swingline Loans to be made pursuant to such Borrowing.
(ii) Mandatory Borrowings shall be made upon the notice specified in
Section 1.01(c), with the Borrower irrevocably agreeing, by its incurrence of
any Swingline Loan, to the making of the Mandatory Borrowings as set forth in
Section 1.01(c).
(c) Without in any way limiting the obligation of the Borrower to
confirm in writing any telephonic notice of such Borrowing of Loans, BTCo may
act without liability upon the basis of telephonic notice of such Borrowing,
believed by BTCo in good faith to be from the President, any Vice President or
the Treasurer of the Borrower, or from any other authorized officer of the
Borrower designated by the Borrower to the Administrative Agent, prior to
receipt of written confirmation. In each such case, the Borrower hereby waives
the right to dispute BTCo's record of the terms of such telephonic notice of
such Borrowing of Loans.
1.04 Disbursement of Funds. Except as otherwise specifically provided
in the immediately succeeding sentence, no later than 12:00 Noon (New York time)
on the date
-3-
10
specified in each Notice of Borrowing (or (x) in the case of Swingline Loans,
not later than 2:00 P.M. (New York time) on the date specified pursuant to
Section 1.03(b)(i) or (y) in the case of Mandatory Borrowings, not later than
12:00 Noon (New York time) on the date specified in Section 1.01(c)), each
Lender will make available its pro rata portion of each such Borrowing requested
to be made on such date (or in the case of Swingline Loans, BTCo shall make
available the full amount thereof). All such amounts shall be made available in
Dollars and in immediately available funds at the Payment Office of the
Administrative Agent, and the Administrative Agent will make available to the
Borrower at the Payment Office the aggregate of the amounts so made available by
the Lenders. Unless the Administrative Agent shall have been notified by any
Lender prior to the date of Borrowing that such Lender does not intend to make
available to the Administrative Agent such Lender's portion of any Borrowing to
be made on such date, the Administrative Agent may assume that such Lender has
made such amount available to the Administrative Agent on such date of Borrowing
and the Administrative Agent may, in reliance upon such assumption, make
available to the Borrower a corresponding amount. If such corresponding amount
is not in fact made available to the Administrative Agent by such Lender, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender. If such Lender does not pay such corresponding amount
forthwith upon the Administrative Agent's demand therefor, the Administrative
Agent shall promptly notify the Borrower and the Borrower shall immediately pay
such corresponding amount to the Administrative Agent. The Administrative Agent
shall also be entitled to recover on demand from such Lender or the Borrower, as
the case may be, interest on such corresponding amount in respect of each day
from the date such corresponding amount was made available by the Administrative
Agent to the Borrower until the date such corresponding amount is recovered by
the Administrative Agent, at a rate per annum equal to (i) if recovered from
such Lender, at the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Lender from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any failure by such Lender to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the principal of, and
interest on, the Loans made by each Lender shall be evidenced (i) if Revolving
Loans, by a promissory note duly executed and delivered by the Borrower
substantially in the form of Exhibit B-1, with blanks appropriately completed in
conformity herewith (each, a "Revolving Note" and, collectively, the "Revolving
Notes") and (ii) if Swingline Loans, by a promissory note duly executed and
delivered by the Borrower substantially in the form of Exhibit B-2, with blanks
appropriately completed in conformity herewith (the "Swingline Note").
(b) The Revolving Note issued to each Lender shall (i) be executed by
the Borrower, (ii) be payable to the order of such Lender and be dated the
Effective Date, (iii) be in a stated principal amount equal to the Commitment of
such Lender and be payable in the principal amount of the Revolving Loans
evidenced thereby, (iv) mature on the Maturity Date, (v) bear interest as
provided in the appropriate clause of Section 1.08 in respect of the Base Rate
Loans and Eurodollar Loans, as the case may be, evidenced thereby, (vi) be
subject to mandatory repayment as provided in Section 4.02 and (vii) be entitled
to the benefits of this Agreement and the other Credit Documents.
-4-
11
(c) The Swingline Note issued to BTCo shall (i) be executed by the
Borrower, (ii) be payable to the order of BTCo and be dated the Effective Date,
(iii) be in a stated principal amount equal to the Maximum Swingline Amount and
be payable in the principal amount of the outstanding Swingline Loans evidenced
thereby from time to time, (iv) mature on the Swingline Expiry Date, (v) bear
interest as provided in the appropriate clause of Section 1.08 in respect of the
Base Rate Loans evidenced thereby and (vi) be entitled to the benefits of this
Agreement and the other Credit Documents.
(d) Each Lender will note on its internal records the amount of each
Loan made by it and each payment in respect thereof and will prior to any
transfer of any of its Notes endorse on the reverse side thereof the outstanding
principal amount of Loans evidenced thereby. Failure to make any such notation
shall not affect the Borrower's obligations in respect of such Loans.
1.06 Conversions. The Borrower shall have the option to convert, on any
Business Day occurring on or after the Effective Date, all or a portion equal to
at least $1,000,000 of the outstanding principal amount of such Loans made
pursuant to one or more Borrowings of one or more Types of Loans into a
Borrowing of another Type of Loan, provided that (i) except as otherwise
provided in Section 1.10(b), Eurodollar Loans may be converted into Base Rate
Loans only on the last day of an Interest Period applicable to the Loans being
converted and no such partial conversion of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a single
Borrowing to less than $1,000,000, (ii) Base Rate Loans may only be converted
into Eurodollar Loans if no Default or Event of Default is in existence on the
date of the conversion, (iii) no conversion pursuant to this Section 1.06 shall
result in a greater number of Borrowings than is permitted under Section 1.02
and (iv) Swingline Loans may not be converted pursuant to this Section 1.06.
Each such conversion shall be effected by the Borrower by giving the
Administrative Agent at its Notice Office prior to 12:00 Noon (New York time) at
least three Business Days' prior notice (each a "Notice of Conversion")
specifying the Loans to be so converted, the Borrowing(s) pursuant to which such
Loans were made and, if to be converted into Eurodollar Loans, the Interest
Period to be initially applicable thereto. The Administrative Agent shall give
each Lender prompt notice of any such proposed conversion affecting any of its
Loans. Upon any such conversion the proceeds thereof will be deemed to be
applied directly on the day of such conversion to prepay the outstanding
principal amount of the Loans being converted.
1.07 Pro Rata Borrowings. All Borrowings of Revolving Loans under this
Agreement shall be incurred from the Lenders pro rata on the basis of their
Commitments; provided that all Borrowings of Revolving Loans made pursuant to a
Mandatory Borrowing shall be incurred from the Lenders pro rata on the basis of
their Adjusted Percentages. It is understood that no Lender shall be responsible
for any default by any other Lender of its obligation to make Loans hereunder
and that each Lender shall be obligated to make the Loans provided to be made by
it hereunder, regardless of the failure of any other Lender to make its Loans
hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in respect of
the unpaid principal amount of each Base Rate Loan from the date the proceeds
thereof are made available to the Borrower until the maturity thereof (whether
by acceleration or otherwise) at a rate per
-5-
12
annum which shall be equal to the sum of the Applicable Base Rate Margin plus
the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the unpaid
principal amount of each Eurodollar Loan from the date the proceeds thereof are
made available to the Borrower until the maturity thereof (whether by
acceleration or otherwise) at a rate per annum which shall, during each Interest
Period applicable thereto, be equal to the sum of the Applicable Eurodollar Rate
Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law, overdue
interest in respect of each Loan and any other overdue amount payable hereunder
shall, in each case, bear interest at a rate per annum equal to 2% per annum in
excess of the rate otherwise applicable to Base Rate Loans from time to time.
(d) Accrued (and theretofore unpaid) interest shall be payable (i) in
respect of each Base Rate Loan, quarterly in arrears on each Quarterly Payment
Date, (ii) in respect of each Eurodollar Loan, on the last day of each Interest
Period applicable thereto and, in the case of an Interest Period in excess of
three months, on each date occurring at three month intervals after the first
day of such Interest Period and (iii) in respect of each Loan, on any repayment
or prepayment (on the amount repaid or prepaid), at maturity (whether by
acceleration or otherwise) and, after such maturity, on demand.
(e) Upon each Interest Determination Date, the Administrative Agent
shall determine the Eurodollar Rate for each Interest Period applicable to
Eurodollar Loans and shall promptly notify the Borrower and the Lenders thereof.
Each such determination shall, absent manifest error, be final and conclusive
and binding on all parties hereto.
1.09 Interest Periods. At the time it gives any Notice of Borrowing or
Notice of Conversion in respect of the making of, or conversion into, any
Eurodollar Loan (in the case of the initial Interest Period applicable thereto)
or prior to 12:00 Noon (New York time) on the third Business Day prior to the
expiration of an Interest Period applicable to such Eurodollar Loan (in the case
of any subsequent Interest Period), the Borrower shall have the right to elect,
by giving the Administrative Agent notice thereof, the interest period (each an
"Interest Period") applicable to such Eurodollar Loan, which Interest Period
shall, at the option of the Borrower, be a one, two, three or six-month period
or, to the extent then available to all Lenders, a nine or twelve-month period,
provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all times
have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including the
date of any conversion thereto from a Loan of a different Type) and each
Interest Period occurring thereafter in respect of such Eurodollar Loan
shall commence on the day on which the next preceding Interest Period
applicable thereto expires;
-6-
13
(iii) if any Interest Period relating to a Eurodollar Loan begins on a
day for which there is no numerically corresponding day in the calendar
month at the end of such Interest Period, such Interest Period shall end on
the last Business Day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day; provided, however, that if any Interest Period for
a Eurodollar Loan would otherwise expire on a day which is not a Business
Day but is a day of the month after which no further Business Day occurs in
such month, such Interest Period shall expire on the next preceding
Business Day;
(v) no Interest Period may be selected at any time when a Default or
Event of Default is then in existence; and
(vi) no Interest Period in respect of any Borrowing shall be selected
which extends beyond the Maturity Date.
If upon the expiration of any Interest Period applicable to a Borrowing
of Eurodollar Loans, the Borrower has failed to elect, or is not permitted to
elect, a new Interest Period to be applicable to such Eurodollar Loans as
provided above, the Borrower shall be deemed to have elected to convert such
Eurodollar Loans into Base Rate Loans effective as of the expiration date of
such current Interest Period.
1.10 Increased Costs, Illegality, etc. (a) In the event that any Lender
shall have determined (which determination shall, absent manifest error, be
final and conclusive and binding upon all parties hereto but, with respect to
clause (i) below, may be made only by the Administrative Agent):
(i) on any Interest Determination Date that, by reason of any changes
arising after the date of this Agreement affecting the interbank Eurodollar
market, adequate and fair means do not exist for ascertaining the
applicable interest rate on the basis provided for in the definition of
Eurodollar Rate; or
(ii) at any time, that such Lender shall incur increased costs or
reductions in the amounts received or receivable hereunder with respect to
any Eurodollar Loan because of (x) any change since the date of this
Agreement in any applicable law or governmental rule, regulation, order,
guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of
any new law or governmental rule, regulation, order, guideline or request,
such as, for example, but not limited to: (A) a change in the basis of
taxation of payment to any Lender of the principal of or interest on the
Notes or any other amounts payable hereunder (except for changes in the
rate of tax on, or determined by reference to, the net income or profits of
such Lender pursuant to the laws of the jurisdiction in which it is
organized or in which its principal office or applicable lending office is
located or any subdivision thereof or therein) or (B) a change in official
reserve requirements, but, in all events, excluding reserves required
-7-
14
under Regulation D to the extent included in the computation of the
Eurodollar Rate and/or (y) other circumstances since the date of this
Agreement affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market; or
(iii) at any time, that the making or continuance of any Eurodollar
Loan has been made (x) unlawful by any law or governmental rule, regulation
or order, (y) impossible by compliance by any Lender in good faith with any
governmental request (whether or not having force of law) or (z)
impracticable as a result of a contingency occurring after the date of this
Agreement which materially and adversely affects the interbank Eurodollar
market;
then, and in any such event, such Lender (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone promptly
confirmed in writing) to the Borrower and, except in the case of clause (i)
above, to the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Lenders).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no longer
be available until such time as the Administrative Agent notifies the Borrower
and the Lenders that the circumstances giving rise to such notice by the
Administrative Agent no longer exist, and any Notice of Borrowing or Notice of
Conversion given by the Borrower with respect to Eurodollar Loans which have not
yet been incurred (including by way of conversion) shall be deemed rescinded by
the Borrower, (y) in the case of clause (ii) above, the Borrower shall pay to
such Lender, within 15 days of such Lender's written request therefor, such
additional amounts (in the form of an increased rate of, or a different method
of calculating, interest or otherwise as such Lender reasonably shall determine)
as shall be required to compensate such Lender for such increased costs or
reductions in amounts received or receivable hereunder as set forth in such
written request as to the additional amounts owed to such Lender, showing in
reasonable detail the basis for the calculation thereof, submitted to the
Borrower by such Lender shall, absent manifest error, be final and conclusive
and binding on all the parties hereto) and (z) in the case of clause (iii)
above, the Borrower shall take one of the actions specified in Section 1.10(b)
as promptly as possible and, in any event, within the time period required by
law.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) shall) either (x) if the affected Eurodollar Loan is then
being made initially or pursuant to a conversion, by giving the Administrative
Agent telephonic notice (confirmed in writing) on the same date that the
Borrower was notified by the affected Lender or the Administrative Agent
pursuant to Section 1.10(a)(ii) or (iii) or (y) if the affected Eurodollar Loan
is then outstanding, upon at least three Business Days' written notice to the
Administrative Agent, require the affected Lender to convert such Eurodollar
Loan into a Base Rate Loan, provided that, if more than one Lender is affected
at any time, then all affected Lenders must be treated the same pursuant to this
Section 1.10(b).
(c) If at any time after the date of this Agreement any Lender
determines that the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law) concerning capital adequacy, or any change in
interpretation or administration thereof by any governmental authority,
-8-
15
central bank or comparable agency, will have the effect of increasing the amount
of capital required or expected to be maintained by such Lender or any
corporation controlling such Lender based on the existence of such Lender's
Commitments hereunder or its obligations hereunder, then the Borrower shall pay
to such Lender, upon its written demand therefor, such additional amounts as
shall be required to compensate such Lender or such other corporation for the
increased cost to such Lender or such other corporation or the reduction in the
rate of return to such Lender or such other corporation as a result of such
increase of capital. In determining such additional amounts, each Lender will
act reasonably and in good faith and will use averaging and attribution methods
which are reasonable, provided that such Lender's determination of compensation
owing under this Section 1.10(c) shall, absent manifest error, be final and
conclusive and binding on all the parties hereto. Each Lender, upon determining
that any additional amounts will be payable pursuant to this Section 1.10(c),
will give prompt written notice thereof to the Borrower, which notice shall show
in reasonable detail the basis for calculation of such additional amounts.
(d) The provisions of this Section 1.10 are subject to Section 13.15
(to the extent same is applicable in accordance with the terms thereof).
1.11 Compensation. The Borrower shall compensate each Lender, within 15
days of its written request (which request shall set forth in reasonable detail
the basis for requesting such compensation), for all reasonable losses, expenses
and liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other funds
required by such Lender to fund its Eurodollar Loans but excluding loss of
anticipated profits) which such Lender may sustain: (i) if for any reason (other
than a default by such Lender or the Administrative Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a)); (ii)
if any repayment (including any repayment made pursuant to Section 4.02 or as a
result of an acceleration of the Loans pursuant to Section 10) or conversion of
any of its Eurodollar Loans occurs on a date which is not the last day of an
Interest Period with respect thereto; (iii) if any prepayment of any of its
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by the
Borrower to repay its Loans when required by the terms of this Agreement or any
Note held by such Lender or (y) any election made pursuant to Section 1.10(b).
Calculation of all amounts payable to each Lender under clause (ii) of the
immediately preceding sentence shall be made as if such Lender (x) had actually
funded its relevant Eurodollar Loan through the purchase of a Eurodollar deposit
bearing interest at the Eurodollar Rate in an amount equal to the amount of that
Loan, having a maturity comparable to the relevant Interest Period and (y) is
actually required to terminate such deposit on the date of the respective
repayment or conversion and pay the customary breakage charges in connection
therewith; provided, however, that each Lender may fund each of its Eurodollar
Loans in any manner it sees fit and the foregoing assumption shall be utilized
only for the calculation of amounts payable under clause (ii) of the first
sentence of this Section 1.11.
1.12 Change of Lending Office. Each Lender agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 2.06
-9-
16
or Section 4.04 with respect to such Lender, it will, if requested by the
Borrower, use reasonable efforts (subject to overall policy considerations of
such Lender) to designate another lending office for any Loans or Letters of
Credit affected by such event, provided that such designation is made on such
terms that such Lender and its lending office suffer no economic, legal or
regulatory disadvantage, with the object of avoiding the consequence of the
event giving rise to the operation of such Section. Nothing in this Section 1.12
shall affect or postpone any of the obligations of the Borrower or the right of
any Lender provided in Sections 1.10, 2.06 and 4.04.
1.13 Replacement of Lenders. (x) If any Lender becomes a Defaulting
Lender or otherwise defaults in its obligations to make Loans or fund Unpaid
Drawings, (y) upon the occurrence of an event giving rise to the operation of
Section 1.10(a)(ii) or (iii), Section 1.10(c), Section 2.06 or Section 4.04 with
respect to any Lender which results in such Lender charging to the Borrower
increased costs in excess of those being generally charged by the Lenders or (z)
as provided in Section 13.12(b) in the case of certain refusals by a Lender to
consent to certain proposed changes, waivers, discharges or terminations with
respect to this Agreement which have been approved by the Required Lenders, the
Borrower shall have the right, if no Default or Event of Default then exists, to
replace such Lender (the "Replaced Lender") with one or more other Eligible
Transferee or Transferees, none of whom shall constitute a Defaulting Lender at
the time of such replacement (collectively, the "Replacement Lender") reasonably
acceptable to the Administrative Agent, provided that (i) at the time of any
replacement pursuant to this Section 1.13, the Replacement Lender shall enter
into one or more Assignment and Assumption Agreements pursuant to Section
13.04(b) (and with all fees payable pursuant to said Section 13.04(b) to be paid
by the Replacement Lender) pursuant to which the Replacement Lender shall
acquire all of the Commitments and outstanding Loans of, and participations in
Letters of Credit by, the Replaced Lender and, in connection therewith, shall
pay to (x) the Replaced Lender in respect thereof an amount equal to the sum of
(A) an amount equal to the principal of, and all accrued interest on, all
outstanding Loans of the Replaced Lender, (B) an amount equal to all Unpaid
Drawings that have been funded by (and not reimbursed to) such Replaced Lender,
together with all then unpaid interest with respect thereto at such time and (C)
an amount equal to all accrued, but theretofore unpaid, Fees owing to the
Replaced Lender pursuant to Section 3.01 and (y) BTCo an amount equal to such
Replaced Lender's Adjusted Percentage (for this purpose, determined as if the
adjustment described in clause (y) of the immediately succeeding sentence had
been made with respect to such Replaced Lender) of any Unpaid Drawing (which at
such time remains an Unpaid Drawing) to the extent such amount was not
theretofore funded by such Replaced Lender, and (ii) all obligations of the
Borrower owing to the Replaced Lender (other than those specifically described
in clause (i) above in respect of which the assignment purchase price has been,
or is concurrently being, paid) shall be paid in full to such Replaced Lender
concurrently with such replacement. Upon the execution of the respective
Assignment and Assumption Agreements, the payment of amounts referred to in
clauses (i) and (ii) above and, if so requested by the Replacement Lender,
delivery to the Replacement Lender of the appropriate Note or Notes executed by
the Borrower, (x) the Replacement Lender shall become a Lender hereunder and the
Replaced Lender shall cease to constitute a Lender hereunder, except with
respect to indemnification provisions under this Agreement, which shall survive
as to such Replaced Lender and (y) the Adjusted Percentages of the Lenders shall
be automatically adjusted
-10-
17
at such time to give effect to such replacement (and to give effect to the
replacement of a Defaulting Lender with one or more Non-Defaulting Lenders).
SECTION 2. Letters of Credit.
2.01 Letters of Credit. (a) Subject to and upon the terms and
conditions herein set forth, the Borrower may request that BTCo issue, at any
time and from time to time on and after the Effective Date and prior to the 10th
day preceding the Maturity Date (or the 30th day preceding the Maturity Date in
the case of Trade Letters of Credit), (x) for the account of the Borrower and
for the benefit of any holder (or any trustee, agent or other similar
representative for any such holders) of L/C Supportable Obligations of the
Borrower or any of its Subsidiaries, an irrevocable sight standby letter of
credit in Dollars or an Alternate Currency and in a form customarily used by
BTCo or in such other form as has been approved by BTCo (each such standby
letter of credit, a "Standby Letter of Credit") in support of such L/C
Supportable Obligations and (y) for the account of the Borrower, an irrevocable
sight trade letter of credit in Dollars or an Alternate Currency and in a form
customarily used by BTCo or in such other form as has been approved by BTCo
(each such trade letter of credit, a "Trade Letter of Credit", and each such
Trade Letter of Credit and each Standby Letter of Credit, a "Letter of Credit")
in support of customary commercial transactions of the Borrower and its
Subsidiaries.
(b) BTCo hereby agrees that it will, at any time and from time to time
on or after the Effective Date and prior to the Maturity Date, following its
receipt of the respective Letter of Credit Request, issue for the account of the
Borrower one or more Letters of Credit (x) in the case of Standby Letters of
Credit, in support of such L/C Supportable Obligations of the Borrower or any of
its Subsidiaries as are permitted to remain outstanding without giving rise to a
Default or Event of Default hereunder and (y) in the case of Trade Letters of
Credit, in support of buyers of goods as referenced in Section 2.01(a), provided
that BTCo shall be under no obligation to issue any Letter of Credit of the
types described above if at the time of such issuance:
(i) any order, judgment or decree of any governmental authority or
arbitrator shall purport by its terms to enjoin or restrain BTCo from
issuing such Letter of Credit or any requirement of law applicable to BTCo
or any request or directive (whether or not having the force of law) from
any governmental authority with jurisdiction over BTCo shall prohibit, or
request that BTCo refrain from, the issuance of letters of credit generally
or such Letter of Credit in particular or shall impose upon BTCo with
respect to such Letter of Credit any restriction or reserve or capital
requirement (for which BTCo is not otherwise compensated) not in effect on
the date hereof, or any unreimbursed loss, cost or expense which was not
applicable, in effect or known to BTCo as of the date hereof and which BTCo
reasonably and in good xxxxx xxxxx material to it; or
(ii) BTCo shall have received notice from any Lender prior to the
issuance of such Letter of Credit of the type described in the second
sentence of Section 2.03(b).
(c) Notwithstanding the foregoing, (i) no Letter of Credit shall be
issued the Stated Amount of which, when added to the Letter of Credit
Outstandings (exclusive of Unpaid
-11-
18
Drawings which are repaid on the date of, and prior to the issuance of, the
respective Letter of Credit) at such time would exceed either (x) $15,000,000 or
(y) when added to the aggregate principal amount of all Revolving Loans made by
Non-Defaulting Lenders and Swingline Loans then outstanding, an amount equal to
the Adjusted Total Commitment at such time, (ii) no Letter of Credit denominated
in an Alternate Currency shall be issued if the Stated Amount of such Letter of
Credit, (x) when added to the Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid on the date of, and prior to the issuance of, such
Letter of Credit) at such time in respect of all other outstanding Letters of
Credit denominated in an Alternate Currency, would exceed $13,500,000 unless the
Administrative Agent consents in writing prior to the issuance thereof, and (y)
when added to the aggregate principal amount of all Revolving Loans made by
Non-Defaulting Lenders and Swingline Loans and Letter of Credit Outstandings
(exclusive of Unpaid Drawings which are repaid on the date of, and prior to the
issuance of, such Letter of Credit) at such time, would exceed an amount equal
to 95% of the Adjusted Total Commitment at such time and (iii) each Letter of
Credit shall by its terms terminate on or before the earlier of (x) (A) in the
case of Standby Letters of Credit, the date which occurs 24 months after the
date of the issuance thereof (although any such Standby Letter of Credit may be
extendible for successive periods of up to 12 months, but not beyond the date
which is 10 days prior to the Maturity Date, on terms acceptable to BTCo) and
(B) in the case of Trade Letters of Credit, the date which occurs 24 months
after the date of issuance thereof and (y) the date which is 30 days prior to
the Maturity Date.
(d) Schedule X contains a description of all letters of credit issued
by BTCo pursuant to the Existing Credit Agreement and which are to remain
outstanding on the Effective Date. Each such letter of credit, including any
extension thereof (each an "Existing Letter of Credit") shall constitute a
"Letter of Credit" for all purposes of this Agreement. Each Existing Letter of
Credit shall be deemed issued for purposes of Sections 2.04(a), 3.01(b) and
3.01(c) on the Effective Date.
2.02 Minimum Stated Amount. The Stated Amount of each Letter of Credit
shall be not less than $20,000 or such lesser amount as is acceptable to BTCo.
2.03 Letter of Credit Requests. (a) Whenever the Borrower desires that
a Letter of Credit be issued for its account, the Borrower shall give the
Administrative Agent and BTCo at least two Business Days' (or such shorter
period as is acceptable to BTCo in any given case) written notice thereof
(including by way of facsimile). Each notice shall be in the form of Exhibit C
(each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be deemed to be a
representation and warranty by the Borrower that such Letter of Credit may be
issued in accordance with, and will not violate the requirements of, Section
2.01(c). Unless BTCo has received notice from the Required Lenders before it
issues a Letter of Credit that one or more of the conditions specified in
Section 5 are not satisfied on the Effective Date or Section 6 are not then
satisfied, or that the issuance of such Letter of Credit would violate Section
2.01(c), then BTCo may issue the requested Letter of Credit for the account of
the Borrower in accordance with BTCo's usual and customary practices. Upon its
issuance of or amendment to any Standby Letter of Credit, BTCo shall promptly
notify the Borrower and each Lender, in writing of such issuance or amendment
and, if requested by a Lender, BTCo shall provide such Lender with copies of any
such
-12-
19
issuance or amendment. In the case of Trade Letters of Credit, BTCo shall
promptly notify the Lenders of the aggregate Stated Amount of same as of the
close of business on the last Business Day of the preceding week.
2.04 Letter of Credit Participations. (a) Immediately upon the issuance
by BTCo of any Letter of Credit, BTCo shall be deemed to have sold and
transferred to each Lender other than BTCo (each such Lender, in its capacity
under this Section 2.04, a "Participant"), and each such Participant shall be
deemed irrevocably and unconditionally to have purchased and received from BTCo,
without recourse or warranty, an undivided interest and participation, to the
extent of such Participant's Adjusted Percentage in such Letter of Credit, each
amendment and each drawing made thereunder and the obligations of the Borrower
under this Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Commitments or Adjusted Percentages
of the Lenders pursuant to Section 1.13 or 13.04 or as a result of a Lender
Default, it is hereby agreed that, with respect to all outstanding Letters of
Credit and Unpaid Drawings, there shall be an automatic adjustment to the
participations pursuant to this Section 2.04 to reflect the new Adjusted
Percentages of the assignor and assignee Lender or of all Lenders with
Commitments, as the case may be.
(b) In determining whether to pay under any Letter of Credit, BTCo
shall have no obligation relative to the other Lenders other than to confirm
that any documents required to be delivered under such Letter of Credit appear
to have been delivered and that they appear to substantially comply on their
face with the requirements of such Letter of Credit. Any action taken or omitted
to be taken by BTCo under or in connection with any Letter of Credit if taken or
omitted in the absence of gross negligence or willful misconduct (as determined
by the final, non-appealable decision of a court of competent jurisdiction)
shall not create for BTCo any resulting liability to the Borrower or any Lender.
(c) In the event that BTCo makes any payment under any Letter of Credit
and the Borrower shall not have reimbursed such amount in full to BTCo pursuant
to Section 2.05(a), BTCo shall promptly notify the Administrative Agent, which
shall promptly notify each Participant of such failure, and each Participant
shall promptly and unconditionally pay to BTCo the amount of such Participant's
Adjusted Percentage of such unreimbursed payment in Dollars and in same day
funds. If BTCo so notifies, prior to 11:00 A.M. (New York time) on any Business
Day, any Participant required to fund a payment under a Letter of Credit, such
Participant shall make available to BTCo in Dollars such Participant's Adjusted
Percentage of the amount of such payment on such Business Day in same day funds.
If and to the extent such Participant shall not have so made its Adjusted
Percentage of the amount of such payment available to BTCo, such Participant
agrees to pay to BTCo, forthwith on demand such amount, together with interest
thereon, for each day from such date until the date such amount is paid to BTCo
at the overnight Federal Funds Rate for the first three days and at the rate
applicable to Revolving Loans maintained as Base Rate Loans hereunder for each
day thereafter. The failure of any Participant to make available to BTCo its
Adjusted Percentage of any payment under any Letter of Credit shall not relieve
any other Participant of its obligation hereunder to make available to BTCo its
Adjusted Percentage of any Letter of Credit on the date required, as
-13-
20
specified above, but no Participant shall be responsible for the failure of any
other Participant to make available to BTCo such other Participant's Adjusted
Percentage of any such payment.
(d) Whenever BTCo receives a payment of a reimbursement obligation as
to which it has received any payments from the Participants pursuant to clause
(c) above, BTCo shall pay to each Participant which has paid its Adjusted
Percentage thereof, in Dollars and in same day funds, an amount equal to such
Participant's share (based upon the proportionate aggregate amount originally
funded by such Participant to the aggregate amount funded by all Participants)
of the principal amount of such reimbursement obligation and interest thereon
accruing after the purchase of the respective participations.
(e) The obligations of the Participants to make payments to BTCo with
respect to Letters of Credit issued by it shall be irrevocable and not subject
to any qualification or exception whatsoever and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances,
including, without limitation, any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement or any of
the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other right which
the Borrower or any of its Subsidiaries may have at any time against a
beneficiary named in a Letter of Credit, any transferee of any Letter of
Credit (or any Person for whom any such transferee may be acting), the
Administrative Agent, any Participant, or any other Person, whether in
connection with this Agreement, any Letter of Credit, the transactions
contemplated herein or any unrelated transactions (including any underlying
transaction between the Borrower and the beneficiary named in any such
Letter of Credit);
(iii) any draft, certificate or any other document presented under any
Letter of Credit proving to be forged, fraudulent, invalid or insufficient
in any respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the surrender or impairment of any security for the performance
or observance of any of the terms of any of the Credit Documents; or
(v) the occurrence of any Default or Event of Default.
2.05 Agreement to Repay Letter of Credit Drawings. (a) The Borrower
hereby agrees to reimburse BTCo, by making payment in Dollars (in an amount
equal to the Dollar Equivalent of any payments or disbursements in respect of
Letters of Credit denominated in an Alternate Currency determined on the date of
such payment or disbursement) to BTCo in immediately available funds at the
Payment Office, for any payment or disbursement made by BTCo under any Letter of
Credit (each such amount (using the Dollar Equivalent of any Letters of Credit
denominated in an Alternate Currency determined on the date of such payment or
disbursement), so paid until reimbursed, an "Unpaid Drawing"), upon receipt of
notice by BTCo of such payment or disbursement prior to 11:00 A.M. (New York
time) on the date of, such
-14-
21
payment or disbursement, with interest on the amount so paid or disbursed by
BTCo, to the extent not reimbursed prior to 12:00 Noon (New York time) on the
date of such payment or disbursement, from and including the date paid or
disbursed to but excluding the date BTCo was reimbursed by the Borrower therefor
at a rate per annum which shall be the Base Rate in effect from time to time
plus the Applicable Base Rate Margin, provided, however, to the extent such
amounts are not reimbursed prior to 12:00 Noon (New York time) on the third
Business Day following the receipt by the Borrower of notice of such payment or
disbursement or the occurrence of a Default under Section 10.05, interest shall
thereafter accrue on the amounts so paid or disbursed by BTCo (and until
reimbursed by the Borrower) at a rate per annum which shall be the Base Rate in
effect from time to time plus the Applicable Base Rate Margin plus 2%, in each
such case, with interest to be payable on demand. BTCo shall give the Borrower
prompt written notice of each Drawing under any Letter of Credit, provided that
the failure to give any such notice shall in no way affect, impair or diminish
the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 2.05 to
reimburse BTCo with respect to Unpaid Drawings (including, in each case,
interest thereon) shall be absolute and unconditional under any and all
circumstances and irrespective of any setoff, counterclaim or defense to payment
which the Borrower may have or have had against any Lender (including in its
capacity as issuer of the Letter of Credit or as Participant), including,
without limitation, any defense based upon the failure of any drawing under a
Letter of Credit (each a "Drawing") to substantially conform to the terms of the
Letter of Credit or any nonapplication or misapplication by the beneficiary or
any transferee of the proceeds of such Drawing; provided, however, that the
Borrower shall not be obligated to reimburse BTCo for any wrongful payment made
by BTCo under a Letter of Credit as a result of acts or omissions constituting
willful misconduct or gross negligence on the part of BTCo (as determined by the
final, non-appealable decision of a court of competent jurisdiction).
2.06 Increased Costs. (a) If at any time after the date of this
Agreement, the introduction of or any change in any applicable law, rule,
regulation, order, guideline or request or in the interpretation or
administration thereof by any governmental authority charged with the
interpretation or administration thereof, or compliance by BTCo or any
Participant with any request or directive by any such authority (whether or not
having the force of law), shall either (i) impose, modify or make applicable any
reserve, deposit, capital adequacy or similar requirement against letters of
credit issued by BTCo or participated in by any Participant, or (ii) impose on
BTCo or any Participant any other conditions relating, directly or indirectly,
to this Agreement; and the result of any of the foregoing is to increase the
cost to BTCo or any Participant of issuing, maintaining or participating in any
Letter of Credit, or reduce the amount of any sum received or receivable by BTCo
or any Participant hereunder or reduce the rate of return on its capital with
respect to Letters of Credit (except for changes in the rate of tax on, or
determined by reference to, the net income or profits of BTCo or such
Participant pursuant to the laws of the jurisdiction in which it is organized or
in which its principal office or applicable lending office is located or any
subdivision thereof or therein), then, within 15 days of the delivery of the
certificate referred to below to the Borrower by BTCo or any Participant (a copy
of which certificate shall be sent by BTCo or such Participant to the
Administrative Agent), the Borrower shall pay to BTCo or such Participant such
additional amount or amounts as will compensate such Lender for such increased
cost or reduction in the amount receivable or reduction
-15-
22
on the rate of return on its capital. BTCo or any Participant, upon determining
that any additional amounts will be payable pursuant to this Section 2.06, will
give prompt written notice thereof to the Borrower, which notice shall include a
certificate submitted to the Borrower by BTCo or such Participant (a copy of
which certificate shall be sent by BTCo or such Participant to the
Administrative Agent), setting forth in reasonable detail the basis for the
calculation of such additional amount or amounts necessary to compensate BTCo or
such Participant. The certificate required to be delivered pursuant to this
Section 2.06 shall, absent manifest error, be final and conclusive and binding
on the Borrower.
(b) The provisions of this Section 2.06 are subject to Section 13.15
(to the extent same is applicable in accordance with the terms thereof).
SECTION 3. Commitment Commission; Fees; Reductions of Commitment.
3.01 Fees. (a) The Borrower agrees to pay to the Administrative Agent
for distribution to each Non-Defaulting Lender a commitment commission (the
"Commitment Commission") for the period from the Effective Date to and including
the Maturity Date (or such earlier date as the Total Commitment shall have been
terminated), computed at a rate for each day equal to (i) 0.375% per annum on
the daily average Unutilized Commitment of such Non-Defaulting Lender at any
time when the Leverage Ratio shall be less than or equal to 4.5:1.0 and (ii)
0.50% per annum on the daily average Unutilized Commitment of such
Non-Defaulting Lender at any time when the Leverage Ratio shall be greater than
4.5:1.0. Accrued Commitment Commission shall be due and payable quarterly in
arrears on each Quarterly Payment Date and on the Maturity Date or such earlier
date upon which the Total Commitment is terminated.
(b) The Borrower agrees to pay to the Administrative Agent for
distribution to each Non-Defaulting Lender (based on their respective Adjusted
Percentages) a fee in respect of each Letter of Credit issued hereunder (the
"Letter of Credit Fee") in the case of each Letter of Credit, for the period
from and including the date of issuance of such Letter of Credit to and
including the termination of such Letter of Credit (or, in the case of a Trade
Letter of Credit, the date of the stated expiration thereof), computed at a rate
per annum equal to the Applicable Eurodollar Rate Margin on the daily average
Stated Amount of such Letter of Credit. Accrued Letter of Credit Fees shall be
due and payable quarterly in arrears on each Quarterly Payment Date and on the
first day after the termination of the Total Commitment upon which no Letters of
Credit remain outstanding.
(c) The Borrower agrees to pay to BTCo, for its own account, a facing
fee in respect of each Letter of Credit issued for its account hereunder (the
"Facing Fee") (x) in the case of each Standby Letter of Credit, for the period
from and including the date of issuance of such Standby Letter of Credit to and
including the termination of such Standby Letter of Credit, computed at a rate
equal to 1/4 of 1% per annum of the daily average Stated Amount of such Standby
Letter of Credit, provided that, in any event, the minimum amount of the Facing
Fee payable in any 12-month period for each Standby Letter of Credit shall be
$500 (it being agreed that, on each anniversary of the issuance of any Standby
Letter of Credit or upon any earlier termination or expiration of a Standby
Letter of Credit, if $500 exceeds the amount of Facing Fees theretofore paid or
then accrued with respect to such Standby Letter of Credit, in either case
-16-
23
after the date of the issuance thereof or, if later, after the date of the last
anniversary of the issuance thereof (but excluding any amounts paid after such
anniversary with respect to periods ending on or prior to such anniversary,
including, without limitation, as a result of the operation of this
parenthetical), the amount of such excess shall be payable on the next date upon
which accrued Facing Fees are otherwise payable with respect to Standby Letters
of Credit as provided in the following sentence), and (y) in the case of each
Trade Letter of Credit, in an amount equal to the greater of (A) the Applicable
Eurodollar Rate Margin for Revolving Loans maintained as Eurodollar Loans
multiplied by the daily average Stated Amount of such Trade Letter of Credit and
(B) $500. Except as otherwise provided in the proviso to the immediately
preceding sentence, accrued Facing Fees shall be due and payable quarterly in
arrears on each Quarterly Payment Date and upon the first day after the
termination of the Total Commitment upon which no Letters of Credit remain
outstanding.
(d) The Borrower shall pay, upon each drawing or payment under,
issuance of, or amendment to, any Letter of Credit, such amount as shall at the
time of such event be the administrative charge and reasonable out-of-pocket
expenses which BTCo is generally imposing in connection with such occurrence
with respect to letters of credit.
(e) The Borrower shall pay to the Administrative Agent, for its own
account, such other fees as have been agreed to in writing by the Borrower and
the Administrative Agent.
3.02 Voluntary Termination of Unutilized Commitments. Upon at least two
Business Days' prior notice to the Administrative Agent at its Notice Office
(which notice the Administrative Agent shall promptly transmit to each of the
Lenders), the Borrower shall have the right, at any time or from time to time,
without premium or penalty, to terminate the Total Unutilized Commitment, in
whole or in part, in integral multiples of $1,000,000 in the case of partial
reductions to the Total Unutilized Commitment, provided that (i) each such
reduction shall apply proportionately to permanently reduce the Commitment of
each Lender and (ii) the reduction to the Total Unutilized Commitment shall in
no case be in an amount which would cause the Commitment of any Lender to be
reduced (as required by preceding clause (i)) by an amount which exceeds the
remainder of (x) the Unutilized Commitment of such Lender as in effect
immediately before giving effect to such reduction minus (y) such Lender's
Adjusted Percentage of the aggregate principal amount of Swingline Loans then
outstanding.
3.03 Mandatory Reduction of Commitments. (a) The Total Commitment (and
the Commitment of each Lender) shall terminate in its entirety on June 30, 2000
unless the Effective Date has occurred on or before such date.
(b) In addition to any other mandatory commitment reductions pursuant
to this Section 3.03, the Total Commitment (and the Commitment of each Lender)
shall terminate in its entirety on the Maturity Date.
(c) Each reduction to the Total Commitment pursuant to this Section
3.03 (or pursuant to Section 4.02) shall be applied proportionately to reduce
the Commitment of each Lender.
-17-
24
SECTION 4. Prepayments; Payments; Taxes.
4.01 Voluntary Prepayments. The Borrower shall have the right to prepay
the Loans, without premium or penalty, in whole or in part at any time and from
time to time on the following terms and conditions: (i) the Borrower shall give
the Administrative Agent prior to 12:00 Noon (New York time) at its Notice
Office (x) at least one Business Day's prior written notice (or telephonic
notice promptly confirmed in writing) of its intent to prepay Base Rate Loans
(or same day notice in the case of Swingline Loans provided such notice is given
prior to 12:00 Noon (New York time) on such Business Day) and (y) at least three
Business Days' prior written notice (or telephonic notice promptly confirmed in
writing) of its intent to prepay Eurodollar Loans, whether Revolving Loans or
Swingline Loans shall be prepaid, the amount of such prepayment and the Types of
Loans to be prepaid and, in the case of Eurodollar Loans, the specific Borrowing
or Borrowings pursuant to which made, which notice the Administrative Agent
shall promptly transmit to each of the Lenders; (ii) each prepayment shall be in
an aggregate principal amount of at least $100,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than $1,000,000, then such Borrowing may not be continued as a Borrowing of
Eurodollar Loans and any election of an Interest Period with respect thereto
given by the Borrower shall have no force or effect; (iii) prepayments of
Eurodollar Loans made pursuant to this Section 4.01 may only be made on the last
day of an Interest Period applicable thereto; (iv) each prepayment in respect of
any Loans made pursuant to a Borrowing shall, except as provided in clause (v)
below, be applied pro rata among such Loans; and (v) at the Borrower's election
in connection with any prepayment of Revolving Loans pursuant to this Section
4.01, such prepayment shall not be applied to any Revolving Loan of a Defaulting
Lender.
4.02 Mandatory Repayments and Commitment Reductions. (a)(i) On any day
on which the sum of the aggregate outstanding principal amount of the Revolving
Loans made by Non-Defaulting Lenders, Swingline Loans and the Letter of Credit
Outstandings exceeds the Adjusted Total Commitment as then in effect, the
Borrower shall prepay principal of Swingline Loans and, after the Swingline
Loans have been repaid in full, Revolving Loans of Non-Defaulting Lenders in an
amount equal to such excess. If, after giving effect to the prepayment of all
outstanding Swingline Loans and Revolving Loans of Non-Defaulting Lenders, the
aggregate amount of the Letter of Credit Outstandings exceeds the Adjusted Total
Commitment as then in effect, the Borrower shall pay to the Administrative Agent
at the Payment Office on such date an amount of cash or Cash Equivalents equal
to the amount of such excess (up to a maximum amount equal to the Letter of
Credit Outstandings at such time), such cash or Cash Equivalents to be held as
security for all obligations of the Borrower to Non-Defaulting Lenders hereunder
in a cash collateral account to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal amount of
the Revolving Loans made by any Defaulting Lender exceeds the Commitment of such
Defaulting Lender, the Borrower shall prepay principal of Revolving Loans of
such Defaulting Lender in an amount equal to such excess.
-18-
25
(b) In addition to any other mandatory repayments or commitment
reductions pursuant to this Section 4.02, on the fifth Business Day after each
date after the Effective Date upon which Holdings or any of its Subsidiaries
receives Net Sale Proceeds from any Asset Sale, the Total Commitment shall be
permanently reduced by an amount equal to 100% of the Net Sale Proceeds
therefrom in accordance with the requirements of Section 4.02(c), provided that
the Total Commitment shall not be required to be so reduced by any Net Sale
Proceeds received by Holdings or any of its Subsidiaries in connection with any
Asset Sale on such fifth Business Day to the extent the Borrower has delivered a
Reinvestment Notice to the Administrative Agent on or prior to the fifth
Business Day following the consummation of such Asset Sale stating that the Net
Sale Proceeds received (or to be received) therefrom shall be reinvested or
shall be committed to be reinvested (a "Reinvestment Election") in equipment or
other assets useful in a Permitted Business (including capital stock or other
equity interests of a Person engaged in such business) (each a "Reinvestment
Asset" and collectively, the "Reinvestment Assets") within 18 months following
the date of receipt of such Net Sale Proceeds and provided further, that if all
or any portion of such Net Sale Proceeds referred to in the preceding proviso
are not so used within the 18-month period following the date of the receipt of
such Net Sale Proceeds, such remaining portion shall be applied on the last day
of such period as a permanent reduction of the Total Commitment as provided
above in this Section 4.02(b) without regard to the immediately preceding
proviso. The Borrower may exercise its Reinvestment Election (within the
parameters specified in the preceding sentence) with respect to an Asset Sale if
(x) no Default or Event of Default exists and (y) the Borrower delivers a
Reinvestment Notice to the Administrative Agent within five Business Days
following the date of the consummation of the respective Asset Sale, with such
Reinvestment Election being effective with respect to the Net Sale Proceeds of
such Asset Sale equal to the Anticipated Reinvestment Amount specified in such
Reinvestment Notice.
(c) With respect to each repayment of Loans required by this Section
4.02, the Borrower may designate the Types of Loans which are to be repaid and,
in the case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant
to which made, provided that: (i) repayments of Eurodollar Loans pursuant to
this Section 4.02 may only be made on the last day of an Interest Period
applicable thereto unless all Eurodollar Loans made pursuant to such Borrowing
with Interest Periods ending on such date of required repayment and all Base
Rate Loans made pursuant to such Borrowing have been paid in full; (ii) if any
repayment of Eurodollar Loans made pursuant to a single Borrowing shall reduce
the outstanding Eurodollar Loans made pursuant to such Borrowing to an amount
less than $1,000,000, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans. In the absence of a designation by the Borrower as described
in the preceding sentence, the Administrative Agent shall, subject to the above,
make such designation in its sole discretion.
(d) Notwithstanding anything to the contrary contained elsewhere in
this Agreement, (i) all then outstanding Swingline Loans shall be repaid in full
on the Swingline Expiry Date and (ii) all other then outstanding Loans shall be
repaid in full on the Maturity Date.
4.03 Method and Place of Payment. Except as otherwise specifically
provided herein, all payments under this Agreement or any Note shall be made to
the Administrative
-19-
26
Agent for the account of the Lender or Lenders entitled thereto not later than
12:00 Noon (New York time) on the date when due and shall be made in Dollars in
immediately available funds at the Payment Office of the Administrative Agent.
Whenever any payment to be made hereunder or under any Note shall be stated to
be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
4.04 Net Payments. (a) All payments made by the Borrower hereunder or
under any Note will be made without setoff, counterclaim or other defense.
Except as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future taxes,
levies, imposts, duties, fees, assessments or other charges of whatever nature
now or hereafter imposed by any jurisdiction or by any political subdivision or
taxing authority thereof or therein with respect to such payments (but excluding
any tax imposed on or measured by the net income or net profits of a Lender
pursuant to the laws of the jurisdiction in which it is organized or in which
the principal office or applicable lending office of such Lender is located or
any subdivision thereof or therein) and all interest, penalties or similar
liabilities with respect thereto (all such non-excluded taxes, levies, imposts,
duties, fees, assessments or other charges being referred to collectively, as
"Taxes"). If any Taxes are so levied or imposed, the Borrower agrees to pay the
full amount of such Taxes, and such additional amounts as may be necessary so
that every payment of all amounts due under this Agreement or under any Note,
after withholding or deduction for or on account of any Taxes, will not be less
than the amount provided for herein or in such Note. The Borrower will furnish
to the Administrative Agent within 45 days after the date the payment of any
Taxes is due pursuant to applicable law certified copies of tax receipts
evidencing such payment by the Borrower or, if the relevant taxing authority
does not issue such receipts, such other evidence of payment as may be
reasonably satisfactory to the Administrative Agent. The Borrower agrees to
indemnify and hold harmless each Lender, and reimburse such Lender upon its
written request, for the amount of any Taxes so levied or imposed and paid by
such Lender.
(b) Each Lender that is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Lender that is an assignee or transferee
of an interest under this Agreement pursuant to Section 1.13 or 13.04 (unless
the respective Lender was already a Lender hereunder immediately prior to such
assignment or transfer) on the date of such assignment or transfer to such
Lender, (i) two accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI or W-8BEN (with respect to a complete exemption from
withholding tax under an income tax treaty) (or successor forms) certifying to
such Lender's entitlement as of such date to a complete exemption from United
States withholding tax with respect to payments to be made under this Agreement
and under any Note or (ii) if the Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code and cannot deliver either Internal Revenue
Service Form W-8BEN (with respect to a complete exemption from withholding tax
under an income tax treaty) or W-8ECI pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a
"Section 4.04(b)(ii) Certificate") and (y) two accurate and complete original
signed copies of Internal Revenue Service Form W-8BEN (with respect to the
portfolio interest exception) (or successor form) certifying to such Lender's
entitlement on the date of such
-20-
27
certificate to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Note. In addition, each Lender agrees that from time to time after the Effective
Date, when a lapse in time or change in circumstances renders the previous
certification obsolete or inaccurate in any material respect, it will deliver to
the Borrower and the Administrative Agent two new accurate and complete original
signed copies of Internal Revenue Service Form W-8ECI or W-8BEN (with respect to
a complete exemption from withholding tax under an income tax treaty), or Form
W-8BEN (with respect to the portfolio interest exception) and a Section
4.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Lender to a
continued exemption from or reduction in United States withholding tax with
respect to payments under this Agreement and any Note, or it shall immediately
notify the Borrower and the Administrative Agent of its inability to deliver any
such Form or Certificate. Such Lender shall not be required to deliver any such
Form or Certificate pursuant to this Section 4.04(b) if such inability results
from a change after the Effective Date (or, in the case of a Lender that is not
a Lender hereunder on the Effective Date, a change after the date such Lender
became an assignee or a transferee of an interest hereunder) in any applicable
law, treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof. Notwithstanding anything to the contrary contained in
Section 4.04(a), but subject to Section 13.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to do
so by law, to deduct or withhold income or similar taxes imposed by the United
States (or any political subdivision or taxing authority thereof or therein)
from interest, Fees or other amounts payable hereunder for the account of any
Lender which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for U.S. Federal income tax purposes to the extent that
such Lender has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 4.04(a) hereof to
gross-up payments to be made to a Lender in respect of income or similar taxes
imposed by the United States if (I) such Lender has not provided to the Borrower
the Internal Revenue Service Forms required to be provided to the Borrower
pursuant to this Section 4.04(b) or (II) in the case of a payment, other than
interest, to a Lender described in clause (ii) above, to the extent that such
Forms do not establish a complete exemption from withholding of such taxes.
Notwithstanding anything to the contrary contained in the preceding sentence or
elsewhere in this Section 4.04 and except as set forth in Section 13.04(b), the
Borrower agrees to pay any additional amounts and to indemnify each Lender in
the manner set forth in Section 4.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence as
a result of any change on or after the Effective Date in any applicable law,
treaty, governmental rule, regulation, guideline or order, or in the
interpretation thereof, relating to the deducting or withholding of such Taxes.
(c) If the Borrower pays any additional amount under this Section 4.04
to a Lender and such Lender determines in its sole discretion that it has
actually received or realized in connection therewith any refund or any
reduction of, or credit against, its Tax liabilities in or with respect to the
taxable year in which the additional amount is paid (a "Tax Benefit"), such
Lender shall pay to the Borrower an amount that the Lender shall, in its sole
discretion, determine is equal to the net benefit, after tax, which was obtained
by the Lender in such year as
-21-
28
a consequence of such Tax Benefit; provided, however, that (i) any Lender may
determine, in its sole discretion consistent with the policies of such Lender,
whether to seek a Tax Benefit; (ii) any Taxes that are imposed on a Lender as a
result of a disallowance or reduction (including through the expiration of any
tax credit carryover or carryback of such Lender that otherwise would not have
expired) of any Tax Benefit with respect to which such Lender has made a payment
to the Borrower pursuant to this Section 4.04(c) shall be treated as a Tax for
which the Borrower is obligated to indemnify such Lender pursuant to this
Section 4.04 without any exclusions or defenses; and (iii) nothing in this
Section 4.04(c) shall require the Lender to disclose any confidential
information to the Borrower (including, without limitation, its tax returns).
SECTION 5. Conditions Precedent to Effectiveness. The obligation of
each Lender to make Loans, and the obligation of BTCo to issue Letters of
Credit, on and after the Effective Date, are subject at the time of the making
of such Loans or the issuance of such Letters of Credit to the satisfaction of
the following conditions:
5.01 Execution of Agreement; Notes. On or prior to the Effective Date,
there shall have been delivered to the Administrative Agent for the account of
each of the Lenders the appropriate Revolving Note executed by the Borrower, and
to BTCo the Swingline Note executed by the Borrower, in each case in the amount,
maturity and as otherwise provided herein.
5.02 Officer's Certificate. On the Effective Date, the Administrative
Agent shall have received a certificate dated the Effective Date signed on
behalf of the Borrower by the President or any Vice President of the Borrower
stating that all of the conditions in Sections 5.06, 5.07, 5.12, 5.13 and 6.01
have been satisfied on such date (except to the extent that any such condition
is required to be satisfactory to the Administrative Agent or any Lender).
5.03 Opinions of Counsel. On the Effective Date, the Administrative
Agent shall have received (i) from Xxxxxxx Xxxx & Xxxxx LLP, counsel to each
Credit Party, an opinion addressed to the Administrative Agent and each of the
Lenders and dated the Effective Date covering the matters set forth in Exhibit E
and such other matters incident to the transaction contemplated herein as the
Administrative Agent may request and (ii) from local counsel to the Borrower
satisfactory to the Administrative Agent, opinions each of which shall be in
form and substance satisfactory to the Administrative Agent and the Required
Lenders and shall cover the perfection of the security interests granted
pursuant to the Security Documents and such other matters incident to the
transactions contemplated herein as the Administrative Agent may reasonably
request.
5.04 Corporate Documents; Proceedings; etc. (a) On the Effective Date,
the Administrative Agent shall have received a certificate, dated the Effective
Date, signed by the President or any Vice President of each Credit Party, and
attested to by the Secretary or any Assistant Secretary of such Credit Party, in
the form of Exhibit F with appropriate insertions, together with copies of the
Certificate of Incorporation and By-Laws of such Credit Party and the
resolutions of such Credit Party referred to in such certificate, and the
foregoing shall be reasonably acceptable to the Administrative Agent.
-22-
29
(b) On the Effective Date, all corporate and legal proceedings and all
instruments and agreements in connection with the transactions contemplated by
this Agreement and the other Documents shall be satisfactory in form and
substance to the Administrative Agent and the Required Lenders, and the
Administrative Agent shall have received all information and copies of all
documents and papers, including records of corporate proceedings, governmental
approvals, good standing certificates and bring-down telegrams, if any, which
the Administrative Agent reasonably may have requested in connection therewith,
such documents and papers where appropriate to be certified by proper corporate
or governmental authorities.
5.05 Employee Benefit Plans; Shareholders' Agreements; Management
Agreements; Collective Bargaining Agreements; Employment Agreements; Debt
Agreements. On the Effective Date, there shall have been delivered to the
Administrative Agent true and correct copies, certified as true and complete by
an appropriate officer of the relevant Credit Party of (i) all Plans that are
subject to Title IV of ERISA (and for each Plan that is required to file an
annual report on Internal Revenue Service Form 5500-series, a copy of the most
recent such report (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information), and for each Plan that is a
"single-employer plan," as defined in Section 4001(a)(15) of ERISA, the most
recently prepared actuarial valuation therefor) (provided that the foregoing
shall apply in the case of any multiemployer plan, as defined in 4001(a)(3) of
ERISA, only to the extent that any document described therein is in the
possession of Holdings or any Subsidiary of Holdings or any ERISA Affiliate or
reasonably available thereto from the sponsor or trustee of any such plan)
(collectively, the "Employee Benefit Plans"), (ii) all agreements entered into
by such Credit Party or any of its Subsidiaries governing the terms and relative
rights of its capital stock and any agreements entered into by shareholders
relating to any such entity with respect to its capital stock (collectively, the
"Shareholders' Agreements"), (iii) all agreements with members of, or with
respect to, the management of such Credit Party (collectively, the "Management
Agreements"), (iv) all collective bargaining agreements applying or relating to
any employee of such Credit Party or any of its Subsidiaries (collectively, the
"Collective Bargaining Agreements"), (v) all material employment agreements
entered into by Holdings or any of its Subsidiaries (collectively, the
"Employment Agreements") and (vi) all agreements evidencing or relating to
Indebtedness of such Credit Party or any of its Subsidiaries which is to remain
outstanding after the Effective Date (collectively, the "Debt Agreements"); all
of which Employee Benefit Plans, Shareholders' Agreements, Management
Agreements, Collective Bargaining Agreements, Employment Agreements and Debt
Agreements shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders and shall be in full force and
effect on the Effective Date.
5.06 Consummation of the Synthetic Lease Financing; etc. (a) On the
Effective Date, the Synthetic Lease Financing shall have been consummated in all
material respects in accordance with the Synthetic Lease Financing Documents and
all applicable laws, and each of the conditions precedent to the consummation of
the Synthetic Lease Financing shall have been satisfied and not waived in any
material respect except with the consent of the Administrative Agent and the
Required Lenders (which consent shall not be unreasonably withheld).
-23-
30
(b) On or prior to the Effective Date, (i) the Borrower shall have
consummated a consent solicitation (the "Borrower Senior Discount Notes Consent
Solicitation") with respect to the outstanding Borrower Senior Discount Notes,
pursuant to which consents shall be solicited from the holders of the Borrower
Senior Discount Notes to permit the Borrower and its Subsidiaries to enter into
the Synthetic Lease Financing, (ii) the Borrower shall have received sufficient
consents to authorize the execution and delivery of the Synthetic Lease
Financing Documents, which consents shall be in form and substance reasonably
satisfactory to the Administrative Agent, and (iii) the Administrative Agent
shall be reasonably satisfied that the Borrower Senior Discount Notes Consent
Solicitation shall have been consummated in accordance with all applicable laws.
(c) On or prior to the Effective Date, there shall have been delivered
to the Administrative Agent true and correct copies of the Synthetic Lease
Financing Documents, and all of the terms and conditions of the Synthetic Lease
Financing Documents shall be reasonably satisfactory in form and substance to
the Administrative Agent and the Required Lenders.
5.07 Refinancing. (a) On or prior to the Effective Date, the total
commitment in respect of the Indebtedness to be Refinanced shall have been
terminated, and all loans and notes with respect thereto shall have been repaid
in full, together with interest thereon, all letters of credit issued thereunder
(including the Existing Letters of Credit) shall have been terminated,
incorporated hereunder as Letters of Credit as contemplated by Section 2.01(d)
or supported by a back-stop Letter of Credit issued hereunder and all other
amounts (including premiums) owing pursuant to the Indebtedness to be Refinanced
shall have been repaid in full and all documents in respect of the Indebtedness
to be Refinanced and all guarantees with respect thereto shall have been
terminated (except as to indemnification provisions which may survive to the
extent provided therein) and be of no further force and effect.
(b) On or prior to the Effective Date, the creditors in respect of the
Indebtedness to be Refinanced shall have terminated and released any and all
security interests and Liens on the assets owned by Holdings and its
Subsidiaries. The Administrative Agent shall have received such releases of
security interests in and Liens on the assets owned by Holdings and its
Subsidiaries as may have been reasonably requested by the Administrative Agent,
which releases shall be in form and substance reasonably satisfactory to the
Administrative Agent. Without limiting the foregoing, there shall have been
delivered (i) proper termination statements (Form UCC-3 or the appropriate
equivalent) for filing under the UCC of each jurisdiction where a financing
statement (Form UCC-1 or the appropriate equivalent) was filed with respect to
Holdings or any of its Subsidiaries in connection with the security interests
created with respect to the Indebtedness to be Refinanced and the documentation
related thereto, (ii) termination or reassignment of any security interest in,
or Lien on, any patents, trademarks, copyrights, or similar interests of
Holdings or any of its Subsidiaries on which filings have been made, (iii)
terminations of all mortgages, leasehold mortgages, deeds of trust and leasehold
deeds of trust created with respect to property of Holdings or any of its
Subsidiaries, in each case, to secure the obligations in respect of the
Indebtedness to be Refinanced, all of which shall be in form and substance
reasonably satisfactory to the Administrative Agent, and (iv) all collateral
owned by Holdings and its Subsidiaries in the possession of any of the creditors
in respect of the
-24-
31
Indebtedness to be Refinanced or any collateral agent or trustee under any
related security document shall have been returned to Holdings or its respective
Subsidiary, as the case may be.
(c) The Administrative Agent shall have received evidence, in form and
substance reasonably satisfactory to it, that the matters set forth in this
Section 5.07 have been satisfied as of the Effective Date.
5.08 Pledge Agreement. On the Effective Date, each Credit Party shall
have duly authorized, executed and delivered the Pledge Agreement in the form of
Exhibit G (as amended, modified or supplemented from time to time, the "Pledge
Agreement") and, except as otherwise provided in Section 8.11(e), shall have
delivered to the Collateral Agent, as pledgee thereunder, all of the Pledged
Securities, if any, referred to therein and owned by such Credit Party, (x)
endorsed in blank in the case of promissory notes constituting Pledged
Securities and (y) together with executed and undated stock powers in the case
of capital stock constituting Pledged Securities.
5.09 Security Agreement. On the Effective Date, each Credit Party shall
have duly authorized, executed and delivered the Security Agreement in the form
of Exhibit H (as modified, supplemented or amended from time to time, the
"Security Agreement") covering all of such Credit Party's present and future
Security Agreement Collateral, together with:
(i) proper Financing Statements (Form UCC-1 or the equivalent) fully
executed for filing under the UCC or other appropriate filing offices of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to
be created by the Security Agreement;
(ii) certified copies of Requests for Information or Copies (Form
UCC-11), or equivalent reports, listing all effective financing statements
that name any Credit Party or any of its Subsidiaries as debtor and that
are filed in the jurisdictions referred to in clause (i) above, together
with copies of such other financing statements that name any Credit Party
or any of its Subsidiaries as debtor (none of which shall cover the
Collateral except to the extent evidencing Permitted Liens or in respect of
which the Collateral Agent shall have received termination statements (Form
UCC-3 or the equivalent) as shall be required by local law fully executed
for filing);
(iii) evidence of the completion of all other recordings and filings
of, or with respect to, the Security Agreement as may be necessary or, in
the reasonable opinion of the Collateral Agent, desirable to perfect the
security interests intended to be created by the Security Agreement; and
(iv) evidence that all other actions necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect and protect the
security interests purported to be created by the Security Agreement have
been taken.
5.10 Subsidiaries Guaranty. On the Effective Date, each Subsidiary
Guarantor shall have duly authorized, executed and delivered the Subsidiaries
Guaranty in the form of
-25-
32
Exhibit I (as amended, modified or supplemented from time to time, the
"Subsidiaries Guaranty"), and the Subsidiaries Guaranty shall be in full force
and effect.
5.11 Consent Letter. On the Effective Date, the Administrative Agent
shall have received a letter from CT Corporation System, presently located at
000 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, substantially in the form of
Exhibit J, indicating its consent to its appointment by each Credit Party as
such Credit Party's agent to receive service of process as specified in Section
13.08 of this Agreement and Section 20 of the Subsidiaries Guaranty.
5.12 Adverse Change, etc. (a) On the Effective Date, nothing shall have
occurred since March 31, 2000 (and the Lenders shall not have become aware of
any facts or conditions not previously known) which the Administrative Agent or
the Required Lenders shall determine has, or could reasonably be expected to
have, a material adverse effect on the rights or remedies of the Administrative
Agent or the Lenders, or on the ability of any Credit Party to perform its
Obligations to the Administrative Agent and the Lenders or which has, or could
reasonably be expected to have, a materially adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
(b) On or prior to the Effective Date, all necessary governmental
(domestic and foreign) and material third party approvals in connection with the
Holdings IPO, the Repurchase, the Synthetic Lease Financing and the other
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken by
any competent governmental authority which restrains, prevents or imposes
materially adverse conditions upon the consummation of the Holdings IPO, the
Repurchase, the Synthetic Lease Financing or the other transactions contemplated
by the Credit Documents and otherwise referred to herein or therein.
Additionally, there shall not exist any judgment, order, injunction or other
restraint of any governmental authority issued or filed or a hearing seeking
injunctive relief or other restraint pending or notified prohibiting or imposing
materially adverse conditions upon the consummation of the Holdings IPO, the
Repurchase, the Synthetic Lease Financing, the other transactions contemplated
by the Credit Documents or the making of the Loans.
(c) On the Effective Date, there shall not have occurred and be
continuing any material adverse change to the syndication market for credit
facilities similar in nature to this Agreement and there shall not have occurred
and be continuing a material disruption or a material adverse change in
financial, banking or capital markets that would have a material adverse effect
on the syndication, in each case as determined by the Administrative Agent in
its reasonable discretion.
5.13 Litigation. On the Effective Date, no litigation by any entity
(private or governmental) shall be pending or threatened in writing against any
Credit Party with respect to this Agreement or any documentation executed in
connection herewith or the transactions contemplated hereby, or with respect to
the Holdings IPO, the Repurchase
-26-
33
or the Synthetic Lease Financing or which the Administrative Agent or the
Required Lenders shall determine could reasonably be expected to have a
materially adverse effect on the Holdings IPO, the Repurchase or the Synthetic
Lease Financing or on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole.
5.14 Fees, etc. On the Effective Date, the Borrower shall have paid to
the Administrative Agent and the Lenders all costs, fees and expenses
(including, without limitation, the reasonable legal fees and expenses of the
Administrative Agent's counsel and local counsel) payable to the Administrative
Agent and the Lenders to the extent then due.
5.15 Solvency Letter; Insurance Certificate. On the Effective Date, the
Borrower shall cause to be delivered to the Administrative Agent (i) a solvency
certificate signed by the Chief Financial Officer of the Borrower, in form and
substance satisfactory to the Required Lenders, setting forth the conclusion
that, after giving effect to the Holdings IPO, the Repurchase, the Synthetic
Lease Financing and the incurrence of all financings contemplated herein, the
Borrower and its Subsidiaries, taken as a whole, are not insolvent and will not
be rendered insolvent by the indebtedness incurred in connection herewith, will
not be left with unreasonably small capital with which to engage in their
businesses and will not have incurred debts beyond their ability to pay such
debts as they mature and (ii) evidence of insurance complying with the
requirements of Section 8.03 for the business and properties of the Borrower and
its Subsidiaries, in scope, form and substance satisfactory to the
Administrative Agent and the Required Lenders and naming the Collateral Agent as
an additional insured and/or loss payee where appropriate, and stating that such
insurance shall not be canceled or revised without 30 days' prior written notice
by the insurer to the Administrative Agent.
5.16 Financial Statements; Pro Forma Financial Statements; Financial
Projections. On or prior to the Effective Date, the Administrative Agent shall
have received true and correct copies of the historical financial statements,
the pro forma financial statements and the Projections referred to in Sections
7.05(a) and (d), which historical financial statements, pro forma financial
statements and projections shall be in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders.
5.17 Consummation of the Holdings IPO and the Repurchase. (a) On or
prior to the Effective Date, (i) Holdings shall have consummated a Qualified
Public Equity Offering of the capital stock of Holdings and shall have received
gross cash proceeds in a minimum aggregate principal amount equal to
$100,000,000 from such Qualified Public Equity Offering and (ii) Holdings and
its Subsidiaries shall have utilized the proceeds of the Qualified Public Equity
Offering described in clause (i) above to defease, redeem or otherwise retire
(the "Repurchase"), on terms and conditions reasonably satisfactory to the
Administrative Agent, all of the outstanding Holdings Senior Discount Notes in
accordance with the applicable provisions of the Holdings Senior Note Documents.
The Repurchase shall have been consummated in accordance with the Repurchase
Documents and all applicable laws, and each of the conditions precedent to the
consummation of the Repurchase shall have been satisfied and not waived in any
material respect except with the consent of the Administrative Agent and the
Required Lenders (which consent shall not be unreasonably withheld or delayed).
(b) On or prior to the Effective Date, there shall have been delivered
to the Administrative Agent true and correct copies of the Repurchase Documents,
and all of the terms
-27-
34
and conditions of the Repurchase Documents shall be reasonably satisfactory in
form and substance to the Administrative Agent and the Required Lenders.
SECTION 6. Conditions Precedent to All Credit Events. The obligation of
each Lender to make Loans (excluding Mandatory Borrowings which shall be made as
provided in Section 1.01(c)), and the obligation of BTCo to issue any Letter of
Credit, is subject, at the time of each such Credit Event (except as hereinafter
indicated), to the satisfaction of the following conditions:
6.01 No Default; Representations and Warranties. At the time of each
such Credit Event and also after giving effect thereto (i) there shall exist no
Default or Event of Default and (ii) all representations and warranties
contained herein shall be true and correct in all material respects with the
same effect as though such representations and warranties had been made on the
date of the making of such Credit Event (it being understood and agreed that any
representation or warranty which by its terms is made as of a specified date
shall be required to be true and correct in all material respects only as of
such specified date).
6.02 Notice of Borrowing; Letter of Credit Request. (a) Prior to the
making of each Loan (excluding Swingline Loans), the Administrative Agent shall
have received a Notice of Borrowing meeting the requirements of Section 1.03(a).
Prior to the making of any Swingline Loan, BTCo shall have received the notice
required by Section 1.03(b)(i).
(b) Prior to the issuance of each Letter of Credit, the Administrative
Agent and BTCo shall have received a Letter of Credit Request meeting the
requirements of Section 2.03.
The acceptance of the proceeds of each Credit Event shall constitute a
representation and warranty by Holdings and the Borrower to the Administrative
Agent and each of the Lenders that all the conditions specified in Section 5
(with respect to Credit Events on the Effective Date) and in this Section 6
(with respect to Credit Events on and after the Effective Date) and applicable
to such Credit Event exist as of that time. All of the Notes, certificates,
legal opinions and other documents and papers referred to in Section 5 and in
this Section 6, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the account of each of the Lenders
and, except for the Notes, in sufficient counterparts or copies for each of the
Lenders and shall be in form and substance reasonably satisfactory to the
Administrative Agent and the Required Lenders.
SECTION 7. Representations, Warranties and Agreements. In order to
induce the Lenders to enter into this Agreement and to make the Loans, and issue
(or participate in) the Letters of Credit as provided herein, each of Holdings
and the Borrower makes the following representations, warranties and agreements,
in each case after giving effect to the Holdings IPO, the Repurchase and the
Synthetic Lease Financing, all of which shall survive the execution and delivery
of this Agreement and the Notes and the making of the Loans and issuance of the
Letters of Credit, with the occurrence of each Credit Event on or after the
Effective Date being deemed to constitute a representation and warranty that the
matters specified in this Section 7 are true and correct on and as of the
Effective Date and in all material respects on the date of each such Credit
-28-
35
Event (it being understood and agreed that any representation or warranty which
by its terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date).
7.01 Corporate and Other Status. Each Credit Party and each of its
Subsidiaries (i) is a duly organized and validly existing corporation in good
standing under the laws of the jurisdiction of its incorporation, (ii) has the
corporate power and authority to own its property and assets and to transact the
business in which it is engaged and presently proposes to engage and (iii) is
duly qualified and is authorized to do business and is in good standing in each
jurisdiction where the ownership, leasing or operation of its property or the
conduct of its business requires such qualifications except for failures to be
so qualified which, individually or in the aggregate, could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
7.02 Corporate and Other Power and Authority. Each Credit Party has the
corporate power and authority to execute, deliver and perform the terms and
provisions of each of the Documents to which it is party and has taken all
necessary corporate action to authorize the execution, delivery and performance
by it of each of such Documents. Each Credit Party has duly executed and
delivered each of the Documents to which it is party, and each of such Documents
constitutes its legal, valid and binding obligation enforceable in accordance
with its terms, except to the extent that the enforceability thereof may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws generally affecting creditors' rights and by equitable
principles (regardless of whether enforcement is sought in equity or at law).
7.03 No Violation. Neither the execution, delivery or performance by
any Credit Party of the Documents to which it is a party, nor compliance by it
with the terms and provisions thereof, (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will, after giving effect to any
waivers, conflict with or result in any material breach of any of the terms,
covenants, conditions or provisions of, or constitute a default under, or result
in the creation or imposition of (or the obligation to create or impose) any
Lien (except pursuant to the Security Documents and the Synthetic Lease
Financing Documents) upon any of the property or assets of Holdings or any of
its Subsidiaries pursuant to the terms of any indenture, mortgage, deed of
trust, credit agreement or loan agreement, or any other material agreement,
contract or instrument, to which Holdings or any of its Subsidiaries of Holdings
is a party or by which it or any of its property or assets is bound or to which
it may be subject or (iii) will violate any provision of the Certificate of
Incorporation or By-Laws of Holdings or any of its Subsidiaries.
7.04 Governmental Approvals. No order, consent, approval, license,
authorization or validation of, or filing, recording or registration with (other
than the filing of the Financing Statements relating to the Security Agreement
and except as have otherwise been obtained or made on or prior to the Effective
Date), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in
-29-
36
connection with, (i) the execution, delivery and performance of any Document or
(ii) the legality, validity, binding effect or enforceability of any such
Document.
7.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) The audited consolidated balance sheets of
Holdings and its Subsidiaries for the fiscal years ended on March 31, 1999 and
March 31, 2000 and the related statements of income, cash flows and
shareholders' equity of Holdings and its Subsidiaries for the fiscal years ended
on such dates, which annual financial statements have been examined by Deloitte
& Touche LLP, certified public accountants, who delivered an unqualified opinion
with respect thereto and copies of which have heretofore been delivered to each
Lender, present fairly in all material respects the financial position of
Holdings and its Subsidiaries at the date of such balance sheets and the results
of the operations of Holdings and its Subsidiaries for the periods covered
thereby. All of the foregoing historical financial statements have been prepared
in accordance with generally accepted accounting principles consistently
applied. The pro forma consolidated financial statements of Holdings and its
Subsidiaries as of March 31, 2000 (as contained in the registration statement
filed on Form S-1 with the SEC on [INSERT DATE]), in each case after giving
effect to the Holdings IPO, the Repurchase and the Synthetic Lease Financing,
copies of which have been furnished to the Lenders prior to the Effective Date,
present fairly in all material respects the pro forma consolidated financial
position of Holdings and its Subsidiaries as of March 31, 2000. After giving
effect to the Holdings IPO, the Repurchase and the Synthetic Lease Financing,
since March 31, 2000, there has been no material adverse change in the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of the Borrower or of Holdings and its Subsidiaries taken as a whole.
(b) On and as of the Effective Date and after giving effect to the
Holdings IPO, the Repurchase and the Synthetic Lease Financing and to all
Indebtedness (including any Loans) being incurred or assumed and Liens created
by the Credit Parties in connection therewith (i) the sum of the assets, at a
fair valuation, of each of the Borrower on a stand-alone basis and of Holdings
and its Subsidiaries taken as a whole will exceed its debts; (ii) each of the
Borrower on a stand-alone basis and Holdings and its Subsidiaries taken as a
whole has not incurred and does not intend to incur, and does not believe that
it will incur, debts beyond its ability to pay such debts as such debts mature;
and (iii) each of the Borrower on a stand alone basis and Holdings and its
Subsidiaries taken as a whole will have sufficient capital with which to conduct
its business. For purposes of this Section 7.05(b), "debt" means any liability
on a claim, and "claim" means (A) right to payment, whether or not such a right
is reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured, or unsecured or (B)
right to an equitable remedy for breach of performance if such breach gives rise
to a payment, whether or not such right to an equitable remedy is reduced to
judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
or unsecured. The amount of contingent liabilities at any time shall be computed
as the amount that, in the light of all the facts and circumstances existing at
such time, represents the amount that can reasonably be expected to become an
actual or matured liability.
(c) Except as fully disclosed in the financial statements delivered
pursuant to Section 7.05(a) or the Documents, there are as of the Effective Date
no liabilities or obligations with respect to Holdings or any of its
Subsidiaries of any nature whatsoever (whether absolute,
-30-
37
accrued, contingent or otherwise and whether or not due) which, either
individually or in aggregate, could reasonably be expected to be material to the
Borrower or to Holdings and its Subsidiaries taken as a whole. As of the
Effective Date, neither Holdings nor the Borrower knows of any basis for the
assertion against it or any of its Subsidiaries of any liability or obligation
of any nature whatsoever that is not fully disclosed in the financial statements
delivered pursuant to Section 7.05(a) or the Documents which, either
individually or in the aggregate, could reasonably be expected to be material to
the Borrower or to Holdings and its Subsidiaries taken as a whole.
(d) On and as of the Effective Date, the Projections delivered to the
Administrative Agent and the Lenders prior to the Effective Date have been
prepared in good faith and are based on reasonable assumptions, and there are no
statements or conclusions in the Projections which are based upon or include
information known to Holdings or the Borrower to be misleading in any material
respect or which fail to take into account material information known to
Holdings or the Borrower regarding the matters reported therein. On the
Effective Date, Holdings and the Borrower believe that the Projections are
reasonable and attainable, it being recognized by the Lenders, however, that
projections as to future events are not to be viewed as facts and that the
actual results during the period or periods covered by the Projections may
differ from the projected results and that the differences may be material.
7.06 Litigation. There are no actions, suits or proceedings pending or,
to the best knowledge of Holdings and the Borrower, threatened (i) with respect
to the Holdings IPO, the Repurchase, the Synthetic Lease Financing or any
Document, or (ii) that could reasonably be expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole.
7.07 True and Complete Disclosure. All factual information (taken as a
whole) furnished by any Credit Party in writing to the Administrative Agent
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement, the other Credit Documents or
any transaction contemplated herein or therein is, and all other such factual
information (taken as a whole) hereafter furnished by any Credit Party in
writing to the Administrative Agent or any Lender will be, true and accurate in
all material respects on the date as of which such information is dated or
certified and not incomplete by omitting to state any fact necessary to make
such information (taken as a whole) not misleading in any material respect at
such time in light of the circumstances under which such information was
provided.
7.08 Use of Proceeds; Margin Regulations. (a) All proceeds of the Loans
shall be used by the Borrower for the Borrower's general corporate and working
capital purposes.
(b) No part of the proceeds of any Loan or the purpose of any Letter of
Credit will be used to purchase or carry any Margin Stock or to extend credit
for the purpose of purchasing or carrying any Margin Stock. Neither the making
of any Loan nor the use of the proceeds thereof nor the occurrence of any other
Credit Event will violate or be inconsistent with the provisions of Regulation
T, U or X of the Board of Governors of the Federal Reserve System.
-31-
38
7.09 Tax Returns and Payments. Holdings and each of its Subsidiaries
have timely filed or caused to be timely filed with the appropriate taxing
authority, all Federal, state and other returns, statements, forms and reports
for taxes, domestic and foreign (the "Returns") required to be filed by or with
respect to the income, properties or operations of Holdings and/or any of its
Subsidiaries. The Returns accurately reflect all material liability for taxes of
Holdings and its Subsidiaries for the periods covered thereby. Holdings and each
of its Subsidiaries have paid all taxes payable by them other than taxes
contested in good faith and for which adequate reserves have been established in
accordance with generally accepted accounting principles. Except as disclosed in
the financial statements referred to in Section 7.05(a), as of the Effective
Date, there is no action, suit, proceeding, investigation, audit, or claim now
pending or, to the knowledge of Holdings and the Borrower, threatened by any
authority regarding any taxes relating to Holdings or any of its Subsidiaries.
As of the Effective Date, neither Holdings nor any of its Subsidiaries has
entered into an agreement or waiver or been requested to enter into an agreement
or waiver extending any statute of limitations relating to the payment or
collection of U.S. Federal income taxes of Holdings or any of its Subsidiaries
or is aware of any agreement or waiver extending any statute of limitations
relating to the payment or collection of other taxes of Holdings or any of its
Subsidiaries. None of Holdings or any of its Subsidiaries has provided, with
respect to itself or property held by it, any consent under Section 341 of the
Code.
7.10 Compliance with ERISA. (a) Except as set forth on Schedule II,
each Plan (and each related trust, insurance contract or fund) is in substantial
compliance with its terms and with all applicable laws, including, without
limitation, ERISA and the Code; each Plan (and each related trust, if any) which
is intended to be qualified under Section 401(a) of the Code has received a
determination letter from the Internal Revenue Service to the effect that it
meets the requirements of Sections 401(a) and 501(a) of the Code; no Reportable
Event has occurred; to the best knowledge of Holdings and the Borrower, each
Plan which is a multiemployer plan (as defined in Section 4001(a)(3) of ERISA)
is in substantial compliance with its terms and with all applicable laws,
including, without limitation, ERISA and the Code; no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) is insolvent or
in reorganization; no Plan which is subject to Title IV of ERISA has an Unfunded
Current Liability; no Plan which is subject to Section 412 of the Code or
Section 302 of ERISA has an accumulated funding deficiency, within the meaning
of such sections of the Code or ERISA, or has applied for or received a waiver
of an accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304 of ERISA; to
the best knowledge of Holdings and the Borrower, no Plan which is a
multiemployer plan (as defined in Section 4001(a)(3) of ERISA) has an Unfunded
Current Liability; all contributions required to be made with respect to a Plan
have been timely made, neither Holdings nor any Subsidiary of Holdings nor any
ERISA Affiliate has incurred any material liability (including any indirect,
contingent or secondary liability) to or on account of a Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 401(a)(29), 4971 or 4975 of the Code or expects to incur any
such liability under any of the foregoing sections with respect to any Plan; no
condition exists which presents a material risk to Holdings or any Subsidiary of
Holdings or any ERISA Affiliate of incurring a liability to or on account of a
Plan pursuant to the foregoing provisions of ERISA and the Code; no proceedings
have been instituted to terminate or appoint a trustee to administer any Plan
which is subject to Title IV of ERISA; no action, suit,
-32-
39
proceeding, hearing, audit or investigation with respect to the administration,
operation or the investment of assets of any Plan (other than routine claims for
benefits) is pending, to the best knowledge of Holdings and the Borrower,
expected or threatened; to the best knowledge of Holdings, using actuarial
assumptions and computation methods consistent with Part 1 of subtitle E of
Title IV of ERISA, the aggregate liabilities of Holdings and its Subsidiaries
and its ERISA Affiliates to all Plans which are multiemployer plans (as defined
in Section 4001(a)(3) of ERISA) in the event of a complete withdrawal therefrom,
as of the close of the most recent fiscal year of each such Plan ended prior to
the date of the most recent Credit Event, would not exceed $50,000; no lien
imposed under the Code or ERISA on the assets of Holdings or any Subsidiary of
Holdings or any ERISA Affiliate exists or is likely to arise on account of any
Plan; and Holdings and its Subsidiaries may cease contributions to or terminate
any employee benefit plan maintained by any of them without incurring any
material liability.
(b) Each Foreign Pension Plan has been maintained in substantial
compliance with its terms and with the requirements of any and all applicable
laws, statutes, rules, regulations and orders and has been maintained, where
required, in good standing with applicable regulatory authorities. All
contributions required to be made with respect to a Foreign Pension Plan have
been timely made. Neither Holdings nor any of its Subsidiaries has incurred any
obligation in connection with the termination of or withdrawal from any Foreign
Pension Plan. The present value of the accrued benefit liabilities (whether or
not vested) under each Foreign Pension Plan, determined as of the end of
Holdings' most recently ended fiscal year on the basis of actuarial assumptions,
each of which is reasonable, did not exceed the current value of the assets of
such Foreign Pension Plan allocable to such benefit liabilities.
7.11 The Security Documents. (a) The provisions of the Security
Agreement are effective to create in favor of the Collateral Agent for the
benefit of the Secured Creditors a legal, valid and enforceable security
interest in all right, title and interest of the Credit Parties in the Security
Agreement Collateral described therein, and the Security Agreement creates a
perfected lien on, and security interest in, all right, title and interest of
the Credit Parties, in all of the Security Agreement Collateral described
therein, subject to no other Liens other than Permitted Liens. The recordation
of the Assignment of Security Interest in U.S. Patents and Trademarks in the
form attached to the Security Agreement in the United States Patent and
Trademark Office together with filings on Form UCC-1 made pursuant to the
Security Agreement will be effective, under federal law, to perfect the security
interest granted to the Collateral Agent in the trademarks and patents covered
by the Security Agreement and the recordation of the Assignment of Security
Interest in U.S. Copyrights in the form attached to the Security Agreement with
the United States Copyright Office together with filings on Form UCC-1 made
pursuant to the Security Agreement will be effective under federal law to
perfect the security interest granted to the Collateral Agent in the copyrights
covered by the Security Agreement. The Credit Parties have good and marketable
title to all Security Agreement Collateral, free and clear of all Liens except
those described above in this clause (a).
(b) The security interests created in favor of the Collateral Agent, as
pledgee, for the benefit of the Secured Creditors, under the Pledge Agreement
constitute first priority perfected security interests in the Pledged Securities
described in the Pledge Agreement, subject to no security interests of any other
Person. No filings or recordings are required to perfect (or
-33-
40
maintain the perfection or priority of) the security interest created in the
Pledged Securities under the Pledge Agreement.
7.12 Representations and Warranties in Documents. All representations
and warranties of the Credit Parties (or their predecessors in interest) set
forth in the other Documents were true and correct in all material respects at
the time as of which such representations and warranties were made (or deemed
made) and shall be true and correct in all material respects as of the Effective
Date if such representations and warranties were made on and as of such date,
unless stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct in all material
respects as of such earlier date.
7.13 Properties. Holdings and each of its Subsidiaries have good and
marketable title to all material properties owned by them, including all
property owned by them, including all property reflected in the balance sheets
referred to in Section 7.05(a) (except as sold or otherwise disposed of since
the date of such balance sheet in the ordinary course of business), free and
clear of all Liens, other than (i) as referred to in the balance sheet or in the
notes thereto or (ii) Liens otherwise permitted by Section 9.01.
7.14 Capitalization. On the Effective Date and after giving effect to
the transactions contemplated hereby (including the Holdings IPO), (i) the
authorized capital stock of Holdings shall consist of (a) 200,000,000 shares of
common stock, $.01 par value per share, of which 12,707,769 shares shall be
issued and 12,695,861 shall be outstanding, and (b) 50,000,000 shares of Series
A preferred stock, none of which shall be issued and outstanding, and (ii) the
authorized capital stock of the Borrower shall consist of 5,000 shares of common
stock, $10 par value per share, of which 4,900 shall be issued and outstanding
and owned by Holdings. All such outstanding shares of common stock have been
duly and validly issued, are fully paid and nonassessable and are free of
preemptive rights. No Credit Party has outstanding any securities convertible
into or exchangeable for its capital stock or outstanding any rights to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to, its capital stock.
7.15 Subsidiaries. As of the Effective Date, the Borrower has no
Subsidiaries other than those Subsidiaries listed on Schedule III hereto.
Schedule III correctly sets forth, as of the Effective Date, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
of each of its Subsidiaries and also identifies the direct owner thereof.
7.16 Compliance with Statutes, etc. Each of Holdings and its
Subsidiaries is in compliance with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property (including applicable statutes, regulations, orders and
restrictions relating to environmental standards and controls), except such
noncompliances as could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
-34-
41
7.17 Investment Company Act. Neither Holdings 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.
7.18 Public Utility Holding Company Act. Neither Holdings nor any of
its Subsidiaries is a "holding company," or a "subsidiary company" of a "holding
company," or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company" within the meaning of the Public Utility Holding Company
Act of 1935, as amended.
7.19 Environmental Matters. (a) Holdings and each of its Subsidiaries
have complied in all material respects with, and on the date of such Credit
Event are in compliance in all material respects with, all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws. There are no pending, past or threatened Environmental
Claims against Holdings or any of its Subsidiaries (including any such claim
arising out of the ownership or operation by Holdings or any of its Subsidiaries
of any Real Property no longer owned by Holdings or any of its Subsidiaries) or
any Real Property owned or operated by Holdings or any of its Subsidiaries.
There are no facts, circumstances, conditions or occurrences with respect to any
Real Property owned or operated by Holdings or any of its Subsidiaries or any
business or operations of Holdings or any of its Subsidiaries (including any
Real Property formerly owned or operated by Holdings or any of its Subsidiaries
but no longer owned by Holdings or any of its Subsidiaries or any business or
operations thereof) or any property adjoining or in the vicinity of any such
Real Property that could reasonably be expected (i) to form the basis of an
Environmental Claim against Holdings or any of its Subsidiaries or any Real
Property owned or operated by Holdings or any of its Subsidiaries, or (ii) to
cause any Real Property owned or operated by Holdings or any of its Subsidiaries
to be subject to any restrictions on the ownership, occupancy or transferability
of such Real Property by Holdings or any of its Subsidiaries under any
applicable Environmental Law.
(b) Hazardous Materials have not at any time been generated, used,
treated or stored on, or transported to or from, any Real Property owned or
operated by Holdings or any of its Subsidiaries except in a manner so as not to
give rise to an Environmental Claim. Hazardous Materials have not at any time
been Released on or from any Real Property owned or operated by Holdings or any
of its Subsidiaries.
(c) Notwithstanding anything to the contrary in this Section 7.19, the
representations made in this Section 7.19 shall not be untrue unless the
aggregate effect of all violations, claims, restrictions, failures and
noncompliances of the types described above could reasonably be expected to have
a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of Holdings and its
Subsidiaries taken as a whole.
7.20 Labor Relations. Neither Holdings nor any of its Subsidiaries is
engaged in any unfair labor practice that could reasonably be expected to have a
material adverse effect on Holdings and its Subsidiaries taken as a whole. There
is (i) no unfair labor practice complaint pending against Holdings or any of its
Subsidiaries or, to the best knowledge of Holdings or the Borrower, threatened
against any of them, before the National Labor Relations Board, and no
-35-
42
significant grievance or significant arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Holdings or any
of its Subsidiaries or, to the best knowledge of Holdings or the Borrower,
threatened against any of them, (ii) no strike, labor dispute, slowdown or
stoppage pending against Holdings or any of its Subsidiaries or, to the best
knowledge of Holdings or the Borrower, threatened against Holdings or any of its
Subsidiaries and (iii) to the best knowledge of Holdings or the Borrower, no
union representation question existing with respect to the employees of Holdings
or any of its Subsidiaries, except (with respect to any matter specified in
clause (i), (ii) or (iii) above, either individually or in the aggregate) such
as could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
7.21 Patents, Licenses, Franchises and Formulas. Each of Holdings and
its Subsidiaries owns all the patents, trademarks, permits, service marks, trade
names, copyrights, licenses, franchises and formulas, or rights with respect to
the foregoing, and has obtained assignments of all leases and other rights of
whatever nature, necessary for the present conduct of its business, without any
known conflict with the rights of others which, or the failure to obtain which,
as the case may be, would result in a material adverse effect on the business,
operations, property, assets, liabilities, condition (financial or otherwise) or
prospects of Holdings and its Subsidiaries taken as a whole.
7.22 Indebtedness. Schedule IV sets forth a true and complete list of
all Indebtedness (including Contingent Obligations) of Holdings and its
Subsidiaries as of the Effective Date and which is to remain outstanding after
such date (excluding the Loans, the Letters of Credit and the Borrower Senior
Discount Notes, the "Existing Indebtedness"), in each case showing the aggregate
principal amount thereof and the name of the respective borrower and any other
entity which directly or indirectly guaranteed such debt.
7.23 Synthetic Lease Financing. At the time of consummation thereof,
all material consents and approvals of, and filings and registrations with, and
all other actions in respect of, all governmental agencies, authorities or
instrumentalities required in order to make or consummate the Synthetic Lease
Financing to the extent then required have been obtained, given, filed or taken
and are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the Synthetic
Lease Financing. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
Synthetic Lease Financing, or the occurrence of any Credit Event or the
performance by each Credit Party of its obligations under the respective
Documents. All actions taken by each Credit Party pursuant to or in furtherance
of the Synthetic Lease Financing have been taken in compliance with the
Documents and all applicable laws except to the extent consented to by the
Administrative Agent and the Required Lenders pursuant to Section 5.06(a).
7.24 Holdings IPO and Repurchase. At the time of consummation thereof,
all material consents and approvals of, and filings and registrations with, and
all other actions in
-36-
43
respect of, all governmental agencies, authorities or instrumentalities required
in order to make or consummate the Holdings IPO and the Repurchase, in each
case, to the extent then required have been obtained, given, filed or taken and
are or will be in full force and effect (or effective judicial relief with
respect thereto has been obtained). All applicable waiting periods with respect
thereto have or, prior to the time when required, will have, expired without, in
all such cases, any action being taken by any competent authority which
restrains, prevents, or imposes material adverse conditions upon the Holdings
IPO or the Repurchase. Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the Holdings
IPO or the Repurchase. All actions taken by each Credit Party pursuant to or in
furtherance of the Holdings IPO or the Repurchase, as the case may be, have been
taken in compliance with the Documents and all applicable laws except to the
extent consented to by the Administrative Agent and the Required Lenders
pursuant to Section 5.17(a).
7.25 Insurance. Schedule V sets forth a true and complete listing of
all insurance maintained by Holdings and its Subsidiaries as of the Effective
Date, and with the amounts insured (and any deductibles) set forth therein.
SECTION 8. Affirmative Covenants. Each of Holdings and the Borrower
covenants and agrees with respect to itself and its Subsidiaries that on and
after the Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations (other than indemnities described in
Section 13.13) incurred hereunder and thereunder, are paid in full:
8.01 Information Covenants. Holdings will furnish to each Lender:
(a) Monthly Reports. Within 45 days after the end of each fiscal month
of Holdings, the consolidated balance sheets of Holdings and its Subsidiaries on
a consolidated basis and the Borrower and its Consolidated Subsidiaries on a
stand-alone basis as at the end of such month and the related consolidated
statements of income and retained earnings and statement of cash flows for such
month and for the elapsed portion of the fiscal year ended with the last day of
such month, in each case accompanied by an abbreviated discussion of the
operating results in such preceding fiscal month.
(b) Quarterly Financial Statements. Within 45 days after the close of
the first three quarterly accounting periods in each fiscal year of Holdings,
the consolidated balance sheets of Holdings and its Subsidiaries on a
consolidated basis and the Borrower and its Consolidated Subsidiaries on a
stand-alone basis as at the end of such quarterly accounting period and the
related consolidated statements of income and retained earnings and statement of
cash flows for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly accounting period, in
each case setting forth comparative figures for the related periods in the prior
fiscal year, all of which shall be certified by the chief financial officer of
Holdings, subject to normal year-end audit adjustments.
(c) Annual Financial Statements. Within 105 days after the close of
each fiscal year of Holdings, the consolidated balance sheets of Holdings and
its Subsidiaries on a consolidated basis and the Borrower and its Consolidated
Subsidiaries on a stand-alone basis as
-37-
44
at the end of such fiscal year and the related consolidated statements of income
and retained earnings and of cash flows for such fiscal year setting forth
comparative figures for the preceding fiscal year and certified, in the case of
the consolidated financial statements of Holdings, by Deloitte & Touche LLP or
such other independent certified public accountants of recognized national
standing reasonably acceptable to the Administrative Agent, and in the case of
the other financial statements, certified by the chief financial officer of
Holdings, together with a report of such accounting firm stating that in the
course of its regular audit of the financial statements of Holdings and its
Subsidiaries, which audit was conducted in accordance with generally accepted
auditing standards, such accounting firm obtained no knowledge of any Default or
Event of Default which has occurred and is continuing or, if in the opinion of
such accounting firm such a Default or Event of Default has occurred and is
continuing, a statement as to the nature thereof.
(d) Management Letters. Promptly after Holdings' or any of its
Subsidiaries' receipt thereof, a copy of any "management letter" addressed to
the board of directors of Holdings or such Subsidiary from its certified public
accountants and any internal control memoranda relating thereto.
(e) Budgets. No later than the first day of each fiscal year of
Holdings, a budget in form satisfactory to the Required Lenders (including
budgeted statements of income and sources and uses of cash and balance sheets)
prepared by Holdings for each of the twelve months of such fiscal year prepared
in detail, accompanied by a statement of the Chief Financial Officer of Holdings
to the effect that, to the best of his knowledge, the budget is a reasonable
estimate for the period covered thereby.
(f) Officer's Certificates. At the time of the delivery of the
financial statements provided for in Sections 8.01(b) and (c), a certificate of
the President or any Vice President of Holdings to the effect that, to the best
of such officer's knowledge, no Default or Event of Default has occurred and is
continuing or, if any Default or Event of Default has occurred and is
continuing, specifying the nature and extent thereof, which certificate shall
set forth in reasonable detail the calculations required to establish whether
the Borrower was in compliance with the provisions of Sections 4.02(b), 9.04,
9.05 and 9.07 through 9.10 (but with respect to Section 9.07 only to the extent
delivered with the financial statements required by Section 8.01(c)), inclusive,
at the end of such fiscal quarter or year, as the case may be.
(g) Notice of Default or Litigation. Promptly, and in any event within
three Business Days after a senior officer of Holdings or the Borrower obtains
knowledge thereof, notice of (i) the occurrence of any event which constitutes a
Default or Event of Default and (ii) any litigation or governmental
investigation or proceeding pending (x) against Holdings or any of its
Subsidiaries which could reasonably be expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings or any of its Subsidiaries or
(y) with respect to the Holdings IPO, the Repurchase, the Synthetic Lease
Financing or any Document.
(h) Other Reports and Filings. Promptly, copies of all financial
information, proxy materials and reports, if any, which Holdings or any of its
Subsidiaries shall publicly file with the Securities and Exchange Commission or
any successor thereto (the "SEC") and all
-38-
45
material financial information delivered to holders of its Indebtedness pursuant
to the terms of the documentation governing such Indebtedness (or any trustee,
agent or other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event within ten
Business Days after, an officer of any Credit Party obtains knowledge thereof,
notice of one or more of the following environmental matters, unless such
environmental matters could not, individually or when aggregated with all other
such environmental matters, be reasonably expected to materially and adversely
affect the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole: (i) any pending or threatened Environmental Claim against Holdings or
any of its Subsidiaries or any Real Property owned or operated by Holdings or
any of its Subsidiaries; (ii) any condition or occurrence on or arising from any
Real Property owned or operated by Holdings or any of its Subsidiaries that (a)
results in noncompliance by Holdings or any of its Subsidiaries with any
applicable Environmental Law or (b) could reasonably be expected to form the
basis of an Environmental Claim against Holdings or any of its Subsidiaries or
any such Real Property; (iii) any condition or occurrence on any Real Property
owned or operated by Holdings or any of its Subsidiaries that could reasonably
be expected to cause such Real Property to be subject to any restrictions on the
ownership, occupancy, use or transferability by Holdings or any of its
Subsidiaries of such Real Property under any Environmental Law; and (iv) the
taking of any removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on any Real Property owned or operated by
Holdings or any of its Subsidiaries as required by any Environmental Law or any
governmental or other administrative agency; provided that, in any event,
Holdings shall deliver to the Administrative Agent all notices received by
Holdings or any of its Subsidiaries from any government or governmental agency
under, or pursuant to, CERCLA which identify Holdings or any of its Subsidiaries
as potentially responsible parties for remediation costs or which otherwise
notify Holdings or any of its Subsidiaries of potential liability under CERCLA.
All such notices shall describe in reasonable detail the nature of the claim,
investigation, condition, occurrence or removal or remedial action and Holdings'
or such Subsidiary's response thereto. In addition, Holdings will provide the
Administrative Agent with copies of all material communications between Holdings
or any of its Subsidiaries and any government or governmental agency relating to
Environmental Laws which could reasonably be expected to materially and
adversely effect the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of Holdings and its Subsidiaries
taken as a whole, all notice of any Environmental Claims, and such detailed
reports of any Environmental Claim as may reasonably be requested by the
Lenders.
(j) Annual Meetings with Lenders. At a date to be mutually agreed upon
between the Administrative Agent and the Borrower, Holdings shall hold a meeting
with all of the Lenders at which meeting shall be reviewed the financial results
of the previous fiscal year and the financial condition of Holdings and its
Subsidiaries and the budgets presented for the current fiscal year of Holdings.
(k) Other Information. From time to time, such other information or
documents (financial or otherwise) with respect to Holdings or its Subsidiaries
as any Lender may reasonably request.
-39-
46
8.02 Books, Records and Inspections. Holdings will, and will cause each
of its Subsidiaries to, keep proper books of record and account in which full,
true and correct entries in conformity with generally accepted accounting
principles and all requirements of law shall be made of all dealings and
transactions in relation to its business and activities. Holdings will, and will
cause each of its Subsidiaries to, permit upon two Business Days' prior notice
officers and designated representatives of the Administrative Agent or the
Required Lenders to visit and inspect, under guidance of officers of Holdings or
such Subsidiary, any of the properties of Holdings or such Subsidiary, and to
examine the books of account of Holdings or such Subsidiary and discuss the
affairs, finances and accounts of Holdings or such Subsidiary with, and be
advised as to the same by, its and their officers and independent accountants,
all at such reasonable times and intervals and to such reasonable extent as the
Administrative Agent or the Required Lenders may reasonably request, all such
inspections to be subject to any binding confidentiality agreement for the
benefit of a third party that prohibits the foregoing. Holdings will, and will
cause each of its Subsidiaries to, permit officers and designated
representatives of the Administrative Agent to conduct, at Holdings' expense, an
annual audit of the accounts receivable and inventories of Holdings and its
Subsidiaries.
8.03 Maintenance of Property; Insurance. (a) Holdings will, and will
cause each of its Subsidiaries to, (i) keep all property necessary to the
business of Holdings and its Subsidiaries taken as a whole in reasonably good
working order and condition, (ii) maintain insurance on all such property in at
least such amounts and against at least such risks as is consistent and in
accordance with industry practice, and (iii) furnish to the Administrative Agent
or the Required Lenders, upon written request, full information as to the
insurance carried. At any time that Holdings or any Subsidiary of Holdings fails
to maintain insurance (other than property or business interruption insurance)
at the levels maintained on the Effective Date, Holdings will, or will cause one
of its Subsidiaries to, notify the Administrative Agent and the Required Lenders
in writing within three Business Days thereof and, if thereafter notified by the
Required Lenders to do so, Holdings or any such Subsidiary, as the case may be,
shall obtain such insurance at such levels to the extent such insurance is
reasonably available. In addition to the requirements of the immediately
preceding sentence, Holdings and the Borrower will at all times cause liability
insurance and business interruption insurance of the type maintained on the
Effective Date to be maintained (with the same scope of coverage as on the
Effective Date) at levels which are at least as great as the respective amounts
maintained on the Effective Date.
(b) Holdings will, and will cause its Subsidiaries to, at all times
keep its insured property insured in favor of the Collateral Agent, and all
policies or certificates (or certified copies thereof) with respect to any
property insurance, general liability insurance and, within ten Business Days
after the date hereof, political risk insurance), (i) shall be endorsed to the
Collateral Agent's reasonable satisfaction for the benefit of the Collateral
Agent (including, without limitation, by naming the Collateral Agent as loss
payee and/or additional insured, (ii) shall state that such insurance policies
shall not be canceled or revised without 30 days' prior written notice thereof
by the respective insurer to the Collateral Agent, (iii) shall provide that the
respective insurers irrevocably waive any and all rights of subrogation with
respect to the Collateral Agent and the Secured Creditors, (iv) shall, except in
the case of public liability insurance, workers' compensation and cargo
insurance, provide that any losses shall be payable notwithstanding (A) any act
or neglect of Holdings or any of its Subsidiaries, (B) the occupation
-40-
47
or use of the properties for purposes more hazardous than those permitted by the
terms of the respective policy if such coverage is obtainable at commercially
reasonable rates and is of the kind from time to time customarily insured
against by Persons owning or using similar property and in such amounts as are
customary, (C) any foreclosure or other proceeding relating to the insured
properties or (D) any change in the title to or ownership or possession of the
insured properties and (v) shall be deposited with the Collateral Agent. If
Holdings or any of its Subsidiaries shall fail to insure its property in
accordance with this Section 8.03, or if Holdings or any of its Subsidiaries
shall fail to so endorse and deposit all policies or certificates with respect
thereto, the Collateral Agent shall have the right (but shall be under no
obligation), upon ten Business Days' prior notice to the Borrower, to procure
such insurance and the Borrower agrees to reimburse the Collateral Agent for all
costs and expenses of procuring such insurance.
(c) The foregoing requirements of this Section 8.03 shall not apply to
any equipment or inventory of Holdings and its Subsidiaries which is subject to
an Equipment Financing Transaction, so long as Holdings and its Subsidiaries are
in material compliance with any similar requirements imposed by the terms of
such Equipment Financing Transaction.
8.04 Corporate Franchises. Holdings will, and will cause each of its
Subsidiaries to, do or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights, franchises,
licenses and patents; provided, however, that nothing in this Section 8.04 shall
prevent (i) transactions in accordance with Section 9.02 or (ii) the withdrawal
by Holdings or any of its Subsidiaries of its qualification as a foreign
corporation in any jurisdiction where such withdrawal could not reasonably be
expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole.
8.05 Compliance with Statutes, etc. Holdings will, and will cause each
of its Subsidiaries to, comply with all applicable statutes, regulations and
orders of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the ownership
of its property, except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
8.06 Compliance with Environmental Laws. (a) Holdings will comply, and
will cause each of its Subsidiaries to comply, in all material respects with all
Environmental Laws applicable to the ownership or use of its Real Property now
or hereafter owned or operated by Holdings or any of its Subsidiaries (except
such noncompliances as could not, individually or in the aggregate, reasonably
be expected to have a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of Holdings and its Subsidiaries taken as a whole), will promptly pay or cause
to be paid all costs and expenses incurred in connection with such compliance,
and will keep or cause to be kept all such Real Property free and clear of any
Liens imposed pursuant to such Environmental Laws. Neither Holdings nor any of
its Subsidiaries will generate, use, treat, store, release or dispose of, or
permit the generation, use, treatment, storage, release or disposal of Hazardous
Materials on any Real Property now or hereafter owned or operated by Holdings or
any of its Subsidiaries, or
-41-
48
transport or permit the transportation of Hazardous Materials to or from any
such Real Property, except for Hazardous Materials generated, used, treated,
stored, released or disposed of at any such Real Properties in compliance in all
material respects with all applicable Environmental Laws and reasonably required
in connection with the operation, use and maintenance of the business or
operations of Holdings or any of its Subsidiaries.
(b) At the written reasonable request of the Administrative Agent or
the Required Lenders, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time, Holdings will provide, at Holdings'
sole cost and expense, an environmental site assessment report concerning any
Real Property owned or operated by Holdings and its Subsidiaries, prepared by an
environmental consulting firm reasonably satisfactory to the Administrative
Agent, indicating the presence or absence of Hazardous Materials and the
potential cost of any removal or remedial action in connection with any
Hazardous Materials on such Real Property, provided that in no event shall such
request be made more often than once every three years for any particular Real
Property unless (i) the Obligations have been declared due and payable pursuant
to Section 10; (ii) the Lenders receive notice under Section 8.01(i) of any
event for which notice is required to be delivered for any such Real Property or
any business or operations of Holdings or any of its Subsidiaries; or (iii) a
Default or an Event of Default then exists. If Holdings or the Borrower fails to
provide the same within ninety days after such request was made, the
Administrative Agent may order the same, the cost of which shall be borne by the
Borrower, and Holdings and the Borrower shall grant and hereby grant to the
Administrative Agent and the Lenders and their agents access to such Real
Property and specifically grant the Administrative Agent and the Lenders an
irrevocable non-exclusive license to undertake such an assessment, all at
Holdings' expense.
8.07 ERISA. As soon as possible and, in any event, within ten (10)
business days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate
knows or has reason to know of the occurrence of any of the following, Holdings
will deliver to each of the Lenders a certificate of the chief financial officer
of Holdings setting forth the full details as to such occurrence and the action,
if any, that Holdings, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by Holdings, the Subsidiary, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto: (i) that a
Reportable Event has occurred (except to the extent that Holdings has previously
delivered to the Lenders a certificate and notices (if any) concerning such
event pursuant to the next clause hereof); (ii) that a contributing sponsor (as
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA
is subject to the advance reporting requirement of PBGC Regulation Section
4043.61 (without regard to subparagraph (b)(1) thereof), and an event described
in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC Regulation Section
4043 is reasonably expected to occur with respect to such Plan within the
following 30 days; (iii) that an accumulated funding deficiency, within the
meaning of Section 412 of the Code or Section 302 of ERISA, has been incurred or
an application may be or has been made for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code or Section
303 or 304 of ERISA with respect to a Plan; (iv) that any contribution required
to be made with respect to a Plan or Foreign Pension Plan has not been timely
made; (v) that a Plan which is subject to Title IV of ERISA has been or may be
terminated, reorganized,
-42-
49
partitioned or declared insolvent under Title IV of ERISA; (vi) that a Plan has
an Unfunded Current Liability; (vii) that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan which is
subject to Title IV of ERISA; (viii) that a proceeding has been instituted
pursuant to Section 515 of ERISA to collect a delinquent contribution to a Plan;
(ix) that Holdings or any Subsidiary of Holdings will or may incur any liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409, 502(i) or 502(l) of
ERISA or with respect to a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code; or
(x) that Holdings or any Subsidiary of Holdings may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any Plan or any Foreign
Pension Plan in addition to the liability that existed on the Effective Date
pursuant to any such plan or plans. Holdings will deliver to each of the Lenders
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA. Holdings
will also deliver to each of the Lenders a complete copy of the annual report
(on Internal Revenue Service Form 5500-series) of each Plan which is subject to
Title IV of ERISA (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed with the
Internal Revenue Service. In addition to any certificates or notices delivered
to the Lenders pursuant to the first sentence hereof, copies of annual reports
and any records, documents or other information required to be furnished to the
PBGC, and any material notices received by Holdings, any Subsidiary of Holdings
or any ERISA Affiliate with respect to any Plan or Foreign Pension Plan shall be
delivered to the Lenders no later than twenty (20) days after the date such
annual report has been filed with the Internal Revenue Service or such records,
documents and/or information has been furnished to the PBGC or such notice has
been received by Holdings, the Subsidiary or the ERISA Affiliate, as applicable.
8.08 End of Fiscal Years; Fiscal Quarters. Holdings shall cause (i)
each of its fiscal years and fourth fiscal quarter to end on March 31 of each
year, and (ii) each of its first three fiscal quarters to end on June 30,
September 30 and December 31 of each year.
8.09 Performance of Obligations. Holdings will, and will cause each of
its Subsidiaries to, perform all of its obligations under the terms of each
mortgage, indenture, security agreement and other debt instrument by which it is
bound, except such non-performances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of Holdings and its Subsidiaries taken as a whole.
8.10 Payment of Taxes. Holdings will pay and discharge or cause to be
paid and discharged, and will cause each of its Subsidiaries to pay and
discharge, all lawful claims, taxes, assessments and governmental charges or
levies imposed upon it or upon its income or profits, or upon any properties
belonging to it, in each case on a timely basis; provided that neither Holdings
nor any of its Subsidiaries shall be required to pay any such tax, assessment,
charge, levy or claim which is being contested in good faith and by proper
proceedings if it has
-43-
50
maintained adequate reserves with respect thereto in accordance with generally
accepted accounting principles.
8.11 Additional Security; Further Assurances. (a) Holdings will, and
will cause each of its Domestic Subsidiaries (and subject to Section 8.12, each
of its Foreign Subsidiaries) to, grant to the Collateral Agent security
interests in such assets and properties of Holdings and its Subsidiaries (other
than Real Property) as are not covered by the original Security Documents and/or
Subsidiaries Guaranty as required by Section 9.15, and as may be reasonably
requested from time to time by the Administrative Agent or the Required Lenders
(collectively, the "Additional Security Documents"). All such security interests
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Administrative Agent and shall constitute valid and enforceable
perfected security interests superior to and prior to the rights of all third
Persons and subject to no other Liens except for Permitted Liens. The Additional
Security Documents or instruments related thereto shall have been duly recorded
or filed in such manner and in such places as are required by law to establish,
perfect, preserve and protect the Liens in favor of the Collateral Agent
required to be granted pursuant to the Additional Security Documents and all
taxes, fees and other charges payable in connection therewith shall have been
paid in full.
(b) Holdings will, and will cause each of its Subsidiaries to, at the
expense of Holdings and the Borrower, make, execute, endorse, acknowledge, file
and/or deliver to the Collateral Agent from time to time such vouchers,
invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, reports and
other assurances or instruments and take such further steps relating to the
Collateral covered by any of the Security Documents as the Collateral Agent may
reasonably require to obtain the benefits intended to be conferred to the
Administrative Agent and the Lenders pursuant to the Security Documents.
Furthermore, Holdings and the Borrower will cause to be delivered to the
Collateral Agent such opinions of counsel, title insurance and other related
documents as may be reasonably requested by the Administrative Agent to assure
itself that this Section 8.11 has been complied with.
(c) Holdings and the Borrower agree that each action required above by
this Section 8.11 shall be completed as soon as possible, but in no event later
than 90 days (30 days in connection with compliance with Section 9.15) after
such action is either requested to be taken by the Administrative Agent or the
Required Lenders or required to be taken by Holdings and/or its Subsidiaries
pursuant to the terms of this Section 8.11; provided that in no event will
Holdings or any of its Subsidiaries be required to take any action, other than
using its reasonable best efforts, to obtain consents from third parties with
respect to its compliance with this Section 8.11.
(d) Notwithstanding anything to the contrary contained in this Section
8.11 or in Section 9.15, no non-Wholly-Owned Domestic Subsidiary of the Borrower
which is acquired pursuant to an acquisition otherwise permitted hereunder shall
be required to enter into any Additional Security Document and/or the
Subsidiaries Guaranty to the extent, and only to the extent, that the terms of
any Indebtedness of such Domestic Subsidiary existing at the time of such
acquisition (and which Indebtedness is otherwise permitted hereunder) prohibits
such
-44-
51
Domestic Subsidiary from entering into any such Additional Security Documents
and/or the Subsidiaries Guaranty (it being understood that at such time as such
prohibition shall no longer be effective, such Domestic Subsidiary shall enter
into Additional Security Documents and/or the Subsidiaries Guaranty as otherwise
described in this Section 8.11 and in Section 9.15).
(e) On or prior to the 45th day following the Effective Date, the
Borrower will, and will cause each other Credit Party to, deliver to the
Collateral Agent the Pledged Securities of Foreign Subsidiaries directly owned
by each such Credit Party, together with executed and undated stock powers, all
as and to the extent required by the Pledge Agreement.
(f) If by the 30th day following the Effective Date Spectrum Rotary
Compression, Inc. shall not have merged with and into the Borrower pursuant to
Section 9.02(vi), then the Borrower will cause Spectrum Rotary Compression, Inc.
at such time to take all of the actions otherwise required to be taken by a new
Wholly-Owned Domestic Subsidiary pursuant to Section 9.15(a).
8.12 Foreign Subsidiaries Security. (a) If following a change in the
relevant sections of the Code or the regulations, rules, rulings, notices or
other official pronouncements issued or promulgated thereunder, counsel for the
Borrower acceptable to the Administrative Agent and the Required Lenders does
not within 120 days after a request from the Administrative Agent or the
Required Lenders deliver evidence, in form and substance satisfactory to the
Administrative Agent and the Required Lenders, with respect to any Foreign
Subsidiary which has not already had all of its stock pledged pursuant to the
Pledge Agreement that (i) a pledge (x) of 66-2/3% or more of the total combined
voting power of all classes of capital stock of such Foreign Subsidiary entitled
to vote, and (y) of any promissory note issued by such Foreign Subsidiary to
Holdings or any of its Domestic Subsidiaries, (ii) the entering into by such
Foreign Subsidiary of a security agreement in substantially the form of the
Security Agreement and (iii) the entering into by such Foreign Subsidiary of a
guaranty in substantially the form of the Subsidiaries Guaranty, in any such
case would cause the undistributed earnings of such Foreign Subsidiary as
determined for Federal income tax purposes to be treated as a deemed dividend to
such Foreign Subsidiary's United States parent for Federal income tax purposes,
then in the case of a failure to deliver the evidence described in clause (i)
above, that portion of such Foreign Subsidiary's outstanding capital stock or
any promissory notes so issued by such Foreign Subsidiary, in each case not
theretofore pledged pursuant to the Pledge Agreement shall be pledged to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the Pledge
Agreement (or another pledge agreement in substantially similar form, if
needed), and in the case of a failure to deliver the evidence described in
clause (ii) above, such Foreign Subsidiary shall execute and deliver the
Security Agreement (or another security agreement in substantially similar form,
if needed), granting the Secured Creditors a security interest in all of such
Foreign Subsidiary's assets and securing the Obligations of the Borrower under
the Credit Documents and under any Interest Rate Protection Agreement or Other
Hedging Agreement and, in the event the Subsidiaries Guaranty shall have been
executed by such Foreign Subsidiary, the obligations of such Foreign Subsidiary
thereunder, and in the case of a failure to deliver the evidence described in
clause (iii) above, such Foreign Subsidiary shall execute and deliver the
Subsidiaries Guaranty (or another guaranty in substantially similar form, if
needed), guaranteeing the Obligations of the Borrower under the Credit Documents
and under any Interest Rate Protection
-45-
52
Agreement or Other Hedging Agreement, in each case to the extent that the
entering into such Security Agreement or Subsidiaries Guaranty is permitted by
the laws of the respective foreign jurisdiction and with all documents delivered
pursuant to this Section 8.12 to be in form and substance reasonably
satisfactory to the Administrative Agent and the Required Lenders, provided that
no pledge shall be required pursuant to this Section 8.12 of a Foreign
Subsidiary if the Administrative Agent has determined pursuant to Section
9.02(ix) that such a pledge shall result in regulatory or economic
disadvantages.
(b) Notwithstanding anything to the contrary contained in this Section
8.12, no non-Wholly Owned Foreign Subsidiary of the Borrower shall be required
to take any of the actions required by clause (a) of this Section 8.12 to the
extent, and only to the extent, that the terms of any Indebtedness of such
Foreign Subsidiary existing at the time that any such action is required to be
taken (and which Indebtedness is otherwise permitted hereunder) prohibits such
Foreign Subsidiary from taking any such actions (it being understood that at
such time as such prohibition shall no longer be effective, such Foreign
Subsidiary shall take such actions as otherwise described in this Section 8.12).
SECTION 9. Negative Covenants. Each of Holdings and the Borrower
covenants and agrees with respect to itself and its Subsidiaries that on and
after the Effective Date and until the Total Commitment and all Letters of
Credit have terminated and the Loans, Notes and Unpaid Drawings, together with
interest, Fees and all other Obligations incurred hereunder and thereunder, are
paid in full:
9.01 Liens. Holdings will not, and will not permit any of its
Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or with
respect to any property or assets (real or personal, tangible or intangible) of
Holdings or any of its Subsidiaries, whether now owned or hereafter acquired, or
sell any such property or assets subject to an understanding or agreement,
contingent or otherwise, to repurchase such property or assets (including sales
of accounts receivable with recourse to Holdings or any of its Subsidiaries), or
assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute; provided that the provisions of this Section 9.01
shall not prevent the creation, incurrence, assumption or existence of the
following (Liens described below are herein referred to as "Permitted Liens"):
(i) inchoate Liens for taxes, assessments or governmental charges or
levies not yet due or Liens for taxes, assessments or governmental charges
or levies being contested in good faith and by appropriate proceedings for
which adequate reserves have been established in accordance with generally
accepted accounting principles;
(ii) Liens in respect of property or assets of Holdings or any of its
Subsidiaries imposed by law, which were incurred in the ordinary course of
business and do not secure Indebtedness for borrowed money, such as
carriers', warehousemen's, materialmen's and mechanics' liens and other
similar Liens arising in the ordinary course of business, and (x) which do
not in the aggregate materially detract from the value of Holdings' or such
Subsidiary's property or assets or materially impair the use thereof in the
operation of the business of Holdings' or such Subsidiary or (y) which are
being contested in good faith
-46-
53
by appropriate proceedings, which proceedings have the effect of preventing
the forfeiture or sale of the property or assets subject to any such Lien;
(iii) Liens in existence on the Effective Date which are listed, and
the property subject thereto described, in Schedule VI, but only to the
respective date, if any, set forth in such Schedule VI for the removal and
termination of any such Liens, plus renewals and extensions of such Liens
to the extent set forth on Schedule VI, provided that (x) the aggregate
principal amount of the Indebtedness, if any, secured by such Liens does
not increase from that amount outstanding at the time of any such renewal
or extension and (y) any such renewal or extension does not encumber any
additional assets or properties of Holdings or any of its Subsidiaries;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) leases or subleases granted to other Persons not materially
interfering with the conduct of the business of Holdings and its
Subsidiaries taken as a whole;
(vii) Liens (including precautionary UCC filings) upon assets of the
Borrower or its Subsidiaries subject to Equipment Financing Transactions to
the extent permitted by Section 9.04(v) and the other provisions of this
Agreement, provided that (x) such Liens secure only the payment of such
obligations under Equipment Financing Transactions, (y) if such obligations
constitute Operating Lease Obligations, the Attributable Indebtedness in
respect thereof shall not exceed $170,000,000 at any time and (z) such
Liens do not encumber any other asset of Holdings or any Subsidiary of
Holdings;
(viii) Liens securing Indebtedness permitted pursuant to Section
9.04(xv);
(ix) easements, rights-of-way, restrictions, encroachments and other
similar charges or encumbrances, and minor title deficiencies, in each case
not securing Indebtedness and not materially interfering with the conduct
of the business of Holdings and its Subsidiaries taken as a whole;
(x) Liens on assets of a Foreign Subsidiary of the Borrower securing
Indebtedness permitted to be incurred by such Foreign Subsidiary under this
Agreement;
(xi) Liens arising out of judgments or awards in respect of which
Holdings or any of its Subsidiaries shall in good faith be prosecuting an
appeal or proceedings for review in respect of which there shall have been
secured a subsisting stay of execution pending such appeal or proceedings,
provided that the aggregate amount of all such judgments or awards (and any
cash and the fair market value of any property subject to such Liens) does
not exceed $1,000,000 at any time outstanding;
(xii) statutory and common law landlords' liens under leases to which
Holdings or any of its Subsidiaries is a party;
-47-
54
(xiii) Liens incurred in the ordinary course of business in connection
with workers compensation claims, unemployment insurance and social
security benefits and Liens securing the performance of bids, tenders,
leases and contracts in the ordinary course of business, provided that the
aggregate outstanding amount of obligations secured by Liens permitted by
this clause (xiii) (and the value of all cash and property encumbered by
Liens permitted pursuant to this clause (xiii)) shall not at any time
exceed $5,000,000;
(xiv) Liens securing Indebtedness permitted pursuant to Section
9.04(xiv);
(xv) Liens existing on property or assets acquired pursuant to a
Permitted Section 9.02(viii) Acquisition, or on property or assets of a
Subsidiary of the Borrower in existence at the time such Subsidiary is
acquired pursuant to a Permitted Section 9.02(viii) Acquisition, provided
that (x) any Indebtedness that is secured by such Liens is otherwise
permitted under Section 9.04(xiii) and (y) such Liens are not incurred in
connection with, or in contemplation or anticipation of, any such
acquisition and do not attach to any asset of Holdings or any other asset
of the Borrower or any of its Subsidiaries; and
(xvi) Liens existing on property or assets of a new Domestic
Subsidiary of the Borrower in existence at the time such Domestic
Subsidiary is acquired pursuant to an investment made under Section
9.05(xii), provided that (x) any Indebtedness that is secured by such Liens
is otherwise permitted under Section 9.04(xiii) and (y) such Liens are not
incurred in connection with, or in contemplation or anticipation of, any
such acquisition and do not attach to any asset of Holdings or the Borrower
or other asset of any Subsidiary of the Borrower.
9.02 Consolidation, Merger, Purchase or Sale of Assets, etc. Holdings
will not, and will not permit any of its Subsidiaries to, wind up, liquidate or
dissolve its affairs or enter into any transaction of merger or consolidation,
or convey, sell, lease or otherwise dispose of (or agree to do any of the
foregoing at any future time) all or any part of its property or assets, or
enter into any sale-leaseback transactions, or purchase or otherwise acquire (in
one or a series of related transactions) any part of the property or assets
(other than purchases or other acquisitions of inventory, materials and
equipment in the ordinary course of business) of any Person, except that:
(i) Capital Expenditures by the Borrower and its Subsidiaries shall be
permitted to the extent not in violation of Section 9.07;
(ii) each of the Borrower and its Subsidiaries may in the ordinary
course of business sell or otherwise dispose of any assets which, in the
reasonable judgment of such Person, are obsolete, worn out or otherwise no
longer useful in the conduct of such Person's business, provided that the
proceeds of all assets subject to sales or other dispositions pursuant to
this clause (ii) shall not exceed $5,000,000 in any fiscal year of the
Borrower;
(iii) investments may be made to the extent permitted by Section 9.05;
-48-
55
(iv) each of the Borrower and its Subsidiaries may lease (as lessee)
real or personal property to the extent permitted by Section 9.04 (so long
as any such lease does not create a Capitalized Lease Obligation except to
the extent permitted by Section 9.04(v));
(v) each of the Borrower and its Subsidiaries may make sales or leases
of inventory or equipment to their customers in the ordinary course of
business;
(vi) any Subsidiary of the Borrower may be merged or consolidated with
or into the Borrower or any other Wholly-Owned Domestic Subsidiary of the
Borrower or be liquidated, wound up or dissolved, or all or substantially
all of its business, property or assets may be conveyed, sold, leased,
transferred or otherwise disposed of, in one transaction or a series of
transactions, to the Borrower or any other Wholly-Owned Domestic Subsidiary
of the Borrower;
(vii) any disposition of assets required to effectuate Equipment
Finance Transactions otherwise permitted hereby shall be permitted;
(viii) each of the Borrower and its Subsidiaries may acquire all or
substantially all of the assets of any Person (or all or substantially all
of the assets of a product line or division of any Person) or 100% of the
capital stock of any Person, through merger with the Borrower or a
Subsidiary of the Borrower or by stock purchase (any such acquisition
permitted by this clause (viii), a "Permitted Section 9.02(viii)
Acquisition"), so long as (i) no Default of Event of Default then exists or
would result therefrom, (ii) each of the representations and warranties
contained in Section 7 shall be true and correct in all material respects
both before and after giving effect to such Permitted Section 9.02(viii)
Acquisition, (iii) any Liens, Indebtedness or Operating Lease Obligations
incurred, assumed or issued in connection with such acquisition are
otherwise permitted under Section 9.01 or 9.04, as the case may be, (iv)
the only consideration paid by the Borrower or any Subsidiary in connection
with any Permitted Section 9.02(viii) Acquisition consists solely of cash,
assumed Indebtedness (including Capitalized Lease Obligations) and/or
Operating Lease Obligations, the issuance of unsecured Indebtedness to the
extent permitted under Section 9.04(xv), common stock of Holdings and/or
Qualified Preferred Stock of Holdings, (v) Holdings and its Subsidiaries
would have been in compliance with the financial covenants set forth in
Section 9.07 through 9.10, inclusive, for the Test Period then most
recently ended prior to the date of the consummation of such Permitted
Section 9.02(viii) Acquisition, in each case with such financial covenants
to be determined on a pro forma basis (subject to the methodology to give
effect to such pro forma adjustments being satisfactory to the
Administrative Agent) as if such Permitted Section 9.02(viii) Acquisition
had been consummated on the first day of such Test Period (and assuming
that any Indebtedness (including Capitalized Lease Obligations) and/or
Operating Lease Obligations incurred, issued or assumed in connection
therewith had been incurred, issued or assumed on the first day of, and had
remained outstanding throughout, such Test Period), (vi) the aggregate
consideration paid in connection with all Permitted Section 9.02(viii)
Acquisitions (including, without limitation, any earn-out, non-compete or
deferred compensation arrangements, the aggregate principal amount of any
Indebtedness assumed in connection therewith and the fair market value of
any
-49-
56
capital stock of Holdings issued in connection therewith) shall not exceed
(x) $75,000,000 in any fiscal year of Holdings, (y) in the event such
consideration consists of cash and assumed Indebtedness (including
Capitalized Leased Obligations), $10,000,000 in any fiscal year (and
$50,000,000 in the aggregate) (excluding any portion of such consideration
which is treated as, or involves the acquisition of assets which is treated
as, a Capital Expenditure under Section 9.07), and (z) to the extent that
such consideration consists solely of common stock of Holdings and/or
Qualified Preferred Stock of Holdings, $200,000,000, (vii) after giving
effect to any Permitted Section 9.02(viii) Acquisition, the Unutilized
Commitment is at least $5,000,000, and (viii) the assets or Person acquired
pursuant to each such Permitted Section 9.02(viii) Acquisition are employed
or engaged, as the case may be, in a Permitted Business;
(ix) any Foreign Subsidiary may be merged with and into, or be
dissolved or liquidated into, or transfer any of its assets to, any Foreign
Subsidiary or Foreign Joint Venture so long as at least 65% of the total
combined voting power of all classes of capital stock of all first-tier
Foreign Subsidiaries and all of the capital stock owned by any Credit Party
of any first-tier Foreign Joint Venture is pledged pursuant to the Pledge
Agreement (unless, (x) in the case of Foreign Subsidiaries, the
Administrative Agent reasonably determines that such pledge shall result in
regulatory or economic disadvantages and (y) additionally, in the case of
Foreign Joint Ventures, the organizational documents thereof prohibit such
Pledge);
(x) the assets of any Foreign Subsidiary or Foreign Joint Venture may
be transferred to the Borrower or any of its Domestic Subsidiaries and any
Foreign Subsidiary or Foreign Joint Venture may be merged with and into, or
be dissolved or liquidated into, the Borrower or any of its Domestic
Subsidiaries so long as the Borrower or such Domestic Subsidiary is the
surviving corporation of any such merger, dissolution or liquidation;
(xi) the Borrower or any of its Domestic Subsidiaries may transfer to
one or more Foreign Subsidiaries or Foreign Joint Venture those assets
theretofore transferred to the Borrower or such Domestic Subsidiary by a
Foreign Subsidiary or Foreign Joint Venture (whether by merger,
liquidation, dissolution or otherwise) pursuant to clause (x) of this
Section 9.02;
(xii) each of the Borrower and its Subsidiaries may enter into sale
and leaseback transactions with respect to their inventory, equipment and
Real Property, in which the Borrower or any of its Subsidiaries acts as
seller of the inventory, equipment or Real Property that is the subject of
the transaction, so long as (v) no Default or Event of Default then exists
or would result therefrom, (w) each such sale and leaseback transaction is
in an arm's-length transaction and the Borrower or the respective
Subsidiary receives at least fair market value (as determined in good faith
by the Borrower or such Subsidiary, as the case may be), (x) the total
consideration received by the Borrower or such Subsidiary is cash and is
paid at the time of the closing of such sale, (y) the Net Sale Proceeds
therefrom are applied and/or reinvested as (and to the extent) required by
-50-
57
Section 4.02(b) and (z) the Capitalized Lease Obligations and/or Operating
Lease Obligations are otherwise permitted under this Agreement;
(xiii) so long as (x) no Default or Event of Default then exists or
would result therefrom and (y) the Borrower shall be in compliance with the
financial covenants contained in Sections 9.07 through 9.10, inclusive,
with such covenants to be calculated on a pro forma basis, the Borrower
may, and may permit its Subsidiaries to, exchange (for reasonably
equivalent value, a portion thereof which may include cash) any inventory,
equipment and other assets (each such transaction an "Asset Swap"),
provided that (A) the sum of (1) the total value of all assets to be
swapped in any fiscal year of the Borrower and (2) the total value of
assets sold in accordance with Section 9.02(xiv) in such fiscal year shall
not exceed in the aggregate 10% of the total value of all assets of the
Borrower and its Subsidiaries as of the end of the most recently ended
fiscal year, (B) that the disposition and acquisition of the subject
inventory, equipment or other assets occur within 60 days of one another
and (C) that any such cash proceeds received by the Borrower or any of its
Subsidiaries in connection with any such Asset Swap shall be applied and/or
reinvested as (and to the extent) required by Section 4.02(b);
(xiv) each of the Borrower and its Subsidiaries may sell assets, so
long as (v) no Default or Event of Default then exists or would result
therefrom, (w) each sale is in an arm's length transaction and the Borrower
or the respective Subsidiary receives at least fair market value (as
determined in good faith by the Borrower or such Subsidiary, as the case
may be), (x) the total consideration received by the Borrower or such
Subsidiary is at least 75% cash and is paid at the time of the closing of
such sale, (y) the Net Sale Proceeds therefrom are applied and/or
reinvested as (and to the extent) required by Section 4.02(b) and (z) the
aggregate amount of the proceeds received from all assets sold pursuant to
this clause (xiv) plus the total value of the assets swapped pursuant to
Section 9.02(xiii) in any fiscal year of the Borrower does not exceed 10%
of the total value of all assets of the Borrower and its Subsidiaries as of
the end of the most recently ended fiscal year of the Borrower; and
(xv) any of Holdings and its Subsidiaries may enter into agreements to
effectuate any transaction otherwise prohibited by this Section 9.02 so
long as the consummation of any such agreement is conditioned upon
obtaining the consent of the Required Lenders or repaying the Obligations
in full (other than indemnification obligations under Sections 1.10, 1.11,
2.06, 4.04 and 13.01) and terminating the Commitments.
To the extent the Required Lenders waive the provisions of this Section 9.02
with respect to the sale of any Collateral, or any Collateral is sold to a
Person other than Holdings or a Subsidiary of Holdings as permitted by this
Section 9.02, such Collateral shall be sold free and clear of the Liens created
by the Security Documents (and, in the event that such Collateral consists of
all of the capital stock of a Subsidiary Guarantor, such Subsidiary Guarantor,
and the assets of such Subsidiary Guarantor, shall be released from the
Subsidiaries Guaranty and the Security Documents to which it is a party), and
the Administrative Agent and Collateral Agent shall be authorized to take any
actions deemed appropriate in order to effect the foregoing.
-51-
58
9.03 Dividends. Holdings shall not, and will not permit any of its
Subsidiaries to, authorize, declare or pay any Dividends with respect to
Holdings or any of its Subsidiaries, except that:
(i) (x) any Subsidiary of the Borrower may pay Dividends to the
Borrower or to any Wholly-Owned Subsidiary of the Borrower and (y) any
non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to its
shareholders generally so long as the Borrower or its respective Subsidiary
which owns the equity interest in the Subsidiary paying such Dividends
receives at least its proportionate share thereof (based upon its relative
holding of the equity interest in the Subsidiary paying such Dividends and
taking into account the relative preferences, if any, of the various
classes of equity interests of such Subsidiary), provided that no
non-Wholly-Owned Subsidiary of the Borrower which is a Subsidiary Guarantor
may pay any Dividends pursuant to this clause (y) at any time that a
Default or an Event of Default has occurred and is continuing;
(ii) so long as there shall exist no Default or Event of Default (both
before and after giving effect to the payment thereof) the Borrower may pay
cash Dividends to Holdings, so long as such proceeds are promptly used by
Holdings to pay (x) corporate overhead costs, directors' fees and other
expenses (including, without limitation, the fees and expenses permitted
pursuant to Section 9.06(iii)), provided that the aggregate amount of cash
Dividends paid during the respective fiscal year pursuant to this clause
(ii), together with the amount of any outstanding loans and advances made
during the respective fiscal year by the Borrower pursuant to Section
9.05(vi) (without reduction for any writedowns or write-offs thereof),
shall not during any fiscal year of the Borrower exceed $1,000,000 or (y)
franchise taxes and federal, state and local income taxes and interest and
penalties with respect thereto, if any, payable by Holdings (provided that
any refund shall be promptly returned by Holdings to the Borrower); and
(iii) so long as there shall exist no Default or Event of Default
(both before and after giving effect to the payment thereof) the Borrower
may pay cash Dividends to Holdings so long as the proceeds thereof are
immediately used by Holdings to purchase shares of common stock or options
to purchase shares of common stock of Holdings held by former employees of
the Borrower following the termination of their employment by the Borrower
or any of its Subsidiaries, provided that the aggregate amount of cash
Dividends paid pursuant to this clause (iii) shall (x) be funded with life
insurance proceeds received by the Borrower under life insurance policies
maintained with respect to such employee or (y) to the extent not funded as
described in preceding clause (x), not during any fiscal year of the
Borrower exceed $3,000,000.
9.04 Indebtedness. Holdings will not, and will not permit any of its
Subsidiaries to, contract, create, incur, assume or suffer to exist any
Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the other
Credit Documents;
-52-
59
(ii) Existing Indebtedness outstanding on the Effective Date and
listed on Schedule IV, without giving effect to any subsequent extensions,
renewal or refinancing thereof except to the extent set forth on Schedule
IV, provided that the aggregate principal amount of Indebtedness to be
extended, renewed or refinanced does not increase from that amount
outstanding at the time of any such extension, renewal or refinancing;
(iii) Indebtedness with respect to surety bonds, appeal bonds or
customs bonds required in the ordinary course of business or in connection
with the enforcement of rights or claims of the Borrower or any of its
Subsidiaries or in connection with judgments that do not result in a
Default or an Event of Default, provided that the aggregate outstanding
amount of all such surety bonds, appeal bonds and customs bonds permitted
by this clause (iii) shall not at any time exceed $5,000,000;
(iv) Indebtedness under Interest Rate Protection Agreements on terms
acceptable to the Administrative Agent;
(v) Indebtedness evidenced by Capitalized Lease Obligations and
Purchase Money Indebtedness to the extent permitted pursuant to Section
9.07, provided that in no event shall the aggregate principal amount of
Capitalized Lease Obligations and Purchase Money Indebtedness permitted by
this clause (v) exceed $15,000,000 at any time outstanding;
(vi) Indebtedness of the Borrower and the Subsidiary Guarantors
evidenced by the Borrower Senior Discount Notes outstanding on the
Effective Date (and guarantees thereof) plus the amount of interest on such
Borrower Senior Discount Notes paid in kind or through accretion or
capitalization;
(vii) accrued expenses and current trade accounts payable incurred in
the ordinary course of business and unsecured guarantees of the Borrower or
any of its Subsidiaries of such trade accounts payable, and obligations
under trade letters of credit incurred by the Borrower or such Subsidiary
in the ordinary course of business, which are to be repaid in full not more
than one year after the date on which such Indebtedness is originally
incurred to finance the purchase of goods by the Borrower or such
Subsidiary;
(viii) Indebtedness of the Borrower under any Other Hedging Agreement
which is entered into to protect the Borrower against fluctuations in
currency values so long as such Other Hedging Agreements are for bona fide
business purposes and are not speculative;
(ix) Indebtedness of the Borrower not to exceed $3,000,000 at any time
outstanding and secured by insurance cancellation premiums relating to
insurance maintained by the Borrower in the ordinary course of business;
(x) intercompany Indebtedness among the Borrower and its Subsidiaries
to the extent permitted by Section 9.05;
-53-
60
(xi) (A) unsecured guarantees by Holdings of Indebtedness, Operating
Lease Obligations or other obligations of its Domestic Subsidiaries that
are permitted to be incurred hereunder, (B) guarantees by Foreign
Subsidiaries of Indebtedness, Operating Lease Obligations or other
obligations of other Foreign Subsidiaries of the Borrower that are
permitted to be incurred hereunder and (C) unsecured performance guarantees
by Holdings and its Subsidiaries of their respective Subsidiaries',
Domestic Joint Ventures' and Foreign Joint Ventures' obligations under
service, supply or other similar contracts so long as (i) any such contract
and the performance guaranty given in respect thereof are entered into in
the ordinary course of business and (ii) in no event shall any such
guaranty guarantee the payment of any Indebtedness of any such Subsidiary,
Domestic Joint Venture or Foreign Joint Venture.
(xii) Indebtedness of any Foreign Subsidiary of the Borrower the
proceeds of which Indebtedness are used for such Foreign Subsidiary's
and/or its Foreign Subsidiaries' working capital and general corporate
purposes ("Foreign Subsidiary Indebtedness");
(xiii) Indebtedness consisting of Capitalized Lease Obligations,
Purchase Money Indebtedness or other Indebtedness which does not constitute
debt for borrowed money of a Subsidiary acquired pursuant to a Permitted
Section 9.02(viii) Acquisition (or such Indebtedness was assumed at the
time of a Permitted Section 9.02(viii) Acquisition of an asset securing
such Indebtedness) or an investment in a new Subsidiary acquired pursuant
to Section 9.05(xii) or (xiv), provided that such Indebtedness was not
incurred in connection with, or in anticipation or contemplation of, such
Permitted Section 9.02(viii) Acquisition or such investment;
(xiv) Indebtedness of the Borrower and its Subsidiaries consisting of
letters of credit and reimbursement obligations with respect thereto,
including renewals or extensions thereof, so long as the aggregate stated
amount of such letters of credit at any time outstanding does not exceed
$17,500,000 (such amount to be reduced by the aggregate principal amount of
all outstanding Letters of Credit); and
(xv) Indebtedness of the Borrower and its Subsidiaries to the extent
not permitted by the foregoing clauses of this Section 9.04 not to exceed
$20,000,000 in aggregate principal amount at any time outstanding.
9.05 Advances, Investments and Loans. Holdings will not, and will not
permit any of its Subsidiaries to, directly or indirectly, lend money or credit
or make advances to any Person, or purchase or acquire any stock, obligations or
securities of, or any other interest in, or make any capital contribution to,
any other Person, or purchase or own a futures contract or otherwise become
liable for the purchase or sale of currency or other commodities at a future
date in the nature of a futures contract, or hold any cash or Cash Equivalents,
except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold accounts
receivable, trade receivables, prepaid expenses and similar items owing to
any of them, if created or acquired in the ordinary course of business;
-54-
61
(ii) the Borrower and its Subsidiaries may acquire and hold cash and
Cash Equivalents;
(iii) non-cash consideration received by Holdings or any of its
Subsidiaries in connection with any asset sale to the extent permitted by
Section 9.02;
(iv) the Borrower and its Subsidiaries may receive and hold
investments in connection with the bankruptcy or reorganization of
suppliers and customers and in settlement of delinquent obligations of, and
other disputes with, customers and suppliers arising in the ordinary course
of business;
(v) the Borrower and its Subsidiaries may make payroll advances in the
ordinary course of business;
(vi) so long as no Default or Event of Default then exists (both
before and after giving effect to the payment thereof), the Borrower may
make loans to Holdings to enable Holdings to pay the amounts described in
Sections 9.03(ii) and 9.03(iii), in an aggregate amount not to exceed in
any fiscal year $1,000,000 less any amounts paid pursuant to Sections
9.03(ii) and 9.03(iii) during such fiscal year;
(vii) the Borrower and its Subsidiaries may hold the investments held
by them on the Effective Date and as set forth on Schedule IX;
(viii) the Borrower and its Subsidiaries may enter into, invest in and
make loans and advances to (x) corporations, associations, partnerships,
business trusts and other business entities organized in the United States,
any state thereof or Canada which would not, after the respective
investment, be a Subsidiary of Holdings (each a "Domestic Joint Venture"),
provided that (i) neither Holdings nor any of its Subsidiaries is liable
for any Indebtedness or other obligations of any nature whatsoever (whether
absolute, accrued, contingent or otherwise and whether or not due) of any
such Domestic Joint Venture (other than unsecured performance guarantees of
any such Domestic Joint Venture's obligations under service, supply or
other similar contracts so long as (A) any such contract and the
performance guaranty given in respect thereof are entered into in the
ordinary course of business and (B) in no event shall any such guaranty
guarantee the payment of any Indebtedness of any such Domestic Joint
Venture) and (ii) the net aggregate amount of all such investments and
loans in Domestic Joint Ventures shall at no time exceed $10,000,000 in any
fiscal year of the Borrower (and $25,000,000 in the aggregate);
(ix) Holdings and its Subsidiaries may make loans and advances in the
ordinary course of business to their respective employees so long as the
aggregate principal amount thereof at any time outstanding (determined
without regard to any write-downs or write-offs of such loans and advances)
shall not exceed $500,000;
(x) the Borrower may enter into Interest Protection Agreements or
Other Hedging Agreements to the extent permitted by Section 9.04(iv) and
(viii);
-55-
62
(xi) the Borrower and the Subsidiary Guarantors that are Wholly-Owned
Domestic Subsidiaries of the Borrower may make intercompany loans and
advances between or among one another (and together with the intercompany
loans and advances made pursuant to clause (xii) of this Section 9.05,
collectively, "Intercompany Loans") or equity investments, so long as no
such Intercompany Loan shall be evidenced by a promissory note or other
instrument except an Intercompany Note that is pledged to the Collateral
Agent pursuant to the Pledge Agreement;
(xii) the Borrower and the Subsidiary Guarantors may make intercompany
loans and advances to, or equity investments in, a non-Wholly Owned
Domestic Subsidiary that is a Subsidiary Guarantor (or that upon the making
of any equity investment will become such a Subsidiary Guarantor unless,
pursuant to Section 8.11(d), such non-Wholly-Owned Domestic Subsidiary is
not required to become a Subsidiary Guarantor) so long as (x) no such
Intercompany Loan shall be evidenced by a promissory note or other
instrument except an Intercompany Note that is pledged to the Collateral
Agent pursuant to the Pledge Agreement and (y) the net aggregate amount of
all such investments made pursuant to this clause (xii) shall not exceed
$20,000,000 in any fiscal year of the Borrower (and $60,000,000 in the
aggregate);
(xiii) the Borrower and its Subsidiaries may effect Permitted Section
9.02(viii) Acquisitions in accordance with the requirements of Section
9.02(viii); and
(xiv) the Borrower and its Subsidiaries may enter into, invest in
(including by transferring assets) and make loans and advances to (x)
Foreign Joint Ventures and (y) Foreign Subsidiaries, provided that (i)
neither Holdings nor any of its Subsidiaries is liable for any Indebtedness
or other obligations of any nature whatsoever (whether absolute, accrued,
contingent or otherwise and whether or not due) of any such Foreign Joint
Venture or Foreign Subsidiary (other than unsecured performance guarantees
of any such Foreign Joint Venture's or Foreign Subsidiary's obligations
under service, supply or other similar contracts so long as (A) any such
contract and the performance guaranty given in respect thereof are entered
into in the ordinary course of business and (B) in no event shall any such
guaranty guarantee the payment of any Indebtedness of any such Foreign
Joint Venture or Foreign Subsidiary), (ii) all such Foreign Joint Ventures
and Foreign Subsidiaries are located or operate only in a Permitted Country
and (iii) the net aggregate amount of all such investments and loans in
Foreign Joint Ventures and Foreign Subsidiaries shall at no time exceed
$20,000,000 (using the fair market value of property other than cash) in
any fiscal year of the Borrower (and $60,000,000 in the aggregate);
provided that no more than $30,000,000 in the aggregate shall be invested
in Foreign Joint Venture and Foreign Subsidiaries located or operating in
Restricted Countries (it being understood that, for purposes of this clause
(xiv), the amounts set forth above in this clause (xiv) shall be increased
by the amount of any cash payments of principal in the case of loans and
cash equity returns (whether as a dividend or redemption) in the case of
equity investments, in each case which are received after the Effective
Date from a non-U.S. Person constituting a Foreign Joint Venture or a
Foreign Subsidiary otherwise permitted under this Section 9.05).
-56-
63
9.06 Transactions with Affiliates. Holdings will not, and will not
permit any of its Subsidiaries to, enter into any transaction or series of
related transactions, whether or not in the ordinary course of business, with
any Affiliate of Holdings or any of its Subsidiaries, other than in the ordinary
course of business and on terms and conditions substantially as favorable to
Holdings or such Subsidiary as would reasonably be obtained by Holdings or such
Subsidiary at that time in a comparable arm's-length transaction with a Person
other than an Affiliate, except that (i) Dividends may be paid to the extent
provided in Section 9.03, (ii) loans may be made and other transactions may be
entered into by Holdings and its Subsidiaries to the extent permitted by Section
9.05, (iii) customary fees may be paid to directors of Holdings or any of its
Subsidiaries in an aggregate amount for all such Persons not to exceed $500,000
per year, (iv) options to purchase common stock of Holdings may be granted to
officers and directors of Holdings and its Subsidiaries in the ordinary course
of business, and (v) Holdings and its Subsidiaries may enter into employment
arrangements with their respective officers in the ordinary course of business.
Except as specifically provided above, no management or similar fees shall be
paid or payable by Holdings or any of its Subsidiaries to any Person other than
customary investment banking, financing and similar fees arising in connection
with transactions after the date hereof.
9.07 Capital Expenditures. (a) Holdings will not, and will not permit
any of its Subsidiaries to, make any Capital Expenditures, except that (i) the
Borrower and its Subsidiaries may make Capital Expenditures in its fiscal years
ending March 31, 2001 and March 31, 2002 and (ii) during any fiscal year of the
Borrower set forth below, the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of such Capital Expenditures does
not exceed in any such fiscal year, the amount set forth opposite such fiscal
year below:
Fiscal Year Ending Amount
------------------ ------
March 31, 2003 $ 125,000,000
March 31, 2004 $ 80,000,000
March 31, 2005 $ 80,000,000
(b)(A) In addition to the foregoing, to the extent that the amount of
Capital Expenditures made by the Borrower and its Subsidiaries during any fiscal
year of the Borrower set forth in the table in clause (a)(ii) of this Section
9.07 (exclusive, however, of Capital Expenditures made pursuant to Sections
9.07(c), (d), (e) and (f)) is less than the amount applicable to the respective
fiscal year as set forth in such table (and without increasing any such amount
set forth in such table by the amount of any additional amounts permitted to be
spent in such fiscal year pursuant to this sentence), such amount may be carried
forward and utilized to make Capital Expenditures in excess of the amount
permitted in clause (a)(ii) above in the following fiscal year; provided that
the aggregate amount expended on Capital Expenditures in any fiscal year set
forth in such table shall not exceed 125% of the amount permitted to be made in
such fiscal year as set forth in clause (a)(ii) of this Section 9.07.
(B) In addition to the foregoing, to the extent that the amount of
Capital Expenditures made by the Borrower and its Subsidiaries during the period
from April 1, 2000 through March 31, 2002 (exclusive, however, of Capital
Expenditures made pursuant to Sections
-57-
64
9.07(c), (d), and (e)) is less than $218,500,000, such amount may be carried
forward and thereafter utilized to make additional Capital Expenditures.
(c) In addition to the foregoing, the amount of Net Sale Proceeds
received by the Borrower or any of its Subsidiaries from any Asset Sale, or sale
of assets permitted pursuant to Section 9.02(vii), may be reinvested in
replacement assets within 18 months following the date of such Asset Sale or
sale of assets to the extent such Net Sale Proceeds are not required to be
applied pursuant to Section 4.02(b), and, to the extent so reinvested, shall not
count as Capital Expenditures for purposes of determining compliance with
clauses (a) and (b) of this Section 9.07.
(d) In addition to the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures with (i) the cash proceeds of any issuance of equity
by Holdings (other than the first $100,000,000 of gross cash proceeds received
from the Holdings IPO) and (ii) common stock of Holdings or Qualified Preferred
Stock of Holdings.
(e) In addition to the foregoing, the Borrower and its Subsidiaries may
make Capital Expenditures in an amount equal to the amount by which Consolidated
EBITDA for any fiscal year of the Borrower exceeded Consolidated EBITDA for such
fiscal year as set forth in the Projections.
(f) In addition to the foregoing, during the Borrower's fiscal years
ending March 31, 2003, 2004 and 2005, the Borrower and its Subsidiaries may make
additional Capital Expenditures constituting Permitted Section 9.02(viii)
Acquisitions or investments made pursuant to Section 9.05(xii) and (xiv) so long
as the aggregate amount thereof during such fiscal years does not exceed
$20,000,000, $35,000,000 and $50,000,000, respectively.
(g) Notwithstanding anything above in this Section 9.07 to the
contrary, in no event may the Borrower or any of its Subsidiaries make Capital
Expenditures pursuant to any single transaction (or series of related
transactions) which exceeds $75,000,000 (subject to any additional restrictions
or limitations set forth in Section 9.02(viii)). In addition, nothing in this
Section 9.07 shall permit either (i) a Permitted Section 9.02(viii) Acquisition
that is not otherwise permitted under Section 9.02(viii) or (ii) an investment
that is not otherwise permitted under Section 9.05(xii) or (xiv).
9.08 Consolidated EBITDAR to Total Interest Expense. Holdings will not
permit the ratio of (i) Consolidated EBITDAR to (ii) the sum of Total Interest
Expense plus all lease expenses for such Test Period associated with the
Synthetic Leases for any Test Period ending on the last day of a fiscal quarter
set forth below to be less than the ratio set forth opposite such fiscal quarter
below:
Period Ratio
------------- ---------
June 30, 2000 2.00:1.00
September 30, 2000 2.00:1.00
December 31, 2000 2.00:1.00
-58-
65
Period Ratio
------------- ---------
March 31, 2001 2.15:1.00
June 30, 2001 2.15:1.00
September 30, 2001 2.20:1.00
December 31, 2001 2.20:1.00
March 31, 2002 2.30:1.00
June 30, 2002 2.30:1.00
September 30, 2002 2.35:1.00
December 31, 2002 2.35:1.00
March 31, 2003 2.40:1.00
June 30, 2003 2.40:1.00
September 30, 2003 2.45:1.00
December 31, 2003 2.45:1.00
March 31, 2004 2.50:1.00
June 30, 2004 and the 2.50:1.00
last day of each fiscal
quarter thereafter
9.09 Maximum Leverage Ratio. Holdings will not permit the Leverage
Ratio at any time during a period set forth below to be greater than the ratio
set forth opposite such period below:
Period Ratio
------------- ---------
Effective Date 5.75:1.00
Through and including June 30, 2000
July 1, 2000 5.75:1.00
Through and including September 30, 2000
October 1, 2000 5.75:1.00
Through and including December 31, 2000
January 1, 2001 5.50:1.00
Through and including March 31, 2001
April 1, 2001 5.50:1.00
Through and including June 30, 2001
July 1, 2001 5.35:1.00
Through and including September 30, 2001
-59-
66
Period Ratio
------------- ---------
October 1, 2001 5.35:1.00
Through and including December 31, 2001
January 1, 2002 5.25:1.00
Through and including March 31, 2002
April 1, 2002 5.25:1.00
Through and including June 30, 2002
July 1, 2002 5.15:1.00
Through and including September 30, 2002
October 1, 2002 5.15:1.00
Through and including December 31, 2002
January 1, 2003 4.75:1.00
Through and including March 31, 2003
April 1, 2003 4.75:1.00
Through and including June 30, 2003
July 1, 2003 4.50:1.00
Through and including September 30, 2003
October 1, 2003 4.50:1.00
Through and including December 31, 2003
January 1, 2004 4.25:1.00
Through and including March 31, 2004
April 1, 2004 4.25:1.00
Through and including June 30, 2004
July 1, 2004 4.00:1.00
Through and including September 30, 2004
October 1, 2004 4.00:1.00
Through and including December 31, 2004
January 1, 2005 3.75:1.00
Through and including March 31, 2005
-60-
67
9.10 Maximum Senior Secured Leverage Ratio. Holdings will not permit
the Senior Secured Leverage Ratio at any time during a period set forth below to
be greater than the ratio set forth opposite such period below:
Period Ratio
------------- ---------
Effective Date 3.75:1.00
Through and including June 30, 2000
July 1, 2000 3.75:1.00
Through and including September 30, 2000
October 1, 2000 3.75:1.00
Through and including December 31, 2000
January 1, 2001 3.00:1.00
Through and including March 31, 2001
April 1, 2001 3.00:1.00
Through and including June 30, 2001
July 1, 2001 2.85:1.00
Through and including September 30, 2001
October 1, 2001 2.85:1.00
Through and including December 31, 2001
January 1, 2002 2.75:1.00
Through and including March 31, 2002
April 1, 2002 2.75:1.00
Through and including June 30, 2002
July 1, 2002 2.65:1.00
Through and including September 30, 2002
October 1, 2002 2.65:1.00
Through and including December 31, 2002
January 1, 2003 2.50:1.00
Through and including March 31, 2003
April 1, 2003 2.50:1.00
Through and including June 30, 2003
-61-
68
Period Ratio
------------- ---------
July 1, 2003 2.35:1.00
Through and including September 30, 2003
October 1, 2003 2.35:1.00
Through and including December 31, 2003
January 1, 2004 2.25:1.00
Through and including March 31, 2004
April 1, 2004 2.25:1.00
Through and including June 30, 2004
July 1, 2004 2.25:1.00
Through and including September 30, 2004
October 1, 2004 2.25:1.00
Through and including December 31, 2004
January 1, 2005 2.25:1.00
Through and including March 31, 2005
9.11 Limitation on Voluntary Payments and Modifications of
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Other Agreements; etc. Holdings will not, and will not permit any of its
Subsidiaries to, (i) make (or give any notice in respect of) any voluntary or
optional payment or prepayment on or redemption or acquisition for value of any
Borrower Senior Discount Notes (except the Borrower may redeem or repurchase up
to 35% of the Borrower Senior Discount Notes outstanding on the Effective Date,
which redemption or repurchase shall be on terms and conditions reasonably
satisfactory to the Administrative Agent), (ii) amend or modify, or permit the
amendment or modification of, any provision of the Existing Indebtedness or the
Borrower Senior Discount Notes (it being understood, however, that Holdings and
its Subsidiaries may amend or modify the Borrower Senior Discount Notes to the
extent the trustee of the respective note can approve such amendment or
modification without obtaining the consent of the holders of such note) or of
any agreement (including, without limitation, any purchase agreement, indenture,
loan agreement or security agreement) relating thereto or the Synthetic Lease
Financing Documents, (iii) make (or give any notice in respect of) any voluntary
or optional payment or prepayment of its lease obligations under the Synthetic
Lease Financing Documents or any other Equipment Financing Transaction (other
than in connection with (x) the refinancing of all obligations thereunder or (y)
the disposition of the assets relating thereto), or (iv) amend, modify or change
its Certificate of Incorporation (including, without limitation, by the filing
or modification of any certificate of designation, other than in connection with
the issuance of Qualified Preferred Stock or Disqualified Preferred Stock) or
By-Laws or any agreement entered into by it, with respect to its capital stock
(including any Shareholders' Agreement), or enter into any new agreement with
respect to its capital stock
-62-
69
unless such amendment, modification, change or other action contemplated by this
clause (iv) could not reasonably be determined to be adverse to the Lenders.
9.12 Limitation on Certain Restrictions on Subsidiaries. Holdings will
not, and will not permit any of its Subsidiaries to, directly or indirectly,
create or otherwise cause or suffer to exist or become effective any encumbrance
or restriction on the ability of any such Subsidiary to (a) pay dividends or
make any other distributions on its capital stock or any other interest or
participation in its profits owned by the Borrower or any Subsidiary of the
Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of the
Borrower, (b) make loans or advances to the Borrower or any of the Borrower's
Subsidiaries or (c) transfer any of its properties or assets to the Borrower,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease governing
a leasehold interest of the Borrower or a Subsidiary of the Borrower, (iv)
customary provisions restricting assignment of any licensing agreement entered
into by the Borrower or a Subsidiary of the Borrower in the ordinary course of
business, (v) the Borrower Senior Note Documents and agreements evidencing
Existing Indebtedness, (vi) Foreign Subsidiary Indebtedness, (vii) the Synthetic
Lease Financing Documents, (viii) restrictions on the transfer of any asset
subject to a Lien permitted by Sections 9.01(vii), (viii), (x), (xiv), (xv) and
(xvi) so long as such restrictions only apply to the assets subject to such
Liens, and (ix) restrictions which are imposed on any Subsidiary of the Borrower
acquired pursuant to a Permitted Section 9.02(viii) Acquisition or pursuant to
an investment in a Person which, upon the making of such an investment, will
become a new Subsidiary pursuant to Section 9.05(xii) or (xiv), in either case
to the extent that such restrictions are set forth in any existing Indebtedness
permitted to be assumed in connection with such Permitted Section 9.02(viii)
Acquisition or such investment and so long as such restrictions are not
applicable to any Subsidiary of the Borrower other than the Subsidiary being
acquired and such restrictions were not created or imposed in connection with,
or in anticipation or contemplation of, such Permitted Section 9.02(viii)
Acquisition or such investment.
9.13 Limitation on Issuance of Capital Stock. (a) Holdings will not,
and will not permit any of its Subsidiaries to, issue (i) any preferred stock
other than Qualified Preferred Stock of Holdings or (ii) any redeemable common
stock other than common stock that is redeemable at the sole option of Holdings
or such Subsidiary.
(b) Holdings shall not permit any of its Subsidiaries to issue any
capital stock (including by way of sales of treasury stock) or any options or
warrants to purchase, or securities convertible into, capital stock, except (i)
for transfers and replacements of then outstanding shares of capital stock, (ii)
for stock splits, stock dividends and similar issuances which do not decrease
the percentage ownership of Holdings or any of its Subsidiaries in any class of
the capital stock of such Subsidiary, (iii) to qualify directors to the extent
required by applicable law and (iv) capital stock issued by newly created or
acquired Subsidiaries, in accordance with the other requirements of this
Agreement.
9.14 Business. The Borrower will not, and will not permit any of its
Subsidiaries to, engage (directly or indirectly) in any business other than the
business in which the Borrower
-63-
70
is engaged on the Effective Date and reasonable extensions thereof and
businesses ancillary thereto.
9.15 Limitation on Creation of Subsidiaries and Entering into
Partnerships and Joint Ventures. (a) Holdings shall not establish, create or
acquire any additional Subsidiaries provided that the Borrower and its
Wholly-Owned Subsidiaries shall be permitted to establish, create and acquire
Subsidiaries otherwise in compliance with this Agreement, so long as any such
new Subsidiary (other than (i) a Foreign Subsidiary except as otherwise provided
in Section 8.12 and (ii) a non-Wholly-Owned Domestic Subsidiary to the extent
provided in Section 8.11(d)) (x) executes and delivers to the Administrative
Agent a counterpart of the Subsidiaries Guaranty, the Pledge Agreement and the
Security Agreement, (y) takes all actions required pursuant to Section 8.11,
and/or (z) executes and delivers, or causes to be executed and delivered, to the
Administrative Agent all other relevant documentation of the type described in
Section 5 as such Subsidiary would have to deliver if such new Subsidiary were a
Credit Party on the Effective Date.
(b) Holdings will not, and will not permit any of its Subsidiaries to,
enter into any partnerships or joint ventures, except to the extent permitted
under Sections 9.05(viii), (xii) and (xiv).
9.16 Special Purpose Corporation. (a) Holdings shall not engage in any
business activities other than the ownership of the capital stock of the
Borrower, the issuance of Qualified Preferred Stock, and the execution, delivery
and performance of the Documents. In no event shall Holdings be permitted to
incur or suffer to exist any Indebtedness on, or create or suffer to exist any
Liens on, its assets; provided that Holdings may engage in any necessary
activity with respect to (i) the maintenance of its corporate or trust existence
and compliance with applicable law, (ii) accounting, legal, public relations,
investor relations, financial or management activities (including the employment
of employees, counsel, accountants, consultants, bankers, advisors or other
professionals in connection with any of the foregoing activities), and (iii)
entering into, performing its obligations and exercising its rights under the
Documents to which it is a party.
(b) Holdings shall have no Subsidiaries other than the Borrower and its
Subsidiaries.
SECTION 10. Events of Default. Upon the occurrence of any of the
following specified events (each an "Event of Default"):
10.01 Payments. The Borrower shall (i) default in the payment when due
of any principal of any Loan or any Note, (ii) default, and such default shall
continue unremedied for three or more Business Days, in the payment when due of
any interest on any Loan or Note, any Unpaid Drawing (to the extent the Borrower
has knowledge that such Unpaid Drawings are past due) or any Fees or (iii)
default, and such default shall continue unremedied for ten or more Business
Days, in the payment of any other amounts owing hereunder or thereunder; or
10.02 Representations, etc. Any representation or warranty made by any
Credit Party herein or in any other Credit Document or in any certificate
delivered to the Administrative
-64-
71
Agent or any Lender pursuant hereto or thereto shall prove to be untrue in any
material respect on the date as of which made or deemed made as provided in
Section 7; or
10.03 Covenants. Any Credit Party shall (i) default in the due
performance or observance by it of any term, covenant or agreement contained in
Section 8.01(g)(i) or 8.08 or Section 9 or (ii) default in the due performance
or observance by it of any other term, covenant or agreement contained in this
Agreement (other than those set forth in Sections 10.01 and 10.02) and such
default shall continue unremedied for a period of 30 days after written notice
thereof to the Borrower by the Administrative Agent or the Required Lenders; or
10.04 Default Under Other Agreements. Holdings or any of its
Subsidiaries shall (A) (i) default in any payment of any Indebtedness (other
than the Notes) beyond the period of grace, if any, provided in the instrument
or agreement under which such Indebtedness was created or (ii) default in the
observance or performance of any agreement or condition relating to any
Indebtedness (other than the Notes) or contained in any instrument or agreement
evidencing, securing or relating thereto, or any other event shall occur or
condition exist, the effect of which default or other event or condition is to
cause, or to permit the holder or holders of such Indebtedness (or a trustee or
agent on behalf of such holder or holders) to cause (determined without regard
to whether any notice is required), any such Indebtedness to become due prior to
its stated maturity, or (iii) any Indebtedness (other than the Notes) of
Holdings or any of its Subsidiaries shall be declared to be due and payable, or
required to be prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof, or (B) (i) default in any payment of any
Operating Lease Obligations beyond the period of grace, if any, provided in the
instrument or agreement under which such Operating Lease Obligations were
created or (ii) default in the observance or performance of any agreement or
condition relating to any Operating Lease Obligations or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Operating
Lease Obligations (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Operating Lease Obligations to become due or prepayable prior to its stated
maturity, or (iii) any Operating Lease Obligations of Holdings or any of its
Subsidiaries shall be declared to be due and payable, or required to be prepaid
other than by a regularly scheduled required payment, prior to the stated
maturity thereof; provided that it shall not be a Default or Event of Default
under this Section 10.04 unless the aggregate principal amount of all
Indebtedness and Operating Lease Obligations as described in preceding clauses
(A) and (B) is at least $4,000,000; or
10.05 Bankruptcy, etc. Holdings or any of its Significant Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against Holdings or any of its Significant Subsidiaries, and the petition is not
controverted within 10 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of
Holdings or any of its Significant Subsidiaries, or Holdings or any of its
Significant Subsidiaries commences any other proceeding under any
reorganization, arrangement, adjustment of debt, relief of debtors, dissolution,
-65-
72
insolvency or liquidation or similar law of any jurisdiction whether now or
hereafter in effect relating to Holdings or any of its Significant Subsidiaries,
or there is commenced against Holdings or any of its Significant Subsidiaries
any such proceeding which remains undismissed for a period of 60 days, or
Holdings or any of its Significant Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Significant Subsidiaries
suffers any appointment of any custodian or the like for it or any substantial
part of its property to continue undischarged or unstayed for a period of 60
days; or Holdings or any of its Significant Subsidiaries makes a general
assignment for the benefit of creditors; or any corporate action is taken by
Holdings or any of its Significant Subsidiaries for the purpose of effecting any
of the foregoing; or
10.06 ERISA. (a)(i) Any Plan shall fail to satisfy the minimum funding
standard required for any plan year or part thereof under Section 412 of the
Code or Section 302 of ERISA or a waiver of such standard or extension of any
amortization period is sought or granted under Section 412 of the Code or
Section 303 or 304 of ERISA, (ii) a Reportable Event shall have occurred, (iii)
a contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation Section 4043.61 (without regard to subparagraph
(b)(1) thereof) and an event described in subsection .62, .63, .64, .65, .66,
.67 or .68 of PBGC Regulation Section 4043 shall be reasonably expected to occur
with respect to such Plan within the following 30 days, (iv) any Plan which is
subject to Title IV of ERISA shall have had or is likely to have a trustee
appointed to administer such Plan, (v) any Plan which is subject to Title IV of
ERISA is, shall have been or is likely to be terminated or to be the subject of
termination proceedings under ERISA, (vi) any Plan shall have an Unfunded
Current Liability, (vii) a contribution required to be made with respect to a
Plan or a Foreign Pension Plan has not been timely made, (viii) Holdings or any
Subsidiary of Holdings or any ERISA Affiliate has incurred or is likely to incur
any liability to or on account of a Plan under Section 409, 502(i), 502(l), 515,
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971
or 4975 of the Code or (ix) on account of a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B
of the Code, or (ix) Holdings or any Subsidiary of Holdings has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or Plans or Foreign Pension Plans; (b) there shall result from any such
event or events the imposition of a lien, the granting of a security interest,
or a liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually, and/or in the aggregate, in the
opinion of the Required Lenders, has had, or could reasonably be expected to
have, a material adverse effect upon the business, operations, condition
(financial or otherwise) or prospects of Holdings and its Subsidiaries taken as
a whole; or
10.07 Security Documents. At any time after the execution and delivery
thereof, any of the Security Documents shall cease to be in full force and
effect, or shall cease to give the Collateral Agent for the benefit of the
Secured Creditors the Liens, rights, powers and privileges purported to be
created thereby (including, without limitation, a perfected security interest
in, and Lien on, all of the Collateral (other than Collateral with a value not
to exceed $1,000,000), in favor of the Collateral Agent, superior to and prior
to the rights of all third Persons (except as
-66-
73
permitted by Section 9.01), and subject to no other Liens (except as permitted
by Section 9.01), or Holdings or any of its Subsidiaries shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to any of the Security Documents and such
default, other than with respect to Sections [2.4 and 2.5] of the Security
Agreement (in which case an Event of Default shall immediately exist without the
giving of any notice), shall continue unremedied for a period of 30 days after
written notice thereof to the Borrower from the Administrative Agent or the
Required Lenders; or
10.08 Subsidiaries Guaranty. At any time after the execution and
delivery thereof, (x) the Subsidiaries Guaranty or any provision thereof shall
cease to be in full force or effect as to any Subsidiary Guarantor, (y) if any
Subsidiary Guarantor or Person acting by or on behalf of any Subsidiary
Guarantor shall deny or disaffirm such Subsidiary Guarantor's obligations under
the Subsidiaries Guaranty, or (z) any Subsidiary Guarantor shall default in the
due performance or observance of any term, covenant or agreement on its part to
be performed or observed pursuant to the Subsidiaries Guaranty; or
10.09 Judgments. One or more judgments or decrees shall be entered
against Holdings or any Subsidiary of Holdings involving in the aggregate for
Holdings and its Subsidiaries a liability (not paid or fully covered by a
reputable and solvent insurance company) and such judgments and decrees either
shall be final and non-appealable or shall not be vacated, discharged or stayed
or bonded pending appeal for any period of 30 consecutive days, and the
aggregate amount of all such judgments exceeds $4,000,000; or
10.10 Change of Control. A Change of Control shall occur;
then, and in any such event, and at any time thereafter, if any Event of Default
shall then be continuing, the Administrative Agent, upon the written request of
the Required Lenders, shall by written notice to the Borrower, take any or all
of the following actions, without prejudice to the rights of the Administrative
Agent, any Lender or the holder of any Note to enforce its claims against the
Borrower (provided, that, if an Event of Default specified in Section 10.05
shall occur with respect to the Borrower, the result which would occur upon the
giving of written notice by the Administrative Agent to the Borrower as
specified in clauses (i) and (ii) below shall occur automatically without the
giving of any such notice): (i) declare the Total Commitment terminated,
whereupon all Commitments of each Lender shall forthwith terminate immediately
and any Commitment Commission shall forthwith become due and payable without any
other notice of any kind; (ii) declare the principal of and any accrued interest
in respect of all Loans and the Notes and all Obligations owing hereunder and
thereunder to be, whereupon the same shall become, forthwith due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby waived by each Credit Party; (iii) terminate any Letter of Credit
which may be terminated, in accordance with its terms; (iv) direct the Borrower
to pay (and the Borrower agrees that upon receipt of such notice, or upon the
occurrence of an Event of Default specified in Section 10.05 with respect to the
Borrower, it will pay) to the Collateral Agent at the Payment Office such
additional amount of cash, to be held as security by the Collateral Agent, as is
equal to the aggregate Stated Amount of all Letters of Credit issued for the
account of the Borrower and then outstanding; (v) enforce, as Collateral Agent,
all of the Liens and security
-67-
74
interests created pursuant to the Security Documents; and (vi) apply any cash
collateral held by the Administrative Agent pursuant to Section 4.02 to the
repayment of the Obligations.
SECTION 11. Definitions and Accounting Terms.
11.01 Defined Terms. As used in this Agreement, the following terms
shall have the following meanings (such meanings to be equally applicable to
both the singular and plural forms of the terms defined):
"Additional Security Documents" shall have the meaning provided in
Section 8.11.
"Adjusted Certificate of Deposit Rate" shall mean, on any day, the sum
(rounded to the nearest 1/100 of 1%) of (1) the rate obtained by dividing (x)
the most recent weekly average dealer offering rate for negotiable certificates
of deposit with a three-month maturity in the secondary market as published in
the most recent Federal Reserve System publication entitled "Select Interest
Rates," published weekly on Form H.15 as of the date hereof, or if such
publication or a substitute containing the foregoing rate information shall not
be published by the Federal Reserve System for any week, the weekly average
offering rate determined by the Administrative Agent on the basis of quotations
for such certificates received by it from three certificate of deposit dealers
in New York of recognized standing or, if such quotations are unavailable, then
on the basis of other sources reasonably selected by the Administrative Agent,
by (y) a percentage equal to 100% minus the stated maximum rate of all reserve
requirements as specified in Regulation D applicable on such day to a
three-month certificate of deposit of a member bank of the Federal Reserve
System in excess of $100,000 (including, without limitation, any marginal,
emergency, supplemental, special or other reserves), plus (2) the then daily net
annual assessment rate as estimated by the Administrative Agent for determining
the current annual assessment payable by the Administrative Agent to the Federal
Deposit Insurance Corporation for insuring three-month certificates of deposit.
"Adjusted Consolidated Net Income" for any period shall mean
Consolidated Net Income for such period plus, without duplication, the sum of
the amount of all net non-cash charges (including, without limitation,
depreciation, amortization, deferred tax expense and non-cash interest expense)
and net non-cash losses which were included in arriving at Consolidated Net
Income for such period less the sum of the amount of all net non-cash gains
(exclusive of items reflected in Adjusted Working Capital) included in arriving
at Consolidated Net Income for such period.
"Adjusted Consolidated Working Capital" at any time shall mean
Consolidated Current Assets (but excluding therefrom all cash and Cash
Equivalents) less Consolidated Current Liabilities.
"Adjusted Percentage" shall mean (x) at a time when no Lender Default
exists, for each Lender, such Lender's Percentage and (y) at a time when a
Lender Default exists (i) for each Lender that is a Defaulting Lender, zero and
(ii) for each Lender that is a Non-Defaulting Lender, the percentage determined
by dividing such Lender's Commitment at such time by the Adjusted
-68-
75
Total Commitment at such time, it being understood that all references herein to
Commitments and the Adjusted Total Commitment at a time when the Total
Commitment or Adjusted Total Commitment, as the case may be, has been terminated
shall be references to the Commitments or Adjusted Total Commitment, as the case
may be, in effect immediately prior to such termination, provided that (A) no
Lender's Adjusted Percentage shall change upon the occurrence of a Lender
Default from that in effect immediately prior to such Lender Default if after
giving effect to such Lender Default, and any repayment of Revolving Loans and
Swingline Loans at such time pursuant to Section 4.02(a) or otherwise, the sum
of (i) the aggregate outstanding principal amount of Revolving Loans of all
Non-Defaulting Lenders plus (ii) the aggregate outstanding principal amount of
Swingline Loans plus (iii) the Letter of Credit Outstandings, exceed the
Adjusted Total Commitment; (B) the changes to the Adjusted Percentage that would
have become effective upon the occurrence of a Lender Default but that did not
become effective as a result of the preceding clause (A) shall become effective
on the first date after the occurrence of the relevant Lender Default on which
the sum of (i) the aggregate outstanding principal amount of the Revolving Loans
of all Non-Defaulting Lenders plus (ii) the aggregate outstanding principal
amount of the Swingline Loans plus (iii) the Letter of Credit Outstandings is
equal to or less than the Adjusted Total Commitment; and (C) if (i) a
Non-Defaulting Lender's Adjusted Percentage is changed pursuant to the preceding
clause (B) and (ii) any repayment of such Lender's Revolving Loans, or of Unpaid
Drawings with respect to Letters of Credit or of Swingline Loans, that were made
during the period commencing after the date of the relevant Lender Default and
ending on the date of such change to its Adjusted Percentage must be returned to
the Borrower as a preferential or similar payment in any bankruptcy or similar
proceeding of the Borrower, then the change to such Non-Defaulting Lender's
Adjusted Percentage effected pursuant to said clause (B) shall be reduced to
that positive change, if any, as would have been made to its Adjusted Percentage
if (x) such repayments had not been made and (y) the maximum change to its
Adjusted Percentage would have resulted in the sum of the outstanding principal
of Revolving Loans made by such Lender plus such Lender's new Adjusted
Percentage of the outstanding principal amount of Swingline Loans and of Letter
of Credit Outstandings equaling such Lender's Commitment at such time.
"Adjusted Total Commitment" shall mean at any time the Total Commitment
less the aggregate Commitments of all Defaulting Lenders.
"Administrative Agent" shall mean Bankers Trust Company, in its
capacity as Administrative Agent for the Lenders hereunder, and shall include
any successor to the Administrative Agent appointed pursuant to Section 12.09.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or indirect
common control with, such Person; provided, however, that for purposes of
Section 9.06, an Affiliate of Holdings shall include any Person that directly or
indirectly owns more than 5% of any class of the capital stock of Holdings and
any officer or director of Holdings or the Borrower. A Person shall be deemed to
control another Person if such Person possesses, directly or indirectly, the
power to direct or cause the direction of the management and policies of such
other Person, whether through the ownership of voting securities, by contract or
otherwise.
-69-
76
"Agreement" shall mean this Credit Agreement, as modified, supplemented
or amended from time to time.
"Alternate Currency" shall mean such foreign currencies which are
readily convertible into Dollars and are acceptable to BTCo.
"Anticipated Reinvestment Amount" shall mean, with respect to any
Reinvestment Election, the amount specified in the Reinvestment Notice delivered
by the Borrower in connection therewith as the amount of the Net Sale Proceeds
from the related Asset Sale that the Borrower or its Subsidiaries intend to use
to purchase, construct or otherwise acquire Reinvestment Assets.
"Applicable Base Rate Margin" shall mean (i) for the period from the
Effective Date through but not including the first Start Date after the
Effective Date, 1.50%, and (ii) from and after any Start Date to and including
the corresponding End Date, the respective percentage per annum set forth in
clause (A), (B), (C), (D), (E) or (F) below if, but only if, as of the Test Date
for such Start Date the applicable condition set forth in clause (A), (B), (C),
(D), (E) or (F) below, as the case may be, is met:
(A) 2.00% if, but only if, as of the Test Date of such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be greater than
5.50:1.00;
(B) 1.75% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 5.50:1.00 and greater than 5.00:1.00;
(C) 1.50% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 5.00:1.00 and greater than 4.50:1.00;
(D) 1.25% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 4.50:1.00 and greater than 4.00:1.00;
(E) 1.00% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 4.00:1.00 and greater than 3.50:1.00; and
(F) 0.75% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 3.00:1.00.
Notwithstanding anything to the contrary above in this definition, (i) in no
event shall the Applicable Base Rate Margin be below 1.50% at any time prior to
the delivery of the financial statements for Holdings' fiscal quarter ending
September 30, 2000 (and to the extent that the Leverage Ratio would indicate
pricing below 1.50%, the Applicable Base Rate Margin shall
-70-
77
instead be 1.50%), and (ii) the Applicable Base Rate Margin shall be 2.00% at
all times when a Default or an Event of Default shall exist.
"Applicable Eurodollar Rate Margin" shall mean (i) for the period from
the Effective Date through but not including the first Start Date after the
Effective Date, 2.50%, and (ii) from and after any Start Date to and including
the corresponding End Date, the respective percentage per annum set forth in
clause (A), (B), (C), (D), (E) or (F) below if, but only if, as of the Test Date
for such Start Date the applicable condition set forth in clause (A), (B), (C),
(D), (E) or (F) below, as the case may be, is met:
(A) 3.00% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be greater than
5.50:1.00;
(B) 2.75% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 5.50:1.00 and greater than 5.00:1.00;
(C) 2.50% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 5.00:1.00 and greater than 4.50:1.00;
(D) 2.25% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 4.50:1.00 and greater than 4.00:1.00;
(E) 2.00% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 4.00:1.00 and greater than 3.50:1.00; and
(F) 1.75% if, but only if, as of the Test Date for such Start Date the
Leverage Ratio for the Test Period ended on such Test Date shall be less than or
equal to 3.00:1.00.
Notwithstanding anything to the contrary above in this definition, (i) in no
event shall the Applicable Eurodollar Rate Margin be below 2.50% prior to the
delivery of the financial statements for Holdings' fiscal quarter ending
September 30, 2000 (and to the extent that the Leverage Ratio would indicate
pricing below 2.50%, the Applicable Eurodollar Rate Margin shall instead be
2.50%), and (ii) the Applicable Eurodollar Rate Margin shall be 3.00% at all
times when a Default or an Event of Default shall exist.
"Applicable Margin Period" shall mean each period which shall commence
on a date on which the financial statements are delivered pursuant to Section
8.01(b) or (c), as the case may be, and which shall end on the earlier of (i)
the date of the actual delivery of the next financial statements pursuant to
Section 8.01(b) or (c), as the case may be, and (ii) the latest date on which
the next financial statements are required to be delivered pursuant to Section
8.01(b) or (c), as the case may be, provided that the first Applicable Margin
Period shall commence with the delivery of Holdings' financial statements for
the Test Period ending on June 30, 2000.
-71-
78
"Asset Sale" shall mean any sale, transfer or other disposition by
Holdings or any of its Subsidiaries to any Person (including by-way-of
redemption by such Person) other than to Holdings or a Wholly-Owned Subsidiary
of Holdings of any asset (including, without limitation, any capital stock or
other securities of, or equity interests in, another Person) other than (i)
sales of assets pursuant to Sections 9.02(ii), (iii), (v), (vii) and (xii)(A)
and (ii) sales of assets which individually, or together with related sales, do
not exceed $500,000 per sale.
"Asset Swap" shall have the meaning provided in Section 9.02(xiii).
"Assignment and Assumption Agreement" shall mean the Assignment and
Assumption Agreement substantially in the form of Exhibit K (appropriately
completed).
"Attributable Indebtedness" shall mean, at any time, with respect to
Operating Lease Obligations (including the Synthetic Lease or any similar
lease), the residual guaranty value in respect of such Operating Lease
Obligations, which residual guaranty value equals 85% of the aggregate
outstanding Operating Lease Obligations (other than the portion thereof
attributable to interest) under the operating lease for such Operating Lease
Obligations.
"Bankruptcy Code" shall have the meaning provided in Section 10.05.
"Base Rate" at any time shall mean the highest of (i) 1/2 of 1% in
excess of the Adjusted Certificate of Deposit Rate, (ii) the Prime Lending Rate
and (iii) 1/2 of 1% in excess of the Federal Funds Rate.
"Base Rate Loan" shall mean (i) each Swingline Loan and (ii) any other
Loan designated or deemed designated as such by the Borrower at the time of the
incurrence thereof or conversion thereto.
"Borrower" shall have the meaning provided in the first paragraph of
this Agreement.
"Borrower Senior Discount Note Indenture" shall mean the Indenture,
dated as of February 20, 0000 xxxxxxx xxx Xxxxxxxx xxx Xxxxxx Xxxxxx Trust
Company of New York, as trustee.
"Borrower Senior Discount Note Purchase Agreement" shall mean the
Purchase Agreement, dated February 20, 1998, among the Borrower and the initial
purchasers of Borrower Senior Discount Notes.
"Borrower Senior Discount Notes" shall mean the Borrower's 9 7/8%
Senior Discount Notes due 2008, which were issued pursuant to the Borrower
Senior Discount Note Indenture.
"Borrower Senior Discount Notes Consent Solicitation" shall have the
meaning provided in Section 5.06(b).
-72-
79
"Borrower Senior Note Documents" shall mean (i) the Borrower Senior
Discount Notes, (ii) the Borrower Senior Discount Note Indenture, (iii) the
Borrower Senior Discount Note Purchase Agreement and (iv) all other agreements,
documents and instruments effectuating the foregoing and all amendments and
exhibits to any of the foregoing.
"Borrowing" shall mean the borrowing of one Type of Loan from all the
Lenders (or from BTCo in the case of Swingline Loans) on a given date (or
resulting from a conversion or conversions on such date) having in the case of
Eurodollar Loans the same Interest Period, provided that Base Rate Loans
incurred pursuant to Section 1.10(b) shall be considered part of the related
Borrowing of Eurodollar Loans.
"BTCo" shall mean Bankers Trust Company or any successor thereto by
merger or otherwise; provided that for purposes of issuing Letters of Credit
hereunder, BTCo also shall include its affiliates, including but not limited to
Deutsche Bank AG, New York Branch.
"Business Day" shall mean (i) for all purposes other than as covered by
clause (ii) below, any day except Saturday, Sunday and any day which shall be in
New York City a legal holiday or a day on which banking institutions are
authorized or required by law or other government action to close and (ii) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (i) above and which is also a day for trading by and between
banks in the New York interbank Eurodollar market.
"Capital Expenditures" shall mean, for any period, without duplication,
(i) expenditures (including, without limitation, the aggregate amount of
Capitalized Lease Obligations incurred during such period) made by the Borrower
and its Subsidiaries to acquire or construct fixed assets, plant and equipment
(including renewals, improvements, replacements and capitalized lease repairs)
during such period which would be reflected as additions to property, plant or
equipment on a consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with GAAP and (ii) that portion of a Permitted Section
8.02 (viii) Acquisition made during such period which is attributable to the
acquisition of fixed assets, plant and equipment and which would be reflected as
additions to property, plant, or equipment on a consolidated balance sheet of
the Borrower and its Subsidiaries prepared in accordance with GAAP.
"Capitalized Lease Obligations" of any Person shall mean all rental
obligations which, under generally accepted accounting principles, are or will
be required to be capitalized on the books of such Person, in each case taken at
the amount thereof accounted for as indebtedness in accordance with such
principles.
"Cash Equivalents" shall mean, as to any Person, (i) securities issued
or directly and fully guaranteed or insured by the United States or any agency
or instrumentality thereof (provided that the full faith and credit of the
United States is pledged in support thereof) having maturities of not more than
six months from the date of acquisition, (ii) time deposits and certificates of
deposit of any commercial bank having, or which is the principal banking
subsidiary of a bank holding company having, a long-term unsecured debt rating
of at least "A"
-73-
80
or the equivalent thereof from Standard & Poor's Ratings Services, a division of
McGraw Hill, Inc. Corporation or "A2" or the equivalent thereof from Xxxxx'x
Investors Service, Inc. with maturities of not more than six months from the
date of acquisition by such Person, (iii) repurchase obligations with a term of
not more than seven days for underlying securities of the types described in
clause (i) above entered into with any bank meeting the qualifications specified
in clause (ii) above, (iv) commercial paper issued by any Person incorporated in
the United States rated at least A-1 or the equivalent thereof by Standard &
Poor's Ratings Services, a division of McGraw Hill, Inc. or at least P-1 or the
equivalent thereof by Xxxxx'x Investors Service, Inc. and in each case maturing
not more than six months after the date of acquisition by such Person, (v)
Eurodollar certificates of deposit maturing within six months after the date of
acquisition thereof issued by any commercial bank organized under the laws of
the United States of America or any State thereof or the District of Columbia or
by any foreign bank, which is a Lender, or United States branches of foreign
banks, and in any case having a combined capital and surplus of not less than
$100,000,000, (vi) investments in money market funds substantially all of whose
assets are comprised of securities of the types described in clauses (i) through
(v) above and (vii) investments made by Foreign Subsidiaries in local currencies
in instruments issued by or with entities of such jurisdiction having
correlative attributes to the foregoing.
"CERCLA" shall mean the Comprehensive Environmental Response,
Compensation, and Liability Act of 1980, as the same may be amended from time to
time, 42 U.S.C. Section 9601 et seq.
"Change of Control" means (a)(i) the consummation of any transaction
(including, without limitation, any merger or consolidation) the result of which
is that any "person" (as such term is defined in Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") or group or
related persons, together with Affiliates thereof (other than the Permitted
Investors), becomes the "beneficial owner" (as such term is defined in Rule
13d-3 and Rule 13d-5 under the Exchange Act), directly or indirectly, of 40% or
more of the Voting Stock of Holdings (as determined on a fully diluted basis and
measured by voting power rather than number of shares), or (ii) the Board of
Directors of Holdings shall not consist of a majority of Continuing Directors,
or (b) the Borrower shall cease to be a direct Wholly-Owned Subsidiary of
Holdings or (c) a "Change of Control" or similar event shall occur under the
Borrower Senior Note Documents.
"Code" shall mean the Internal Revenue Code of 1986, as amended from
time to time and the regulations promulgated and the rulings issued thereunder.
Section references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or personal) with
respect to which any security interests have been granted (or purport to be
granted) pursuant to any Security Document, including, without limitation, all
Security Agreement Collateral, and all cash and Cash Equivalents delivered as
collateral pursuant to Section 4.02 or 10 hereof.
"Collateral Agent" shall mean the Administrative Agent acting as
collateral agent for the Secured Creditors pursuant to the Security Documents.
-74-
81
"Collective Bargaining Agreements" shall have the meaning provided in
Section 5.05.
"Commitment" shall mean, for each Lender, the amount set forth opposite
such Lender's name in Schedule I hereto directly below the column entitled
"Commitment," as same may be (x) reduced from time to time pursuant to Sections
3.02, 3.03, 4.02 and/or 10 or (y) adjusted from time to time as a result of
assignments to or from such Lender pursuant to Section 1.13 or 13.04(b).
"Commitment Commission" shall have the meaning provided in Section
3.01(a).
"Consolidated Current Assets" shall mean, at any time, the consolidated
current assets of Holdings and its Consolidated Subsidiaries.
"Consolidated Current Liabilities" shall mean, at any time, the
consolidated current liabilities of Holdings and its Consolidated Subsidiaries
at such time, but excluding the current portion of and accrued but unpaid
interest on any Indebtedness under this Agreement and any other long-term
Indebtedness which would otherwise be included therein.
"Consolidated Debt" shall mean, at any time, the sum of the aggregate
outstanding principal amount of all Indebtedness for borrowed money, the amount
of any unreimbursed drawings under any letter of credit (which have been
unreimbursed for three or more days), the principal component of Capitalized
Lease Obligations of Holdings and its Consolidated Subsidiaries and the
Attributable Indebtedness for Operating Lease Obligations of Holdings and its
Consolidated Subsidiaries.
"Consolidated EBIT" shall mean, for any period, the Consolidated Net
Income of Holdings and its Consolidated Subsidiaries, before Consolidated Net
Interest Expense and provision for taxes and without giving effect to any
extraordinary gains or losses or gains or losses from sales of assets other than
inventory sold in the ordinary course of business.
"Consolidated EBITDAR" shall mean, for any period, Consolidated EBIT,
adjusted by adding thereto the amount of all amortization of intangibles and
depreciation that were deducted in arriving at Consolidated EBIT for such
period.
"Consolidated Net Income" shall mean, for any period, net after tax
income of Holdings and its Consolidated Subsidiaries for such period (after
deduction for minority interests), provided that the net income of any
Subsidiary of the Borrower shall be excluded to the extent that the declaration
or payment of cash dividends or similar distributions by that Subsidiary of that
net income is not at the date of determination permitted by operation of its
charter or any agreement or instrument applicable to such Subsidiary (other than
restrictions permitted by clause (vi) or (ix) of Section 9.12).
"Consolidated Net Interest Expense" shall mean, for any period, the
total consolidated cash interest expense of Holdings and its Consolidated
Subsidiaries for such period (calculated without regard to any limitations on
the payment thereof) plus, without duplication, that portion of Capitalized
Lease Obligations of Holdings and its Consolidated Subsidiaries
-75-
82
representing the interest factor for such period, and any rental expense
associated with any Operating Lease Obligations for such period, in each case
net of the total consolidated cash interest income of Holdings and its
Consolidated Subsidiaries for such period.
"Consolidated Subsidiaries" shall mean, as to any Person, all
Subsidiaries of such Person which are consolidated with such Person for
financial reporting purposes in accordance with generally accepted accounting
principles in the United States.
"Contingent Obligation" shall mean, as to any Person, any obligation of
such Person guaranteeing or intended to guarantee any Indebtedness, leases,
dividends or other obligations ("primary obligations") of any other Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment of
such primary obligation or (iv) otherwise to assure or hold harmless the holder
of such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Continuing Directors" shall mean the directors of Holdings on the
Effective Date (after giving effect to the Holdings IPO) and each other director
of Holdings if such other director's nomination or election to the Board of
Directors of Holdings is recommended by a majority of the then Continuing
Directors.
"Credit Documents" shall mean this Agreement and, after the execution
and delivery thereof pursuant to the terms of this Agreement, each Note and each
Security Document and the Subsidiaries Guaranty.
"Credit Event" shall mean the making of any Loan or the issuance of any
Letter of Credit.
"Credit Party" shall mean Holdings, the Borrower and each Subsidiary
Guarantor.
"Debt Agreements" shall have the meaning provided in Section 5.05.
"Default" shall mean any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
-76-
83
"Defaulting Lender" shall mean any Lender with respect to which a
Lender Default is in effect.
"Dividend" with respect to any Person shall mean that such Person has
declared or paid a dividend or returned any equity capital to its stockholders
or authorized or made any other distribution, payment or delivery of property
(other than common stock of such Person) or cash to its stockholders as such, or
redeemed, retired, purchased or otherwise acquired, directly or indirectly, for
a consideration any shares of any class of its capital stock outstanding on or
after the Effective Date (or any options or warrants issued by such Person with
respect to its capital stock), or set aside any funds for any of the foregoing
purposes, or shall have permitted any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the capital
stock of such Person outstanding on or after the Effective Date (or any options
or warrants issued by such Person with respect to its capital stock). Without
limiting the foregoing, "Dividends" with respect to any Person shall also
include all payments made or required to be made by such Person with respect to
any stock appreciation rights, plans, equity incentive or achievement plans or
any similar plans or setting aside of any funds for the foregoing purposes.
"Documents" shall mean the Credit Documents, the Repurchase Documents,
the Refinancing Documents and Synthetic Lease Financing Documents.
"Dollar Equivalent" shall mean, at any time of determination thereof,
the amount of Dollars involved which could be purchased with the applicable
amount of the Alternate Currency involved computed at the spot rate of exchange
as quoted or utilized by the Administrative Agent on the date of determination
thereof.
"Dollars" and the sign "$" shall each mean freely transferable lawful
money of the United States.
"Domestic Joint Venture" shall have the meaning provided in Section
9.05(viii).
"Domestic Subsidiary" shall mean each Subsidiary of the Borrower which
is not a Foreign Subsidiary.
"Drawing" shall have the meaning provided in Section 2.05(b).
"Effective Date" shall have the meaning provided in Section 13.10.
"Eligible Transferee" shall mean and include a commercial bank,
financial institution or other "accredited investor" (as defined in Regulation D
of the Securities Act) other than any such Person that is directly involved in a
Permitted Business.
"Employee Benefit Plans" shall have the meaning provided in Section
5.05.
"Employment Agreements" shall have the meaning provided in Section
5.05.
"End Date" shall mean, for any Applicable Margin Period, the last day
of such Applicable Margin Period.
-77-
84
"Environmental Claims" means any and all administrative, regulatory or
judicial actions, suits, demands, demand letters, directives, claims, liens,
notices of noncompliance or violation, investigations or proceedings relating in
any way to any Environmental Law or any permit issued, or any approval given,
under any such Environmental Law (hereafter, "Claims"), including, without
limitation, (a) any and all Claims by governmental or regulatory authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages
pursuant to any applicable Environmental Law, and (b) any and all Claims by any
third party seeking damages, contribution, indemnification, cost recovery,
compensation or injunctive relief in connection with alleged injury or threat of
injury to health, safety or the environment due to the presence of Hazardous
Materials.
"Environmental Law" shall mean any Federal, state, foreign or local
statute, law, rule, regulation, ordinance, code, guideline, written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial or
administrative order, consent decree or judgment, relating to the environment,
employee health and safety or Hazardous Materials, including, without
limitation, CERCLA; RCRA; the Federal Water Pollution Control Act, 33 U.S.C.
Section 1251 et seq.; the Toxic Substances Control Act, 15 U.S.C. Section 2601
et seq.; the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Safe Drinking
Water Act, 42 U.S.C. Section 3803 et seq.; the Oil Pollution Act of 1990, 33
U.S.C. Section 2701 et seq.; the Emergency Planning and the Community
Right-to-Know Act of 1986, 42 U.S.C. Section 11001 et seq.; the Hazardous
Material Transportation Act, 49 U.S.C. Section 1801 et seq.; the Occupational
Safety and Health Act, 29 U.S.C. Section 651 et seq.; and any state and local or
foreign counterparts or equivalents, in each case as amended from time to time.
"Equipment Financing Transactions" shall mean any Capitalized Lease,
Operating Lease, Purchase Money Indebtedness, and any sale-leaseback or other
transactions consummated in connection therewith creating Capitalized Lease
Obligations, Operating Lease Obligations or Purchase Money Indebtedness.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974,
as amended from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in Section 3(9) of
ERISA) which together with Holdings or any Subsidiary of Holdings would be
deemed to be a "single employer" within the meaning of Section 414(b), (c), (m)
or (o) of the Code.
"Eurodollar Loan" shall mean each Loan (excluding Swingline Loans)
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
"Eurodollar Rate" shall mean (a) the offered quotation to first-class
banks in the New York interbank Eurodollar market by BTCo for Dollar deposits of
amounts in immediately available funds comparable to the outstanding principal
amount of the Eurodollar Loan of BTCo with maturities comparable to the Interest
Period applicable to such Eurodollar Loan
-78-
85
commencing two Business Days thereafter as of 10:00 A.M. (New York time) on the
date which is two Business Days prior to the commencement of such Interest
Period, divided (and rounded off to the nearest 1/16 of 1%) by (b) a percentage
equal to 100% minus the then stated maximum rate of all reserve requirements
(including, without limitation, any marginal, emergency, supplemental, special
or other reserves required by applicable law) applicable to any member bank of
the Federal Reserve System in respect of Eurocurrency funding or liabilities as
defined in Regulation D (or any successor category of liabilities under
Regulation D).
"Event of Default" shall have the meaning provided in Section 10.
"Existing Credit Agreement" shall mean the Credit Agreement, dated as
of February 20, 1998, among Holdings, the Borrower, the lending institutions
party thereto, and BTCo, as Agent (as in effect on the Effective Date).
"Existing Indebtedness" shall have the meaning provided in Section
7.22.
"Existing Letter of Credit" shall have the meaning provided in Section
2.01(d).
"Facing Fee" shall have the meaning provided in Section 3.01(c).
"Federal Funds Rate" shall mean for any period, a fluctuating interest
rate equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by the Administrative Agent from three Federal Funds
brokers of recognized standing selected by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or referred to in
Section 3.01.
"Foreign Joint Venture" shall mean any Joint Venture that involves a
corporation, association, partnership, business trust or other business entity
that is incorporated under the laws of any jurisdiction other than the United
States of America, any State thereof, any territory thereof or Canada.
"Foreign Pension Plan" shall mean any plan, fund (including, without
limitation, any superannuation fund) or other similar program established or
maintained outside the United States of America by Holdings or any one or more
of its Subsidiaries primarily for the benefit of employees of Holdings or such
Subsidiaries residing outside the United States of America, which plan, fund or
other similar program provides, or results in, retirement income, a deferral of
income in contemplation of retirement or payments to be made upon termination of
employment, and which plan is not subject to ERISA or the Code.
"Foreign Subsidiary" shall mean each Subsidiary of the Borrower that is
incorporated under the laws of any jurisdiction other than the United States of
America, any State thereof, or any territory thereof.
-79-
86
"Foreign Subsidiary Indebtedness" shall have the meaning provided in
Section 9.04(xiii).
"Guaranteed Obligations" shall mean (i) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of the
principal and interest on each Note issued by, and Loans made to, the Borrower
under this Agreement and all reimbursement obligations and Unpaid Drawings with
respect to Letters of Credit, together with all the other obligations (including
obligations which, but for the automatic stay under Section 362(a) of the
Bankruptcy Code, would become due) and liabilities (including, without
limitation, indemnities, fees and interest thereon) of the Borrower to the
Lenders, the Administrative Agent, the Issuing Lender and the Collateral Agent
now existing or hereafter incurred under, arising out of or in connection with
this Agreement or any other Credit Document and (ii) the full and prompt payment
when due (whether at the stated maturity, by acceleration or otherwise) of all
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) of the Borrower owing
under any Interest Rate Protection Agreement or Other Hedging Agreement entered
into by the Borrower with any Lender or any affiliate thereof (even if such
Lender subsequently ceases to be a Lender under this Agreement for any reason)
so long as such Lender or affiliate participates in such Interest Rate
Protection Agreement or Other Hedging Agreement, and their subsequent assigns,
if any, whether now in existence or hereafter arising, and the due performance
and compliance with all terms, conditions and agreements contained therein.
"Guarantor" shall mean Holdings and each Subsidiary Guarantor.
"Guaranty" shall mean and include the Holdings Guaranty and the
Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petroleum or petroleum
products, radioactive materials, asbestos in any form that is or could become
friable, urea formaldehyde foam insulation, transformers or other equipment that
contain dielectric fluid containing levels of polychlorinated biphenyls, and
radon gas; (b) any chemicals, materials or substances defined as or included in
the definition of "hazardous substances," "hazardous waste," "hazardous
materials," "extremely hazardous substances," "restricted hazardous waste,"
"toxic substances," "toxic pollutants," "contaminants," or "pollutants," or
words of similar import, under any applicable Environmental Law; and (c) any
other chemical, material or substance, the Release of which is prohibited,
limited or regulated by any governmental authority.
"Holdings" shall have the meaning provided in the first paragraph of
this Agreement.
"Holdings Guaranty" shall mean the guaranty of Holdings pursuant to
Section 14.
"Holdings IPO" shall mean the Qualified Public Equity Offering
described in Section 5.17(a).
-80-
87
"Holdings Senior Discount Note Indenture" shall mean the Indenture,
dated as of February 20, 1998 between the Borrower and United States Trust of
New York, as trustee.
"Holdings Senior Discount Note Purchase Agreement" shall mean the
Purchase Agreement, dated February 20, 1998, among the Borrower and the initial
purchasers of Holdings Senior Discount Notes.
"Holdings Senior Discount Notes" shall mean Holdings 11 3/8% Senior
Discount Notes due 2009, which will be issued pursuant to the Holdings Senior
Discount Note Indenture.
"Holdings Senior Note Documents" shall mean (i) the Holdings Senior
Discount Notes, (ii) the Holdings Senior Discount Note Indenture, (iii) the
Holdings Senior Discount Note Purchase Agreement and (iv) all other agreements,
documents and instruments effectuating the foregoing and all amendments and
exhibits to any of the foregoing.
"Indebtedness" shall mean, as to any Person, without duplication, (i)
all indebtedness (including principal, interest, fees and charges) of such
Person for borrowed money or for the deferred purchase price of property or
services, (ii) the maximum amount available to be drawn under all letters of
credit issued for the account of such Person and all unpaid drawings in respect
of such letters of credit, (iii) all Indebtedness of the types described in
clause (i), (ii), (iv), (v), (vi) or (vii) of this definition secured by any
Lien on any property owned by such Person, whether or not such Indebtedness has
been assumed by such Person (provided, that, if the Person has not assumed or
otherwise become liable in respect of such Indebtedness, such Indebtedness shall
be deemed to be in an amount equal to the lesser of the fair market value of the
property to which such Lien relates as determined in good faith by such Person
and the stated amount of such Indebtedness), (iv) Capitalized Lease Obligations,
(v) all obligations of such person to pay a specified purchase price for goods
or services, whether or not delivered or accepted, i.e., take-or-pay and similar
obligations, (vi) all Contingent Obligations of such Person and (vii) all
obligations under any Interest Rate Protection Agreement or Other Hedging
Agreement or under any similar type of agreement. Notwithstanding the foregoing,
Indebtedness shall not include trade payables and accrued expenses incurred by
any Person in accordance with customary practices and in the ordinary course of
business of such Person.
"Indebtedness to be Refinanced" shall mean all indebtedness set forth
in Schedule VII.
"Insignificant Foreign Subsidiary" shall mean any Foreign Subsidiary
whose assets represent less than 10% of the total value of all assets owned by
the Borrower and its Subsidiaries.
"Intercompany Loan" shall have the meaning provided in Section
9.05(xi).
"Intercompany Note" shall mean a promissory note, in the form of
Exhibit L, evidencing Intercompany Loans.
-81-
88
"Interest Determination Date" shall mean, with respect to any
Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section 1.09.
"Interest Rate Protection Agreement" shall mean any interest rate swap
agreement, interest rate cap agreement, interest collar agreement, interest rate
hedging agreement or other similar agreement or arrangement.
"L/C Supportable Obligations" shall mean (i) obligations of the
Borrower or its Subsidiaries incurred in the ordinary course of business with
respect to workers compensation, surety bonds and other similar statutory
obligations and (ii) such other obligations of the Borrower or any of its
Subsidiaries as are reasonably acceptable to BTCo and otherwise permitted to
exist pursuant to the terms of this Agreement.
"Leaseholds" of any Person means all the right, title and interest of
such Person as lessee or licensee in, to and under leases or licenses of land,
improvements and/or fixtures.
"Lender" shall mean each financial institution listed on Schedule I, as
well as any Person which becomes a "Lender" hereunder pursuant to Section 1.13
or 13.04(b).
"Lender Default" shall mean (i) the refusal (which has not been
retracted) of a Lender to make available its portion of any Borrowing (including
any Mandatory Borrowing) or to fund its portion of any unreimbursed payment
under Section 2.04(c) or (ii) a Lender having notified in writing the Borrower
and/or the Administrative Agent that it does not intend to comply with its
obligations under Section 1.01(a) or 1.01(c) or Section 2.
"Letter of Credit" shall have the meaning provided in Section 2.01(a).
"Letter of Credit Fee" shall have the meaning provided in Section
3.01(b).
"Letter of Credit Outstandings" shall mean, at any time, the sum of (i)
the aggregate Stated Amount of all outstanding Letters of Credit and (ii) the
amount of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided in Section
2.03(a).
"Leverage Ratio" shall mean, at any time, the ratio of (i) Consolidated
Debt at such time to (ii) Consolidated EBITDAR for the Test Period then most
recently ended.
"Lien" shall mean any mortgage, pledge, hypothecation, assignment,
deposit arrangement, encumbrance, lien (statutory or other), preference,
priority or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, any financing or similar statement or notice filed under the UCC or
any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
-82-
89
"Loan" shall mean each Revolving Loan and each Swingline Loan.
"Management Agreements" shall have the meaning provided in Section
5.05.
"Mandatory Borrowing" shall have the meaning provided in Section
1.01(c).
"Margin Stock" shall have the meaning provided in Regulation U.
"Maturity Date" shall mean May 30, 2005.
"Maximum Swingline Amount" shall mean $10,000,000.
"Net Sale Proceeds" shall mean for any sale of assets, the gross cash
proceeds (including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such sale of assets, net of the reasonable costs of such sale
(including payments of unassumed liabilities relating to the assets sold and
required payments of any Indebtedness (other than Indebtedness secured pursuant
to the Security Documents) which is secured by the respective assets which were
sold), and the taxes paid or payable by Holdings' consolidated group as a result
of such sale and appropriate amounts to be provided by Holdings or any of its
Subsidiaries, as the case may be, as a reserve, in accordance with GAAP, against
any liabilities associated with such Asset Sale and retained by Holdings or any
of its Subsidiaries, after such Asset Sale, including without limitation,
pension and other post-employment benefit liabilities, liabilities related to
environmental matters and liabilities under any indemnification obligations with
such Asset Sale (it being understood, however, that, to the extent such reserves
are released or reduced, an amount equal to such release or reduction shall be
required to be applied as a mandatory repayment or mandatory commitment
reduction in accordance with Sections 3.03 and 4.02).
"Non-Defaulting Lender" shall mean and include each Lender other than a
Defaulting Lender.
"Note" shall mean each Revolving Note and the Swingline Note.
"Notice of Borrowing" shall have the meaning provided in Section 1.03.
"Notice of Conversion" shall have the meaning provided in Section 1.06.
"Notice Office" shall mean the office of the Administrative Agent
located at 000 Xxxxxxx Xxxxxx, X.X. 0000, Xxx Xxxx, Xxx Xxxx 10006, Attention:
Xxxxxx Xxxxxxxxxx, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the Administrative Agent,
the Collateral Agent or any Lender pursuant to the terms of this Agreement or
any other Credit Document.
-83-
90
"Operating Lease" shall mean, as to any Person, all leases of
inventory, equipment and Real Property which are not Capitalized Leases.
"Operating Lease Obligations" shall mean, as to any Person, all
obligations as lessee under Operating Leases (other than Capital Leases).
"Other Hedging Agreement" shall mean any foreign exchange contract,
currency swap agreement or other similar agreement or arrangement designed to
protect against the fluctuations in currency values.
"Participant" shall have the meaning provided in Section 2.04(a).
"Payment Office" shall mean the office of the Administrative Agent
located at Xxx Xxxxxxx Xxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, or such other
office as the Administrative Agent may hereafter designate in writing as such to
the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation established
pursuant to Section 4002 of ERISA, or any successor thereto.
"Percentage" of any Lender at any time shall mean a fraction (expressed
as a percentage) the numerator of which is the Commitment of such Lender at such
time and the denominator of which is the Total Commitment at such time, provided
that if the Percentage of any Lender is to be determined after the Total
Commitment has been terminated, then the Percentages of the Lenders shall be
determined immediately prior (and without giving effect) to such termination.
"Permitted Business" shall mean the business in which the Borrower is
engaged on the Effective Date and reasonable extensions thereof.
"Permitted Countries" shall mean Argentina, Bolivia, Brazil, Chile,
Colombia, Mexico, Panama, Paraguay, Peru, Uruguay, Venezuela, Australia,
Bangladesh, Cambodia, India, Indonesia, Malaysia, Myanmar, New Zealand,
Pakistan, Thailand, Vietnam and Caymen.
"Permitted Encumbrance" shall mean, with respect to any Mortgaged
Property, such exceptions to title as are set forth in the title insurance
policy or title commitment delivered with respect thereto, all of which
exceptions must be acceptable to the Administrative Agent in its reasonable
discretion.
"Permitted Investors" shall mean (x) Xxxxxx Xxxxxx Partners III L.P.,
Xxxxxx Xxxxxx, Inc. and employees, management and directors of, and persons
owning accounts managed by, any of the foregoing and their respective Affiliates
(including, without limitation, Holdings and the Borrower) and (y) other
investors reasonably satisfactory to the Administrative Agent and the Required
Lenders.
"Permitted Liens" shall have the meaning provided in Section 9.01.
-84-
91
"Permitted Section 9.02(viii) Acquisition" shall have the meaning
provided in Section 9.02(viii).
"Person" shall mean any individual, partnership, joint venture, firm,
corporation, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section 3(2) of ERISA,
which is maintained or contributed to by (or to which there is an obligation to
contribute of) Holdings or a Subsidiary of Holdings or an ERISA Affiliate, and
each such plan for the five year period immediately following the latest date on
which Holdings, or a Subsidiary of Holdings or an ERISA Affiliate maintained,
contributed to or had an obligation to contribute to such plan.
"Pledge Agreement" shall have the meaning provided in Section 5.08.
"Pledge Agreement Collateral" shall mean all "Collateral" as defined in
the Pledge Agreement.
"Pledged Securities" shall mean all "Pledged Securities" as defined in
the Pledge Agreement.
"Prime Lending Rate" shall mean the rate which BTCo announces from time
to time as its prime lending rate, the Prime Lending Rate to change when and as
such prime lending rate changes. The Prime Lending Rate is a reference rate and
does not necessarily represent the lowest or best rate actually charged to any
customer. BTCo may make commercial loans or other loans at rates of interest at,
above or below the Prime Lending Rate.
"Projections" shall mean the projections prepared by the Borrower in
connection with the Holdings IPO, the Repurchase and the Synthetic Lease
Financing, and furnished to the Lenders on or about April 26, 2000.
"Purchase Money Indebtedness" shall mean Indebtedness, the proceeds of
which are used to finance the acquisition, construction or improvement of
inventory, equipment or other property in the ordinary course of business.
"Qualified Preferred Stock" shall mean the preferred stock of Holdings
so long as the terms of any such preferred stock (i) do not contain any
mandatory put, redemption, repayment, sinking fund or other similar provision
occurring before February 28, 2006 other than any such provision which is
comparable to a provision in the preferred stock of Holdings outstanding prior
to the Effective Date, (ii) do not require the cash payment of dividends before
February 28, 2006, (iii) do not contain any covenants other than those covenants
of the type (but no more restrictive than those) set forth in the preferred
stock of Holdings outstanding prior to the Effective Date and (iv) are otherwise
reasonably satisfactory to the Administrative Agent.
"Qualified Public Equity Offering" means a bona fide underwritten sale
to the public of common stock of Holdings pursuant to a registration statement
filed with the SEC in accordance with the Securities Act.
-85-
92
"Quarterly Payment Date" shall mean the last Business Day of each
March, June, September and December occurring after the Effective Date.
"RCRA" shall mean the Resource Conservation and Recovery Act, as the
same may be amended from time to time, 42 U.S.C. Section 6901 et seq.
"Real Property" of any Person shall mean all the right, title and
interest of such Person in and to land, improvements and fixtures, including
Leaseholds.
"Refinancing Documents" shall mean all agreements and documents related
to the Refinancing.
"Refinancings" shall mean the repayment in full by the Borrower of the
Indebtedness to be Refinanced.
"Regulations D, T, U and X" shall mean Regulations D, T, U and X of the
Board of Governors of the Federal Reserve System as from time to time in effect
and any successors to all or a portion thereof.
"Reinvestment Asset" shall have the meaning provided in Section
4.02(b).
"Reinvestment Election" shall have the meaning provided in Section
4.02(b).
"Reinvestment Notice" shall mean a written notice signed by the
President or any Vice President of the Borrower stating that the Borrower or its
respective Subsidiary, in good faith, intends and expects to use all or a
specified portion of the Net Sale Proceeds of an Asset Sale to purchase,
construct or otherwise acquire Reinvestment Assets.
"Release" means disposing, discharging, injecting, spilling, pumping,
leaking, leaching, dumping, emitting, escaping, emptying, pouring or migrating,
into or upon any land or water or air, or otherwise entering into the
environment.
"Replaced Lender" shall have the meaning provided in Section 1.13.
"Replacement Lender" shall have the meaning provided in Section 1.13.
"Reportable Event" shall mean an event described in Section 4043(c) of ERISA
with respect to a Plan that is subject to Title IV of ERISA other than those
events as to which the 30-day notice period is waived under PBGC Regulation
Section 4043.
"Repurchase" shall have the meaning provided in Section 5.17(a).
"Repurchase Documents" shall mean and include all agreements governing,
or relating to, the Repurchase and the Holdings IPO.
-86-
93
"Required Lenders" shall mean Non-Defaulting Lenders, the sum of whose
outstanding Commitments (or after the termination thereof, outstanding Revolving
Loans and Adjusted Percentage of outstanding Swingline Loans and Letter of
Credit Outstandings) represent an amount greater than fifty percent of the sum
of the Adjusted Total Commitment (or after the termination thereof, the sum of
the then total outstanding Revolving Loans of Non-Defaulting Lenders, and the
aggregate Adjusted Percentages of all Non-Defaulting Lenders of the total
outstanding Swingline Loans and Letter of Credit Outstandings at such time).
"Restricted Countries" shall mean Bolivia, Colombia, Venezuela,
Bangladesh, Cambodia, Indonesia, Malaysia, Myanmar, Pakistan and Vietnam;
provided that a Restricted Country shall cease to be a Restricted Country with
respect to any Investment in the event that the Borrower has obtained (and
maintains in full force and effect) political risk insurance in amounts, and on
terms and conditions, reasonably satisfactory to the Administrative Agent.
"Returns" shall have the meaning provided in Section 7.09.
"Revolving Loan" shall have the meaning provided in Section 1.01(a)
"Revolving Note" shall have the meaning provided in Section 1.05(a).
"SEC" shall have the meaning provided in Section 8.01(h).
"Section 4.04(b)(ii) Certificate" shall have the meaning provided in
Section 4.04(b).
"Secured Creditors" shall have the meaning assigned that term in the
Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as amended, and
the rules and regulations promulgated thereunder.
"Securities Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in Section 5.09.
"Security Agreement Collateral" shall mean all "Collateral" as defined
in the Security Agreement.
"Security Document" shall mean and include each of the Security
Agreement, the Pledge Agreement and, after the execution and delivery thereof,
each Additional Security Document.
"Senior Secured Consolidated Debt" shall mean all Consolidated Debt
(including any Foreign Subsidiary Indebtedness) which is secured by any of the
assets of Holdings and its Subsidiaries and which is not by its terms
contractually subordinated to any other Indebtedness of Holdings and its
Subsidiaries.
-87-
94
"Senior Secured Leverage Ratio" shall mean, at any time, the ratio of
(i) the sum of (without duplication) (x) Senior Secured Consolidated Debt at
such time plus (y) an amount equal to the Attributable Indebtedness in respect
of Operating Lease Obligations at such time to (ii) Consolidated EBITDAR for the
Test Period then most recently ended.
"Shareholders' Agreements" shall have the meaning provided in Section
5.05.
"Significant Subsidiary" shall mean, as to any Person, all Subsidiaries
of such Person other than its Insignificant Foreign Subsidiaries.
"Standby Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Start Date" shall mean, with respect to any Applicable Margin Period,
the first day of such Applicable Margin Period.
"Stated Amount" of each Letter of Credit shall, at any time, mean the
maximum amount available to be drawn thereunder (in each case determined without
regard to whether any conditions to drawing could then be met); provided that
the "Stated Amount" of each Letter of Credit denominated in an Alternate
Currency shall be, on any date of calculation, the Dollar Equivalent of the
maximum amount available to be drawn in such Alternate Currency thereunder
(determined without regard to whether any conditions to drawing could then be
met).
"Subsidiaries Guaranty" shall have the meaning provided in Section
5.10.
"Subsidiary" shall mean, as to any Person, (i) any corporation more
than 50% of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, association, joint
venture or other entity in which such Person and/or one or more Subsidiaries of
such Person has more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the Borrower
(other than a Foreign Subsidiary except to the extent otherwise provided in
Section 8.12) that is or becomes a party to the Subsidiaries Guaranty.
"Swingline Expiry Date" shall mean, at any time, the date which is two
Business Days prior to the Maturity Date.
"Swingline Loan" shall have the meaning provided in Section 1.01(b).
"Swingline Note" shall have the meaning provided in Section 1.05(a).
"Synthetic Lease Financing" shall mean the lease financing transaction
contemplated by the Synthetic Lease Financing Documents.
-88-
95
"Synthetic Lease Financing Agreement" shall mean the Participation
Agreement, dated as of May 30, 2000, among the Borrower, as lessee, Holdings, as
guarantor, Wilmington Trust Company, as trustee, Deutsche Bank AG, New York
Branch, as owner participant, and Bankers Trust Company, as Administrative
Agent.
"Synthetic Lease Financing Documents" shall mean the Synthetic Lease
Financing Agreement, the other Operative Documents (as defined in the Synthetic
Lease Financing Agreement) and all other documents executed and delivered in
connection with the Synthetic Lease Financing, as in effect on the Effective
Date and as same may be amended, modified or supplemented from time to time in
accordance with the terms hereof and thereof.
"Synthetic Lease Guaranty" shall mean the guaranty provided by Holdings
of the obligations and liabilities of the Borrower under the Synthetic Lease
Financing, which guaranty shall be unsecured and otherwise be in form and
substance satisfactory to the Administrative Agent.
"Synthetic Leases" shall mean all lease transactions entered into by
the Borrower pursuant to the Synthetic Lease Financing Agreement and the other
Synthetic Lease Financing Documents.
"Tax Benefit" shall have the meaning provided in Section 4.04(c).
"Taxes" shall have the meaning provided in Section 4.04(a).
"Test Date" shall mean, with respect to any Start Date, the last day of
the most recent fiscal quarter of Holdings ended immediately prior to such date.
"Test Period" shall mean each period of four consecutive fiscal
quarters of Holdings then last ended (in each case taken as one accounting
period).
"Total Commitment" shall mean, at any time, the sum of the Commitments
of each of the Lenders.
"Total Interest Expense" shall mean, for any period, the total
consolidated cash interest expense (net of cash interest income) of Holdings and
its Consolidated Subsidiaries for such period (including, without limitation,
the interest expense associated with Capitalized Lease Obligations).
"Trade Letter of Credit" shall have the meaning provided in Section
2.01(a).
"Type" shall mean the type of Loan determined with regard to the
interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to time in
effect in the relevant jurisdiction.
-89-
96
"Unfunded Current Liability" of any Plan shall mean the amount, if any,
by which the value of the accumulated plan benefits under the Plan determined on
a plan termination basis in accordance with actuarial assumptions at such time
consistent with those prescribed by the PBGC for purposes of Section 4044 of
ERISA, exceeds the fair market value of all plan assets allocable to such
liabilities under Title IV of ERISA (excluding any accrued but unpaid
contributions).
"United States" and "U.S." shall each mean the United States of
America.
"Unpaid Drawing" shall have the meaning provided for in Section
2.05(a).
"Unutilized Commitment" with respect to any Lender, at any time, shall
mean such Lender's Commitment at such time less the sum of (i) the aggregate
outstanding principal amount of Revolving Loans made by such Lender and (ii)
such Lender's Adjusted Percentage of the Letter of Credit Outstandings.
"Voting Stock" of any Person as of any date means the capital stock of
such Person that is at the time entitled to vote in the election of the Board of
Directors of such Person.
"Wholly-Owned Subsidiary" shall mean, as to any Person, (i) any
corporation 100% of whose capital stock (other than director's qualifying
shares) is at the time owned by such Person and/or one or more Wholly-Owned
Subsidiaries of such Person and (ii) any partnership, association, joint venture
or other entity in which such Person and/or one or more Wholly-Owned
Subsidiaries of such Person has a 100% equity interest at such time.
SECTION 12. The Administrative Agent.
12.01 Appointment. The Lenders hereby designate Bankers Trust Company
as Administrative Agent (for purposes of this Section 12, the term
"Administrative Agent" shall include Bankers Trust Company in its capacity as
Collateral Agent pursuant to the Security Documents) to act as specified herein
and in the other Credit Documents. Each Lender hereby irrevocably authorizes,
and each holder of any Note by the acceptance of such Note shall be deemed
irrevocably to authorize, the Administrative Agent to take such action on its
behalf under the provisions of this Agreement, the other Credit Documents and
any other instruments and agreements referred to herein or therein and to
exercise such powers and to perform such duties hereunder and thereunder as are
specifically delegated to or required of the Administrative Agent by the terms
hereof and thereof and such other powers as are reasonably incidental thereto.
The Administrative Agent may perform any of its duties hereunder by or through
its respective officers, directors, agents, employees or affiliates.
12.02 Nature of Duties. The Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this Agreement
and the other Credit Documents. Neither the Administrative Agent nor any of its
respective officers, directors, agents, employees or affiliates shall be liable
for any action taken or omitted by it or them hereunder or under any other
Credit Document or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. The duties of the Administrative
-90-
97
Agent shall be mechanical and administrative in nature; the Administrative Agent
shall not have by reason of this Agreement or any other Credit Document a
fiduciary relationship in respect of any Lender or the holder of any Note; and
nothing in this Agreement or any other Credit Document, expressed or implied, is
intended to or shall be so construed as to impose upon the Administrative Agent
any obligations in respect of this Agreement or any other Credit Document except
as expressly set forth herein or therein.
12.03 Lack of Reliance on the Administrative Agent. Independently and
without reliance upon the Administrative Agent, each Lender and the holder of
each Note, to the extent it deems appropriate, has made and shall continue to
make (i) its own independent investigation of the financial condition and
affairs of Holdings and its Subsidiaries in connection with the making and the
continuance of the Loans and the taking or not taking of any action in
connection herewith and (ii) its own appraisal of the creditworthiness of the
Credit Parties and their Subsidiaries and, except as expressly provided in this
Agreement, the Administrative Agent shall not have any duty or responsibility,
either initially or on a continuing basis, to provide any Lender or the holder
of any Note with any credit or other information with respect thereto, whether
coming into its possession before the making of the Loans or at any time or
times thereafter. The Administrative Agent shall not be responsible to any
Lender or the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of Holdings and its Subsidiaries or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any other Credit Document, or the financial
condition of Holdings and its Subsidiaries or the existence or possible
existence of any Default or Event of Default.
12.04 Certain Rights of the Administrative Agent. If the Administrative
Agent shall request instructions from the Required Lenders with respect to any
act or action (including failure to act) in connection with this Agreement or
any other Credit Document, the Administrative Agent shall be entitled to refrain
from such act or taking such action unless and until the Administrative Agent
shall have received instructions from the Required Lenders; and the
Administrative Agent shall not incur liability to any Person by reason of so
refraining. Without limiting the foregoing, no Lender or the holder of any Note
shall have any right of action whatsoever against the Administrative Agent as a
result of the Administrative Agent acting or refraining from acting hereunder or
under any other Credit Document in accordance with the instructions of the
Required Lenders.
12.05 Reliance. The Administrative Agent shall be entitled to rely, and
shall be fully protected in relying, upon any note, writing, resolution, notice,
statement, certificate, telex, teletype or telecopier message, cablegram,
radiogram, order or other document or telephone message signed, sent or made by
any Person that the Administrative Agent believed to be the proper Person, and,
with respect to all legal matters pertaining to this Agreement and any other
Credit Document and its duties hereunder and thereunder, upon advice of counsel
selected by the Administrative Agent.
-91-
98
12.06 Indemnification. To the extent the Administrative Agent is not
reimbursed and indemnified by the Parties the Lenders will reimburse and
indemnify the Administrative Agent, in proportion to their respective
"percentages" as used in determining the Required Lenders, for and against any
and all liabilities, obligations, losses, damages, penalties, claims, actions,
judgments, costs, expenses or disbursements of whatsoever kind or nature which
may be imposed on, asserted against or incurred by the Administrative Agent in
performing its respective duties hereunder or under any other Credit Document,
in any way relating to or arising out of this Agreement or any other Credit
Document; provided that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements resulting from the Administrative Agent's gross
negligence or willful misconduct.
12.07 The Administrative Agent in its Individual Capacity. With respect
to its obligation to make Loans, or issue or participate in Letters of Credit,
under this Agreement, the Administrative Agent shall have the rights and powers
specified herein for a "Lender" and may exercise the same rights and powers as
though it were not performing the duties specified herein; and the term
"Lenders," "Required Lenders," "holders of Notes" or any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative Agent
in its individual capacity. The Administrative Agent may accept deposits from,
lend money to, and generally engage in any kind of banking, trust or other
business with any Credit Party or any Affiliate of any Credit Party as if it
were not performing the duties specified herein, and may accept fees and other
consideration from the Borrower or any other Credit Party for services in
connection with this Agreement and otherwise without having to account for the
same to the Lenders.
12.08 Holders. The Administrative Agent may deem and treat the payee of
any Note as the owner thereof for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may be,
shall have been filed with the Administrative Agent. Any request, authority or
consent of any Person who, at the time of making such request or giving such
authority or consent, is the holder of any Note shall be conclusive and binding
on any subsequent holder, transferee, assignee or indorsee, as the case may be,
of such Note or of any Note or Notes issued in exchange therefor.
12.09 Resignation by the Administrative Agent. (a) The Administrative
Agent may resign from the performance of all its functions and duties hereunder
and/or under the other Credit Documents at any time by giving 15 Business Days'
prior written notice to the Borrower and the Lenders. Such resignation shall
take effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation, the Required Lenders shall
appoint a successor Administrative Agent hereunder or thereunder who shall be a
commercial bank or trust company reasonably acceptable to the Borrower (it being
understood and agreed that any Non-Defaulting Lender is deemed to be acceptable
to the Borrower).
(c) If a successor Administrative Agent shall not have been so
appointed within such 15 Business Day period, the Administrative Agent, with the
consent of the Borrower, shall then appoint a successor Administrative Agent who
shall serve as Administrative Agent
-92-
99
hereunder or thereunder until such time, if any, as the Lenders appoint a
successor Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed pursuant to
clause (b) or (c) above by the 20th Business Day after the date such notice of
resignation was given by the Administrative Agent, the Administrative Agent's
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of the Administrative Agent hereunder and/or under any
other Credit Document until such time, if any, as the Required Lenders appoint a
successor Administrative Agent as provided above.
SECTION 13. Miscellaneous.
13.01 Payment of Expenses, etc. The Borrower shall: (i) whether or not
the transactions herein contemplated are consummated, pay within 15 days
following written demand by the Administrative Agent (other than any payments
due on the Effective Date, which the Borrower shall pay on such date) all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including, without limitation, the reasonable fees and disbursements of White &
Case LLP and the Administrative Agent's local counsel) in connection with the
preparation, execution and delivery of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein and
any amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent in connection with its syndication efforts with respect to
this Agreement and of the Administrative Agent and, after the occurrence and
during the continuance of an Event of Default, each of the Lenders in connection
with the enforcement of this Agreement and the other Credit Documents and the
documents and instruments referred to herein and therein (including, without
limitation, the reasonable fees and disbursements of counsel for the
Administrative Agent and, after the occurrence and during the continuance of an
Event of Default, for each of the Lenders); (ii) pay within 15 days following
written demand by the Administrative Agent (other than any payments due on the
Effective Date, which the Borrower shall pay on such date) and hold each of the
Lenders harmless from and against any and all present and future stamp, excise
and other similar taxes with respect to the foregoing matters and save each of
the Lenders harmless from and against any and all liabilities with respect to or
resulting from any delay or omission (other than to the extent attributable to
such Lender) to pay such taxes; and (iii) indemnify the Administrative Agent and
each Lender, and each of their respective officers, directors, employees,
representatives and agents from and hold each of them harmless against any and
all liabilities, obligations (including removal or remedial actions), losses,
damages, penalties, claims, actions, judgments, suits, costs, expenses and
disbursements (including reasonable attorneys' and consultants' fees and
disbursements) incurred by, imposed on or assessed against any of them as a
result of, or arising out of, or in any way related to, or by reason of, (a) any
investigation, litigation or other proceeding (whether or not the Administrative
Agent or any Lender is a party thereto) related to the entering into and/or
performance of this Agreement or any other Credit Document or the use of any
Letter of Credit or the proceeds of any Loans hereunder or the consummation of
any transactions contemplated herein (including, without limitation, the
Synthetic Lease Financing) or in any other Credit Document or the exercise of
any of their rights or remedies provided herein or in the other Credit
Documents, or (b) the actual or alleged presence of Hazardous Materials in the
air, surface water or groundwater or on the surface or subsurface of any Real
Property owned or at any time
-93-
100
operated by Holdings or any of its Subsidiaries, the generation, storage,
transportation, handling or disposal of Hazardous Materials at any location,
whether or not owned or operated by Holdings or any of its Subsidiaries, the
non-compliance of any Real Property with foreign, federal, state and local laws,
regulations, and ordinances (including applicable permits thereunder) applicable
to any Real Property, or any Environmental Claim in connection with Holdings,
any of its Subsidiaries or their business or operations or any Real Property
owned or at any time operated by Holdings or any of its Subsidiaries, including,
in each case, without limitation, the reasonable fees and disbursements of
counsel and other consultants incurred in connection with any such
investigation, litigation or other proceeding (but excluding any losses,
liabilities, claims, damages or expenses to the extent incurred by reason of the
gross negligence or willful misconduct of the Person to be indemnified). To the
extent that the undertaking to indemnify, pay or hold harmless the
Administrative Agent or any Lender set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, the Borrower
shall make the maximum contribution to the payment and satisfaction of each of
the indemnified liabilities which is permissible under applicable law.
13.02 Right of Setoff. In addition to any rights now or hereafter
granted under applicable law or otherwise, and not by way of limitation of any
such rights, upon the occurrence of an Event of Default, each Lender is hereby
authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to the Borrower or to any other Person, any
such notice being hereby expressly waived, to set off and to appropriate and
apply any and all deposits (general or special) and any other Indebtedness at
any time held or owing by such Lender (including, without limitation, by
branches and agencies of such Lender wherever located) to or for the credit or
the account of any Credit Party against and on account of the Obligations and
liabilities of the Credit Parties to such Lender under this Agreement or under
any of the other Credit Documents, including, without limitation, all interests
in Obligations purchased by such Lender pursuant to Section 13.06(b), and all
other claims of any nature or description arising out of or connected with this
Agreement or any other Credit Document, irrespective of whether or not such
Lender shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
13.03 Notices. Except as otherwise expressly provided herein, all
notices and other communications provided for hereunder shall be in writing
(including telegraphic, telex, telecopier or cable communication) and mailed,
telegraphed, telexed, telecopied, cabled or delivered: if to any Credit Party,
at such Credit Party's address specified opposite its signature below; if to any
Lender, at its address specified opposite its name on Schedule VIII below; and
if to the Administrative Agent, at its Notice Office; or, as to any Credit Party
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Lender, at such other address as shall be designated by such Lender in a written
notice to the Borrower and the Administrative Agent. All such notices and
communications shall, when mailed, telegraphed, telexed, telecopied, or cabled
or sent by overnight courier, be effective when deposited in the mails,
delivered to the telegraph company, cable company or overnight courier, as the
case may be, or sent by telex or telecopier, except that notices and
communications to the Administrative Agent and the Borrower shall not be
effective until received by the Administrative Agent or the Borrower, as the
case may be.
-94-
101
13.04 Benefit of Agreement; Assignments; Participations. (a) This
Agreement shall be binding upon and inure to the benefit of and be enforceable
by the respective successors and assigns of the parties hereto; provided,
however, the Borrower may not assign or transfer any of its rights, obligations
or interest hereunder without the prior written consent of the Lenders and,
provided further, that, although any Lender may transfer, assign or grant
participations in its rights hereunder, such Lender shall remain a "Lender" for
all purposes hereunder (and may not transfer or assign all or any portion of its
Commitments hereunder except as provided in Sections 1.13 and 13.04(b)) and the
transferee, assignee or participant, as the case may be, shall not constitute a
"Lender" hereunder and, provided further, that no Lender shall transfer or grant
any participation under which the participant shall have rights to approve any
amendment to or waiver of this Agreement or any other Credit Document except to
the extent such amendment or waiver would (i) extend the final scheduled
maturity of any Loan, Note or Letter of Credit (unless such Letter of Credit is
not extended beyond the Maturity Date) in which such participant is
participating, or reduce the rate or extend the time of payment of interest or
Fees thereon (except in connection with a waiver of applicability of any
post-default increase in interest rates) or reduce the principal amount thereof,
or increase the amount of the participant's participation over the amount
thereof then in effect (it being understood that a waiver of any Default or
Event of Default or of a mandatory reduction in the Total Commitment shall not
constitute a change in the terms of such participation, and that an increase in
any Commitment or Loan shall be permitted without the consent of any participant
if the participant's participation is not increased as a result thereof), (ii)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement or (iii) release all or substantially all of
the Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Lender in respect of
such participation to be those set forth in the agreement executed by such
Lender in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Lender had not sold such
participation.
(b) Notwithstanding the foregoing, any Lender (or any Lender together
with one or more other Lenders) may (x) assign all or a portion of its
Commitments and related outstanding Obligations hereunder to (i) its parent
company and/or any affiliate of such Lender which is at least 50% owned by such
Lender or its parent company or to one or more Lenders or (ii) in the case of
any Lender that is a fund that invests in loans, any other fund that invests in
loans and is managed or advised by the same investment advisor of such Lender or
by an Affiliate of such investment advisor or (y) assign all, or if less than
all, a portion equal to at least $5,000,000 in the aggregate for the assigning
Lender or assigning Lenders, of such Commitments and related outstanding
Obligations hereunder to one or more Eligible Transferees (treating any fund
that invests in loans and any other fund that invests in loans and is managed or
advised by the same investment advisor of such fund or by an Affiliate of such
investment advisor as a single Eligible Transferee), each of which assignees
shall become a party to this Agreement as a Lender by execution of an Assignment
and Assumption Agreement, provided that (i) at such time Schedule I shall be
deemed modified to reflect the Commitments of such new Lender and of the
existing Lenders, (ii) new Notes will be issued, at the Borrower's expense, to
such new Lender
-95-
102
and to the assigning Lender upon the request of such new Lender or assigning
Lender, such new Notes to be in conformity with the requirements of Section 1.05
(with appropriate modifications) to the extent needed to reflect the revised
Commitments, (iii) the consent of the Administrative Agent and the Borrower
shall be required in connection with any assignment to an Eligible Transferee
pursuant to clause (y) above (which consents shall not be unreasonably
withheld), provided that the consent of the Borrower shall not be required at
any time that an Event of Default has occurred and is continuing, and the
consent of BTCo shall be required in connection with any assignment of all or a
portion of any Commitment, (iv) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Lender, the payment
of a non-refundable assignment fee of $3,500 and (v) promptly after such
assignment, the Borrower shall have received from the Administrative Agent
notice of any such assignment, together with the copy of the Assignment and
Assumption Agreement relating thereto. To the extent of any assignment pursuant
to this Section 13.04(b), the assigning Lender shall be relieved of its
obligations hereunder with respect to its assigned Commitments. At the time of
each assignment pursuant to this Section 13.04(b) to a Person which is not
already a Lender hereunder and which is not a United States person (as such term
is defined in Section 7701(a)(30) of the Code) for Federal income tax purposes,
the respective assignee Lender shall, to the extent legally entitled to do so,
provide to the Borrower in the case of a Lender described in clause (ii) or (iv)
of Section 4.04(b), the forms described in such clause (ii) or (iv), as the case
may be. To the extent that an assignment of all or any portion of a Lender's
Commitments and related outstanding Obligations pursuant to Section 1.13 or this
Section 13.04(b) would, at the time of such assignment, result in increased
costs under Section 1.10, 2.06 or 4.04 from those being charged by the
respective assigning Lender prior to such assignment, then the Borrower shall
not be obligated to pay such increased costs (although the Borrower shall be
obligated to pay any other increased costs of the type described above resulting
from changes after the date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any Lender from
pledging its Loans and Notes hereunder to a Federal Reserve Bank in support of
borrowings made by such Lender from such Federal Reserve Bank.
13.05 No Waiver; Remedies Cumulative. No failure or delay on the part
of the Administrative Agent or any Lender or any holder of any Note in
exercising any right, power or privilege hereunder or under any other Credit
Document and no course of dealing between Holdings or any other Credit Party and
the Administrative Agent or any Lender or the holder of any Note shall operate
as a waiver thereof; nor shall any single or partial exercise of any right,
power or privilege hereunder or under any other Credit Document preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege hereunder or thereunder. The rights, powers and remedies herein or in
any other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Administrative Agent or any Lender or
the holder of any Note would otherwise have. No notice to or demand on any
Credit Party in any case shall entitle any Credit Party to any other or further
notice or demand in similar or other circumstances or constitute a waiver of the
rights of the Administrative Agent or any Lender or the holder of any Note to
any other or further action in any circumstances without notice or demand.
-96-
103
13.06 Payments Pro Rata. (a) Except as otherwise provided in this
Agreement, the Administrative Agent agrees that promptly after its receipt of
each payment from or on behalf of the Borrower in respect of any Obligations
hereunder, it shall distribute such payment to the Lenders (other than any
Lender that has consented in writing to waive its pro rata share of any such
payment) pro rata based upon their respective percentages, if any, of the
Obligations with respect to which such payment was received.
(b) Each of the Lenders agrees that, if it should receive any amount
hereunder (whether by voluntary payment, by realization upon security, by the
exercise of the right of setoff or banker's lien, by counterclaim or cross
action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or interest
on, the Loans, Unpaid Drawings, Commitment Commission or Letter of Credit Fees,
of a sum which with respect to the related sum or sums received by other Lenders
is in a greater proportion than the total of such Obligation then owed and due
to such Lender bears to the total of such Obligation then owed and due to all of
the Lenders immediately prior to such receipt, then such Lender receiving such
excess payment shall purchase for cash without recourse or warranty from the
other Lenders an interest in the Obligations of the respective Party to such
Lenders in such amount as shall result in a proportional participation by all
the Lenders in such amount; provided that if all or any portion of such excess
amount is thereafter recovered from such Lender, such purchase shall be
rescinded and the purchase price restored to the extent of such recovery, but
without interest.
(c) Notwithstanding anything to the contrary contained herein, the
provisions of the preceding Sections 13.06(a) and (b) shall be subject to the
express provisions of this Agreement which require, or permit, differing
payments to be made to Non-Defaulting Lenders as opposed to Defaulting Lenders.
13.07 Calculations; Computations; Accounting Terms. (a) The financial
statements to be furnished to the Lenders pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Lenders); provided that, except as otherwise specifically
provided herein, all computations and all definitions used in determining
compliance with Sections 9.07 through 9.10, inclusive, shall utilize accounting
principles and policies in conformity with those used to prepare the historical
financial statements (except that overhaul expenses will be capitalized instead
of expensed) delivered to the Lenders pursuant to Section 7.05(a) (including, in
any event, that (i) all obligations in respect of the Borrower Senior Discount
Notes shall be treated as obligations in respect of Indebtedness, (ii) all
expenses incurred in connection with the consummation of the Synthetic Lease
Financing, the Repurchase and the Borrower Senior Discount Notes Consent
Solicitation shall be ignored for purposes of such calculations and (iii) any
recharacterization, after the Effective Date, of the prepayment penalties paid
in connection with the Refinancings as expenses shall be ignored for purposes of
such calculations).
(b) All computations of (i) interest on Eurodollar Loans, Commitment
Commission and other Fees hereunder shall be made on the basis of a year of 360
days and (ii)
-97-
104
interest on Base Rate Loans shall be made on the basis of a year of 365 or 366
days, as the case may be, in each case for the actual number of days (including
the first day but excluding the last day, except that in the case of Letter of
Credit Fees, the last day shall be included) occurring in the period for which
such interest, Commitment Commission or Fees are payable.
(c) For purposes of this Agreement, the Dollar Equivalent of (i) each
Letter of Credit denominated in an Alternate Currency shall be calculated on the
date when such Letter of Credit is issued or any disbursements thereunder are
reimbursed and (ii) all outstanding Letters of Credit denominated in an
Alternate Currency shall also be calculated (x) on the second Business Day of
each month and (y) at such other times as designated by the Administrative
Agent. Such Dollar Equivalent shall remain in effect until the same is
recalculated by the Administrative Agent as provided above and notice of such
recalculation is received by the Borrower, it being understood that until such
notice is received, the Dollar Equivalent shall be that Dollar Equivalent as
last reported to the Borrower by the Administrative Agent. The Administrative
Agent shall promptly notify the Borrower and the Lenders of each such
determination of the Dollar Equivalent.
13.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY
TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT
MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE UNITED STATES
FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY ACCEPTS FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. EACH OF HOLDINGS AND THE BORROWER HEREBY
IRREVOCABLY DESIGNATES, APPOINTS AND EMPOWERS CT CORPORATION SYSTEM, WITH
OFFICES ON THE DATE HEREOF AT 000 XXXXXX XXXXXX, XXX XXXX, XXX XXXX 00000 AS ITS
DESIGNEE, APPOINTEE AND AGENT TO RECEIVE, ACCEPT AND ACKNOWLEDGE FOR AND ON ITS
BEHALF, AND IN RESPECT OF ITS PROPERTY, SERVICE OF ANY AND ALL LEGAL PROCESS,
SUMMONS, NOTICES AND DOCUMENTS WHICH MAY BE SERVED IN ANY SUCH ACTION OR
PROCEEDING. IF FOR ANY REASON SUCH DESIGNEE, APPOINTEE AND AGENT SHALL CEASE TO
BE AVAILABLE TO ACT AS SUCH, EACH OF HOLDINGS AND THE BORROWER AGREES TO
DESIGNATE A NEW DESIGNEE, APPOINTEE AND AGENT IN NEW YORK CITY ON THE TERMS AND
FOR THE PURPOSES OF THIS PROVISION SATISFACTORY TO THE AGENT UNDER THIS
AGREEMENT. EACH OF HOLDINGS AND THE BORROWER FURTHER IRREVOCABLY CONSENTS TO THE
SERVICE OF PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR
PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL,
POSTAGE PREPAID, TO ANY CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS
SIGNATURE BELOW, SUCH SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING.
NOTHING HEREIN SHALL AFFECT THE RIGHT OF
-98-
105
THE AGENT UNDER THIS AGREEMENT, ANY BANK OR THE HOLDER OF ANY NOTE TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE LEGAL PROCEEDINGS OR
OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER JURISDICTION.
(b) EACH OF HOLDINGS AND THE BORROWER HEREBY IRREVOCABLY WAIVES ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY OF
THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION WITH THIS
AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS REFERRED TO IN
CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD
OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR PROCEEDING BROUGHT IN ANY
SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY WAIVES ALL
RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
13.09 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Borrower and the
Administrative Agent.
13.10 Effectiveness. This Agreement shall become effective on the date
(the "Effective Date") on which (i) all of the conditions provided in Section 5
have been satisfied or waived and (ii) Holdings, the Borrower, the
Administrative Agent and each of the Lenders shall have signed a counterpart
hereof (whether the same or different counterparts) and shall have delivered the
same to the Administrative Agent at its Notice Office or, in the case of the
Lenders, shall have given to the Administrative Agent telephonic (confirmed in
writing), written or telex notice (actually received) at such office that the
same has been signed and mailed to it. The Administrative Agent will give the
Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.
13.11 Headings Descriptive. The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
13.12 Amendment or Waiver. (a) Neither this Agreement nor any other
Credit Document nor any terms hereof or thereof may be changed, waived,
discharged or terminated unless such change, waiver, discharge or termination is
in writing signed by the respective Credit Parties party thereto and the
Required Lenders, provided that no such change, waiver, discharge or termination
shall, without the consent of each Lender (other than a Defaulting Lender) (with
-99-
106
Obligations being directly affected in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
maturity of any Letter of Credit beyond the Maturity Date, or reduce the rate or
extend the time of payment of interest or Fees thereon (except (x) in connection
with the waiver of applicability of any post-default increase in interest rates
and (y) that any amendment or modification that is not agreed to by each Lender
directly affected thereby to the financial definitions in this Agreement or to
Section 13.07(a) shall not constitute a reduction in the rate of interest or
fees for purposes of this clause (i), notwithstanding the fact that such
amendment or modification would otherwise actually result in such a reduction,
so long as the primary purpose (as determined in good faith by the Borrower and
the Administrative Agent) of the respective amendment or modification was not to
decrease the pricing pursuant to this Agreement), or reduce the principal amount
thereof (except to the extent repaid in cash), (ii) release all or substantially
all of the Collateral (except as expressly provided in the Security Documents)
under all the Security Documents, (iii) amend, modify or waive any provision of
this Section 13.12 (it being understood that, with the consent of the Required
Lenders, additional extensions of credit pursuant to this Agreement may be
included under this Agreement to provide the Lenders with customary similar or
additional rights of consent), (iv) reduce the percentage specified in the
definition of Required Lenders (it being understood that, with the consent of
the Required Lenders, additional extensions of credit pursuant to this Agreement
may be included in the determination of the Required Lenders on substantially
the same basis as the extensions of Commitments are included on the Effective
Date) or (v) consent to the assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement; provided further, that no such
change, waiver, discharge or termination shall (w) increase the Commitments of
any Lender over the amount thereof then in effect without the consent of such
Lender (it being understood that waivers or modifications of conditions
precedent, covenants, Defaults or Events of Default or of a mandatory reduction
in the Total Commitment shall not constitute an increase of the Commitment of
any Lender, and that an increase in the available portion of any Commitment of
any Lender shall not constitute an increase in the Commitment of such Lender),
(x) without the consent of BTCo, amend, modify or waive any provision of Section
2 or alter its rights or obligations with respect to Letters of Credit or
Swingline Loans, (y) without the consent of the Administrative Agent, amend,
modify or waive any provision of Section 12 as same applies to such
Administrative Agent or any other provision as same relates to the rights or
obligations of such Administrative Agent or (z) without the consent of the
Collateral Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent.
(b) If, in connection with any proposed change, waiver, discharge or
termination to any of the provisions of this Agreement as contemplated by clause
(a)(i) through (v), inclusive, of this Section 13.12, the consent of the
Required Lenders is obtained but the consent of one or more of other Lenders
whose consent is required is not obtained, then the Borrower shall have the
right to replace each such non-consenting Lender or Lenders (so long as all
non-consenting Lenders are so replaced) with one or more Replacement Lenders
pursuant to Section 1.13 so long as at the time of such replacement, each such
Replacement Lender consents to the proposed change, waiver, discharge or
termination, provided that the Borrower shall not have the right to replace a
Lender solely as a result of the exercise of such Lender's rights (and the
with-
-100-
107
holding of any required consent by such Lender) pursuant to the second proviso
to Section 13.12(a).
13.13 Survival. All indemnities set forth herein including, without
limitation, in Sections 1.10, 1.11, 2.06, 4.04, 12.06 and 13.01 shall survive
the execution, delivery and termination of this Agreement and the Notes and the
making and repayment of the Obligations.
13.14 Domicile of Loans. Each Lender may transfer and carry its Loans
at, to or for the account of any office, Subsidiary or Affiliate of such Lender.
Notwithstanding anything to the contrary contained herein, to the extent that a
transfer of Loans pursuant to this Section 13.14 would, at the time of such
transfer, result in increased costs under Section 1.10, 1.11, 2.06 or 4.04 from
those being charged by the respective Lender prior to such transfer, then the
Borrower shall not be obligated to pay such increased costs (although the
Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
13.15 Limitation on Additional Amounts, etc. Notwithstanding anything
to the contrary contained in Sections 1.10 and 2.06 of this Agreement, unless a
Lender gives notice to the Borrower that it is obligated to pay an amount under
the respective such Section within 180 days after the later of (x) the date the
Lender incurs the respective increased costs, reduction in amounts received or
receivable or reduction in return on capital or (y) the date such Lender has
actual knowledge of its incurrence of the respective increased costs, reductions
in amounts received or receivable or reduction in return on capital, then such
Lender shall only be entitled to be compensated for such amount by the Borrower
pursuant to said Section 1.10 or 2.06, as the case may be, to the extent the
costs, loss, expense or liability, reduction in amounts received or receivable
or reduction in return on capital are incurred or suffered on or after the date
which occurs 180 days prior to such Lender giving notice to the Borrower that it
is obligated to pay the respective amounts pursuant to said Section 1.10 or
2.06, as the case may be. Furthermore, no Lender shall be entitled to
compensation for any increased costs or reduction in amounts received or
receivable or reduction in return on capital under Section 1.10 or 2.06 unless
at the time it is the policy or general practice of such Lender to request
compensation for comparable costs or reductions, if any, in similar
circumstances, if any, under comparable provisions of other credit agreements
for comparable customers (unless specific facts or circumstances applicable to
the Borrower or the transactions contemplated by this Agreement would alter the
application of such policy or general practice). This Section 13.15 shall have
no applicability to any Section of this Agreement other than said Sections 1.10
and 2.06.
13.16 Register. The Borrower hereby designates the Administrative Agent
to serve as the Borrower's agent, solely for purposes of this Section 13.16, to
maintain a register (the "Register") on which it will record the Commitments
from time to time of each of the Lenders, the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender. Failure to make any such recordation, or any error in such recordation
shall not affect the Borrower's obligations in respect of such Loans. With
respect to any Lender, the transfer of the Commitments of such Lender and the
rights to the principal of, and interest on, any Loan made pursuant to such
Commitments shall not be effective until such transfer is recorded on the
Register maintained by the Administrative Agent with respect to
-101-
108
ownership of such Commitments and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitments and Loans shall
remain owing to the transferor. The registration of assignment or transfer of
all or part of any Commitments and Loans shall be recorded by the Administrative
Agent on the Register only upon the acceptance by the Administrative Agent of a
properly executed and delivered Assignment and Assumption Agreement pursuant to
Section 13.04(b). Coincident with the delivery of such an Assignment and
Assumption Agreement to the Administrative Agent for acceptance and registration
of assignment or transfer of all or part of a Loan, or as soon thereafter as
practicable, the assigning or transferor Lender shall surrender the Note
evidencing such Loan, and thereupon one or more new Notes in the same aggregate
principal amount shall be issued to the assigning or transferor Lender and/or
the new Lender. The Borrower agrees to indemnify the Administrative Agent from
and against any and all losses, claims, damages and liabilities of whatsoever
nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its duties under this Section 13.16.
13.17 Confidentiality. (a) Subject to the provisions of clause (b) of
this Section 13.17, each Lender agrees that it will use its reasonable efforts
not to disclose without the prior consent of the Borrower (other than to its
employees, auditors, advisors or counsel or to another Lender if the Lender or
such Lender's holding or parent company in its sole discretion determines that
any such party should have access to such information, provided such Persons
shall be subject to the provisions of this Section 13.17 to the same extent as
such Lender) any information with respect to Holdings or any of its Subsidiaries
which is now or in the future furnished pursuant to this Agreement or any other
Credit Document and which is designated by the Borrower to the Lenders in
writing as confidential, provided that any Lender may disclose any such
information (i) as has become generally available to the public other than by
virtue of a breach of this Section 13.17(a) by the respective Lender, (ii) as
may be required or appropriate in any report, statement or testimony submitted
to any municipal, state or Federal Reserve Board, the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or elsewhere)
or their successors, (iii) as may be required or appropriate in respect to any
summons or subpoena or in connection with any litigation, (iv) in order to
comply with any law, order, regulation or ruling applicable to such Lender, (v)
to the Administrative Agent or the Collateral Agent and (vi) to any prospective
or actual transferee or participant in connection with any contemplated transfer
or participation of any of the Notes or Commitments or any interest therein by
such Lender, provided that such prospective transferee agrees to be bound by the
confidentiality provisions contained in this Section 13.17.
(b) Each of Holdings and the Borrower hereby acknowledges and agrees
that each Lender may share with any of its affiliates any information related to
Holdings or any of its Subsidiaries (including, without limitation, any
nonpublic customer information regarding the creditworthiness of Holdings and
its Subsidiaries), provided such Persons shall be subject to the provisions of
this Section 13.17 to the same extent as such Lender).
SECTION 14. Holdings Guaranty.
14.01 Guaranty. In order to induce the Administrative Agent, the
Collateral Agent, the Issuing Lender and the Lenders to enter into this
Agreement and to extend credit
-102-
109
hereunder, and to induce the other Guaranteed Creditors to enter into Interest
Rate Protection Agreements or Other Hedging Agreements, and in recognition of
the direct benefits to be received by Holdings from the proceeds of the Loans,
the issuance of the Letters of Credit and the entering into of such Interest
Rate Protection Agreements or Other Hedging Agreements, Holdings hereby agrees
with the Guaranteed Creditors as follows: Holdings hereby unconditionally and
irrevocably guarantees as primary obligor and not merely as surety the full and
prompt payment when due, whether upon maturity, acceleration or otherwise, of
any and all of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors. If any or all of the Guaranteed Obligations of the Borrower to the
Guaranteed Creditors becomes due and payable hereunder, Holdings unconditionally
and irrevocably promises to pay such indebtedness to the Administrative Agent
and/or the other Guaranteed Creditors, or order, on demand, together with any
and all expenses which may be incurred by the Administrative Agent or the other
Guaranteed Creditors in collecting any of the Guaranteed Obligations. If claim
is ever made upon any Guaranteed Creditor for repayment or recovery of any
amount or amounts received in payment or on account of any of the Guaranteed
Obligations and any of the aforesaid payees repays all or part of said amount by
reason of (i) any judgment, decree or order of any court or administrative body
having jurisdiction over such payee or any of its property or (ii) any
settlement or compromise of any such claim effected by such payee with any such
claimant (including the Borrower), then and in such event Holdings agrees that
any such judgment, decree, order, settlement or compromise shall be binding upon
Holdings, notwithstanding any revocation of this Guaranty or other instrument
evidencing any liability of the Borrower, and Holdings shall be and remain
liable to the aforesaid payees hereunder for the amount so repaid or recovered
to the same extent as if such amount had never originally been received by any
such payee.
14.02 Bankruptcy. Additionally, Holdings unconditionally and
irrevocably guarantees the payment of any and all of the Guaranteed Obligations
of the Borrower to the Guaranteed Creditors whether or not due or payable by the
Borrower upon the occurrence of any of the events specified in Section 10.05,
and irrevocably and unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, in lawful money of the United States.
14.03 Nature of Liability. The liability of Holdings hereunder is
exclusive and independent of any security for or other guaranty of the
Guaranteed Obligations of the Borrower whether executed by Holdings, any other
guarantor or by any other party, and the liability of Holdings hereunder is not
affected or impaired by (a) any direction as to application of payment by the
Borrower or by any other party, or (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
Guaranteed Obligations of the Borrower, or (c) any payment on or in reduction of
any such other guaranty or undertaking, or (d) any dissolution, termination or
increase, decrease or change in personnel by the Borrower, or (e) any payment
made to any Guaranteed Creditor on the Guaranteed Obligations which any such
Guaranteed Creditor repays to the Borrower pursuant to court order in any
bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and Holdings waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
14.04 Independent Obligation. The obligations of Holdings hereunder are
independent of the obligations of any other guarantor, any other party or the
Borrower, and a separate
-103-
110
action or actions may be brought and prosecuted against Holdings whether or not
action is brought against any other guarantor, any other party or the Borrower
and whether or not any other guarantor, any other party or the Borrower be
joined in any such action or actions. Holdings waives, to the fullest extent
permitted by law, the benefit of any statute of limitations affecting its
liability hereunder or the enforcement thereof. Any payment by the Borrower or
other circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to Holdings.
14.05 Authorization. Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:
(a) change the manner, place or terms of payment of, and/or change or
extend the time of payment of, renew, increase, accelerate or alter, any of
the Guaranteed Obligations (including any increase or decrease in the rate
of interest or fees thereon), any security therefor, or any liability
incurred directly or indirectly in respect thereof, and the Guaranty herein
made shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, impair, surrender, realize upon or
otherwise deal with in any manner and in any order any property by
whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any of
those hereunder) incurred directly or indirectly in respect thereof or
hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or others or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers, guarantors, the
Borrower, other Credit Parties or other obligors;
(e) settle or compromise any of the Guaranteed Obligations, any
security therefor or any liability (including any of those hereunder)
incurred directly or indirectly in respect thereof or hereof, and may
subordinate the payment of all or any part thereof to the payment of any
liability (whether due or not) of the Borrower to its creditors other than
the Guaranteed Creditors;
(f) apply any sums by whomsoever paid or howsoever realized to any
liability or liabilities of the Borrower to the Guaranteed Creditors
regardless of what liability or liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or default
under, this Agreement, any other Credit Document or any of the instruments
or agreements referred to herein or therein, or otherwise amend, modify or
supplement this Agreement, any other Credit Document or any of such other
instruments or agreements; and/or
-104-
111
(h) take any other action which would, under otherwise applicable
principles of common law, give rise to a legal or equitable discharge of
Holdings from its liabilities under this Guaranty.
14.06 Reliance. It is not necessary for any Guaranteed Creditor to
inquire into the capacity or powers of Holdings or any of its Subsidiaries or
the officers, directors, partners or agents acting or purporting to act on their
behalf, and any Guaranteed Obligations made or created in reliance upon the
professed exercise of such powers shall be guaranteed hereunder.
14.07 Subordination. Any indebtedness of the Borrower now or hereafter
owing to Holdings is hereby subordinated to the Guaranteed Obligations of the
Borrower owing to the Guaranteed Creditors; and if the Administrative Agent so
requests at a time when an Event of Default exists, all such indebtedness of the
Borrower to Holdings shall be collected, enforced and received by Holdings for
the benefit of the Guaranteed Creditors and be paid over to the Administrative
Agent on behalf of the Guaranteed Creditors on account of the Guaranteed
Obligations of the Borrower to the Guaranteed Creditors, but without affecting
or impairing in any manner the liability of Holdings under the other provisions
of this Guaranty. Prior to the transfer by Holdings of any note or negotiable
instrument evidencing any such indebtedness of the Borrower to Holdings,
Holdings shall xxxx such note or negotiable instrument with a legend that the
same is subject to this subordination. Without limiting the generality of the
foregoing, Holdings hereby agrees with the Guaranteed Creditors that it will not
exercise any right of subrogation which it may at any time otherwise have as a
result of this Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code or otherwise) until all Guaranteed Obligations have been
irrevocably paid in full in cash.
14.08 Waiver. (a) Holdings waives any right (except as shall be
required by applicable statute and cannot be waived) to require any Guaranteed
Creditor to (i) proceed against the Borrower, any other guarantor or any other
party, (ii) proceed against or exhaust any security held from the Borrower, any
other guarantor or any other party or (iii) pursue any other remedy in any
Guaranteed Creditor's power whatsoever. Holdings waives any defense based on or
arising out of any defense of the Borrower, any other guarantor or any other
party, other than payment in full of the Guaranteed Obligations, based on or
arising out of the disability of the Borrower, any other guarantor or any other
party, or the validity, legality or unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full of the Guaranteed
Obligations. The Guaranteed Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or any other
Guaranteed Creditor by one or more judicial or nonjudicial sales, whether or not
every aspect of any such sale is commercially reasonable (to the extent such
sale is permitted by applicable law), or exercise any other right or remedy the
Guaranteed Creditors may have against the Borrower or any other party, or any
security, without affecting or impairing in any way the liability of Holdings
hereunder except to the extent the Guaranteed Obligations have been paid.
Holdings waives any defense arising out of any such election by the Guaranteed
Creditors, even though such election operates to impair or extinguish any right
of reimbursement or subrogation or other right or remedy of Holdings against the
Borrower or any other party or any security.
-105-
112
(b) Holdings waives all presentments, demands for performance, protests
and notices, including without limitation notices of nonperformance, notices of
protest, notices of dishonor, notices of acceptance of this Guaranty, and
notices of the existence, creation or incurring of new or additional Guaranteed
Obligations. Holdings assumes all responsibility for being and keeping itself
informed of the Borrower's financial condition and assets, and of all other
circumstances bearing upon the risk of nonpayment of the Guaranteed Obligations
and the nature, scope and extent of the risks which Holdings assumes and incurs
hereunder, and agrees that the Administrative Agent and the Lenders shall have
no duty to advise Holdings of information known to them regarding such
circumstances or risks.
(c) Holdings hereby acknowledges and affirms that it understands that
to the extent the Guaranteed Obligations are secured by Real Property located in
California, Holdings shall be liable for the full amount of the liability
hereunder notwithstanding the foreclosure on such Real Property by trustee sale
or any other reason impairing Holdings' or any Guaranteed Creditor's right to
proceed against the Borrower or any other guarantor of the Guaranteed
Obligations. In accordance with Section 2856 of the California Civil Code,
Holdings hereby waives:
(i) all rights of subrogation, reimbursement, indemnification, and
contribution and any other rights and defenses that are or may become
available to Holdings by reason of Sections 2787 to 2855, inclusive, 2899
and 3433 of the California Civil Code;
(ii) all rights and defenses that Holdings may have because the
Guaranteed Obligations are secured by Real Property located in California.
This means, among other things: (A) the Guaranteed Creditors may collect
from Holdings without first foreclosing on any real or personal property
collateral pledged by the Borrower or any other Credit Party; and (B) if
the Guaranteed Creditors foreclose on any Real Property collateral pledged
by the Borrower or any other Credit Party, (1) the amount of the Guaranteed
Obligations may be reduced only by the price for which that collateral is
sold at the foreclosure sale, even if the collateral is worth more than the
sale price, and (2) the Guaranteed Creditors may collect from Holdings even
if the Guaranteed Creditors, by foreclosing on the Real Property
collateral, have destroyed any right Holdings may have to collect from the
Borrower. This is an unconditional and irrevocable waiver of any rights and
defenses Holdings may have because the Guaranteed Obligations are secured
by Real Property. These rights and defenses include, but are not limited
to, any rights or defenses based upon Section 580a, 580b, 580d or 726 of
the California Code of Civil Procedure; and
(iii) all rights and defenses arising out of an election of remedies
by the Guaranteed Creditors, even though that election of remedies, such as
a nonjudicial foreclosure with respect to security for the Guaranteed
Obligations, has destroyed Holdings' rights of subrogation and
reimbursement against the Borrower by the operation of Section 580d of the
Code of Civil Procedure or otherwise.
Holdings warrants and agrees that each of the waivers set forth above
is made with full knowledge of its significance and consequences and that if any
of such waivers are
-106-
113
determined to be contrary to any applicable law or public policy, such waivers
shall be effective only to the maximum extent permitted by law.
14.09 Nature of Liability. It is the desire and intent of Holdings and
the Guaranteed Creditors that this Guaranty shall be enforced against Holdings
to the fullest extent permissible under the laws and public policies applied in
each jurisdiction in which enforcement is sought. If, however, and to the extent
that, the obligations of Holdings under this Guaranty shall be adjudicated to be
invalid or unenforceable for any reason (including, without limitation, because
of any applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of Holdings obligations under this Guaranty shall be
deemed to be reduced and Holdings shall pay the maximum amount of the Guaranteed
Obligations which would be permissible under applicable law.
* * *
-107-
114
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Agreement as of the date first
above written.
Address:
4440 Brittmoore UNIVERSAL COMPRESSION HOLDINGS, INC.
Xxxxxxx, Xxxxx 00000
Attn.: President
Tel: (000) 000-0000
Fax: (000) 000-0000 By /s/ XXXXXXX XXXXXXXXXX
----------------------------------------
Title: Chief Financial Officer
UNIVERSAL COMPRESSION, INC.
By /s/ XXXXXXX XXXXXXXXXX
----------------------------------------
Title: Chief Financial Officer
BANKERS TRUST COMPANY,
Individually and as Administrative Agent
By /s/ XXXXXX XXXXXXXXXX
----------------------------------------
Title: Director
115
FIRST UNION NATIONAL BANK
By: /s/ XXXXXX X. XXXXXXXXX
---------------------------------
Title: Senior Vice President
BANK ONE, N.A.
By: /s/ J. XXXXXXX XXXXX, XX.
---------------------------------
Title: First Vice President
116
SCHEDULE I
COMMITMENTS
Lender Commitment
------ ----------
Bankers Trust Company $30,000,000
First Union National Bank $10,000,000
Bank One, N.A. $10,000,000
TOTAL: $50,000,000
117
SCHEDULE II
ERISA
None.
118
SCHEDULE III
Borrower Subsidiaries
Borrower Percentage
Name Ownership Direct Owner
---------------------------------- ------------------------ ------------------------------------------
Universal Compression
International, Inc. 100% Universal Compression, Inc.
---------------------------------- ------------------------ ------------------------------------------
Universal Compression
International, Ltd. 100% Universal Compression International, Inc.
---------------------------------- ------------------------ ------------------------------------------
Universal Compression Finance
Company, Ltd. 100% Universal Compression International, Ltd.
---------------------------------- ------------------------ ------------------------------------------
Universal Compression of Colombia,
Ltd. 100% Universal Compression International, Ltd.
---------------------------------- ------------------------ ------------------------------------------
Uniwhale, Ltd. 50% Universal Compression of Colombia,
75% Ltd.;
25% Universal Compression International,
Ltd.
---------------------------------- ------------------------ ------------------------------------------
Universal Compression de Venezuela
Unicom, C.A. 100% Universal Compression, Inc.*
---------------------------------- ------------------------ ------------------------------------------
Universal Compression PTY Ltd.
(Australia) 100% Universal Compression, Inc.*
---------------------------------- ------------------------ ------------------------------------------
Universal Compression de Mexico, 99% Universal Compression International,
S.A. de C.V. 100 % Inc.;
1% Universal Compression, Inc.
---------------------------------- ------------------------ ------------------------------------------
----------
* To be dividended to Universal Compression International, Inc. or Universal
Compression International, Ltd.
119
SCHEDULE VI
Existing Indebtedness
Debt Agreements
Aggregate
Document Principal Amount Obligor(s)
------------------------------------------------- ------------------------ ------------------------------------------
Synthetic Lease Facility $200,000,000 Borrower (lessee)
(permitted) Holdings (guarantor)
Lease Agreement dated as of July 19, 1999 to be paid off promptly Borrower (grantor) Universal
between Societe Generale Financial Corporation following the Effective Compression International, Ltd.
as lessor and Universal Compression Date and prior to any (lessee), Uniwhale de Colombia
International, Ltd. as lessee and related borrowing under the Credit (EU (sublesee) and Uniwhale Ltd.
documents Agreement (joint venturer)
Master Lease Agreement dated as of July 19, 1999 $5,000,000 Borrower (lessee)
between GE Capital Fleet Services and Universal
Compression, Inc.
Contingent Obligations
Document Obligor(s)
------------------------------------------------- ------------------------------------------
Purchase Price Adjustment Agreement Borrower, Holdings
dated as of September 18, 1997 among
Holdings, the Borrower and Tidewater Inc.
Acuerdo dated as of November 23, 1998 between Borrower
Empresa Colombiana de Gas-ECOGAS and Borrower
Miscellaneous performance bonds, Borrower, Holdings,
performance guaranties and similar Subsidiaries
Contingent Obligations none of which
constitute Indebtedness for borrowed
money and all of which are permitted under
Section 9.04.
All such Indebtedness may be extended, renewed or refinanced.
120
SCHEDULE V
Insurance
Universal Compression Holdings, Inc.
Schedule of Insurance Coverage
2000 Policy Term
TYPE OF INSURANCE LIMIT OF DEDUCTIBLES/ ANNUAL
COVERAGE COMPANY INSURANCE SIR PREMIUM
---------------------- ---------------------------- ------------------------- ----------------- --------------
Commercial Property Reliance National Company of $15,060,205 Blanket Limit $5,000 Deductible $45,163.65
Illinois each loss except: Net incl. Tax
$10,000,000 Boiler & $25,000 Deductible
Machinery Flood & Earthquake
$25,000 Deductible
Boiler & Machinery
12 hour waiting
period Off Premise
Power Interruption
8 hour waiting period
Service Interruption
---------------------- ---------------------------- ------------------------- ----------------- --------------
Commercial Property RLI Insurance Company $3,500,000 Blanket Limit $250,000 Deductible
Policy term May 30, All Risk, territory US Repair or replacement
2000-2001 and its possessions (at actual cash value)
including Flood and
Earthquake
---------------------- ---------------------------- ------------------------- ----------------- --------------
Commercial General Zurich American Insurance $1,000,000 Each Occurrence $250,000 BI & PD $65,000.00 Net
Liability Group Deductible
$2,000,000 General $5,000 Employee
Aggregate Benefits Deductible
---------------------- ---------------------------- ------------------------- ----------------- --------------
Commercial Umbrella Lumbermens Mutual Casualty $50,000,000 Each Occurrence $10,000 SIR $74,000.00 Net
Company $50,000,000 General
Aggregate
---------------------- ---------------------------- ------------------------- ----------------- --------------
Workers Compensation/ American Zurich Insurance WC-Statutory Benefits $370,534.00
Company Net incl. Tax
Employers Liability EL - $1,000,000 Bodily
Injury
---------------------- ---------------------------- ------------------------- ----------------- --------------
121
SCHEDULE V
Automobile Liability American Guarantee and Liability $1,000,000 BI & PD $25,000 BI & PD $103,252.54
Combined Single Limit Deductible Net incl. Tax
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Foreign Package ACE USA $6,800.00 Net
- Workers Compensation State of Hire
- Employers Liability $1,000,000
- General Liability $1,000,000 Each Occurrence
/$2,000,000 General Aggregate
- Automobile Liability $1,000,000 BI & PD
Combined Single Limit
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Political Risk Coverage Chubb Group of Insurance $41,000,000 Max. Policy $205,000.00 Net
Companies Limit
$21,000,000 Country Limit of
Liability - Colombia
$20,000,000 Country Limit of
Liability - Argentina
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Payment Bond Underwriters Indemnity Group $250.00
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Directors & Officers AIG (National Union) $10,000,000 Aggregate $106,315.00 Net
Liability (including for the term
Employment Practices 3/20/99 -
Liability) 6/30/00
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Directors & Officers AIG (National Union) $10,000,000 Aggregate Per Loss $379,500.00
Liability (including Deductible: 3 Year pre-paid
Employment Practices $0 for premium
Liability) unindemnifiable
losses $150,000
for Securities
Claims, $75,000
for all other
claims
Policy term May 19,
2000 - 2003
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Excess Directors & XL $10,000,000 xs $10,000,000 Per Loss $227,700.00 3
Officers Deductible: Year pre-paid
Per Primary premium
Policy Term May 19,
2000 - 2003
---------------------- ---------------------------- ------------------------- ----------------- ----------------
122
SCHEDULE V
---------------------- ---------------------------- ------------------------- ----------------- -----------------
Employment Practices AIG (National Union) $5,000,000 Aggregate Per Loss $68,400.00 2 Year
Liability Deductible: pre-paid
$50,000 premium
May 19, 2000 - 2002
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Commercial Crime Great American Insurance $5,000,000 Per Loss $7,479.85 Net
Company
---------------------- ---------------------------- ------------------------- ----------------- ----------------
Fiduciary Liability Chubb Executive Risk $3,000,000 Aggregate $3,315.00 Net
---------------------- ---------------------------- ------------------------- ----------------- ----------------
123
SCHEDULE VI
Existing Liens
1. Liens created pursuant to the Synthetic Lease Financing Documents.
2. Equipment Lease, securing collateral consisting of commercial ice machines
and ice bins in favor of Xxxxxxxxxxx Incorporated, filed with the Secretary
of State of Texas on June 15, 1998 and July 10, 1998 (# 122137, 140501).
3. Equipment purchase/consignment securing collateral consisting of all goods
sold or consigned by Kaeser Compressors, Inc. to Universal Compression,
Inc., and all proceeds derived therefrom in favor of Kaeser Compressors,
Inc., filed with the Secretary of State of Texas on August 20, 1998
(#169345)
4. Master Lease Agreement dated as of July 19, 1999 between GE Capital Fleet
Services and Universal Compression, Inc. securing collateral consisting of
certain vehicles as more fully described in the agreement.
5. Lease Agreement dated as of July 19, 1999 between Societe Generale
Financial Corporation and Universal Compression International, Ltd. and
related documents securing collateral consisting of equipment described in
Schedule A to the agreement.
All such Liens may be renewed or extended.
124
SCHEDULE VII
Indebtedness to be Refinanced
1. Credit Agreement dated as of February 20, 1998 among Universal Compression
Holdings, Inc., Universal Compression, Inc., the various lenders party
thereto and Bankers Trust Company, as Agent, and the Loan Documents (as
defined therein).
2. Letters of Credit listed on Schedule X hereto, issued pursuant to item 1
above.
3. Holdings Senior Discount Notes.
125
SCHEDULE VIII
LENDER ADDRESSES
Lender Addresses
-------------------------- ------------------
Bankers Trust Company 000 Xxxxxxx Xxxxxx
M.S. 0000
Xxx Xxxx, Xxx Xxxx 00000
Attn.: Xxxxxx Xxxxxxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
First Union National Bank 000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Attn.: Xxxxxx Wateroff
Tel: (000) 000-0000
Fax: (000) 000-0000
Bank One, N.A. 000 Xx. Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxxxxx, XX 00000
Attn.: Xxxxxxx Xxxxx, Xx.
Tel: (000) 000-0000
Fax: (000) 000-0000
126
SCHEDULE IX
Existing Investments
Currently, existing net investment does not exceed $30,000,000. Includes
Argentina, Colombia, Venezuela, Australia, Mexico and Cayman Islands. Net
investment in restricted countries is approximately $14 million, subject to
further review of Administrative Agent.
127
SCHEDULE X
Existing Letters of Credit
Universal Compression
Letters of Credit Outstanding Close of Business 5/26/2000
Beneficiary LC No. Face Amount Expiry Date
Whitney National Bank S-12340 $ 45,175.00 02/19/2001
China Petroleum S-12392 $ 92,954.32 08/15/2000
ENPPI S-12393 $ 27,327.00 03/16/2001
Zurich Insurance S-12425 $ 153,000.00 12/31/2000
Hyundai Heavy Ind S-12447 $ 47,600.00 08/31/2000
Astilleros S-12582 $ 17,315.00 06/30/2000
Astilleros S-12615 $ 30,810.00 07/31/2000
China Xxxxxxxx Xxxxx X-00000 $ 92,500.00 08/31/2000
Kvaerner Process S-12723 $ 47,570.00 07/31/2000
Compatabilite Fourniesserus Alstom S-12750 $ 105,564.00 10/15/2000
Mitsui Engineering S-12809 $ 31,500.00 12/16/2000
JGC Engineering S-12871 $ 22,758.00 02/08/2001
Siemens Westinghouse S-12906 $ 85,856.50 02/25/2001
Maritima Overseas S-12991 $ 60,000.00 05/31/2001
Maritima Overseas S-12992 $ 60,000.00 05/31/2001
Hyundai Heavy Ind S-13166 $ 80,866.40 05/31/2000
Keyspan Energy Mgmt S-13332 $ 17,500.00 05/31/2000
Xxxxxxx Xxxxxxxxx Xxxxx X-00000 $ 754,200.00 03/27/2001
Xxxxxxx Xxxxxxxxx Xxxxx X-00000 $ 543,745.75 03/27/2001
Xxxxxxx Energy & Chemical S-13409 $ 8,860.00 05/15/2001
Total $ 2,325,101.97
