1
Exhibit 10.53
LOAN AGREEMENT
dated as of
December 14, 2000
between
THE PRINCETON REVIEW, INC.
The SUBSIDIARY GUARANTORS Party Hereto
The LENDERS Party Hereto
and
RESERVOIR CAPITAL PARTNERS, L.P.,
as Administrative Agent
$25,000,000
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TABLE OF CONTENTS
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ARTICLE I
SECTION 1.01. Defined Terms.......................................... 1
SECTION 1.02. Terms Generally........................................ 17
SECTION 1.03. Accounting Terms; GAAP................................. 18
ARTICLE II
SECTION 2.01. The Commitments........................................ 18
SECTION 2.02. Loans and Borrowings................................... 19
SECTION 2.03. Requests for Borrowings................................ 19
SECTION 2.04. Funding of Borrowings.................................. 19
SECTION 2.05. Termination and Reduction of the Commitments........... 20
SECTION 2.06. Repayment of Loans; Evidence of Debt................... 20
SECTION 2.07. Prepayment of Loans.................................... 21
SECTION 2.08. [Reserved]............................................. 22
SECTION 2.09. Interest............................................... 23
SECTION 2.10. Taxes ................................................. 23
SECTION 2.11. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs......................................... 24
SECTION 2.12. Mitigation Obligations; Replacement of Lenders......... 26
ARTICLE III
SECTION 3.01. The Guarantee.......................................... 27
SECTION 3.02. Obligations Unconditional.............................. 27
SECTION 3.03. Reinstatement.......................................... 28
SECTION 3.04. Subrogation............................................ 28
SECTION 3.05. Remedies............................................... 28
SECTION 3.06. Instrument for the Payment of Money.................... 29
SECTION 3.07. Continuing Guarantee................................... 29
SECTION 3.08. Rights of Contribution................................. 29
SECTION 3.09. General Limitation on Guarantee Obligations............ 30
ARTICLE IV
SECTION 4.01. Organization; Powers................................... 30
SECTION 4.02. Authorization; Enforceability.......................... 30
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SECTION 4.03. Governmental Approvals; No Conflicts................... 31
SECTION 4.04. Financial Condition; No Material Adverse Change........ 31
SECTION 4.05. Properties............................................. 32
SECTION 4.06. Litigation and Environmental Matters................... 33
SECTION 4.07. Compliance with Laws and Agreements.................... 33
SECTION 4.08. Investment and Holding Company Status.................. 33
SECTION 4.09. Taxes ................................................. 33
SECTION 4.10. ERISA ................................................. 34
SECTION 4.11. Disclosure............................................. 34
SECTION 4.12. Use of Credit.......................................... 34
SECTION 4.13. Material Agreements and Liens.......................... 34
SECTION 4.14. Capitalization......................................... 35
SECTION 4.15. Subsidiaries and Investments........................... 35
SECTION 4.16. Acquisition Agreements................................. 36
ARTICLE V
SECTION 5.01. Effective Date......................................... 36
SECTION 5.02. Each Credit Event...................................... 39
SECTION 5.03. Certain Credit Events.................................. 39
ARTICLE VI
SECTION 6.01. Financial Statements and Other Information............. 40
SECTION 6.02. Notices of Material Events............................. 42
SECTION 6.03. Existence; Conduct of Business......................... 43
SECTION 6.04. Payment of Obligations................................. 43
SECTION 6.05. Maintenance of Properties; Insurance................... 43
SECTION 6.06. Books and Records; Inspection Rights................... 43
SECTION 6.07. Compliance with Laws................................... 43
SECTION 6.08. Use of Proceeds........................................ 43
SECTION 6.09. Certain Obligations Respecting Subsidiaries; Further
Assurances....................................... 44
ARTICLE VII
SECTION 7.01. Indebtedness........................................... 45
SECTION 7.02. Liens ................................................. 46
SECTION 7.03. Fundamental Changes.................................... 46
SECTION 7.04. Lines of Business...................................... 47
SECTION 7.05. Investments............................................ 47
SECTION 7.06. Restricted Payments.................................... 47
SECTION 7.07. Transactions with Affiliates........................... 48
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SECTION 7.08. Restrictive Agreements................................. 48
SECTION 7.09. Leakage Account........................................ 48
SECTION 7.10. Certain Financial Covenants............................ 49
SECTION 7.11. Acquisition Indebtedness............................... 50
SECTION 7.12. Modifications of Certain Documents..................... 50
ARTICLE VIII................................................................ 50
ARTICLE IX.................................................................. 53
ARTICLE X
SECTION 10.01. Notices............................................... 56
SECTION 10.02. Waivers; Amendments................................... 57
SECTION 10.03. Expenses; Indemnity; Damage Waiver.................... 58
SECTION 10.04. Successors and Assigns................................ 59
SECTION 10.05. Survival.............................................. 62
SECTION 10.06. Counterparts; Integration; Effectiveness.............. 62
SECTION 10.07. Severability.......................................... 63
SECTION 10.08. Right of Setoff....................................... 63
SECTION 10.09. Governing Law; Jurisdiction; Etc...................... 63
SECTION 10.10. WAIVER OF JURY TRIAL.................................. 64
SECTION 10.11. Headings.............................................. 64
SECTION 10.12. Treatment of Certain Information; Confidentiality..... 64
SECTION 10.13. Representations of the Lenders........................ 65
SCHEDULE I - Commitments
SCHEDULE II - Material Agreements and Liens
SCHEDULE III - Restrictive Agreements
SCHEDULE IV - Litigation
SCHEDULE V - Environmental Matters
SCHEDULE VI - Subsidiaries and Investments
SCHEDULE VII - Intellectual Property
EXHIBIT A - Form of Assignment and Acceptance
EXHIBIT B - Form of Security Agreement
EXHIBIT C - Form of Subordination Agreement
EXHIBIT D - Form of Guarantee Assumption Agreement
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EXHIBIT E - Form of Note
EXHIBIT F - Form of Opinion of Counsel to the Obligors
EXHIBIT G - Form of Opinion of Special New York Counsel to RCP
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LOAN AGREEMENT dated as of December 14, 2000, between THE PRINCETON
REVIEW, INC., the SUBSIDIARY GUARANTORS party hereto, the LENDERS party hereto,
and RESERVOIR CAPITAL PARTNERS, L.P., as Administrative Agent.
The Borrower (as hereinafter defined) has requested that the Lenders
(as so defined) make loans to it, under the guarantee of the Subsidiary
Guarantors (as so defined), in an aggregate principal amount not exceeding
$25,000,000, to enable certain acquisitions by the Obligors (as so defined), and
for other purposes. The Lenders are prepared to make such loans upon the terms
and conditions hereof, and, accordingly, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Defined Terms. As used in this Agreement, the
following terms have the meanings specified below:
"Acquisitions" means, collectively, the PR Boston/NJ Acquisition,
the PR Texas Acquisition and the PR San Xxxx Acquisition; provided, that the PR
Texas Acquisition shall be an Acquisition only if the subordination,
acceleration and other note provisions in the PR Texas Acquisition Agreement
(with respect to the Acquisition Indebtedness contemplated thereby) are amended
to be substantially identical to the corresponding provisions in the PR
Boston/NJ Acquisition Agreement, as reasonably determined by the Administrative
Agent. In addition, each Franchise Acquisition shall be deemed to be an
"Acquisition" hereunder, provided that (i) the Borrower provides a copy of the
applicable Franchise Acquisition Agreement to the Administrative Agent and each
Lender, certified as being true, correct and complete by a Financial Officer of
the Borrower; and (ii) the Required Lenders approve all of the terms of the
applicable Franchise Acquisition Agreements, it being understood that each
Lender may withhold its approval in its sole and absolute discretion.
"Acquisition Agreements" means, collectively, the PR Boston/NJ
Acquisition Agreement, the PR Texas Acquisition Agreement and the PR San Xxxx
Acquisition Agreement. In addition, each Franchise Acquisition Agreement shall
be deemed to be an "Acquisition Agreement" hereunder, provided that the
applicable Franchise Acquisition is deemed to be an "Acquisition" hereunder.
"Acquisition Indebtedness" means the Indebtedness of the Borrower
pursuant to the Acquisition Agreements. In addition, Franchise Acquisition
Indebtedness shall be deemed to be "Acquisition Indebtedness" hereunder,
provided that the applicable Franchise Acquisition is deemed to be an
"Acquisition" hereunder.
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"Acquisition Period" means the period from and including the
Effective Date to and including May 31, 2001; provided, that if one or more
Acquisition Agreements have been entered into prior to May 31, 2001 but at least
one closing of the applicable Acquisitions has yet to occur, then the
Acquisition Period shall be extended to and including the earlier to occur of
(i) the date of the closing of the last to close of such Acquisitions, and (ii)
July 31, 2001.
"Administrative Agent" means RCP, in its capacity as administrative
agent for the Lenders hereunder.
"Administrative Questionnaire" means an Administrative Questionnaire
in a form supplied by the Administrative Agent.
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments or Loans hereunder represented by the
aggregate amount of such Lender's Commitments or Loans hereunder.
"Applicable Rate" means, for any day during any period set forth in
the schedule below, with respect to any Loan, as the case may be, the applicable
rate per annum set forth below under the caption "Rate", respectively:
=======================================================================
Period: Rate
-----------------------------------------------------------------------
From the date hereof 13.0%
to but excluding
December 14, 2001
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From and including 14.0%
December 14, 2001
to but excluding
December 14, 2002
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From and including 15.0%
December 14, 2002
to but excluding
the Maturity Date
=======================================================================
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"Approved Fund" means, with respect to any Lender that is a fund
that invests in commercial loans, any other fund that invests in commercial
loans and is managed or advised by the same investment advisor as such Lender or
by an Affiliate of such investment advisor.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 10.04), and accepted by the Administrative Agent,
in the form of Exhibit A or any other form approved by the Administrative Agent.
"Availability Period" means the period from and including the
Effective Date to and including September 30, 2003.
"Basic Documents" means, collectively, the Loan Documents and the
Warrant Documents.
"Board" means the Board of Governors of the Federal Reserve System
of the United States of America.
"Borrower" means The Princeton Review, Inc., a Delaware corporation.
"Borrowing" means all Loans made on the same date.
"Borrowing Request" means a request by the Borrower for a Borrowing
in accordance with Section 2.03.
"Business Day" means any day that is not a Saturday, Sunday or other
day on which commercial banks in New York City are authorized or required by law
to remain closed.
"Capital Expenditures" means, for any period, expenditures
(including the aggregate amount of Capital Lease Obligations incurred during
such period) made by the Borrower or any of its Subsidiaries to acquire or
construct fixed assets, plant and equipment (including renewals, improvements
and replacements, but excluding repairs), and any other assets (tangible or
intangible) that are required to be capitalized during such period computed in
accordance with GAAP.
"Capital Lease Obligations" of any Person means the obligations of
such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and
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the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Flow" means, for any period, the sum, for the Borrower and its
Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP), of the following: (a) net operating income (calculated
before income taxes, Interest Expense, extraordinary and unusual items and
income or loss attributable to equity in Affiliates) for such period plus (b)
depreciation and amortization (to the extent deducted in determining net
operating income) for such period.
"Change in Control" means (a) the acquisition of ownership, directly
or indirectly, beneficially or of record, by any Person or group (within the
meaning of the Securities Exchange Act of 1934 and the rules of the Securities
and Exchange Commission thereunder as in effect on the date hereof) other than
Xxxx X. Xxxxxxx, of shares representing more than 40% of the aggregate ordinary
voting power represented by the issued and outstanding capital stock of the
Borrower; (b) occupation of a majority of the seats (other than vacant seats) on
the board of directors of the Borrower by Persons who were neither (i) nominated
by the board of directors of the Borrower nor (ii) appointed by directors so
nominated; or (c) the acquisition of direct or indirect Control of the Borrower
by any Person or group other than Xxxx X. Xxxxxxx.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender with
any request, guideline or directive (whether or not having the force of law) of
any Governmental Authority made or issued after the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Commitment" means, with respect to each Lender, the commitment of
such Lender to make one or more Loans hereunder during the Availability Period,
expressed as an amount representing the maximum aggregate principal amount of
the Loans to be made by such Lender hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.05 or 2.07(b) and (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 10.04. The initial amount of each Lender's Commitment is set
forth on Schedule I, or in the Assignment and Acceptance pursuant to which such
Lender shall have assumed its Commitment, as applicable. The initial aggregate
amount of the Lenders' Commitments is $25,000,000.
"Control" means the possession, directly or indirectly, of the power
to direct or cause the direction of the management or policies of a Person,
whether through the ability to
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exercise voting power, by contract or otherwise. "Controlling" and "Controlled"
have meanings correlative thereto.
"Current Ratio" means, at any time, the ratio of (a) the current
assets of the Borrower and its Subsidiaries to (b) the current liabilities of
the Borrower and its Subsidiaries (excluding any portion thereof attributable to
deferred income and the current portion of all Indebtedness in respect of the
Loans made under this Agreement).
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings
disclosed in Schedule IV and the environmental matters disclosed in Schedule V.
"Disposition" means any sale, assignment, transfer or other
disposition of any property (whether now owned or hereafter acquired) by the
Borrower or any of its Subsidiaries to any other Person excluding any sale,
assignment, transfer or other disposition of any property sold or disposed of in
the ordinary course of business and on ordinary business terms.
"Dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified in
Section 5.01 are satisfied (or waived in accordance with Section 10.02).
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
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"Equity Issuance" means (a) any issuance or sale by the Borrower or
any of its Subsidiaries after the Effective Date of (i) any of its capital stock
(except upon the exercise of options issued pursuant to benefit plans approved
by the Borrower's board of directors, upon exercise of warrants outstanding on
the date hereof, upon exercise of warrants issued to the Lenders, upon the
conversion of preferred stock outstanding on the date hereof or upon the initial
public offering of the Borrower's common stock), (ii) any warrants or options
exercisable in respect of its capital stock (other than any warrants or options
issued to directors, officers, consultants or employees of the Borrower or any
of its Subsidiaries pursuant to employee benefit plans established in the
ordinary course of business and any capital stock of the Borrower issued upon
the exercise of such warrants or options) or (iii) any other security or
instrument representing an equity interest (or the right to obtain any equity
interest) in the Borrower or any of its Subsidiaries or (b) the receipt by the
Borrower or any of its Subsidiaries after the Effective Date of any capital
contribution (whether or not evidenced by any equity security issued by the
recipient of such contribution); provided that Equity Issuance shall not include
(x) any such issuance or sale by any Subsidiary of the Borrower to the Borrower
or any wholly owned Subsidiary Guarantor or (y) any capital contribution by the
Borrower or any wholly owned Subsidiary Guarantor to any wholly owned Subsidiary
Guarantor.
"Equity Rights" means, with respect to any Person, any
subscriptions, options, warrants, commitments, preemptive rights or agreements
of any kind (including any shareholders' or voting trust agreements) for the
issuance, sale, registration or voting of, or securities convertible into, any
additional shares of capital stock of any class, or partnership or other
ownership interests of any type in, such Person.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with the Borrower, is treated as a single employer
under Section 414(b) or (c) of the Code, or, solely for purposes of Section 302
of ERISA and Section 412 of the Code, is treated as a single employer under
Section 414 of the Code.
"ERISA Event" means (a) any "reportable event", as defined in
Section 4043 of ERISA or the regulations issued thereunder with respect to a
Plan (other than an event for which the 30-day notice period is waived); (b) the
existence with respect to any Plan of an "accumulated funding deficiency" (as
defined in Section 412 of the Code or Section 302 of ERISA), whether or not
waived; (c) the filing pursuant to Section 412(d) of the Code or Section 303(d)
of ERISA of an application for a waiver of the minimum funding standard with
respect to any Plan; (d) the incurrence by the Borrower or any of its ERISA
Affiliates of any liability under Title IV of ERISA with respect to the
termination of any Plan; (e) the receipt by
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the Borrower or any ERISA Affiliate from the PBGC or a plan administrator of any
notice relating to an intention to terminate any Plan or Plans or to appoint a
trustee to administer any Plan; (f) the incurrence by the Borrower or any of its
ERISA Affiliates of any liability with respect to the withdrawal or partial
withdrawal from any Plan or Multiemployer Plan; or (g) the receipt by the
Borrower or any ERISA Affiliate of any notice, or the receipt by any
Multiemployer Plan from the Borrower or any ERISA Affiliate of any notice,
concerning the imposition of Withdrawal Liability or a determination that a
Multiemployer Plan is, or is expected to be, insolvent or in reorganization,
within the meaning of Title IV of ERISA.
"Event of Default" has the meaning assigned to such term in Article
VIII.
"Excel" means Excel Bank, N.A.
"Excluded Taxes" means, with respect to the Administrative Agent,
any Lender or any other recipient of any payment to be made by or on account of
any obligation of the Borrower hereunder, (a) income or franchise taxes imposed
on (or measured by) its net income by the United States of America, or by the
jurisdiction under the laws of which such recipient is organized or in which its
principal office is located or, in the case of any Lender, in which its
applicable lending office is located, (b) any branch profits taxes imposed by
the United States of America or any similar tax imposed by any other
jurisdiction in which the Borrower is located and (c) in the case of a Foreign
Lender (other than an assignee pursuant to a request by the Borrower under
Section 2.12(b)), any withholding tax that is imposed on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
or is attributable to such Foreign Lender's failure or inability (other than as
a result of a Change in Law) to comply with Section 2.10(e), except to the
extent that such Foreign Lender's assignor (if any) was entitled, at the time of
assignment, to receive additional amounts from the Borrower with respect to such
withholding tax pursuant to Section 2.10(a).
"Financial Officer" means the chief financial officer, principal
accounting officer, treasurer or controller of the Borrower.
"Foreign Lender" means any Lender that is organized under the laws
of a jurisdiction other than that in which the Borrower is located. For purposes
of this definition, the United States of America, each State thereof and the
District of Columbia shall be deemed to constitute a single jurisdiction.
"Franchise Acquisition" means the transactions contemplated by the
applicable Franchise Acquisition Agreement.
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"Franchise Acquisition Agreement" means, collectively, the
agreements, instruments and documents relating to the acquisition by the
Borrower of one or more of its franchises (other than the acquisitions
contemplated by the PR Boston/NJ Acquisition Agreement, the PR Texas Acquisition
Agreement and the PR San Xxxx Acquisition Agreement) intended to be acquired
pursuant to such agreements, instruments and documents.
"Franchise Acquisition Indebtedness" means the Indebtedness of the
Borrower pursuant to the applicable Franchise Acquisition Agreement.
"GAAP" means generally accepted accounting principles in the United
States of America.
"Governmental Authority" means the government of the United States
of America, or of any other nation, or any political subdivision thereof,
whether state or local, and any agency, authority, instrumentality, regulatory
body, court, central bank or other entity exercising executive, legislative,
judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided, that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Guarantee Assumption Agreement" means a Guarantee Assumption
Agreement substantially in the form of Exhibit D by an entity that, pursuant to
Section 6.09(a) is required to become a "Subsidiary Guarantor" hereunder in
favor of the Administrative Agent.
"Hazardous Materials" means all explosive or radioactive substances
or wastes and all hazardous or toxic substances, wastes or other pollutants,
including petroleum or petroleum distillates, asbestos or asbestos containing
materials, polychlorinated biphenyls, radon
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gas, infectious or medical wastes and all other substances or wastes of any
nature regulated pursuant to any Environmental Law.
"Hedging Agreement" means any interest rate protection agreement,
foreign currency exchange agreement, commodity price protection agreement or
other interest or currency exchange rate or commodity price hedging arrangement.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding accounts
payable treated as a current liability under GAAP incurred in the ordinary
course of business), (f) all Indebtedness of others secured by (or for which the
holder of such Indebtedness has an existing right, contingent or otherwise, to
be secured by) any Lien on property owned or acquired by such Person, whether or
not the Indebtedness secured thereby has been assumed, (g) all Guarantees by
such Person of Indebtedness of others (excluding Guarantees by such Person of
the Indebtedness of its Subsidiaries or its parent or Subsidiaries of its
parent), (h) all Capital Lease Obligations of such Person, (i) all obligations,
contingent or otherwise, of such Person as an account party in respect of
letters of credit and letters of guaranty, (j) all obligations, contingent or
otherwise, of such Person in respect of bankers' acceptances, (k) all
obligations of such Person in respect of one or more Hedging Agreements, (l) all
obligations of such Person under take-or-pay or similar agreements or under
commodities agreements, (m) all preferred stock or other equity interests issued
by such Person and required by the terms thereof to be redeemed, or for which
mandatory sinking fund payments are due, before the Maturity Date, and (n) other
off balance sheet financing arrangements of such Person including without
limitation synthetic leases. The Indebtedness of any Person shall include the
Indebtedness of any other entity (including any partnership in which such Person
is a general partner) to the extent such Person is liable therefor as a result
of such Person's ownership interest in or other relationship with such entity,
except to the extent the terms of such Indebtedness provide that such Person is
not liable therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Intellectual Property" has the meaning assigned to such term in the
Security Agreement.
"Interest Expense" means, for any period, the sum, for the Borrower
and its Subsidiaries (determined on a consolidated basis without duplication in
accordance with GAAP),
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of the following: (a) all interest in respect of Indebtedness (including the
interest component of any payments in respect of Capital Lease Obligations)
accrued or capitalized during such period (whether or not actually paid during
such period) plus (b) the net amount payable (or minus the net amount
receivable) under Hedging Agreements relating to interest during such period
(whether or not actually paid or received during such period).
"Interest Payment Date" means, with respect to any Loan, each
Quarterly Date.
"Investment" means, for any Person: (a) the acquisition (whether for
cash, property, services or securities or otherwise) of capital stock, bonds,
notes, debentures, partnership or other ownership interests or other securities
of any other Person or any agreement to make any such acquisition (including any
"short sale" or any sale of any securities at a time when such securities are
not owned by the Person entering into such sale); (b) the making of any deposit
with, or advance, loan or other extension of credit to, any other Person
(including the purchase of property from another Person subject to an
understanding or agreement, contingent or otherwise, to resell such property to
such Person), but excluding any such advance, loan or extension of credit having
a term not exceeding 90 days arising in connection with the sale of inventory or
supplies by such Person in the ordinary course of business; or (c) the entering
into of any Guarantee of, or other contingent obligation with respect to,
Indebtedness or other liability of any other Person and (without duplication)
any amount committed to be advanced, lent or extended to such Person.
"Leakage" means, as of any date, the principal and interest payments
to be made by the Borrower and its Subsidiaries, in respect of all then existing
Acquisition Indebtedness, from and including such date to and including the
Maturity Date, except for regularly scheduled payments of interest at an annual
rate not in excess of 8 1/4% in respect of the $3,125,000 note to be issued in
connection with the PR Boston/NJ Acquisition, all as determined by the
Administrative Agent in its reasonable discretion. Leakage shall be determined
assuming facts giving rise to the fastest required amortization of such
Acquisition Indebtedness pursuant to the terms thereof, other than due to the
acceleration and optional prepayment thereof.
"Leakage Account" means the segregated account of the Borrower into
which the Borrower deposits the proceeds of any Loan intended by the Borrower to
be applied to Leakage.
"Leakage Payments" means, as of any date, the principal and interest
payments paid in cash by the Borrower and its Subsidiaries in respect of all
Acquisition Indebtedness (other than regularly scheduled payments of interest at
an annual rate not in excess of 8 1/4% in respect of the $3,125,000 note to be
issued in connection with the PR Boston/NJ Acquisition), to the extent the same
were paid (i) simultaneously with the making of a Loan and out of the proceeds
thereof, or (ii) out of the Leakage Account from funds deposited and at all
times
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retained therein from the proceeds of a Loan, all as determined by the
Administrative Agent in its sole discretion.
"Lenders" means the Persons listed on Schedule I and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter Agreement" means the letter agreement, dated November 4,
2000, between the Borrower and the RCP.
"Lien" means, with respect to any asset, (a) any mortgage, deed of
trust, lien, pledge, hypothecation, encumbrance, charge or security interest in,
on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any
financing lease having substantially the same economic effect as any of the
foregoing) relating to such asset and (c) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Documents" means, collectively, this Agreement, the Security
Documents and the Subordination Agreement.
"Loans" means the loans made by the Lenders to the Borrower pursuant
to this Agreement.
"Margin Stock" means "margin stock" within the meaning of
Regulations T, U and X of the Board.
"Material Adverse Effect" means a material adverse effect on (a) the
business, assets, operations, prospects or condition, financial or otherwise, of
the Borrower and its Subsidiaries taken as a whole, (b) the ability of any
Obligor to perform any of its obligations under this Agreement or any of the
other Loan Documents to which it is a party or (c) the rights of or benefits
available to the Lenders under this Agreement or any of the other Loan
Documents.
"Material Indebtedness" means Indebtedness (other than the Loans),
or obligations in respect of one or more Hedging Agreements, of any one or more
of the Borrower and its Subsidiaries in an aggregate principal amount exceeding
$200,000. For purposes of determining Material Indebtedness, the "principal
amount" of the obligations of any Person in respect of any Hedging Agreement at
any time shall be the maximum aggregate amount (giving effect to any netting
agreements) that such Person would be required to pay if such Hedging Agreement
were terminated at such time.
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"Maturity Date" means December 15, 2003.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Net Available Proceeds" means:
(a) in the case of any Disposition, the aggregate amount of
all cash payments, and the fair market value of any non-cash
consideration, received by the Borrower and its Subsidiaries directly or
indirectly in connection with such Disposition; provided that (i) Net
Available Proceeds shall be net of (x) the amount of any legal, title and
recording tax expenses, commissions and other fees and expenses paid by
the Borrower and its Subsidiaries in connection with such Disposition and
(y) any Federal, state and local income or other taxes estimated to be
payable by the Borrower and its Subsidiaries as a result of such
Disposition (but only to the extent that such estimated taxes are in fact
paid to the relevant Federal, state or local governmental authority within
three months of the date of such Disposition) and (ii) Net Available
Proceeds shall be net of any repayments by the Borrower or any of its
Subsidiaries of Indebtedness to the extent that (x) such Indebtedness is
secured by a Lien on the property that is the subject of such Disposition
and (y) the transferee of (or holder of a Lien on) such property requires
that such Indebtedness be repaid as a condition to the purchase of such
property; and
(b) in the case of any Equity Issuance, the aggregate amount
of all cash received by the Borrower and its Subsidiaries in respect of
such Equity Issuance net of reasonable expenses incurred by the Borrower
and its Subsidiaries in connection therewith.
"Notes" means, collectively, the Promissory Notes substantially in
the form of Exhibit E made by the Borrower to the Lenders.
"Obligor" means the Borrower and each Subsidiary Guarantor.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made under any Loan Document or from the
execution, delivery or enforcement of, or otherwise with respect to, any Loan
Document.
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"PBGC" means the Pension Benefit Guaranty Corporation referred to
and defined in ERISA and any successor entity performing similar functions.
"Permitted Capital Lease Obligations" means, collectively, the
Capital Lease Obligations of the Borrower and its Subsidiaries existing on the
date hereof and disclosed in the Registration Statement in the section therein
entitled "Capital Lease Obligations", such obligations not to exceed the dollar
amounts set forth in such section.
"Permitted Encumbrances" means:
(a) Liens imposed by law for taxes that are not yet due or are
being contested in compliance with Section 6.04;
(b) carriers', warehousemen's, mechanics', materialmen's,
repairmen's and other like Liens imposed by law, arising in the ordinary
course of business and securing obligations that are not overdue by more
than 30 days or are being contested in compliance with Section 6.04;
(c) pledges and deposits made in the ordinary course of business in
compliance with workers' compensation, unemployment insurance and other
social security laws or regulations;
(d) cash deposits to secure the performance of bids, trade
contracts, leases, statutory obligations, surety and appeal bonds,
performance bonds and other obligations of a like nature, in each case in
the ordinary course of business;
(e) judgment liens in respect of judgments that do not constitute
an Event of Default under clause (j) of Article VIII; and
(f) easements, zoning restrictions, rights-of-way and similar
encumbrances on real property imposed by law or arising in the ordinary
course of business that do not secure any monetary obligations and do not
materially detract from the value of the affected property or interfere
with the ordinary conduct of business of the Borrower or any Subsidiary;
provided that the term "Permitted Encumbrances" shall not include any Lien
securing Indebtedness.
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"Permitted Investments" means:
(a) direct obligations of, or obligations the principal of and
interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are
backed by the full faith and credit of the United States of America), in
each case maturing within one year from the date of acquisition thereof;
(b) investments in commercial paper maturing within 270 days from
the date of acquisition thereof and having, at such date of acquisition,
the highest credit rating obtainable from Standard & Poor's Ratings
Services, a Division of The XxXxxx-Xxxx Companies, Inc., or from Xxxxx'x
Investors Services, Inc;
(c) investments in certificates of deposit, banker's acceptances and
time deposits maturing within 180 days from the date of acquisition
thereof issued or guaranteed by or placed with, and money market deposit
accounts issued or offered by, any domestic office of any commercial bank
organized under the laws of the United States of America or any State
thereof which has a combined capital and surplus and undivided profits of
not less than $250,000,000; and
(d) fully collateralized repurchase agreements with a term of not
more than 30 days for securities described in clause (a) of this
definition and entered into with a financial institution satisfying the
criteria described in clause (c) of this definition.
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"PR Boston/NJ Acquisition" means the transactions contemplated by
the PR Boston/NJ Acquisition Agreement.
"PR Boston/NJ Acquisition Agreement" means, collectively, the Option
Agreement dated as of May 30, 2000 by and between Princeton Review Operations,
L.L.C., on the one hand, and Princeton Review of Boston, Inc. and Princeton
Review of New Jersey, Inc., on the other, as amended by the Option Agreement
Amendment in the form provided by the Borrower to the Administrative Agent, and
all related agreements, instruments and documents.
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"PR Canada" means The Princeton Review of Canada, Inc., an Ontario
corporation.
"PR Finance" means Princeton Review Finance, L.L.C., a Delaware
limited liability company.
"PR Texas Acquisition" means the transactions contemplated by the PR
Texas Acquisition Agreement.
"PR Texas Acquisition Agreement" means, collectively, the Option
Agreement dated as of October 18, 2000 by and between Princeton Review
Operations, L.L.C., on the one hand, and T.S.T.S., Inc., Xxxxxx X. Case and
Xxxxx X. Xxxxxxxx, on the other, and all related agreements, instruments and
documents.
"PR San Xxxx Acquisition" means the transactions contemplated by the
PR San Xxxx Acquisition Agreement.
"PR San Xxxx Acquisition Agreement" means, collectively, the Option
Agreement by and between Princeton Review Operations, L.L.C. and The Princeton
Review Peninsula, Inc., in the form provided by the Borrower to the
Administrative Agent, and all related agreements, instruments and documents.
"Quarterly Dates" means the last Business Day of January, April,
July and October in each year, the first of which shall be the first such day
after the date hereof.
"RCP" means Reservoir Capital Partners, L.P.
"Register" has the meaning set forth in Section 10.04.
"Registration Statement" means the Form S-1 Registration Statement
(Registration No. 333-43874) filed by the Borrower with the Securities and
Exchange Commission on August 15, 2000, as amended by Amendment No. 1 thereto
filed on November 16, 2000.
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents
and advisors of such Person and such Person's Affiliates.
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"Required Lenders" means, at any time, Lenders having outstanding
Loans and unused Commitments representing (i) more than 66 2/3% of the sum of
the total outstanding Loans and unused Commitments at such time for the purposes
of Section 10.02(b) and the final proviso contained in Article VIII to the
extent such proviso relates to the breach of the covenant contained in Section
7.10(b), and (ii) a majority of the sum of the total outstanding Loans and
unused Commitments at such time, for all other purposes.
"Restricted Payment" means (i) any dividend or other distribution
(whether in cash, securities or other property) with respect to any shares of
any class of capital stock or membership interest of the Borrower or any of its
Subsidiaries, or (ii) any payment (whether in cash, securities or other
property), including any sinking fund or similar deposit, on account of the
purchase, redemption, retirement, acquisition, cancellation or termination of
any such shares of capital stock of the Borrower or any option, warrant or other
right to acquire any such shares of capital stock of the Borrower.
"Security Agreement" means a Security Agreement substantially in the
form of Exhibit B between the Borrower and the Subsidiary Guarantors and the
Administrative Agent, as the same shall be modified and supplemented and in
effect from time to time.
"Security Documents" means, collectively, the Security Agreement,
all Uniform Commercial Code financing statements and all other filings required
by the Security Agreement to be filed with respect to the security interests in
personal property and fixtures created pursuant to the Security Agreement.
"Senior Debt" means the Indebtedness of the Borrower in respect of
the Promissory Note, dated October 27, 2000, issued by the Borrower to Excel in
the amount of $4,500,000, which matures on October 31, 2001.
"Senior Debt Documents" means all documents and agreements executed
and delivered in connection with the original issuance of the Senior Debt,
including the promissory note evidencing Indebtedness thereunder, in each case,
as the same shall, subject to Section 7.12, be modified and supplemented and in
effect from time to time.
"Subordination Agreement" means a Subordination Agreement
substantially in the form of Exhibit C among the Borrower, the Subsidiary
Guarantors, the Administrative Agent, the Lenders and Excel, as the same shall
be modified and supplemented and in effect from time to time.
"Subsidiary" means, with respect to any Person (the "parent") at any
date, any corporation, limited liability company, partnership, association or
other entity the accounts of
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which would be consolidated with those of the parent in the parent's
consolidated financial statements if such financial statements were prepared in
accordance with GAAP as of such date, as well as any other corporation, limited
liability company, partnership, association or other entity of which securities
or other ownership interests representing more than 50% of the equity or more
than 50% of the ordinary voting power or, in the case of a partnership, more
than 50% of the general partnership interests are, as of such date, owned,
controlled or held. Unless otherwise specified, "Subsidiary" means a Subsidiary
of the Borrower.
"Subsidiary Guarantor" means each of the Subsidiaries of the
Borrower identified under the caption "SUBSIDIARY GUARANTORS" on the signature
pages hereto and each Subsidiary of the Borrower that becomes a "Subsidiary
Guarantor" after the date hereof pursuant to Section 6.09(a).
"Taxes" means any and all present or future taxes, levies, imposts,
duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Transactions" means the execution, delivery and performance by each
Obligor of this Agreement and the other Basic Documents to which such Obligor is
intended to be a party, the borrowing of Loans and the use of the proceeds
thereof.
"Varick Letter of Credit" means the letter of credit issued by The
Chase Manhattan Bank on July 26, 2000 in the amount of $225,585, which was
issued in connection with the Lease, dated as of July 20, 2000, by and between
The Xxxxxx, Church-Wardens and Vestrymen of Trinity Church in the City of New
York and Princeton Review Publishing, L.L.C.
"Warrant Agreement" means the Warrant Agreement, dated as of the
date hereof, among the Borrower and the Lenders.
"Warrant Documents" means, collectively, the Warrant Agreement and
the Warrants.
"Warrants" means the warrants to be issued by the Borrower to the
Lenders pursuant to the Warrant Agreement.
"Withdrawal Liability" means liability to a Multiemployer Plan as a
result of a complete or partial withdrawal from such Multiemployer Plan, as such
terms are defined in Part I of Subtitle E of Title IV of ERISA.
SECTION 1.02. Terms Generally. The definitions of terms herein shall
apply equally to the singular and plural forms of the terms defined. Whenever
the context may require,
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any pronoun shall include the corresponding masculine, feminine and neuter
forms. The words "include", "includes" and "including" shall be deemed to be
followed by the phrase "without limitation". The word "will" shall be construed
to have the same meaning and effect as the word "shall". Unless the context
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.03. Accounting Terms; GAAP. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall be
construed in accordance with GAAP, as in effect from time to time; provided
that, if the Borrower notifies the Administrative Agent that the Borrower
requests an amendment to any provision hereof to eliminate the effect of any
change occurring after the date hereof in GAAP or in the application thereof on
the operation of such provision (or if the Administrative Agent notifies the
Borrower that the Required Lenders request an amendment to any provision hereof
for such purpose), regardless of whether any such notice is given before or
after such change in GAAP or in the application thereof, then such provision
shall be interpreted on the basis of GAAP as in effect and applied immediately
before such change shall have become effective until such notice shall have been
withdrawn or such provision amended in accordance herewith. To enable the ready
and consistent determination of compliance with the covenants set forth in
Article VII, the Borrower will not change the last day of its fiscal year from
December 31, or the last days of the first three fiscal quarters in each of its
fiscal years from March 31, June 30 and September 30, respectively.
ARTICLE II
THE LOANS
SECTION 2.01. The Commitments. Subject to the terms and conditions
set forth herein, each Lender agrees to make one or more Loans to the Borrower
during the Availability
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Period in a principal amount not exceeding its Commitment. Amounts prepaid or
repaid in respect of Loans may not be reborrowed.
SECTION 2.02. Loans and Borrowings.
(a) Obligations of Lenders. Each Loan shall be made as part of a
Borrowing consisting of Loans made by the Lenders ratably in accordance with
their respective Commitments. The failure of any Lender to make any Loan
required to be made by it shall not relieve any other Lender of its obligations
hereunder; provided that the Commitments of the Lenders are several and no
Lender shall be responsible for any other Lender's failure to make Loans as
required.
(b) Minimum Amounts. Each Borrowing shall be in an aggregate amount
equal to $1,000,000 or a larger multiple of $100,000; provided that a Borrowing
may be in an aggregate amount that is equal to the entire unused balance of the
total Commitments.
SECTION 2.03. Requests for Borrowings.
(a) Notice by the Borrower. To request a Borrowing, the Borrower
shall notify the Lenders and the Administrative Agent of such request in writing
not later than 12:00 noon, New York City time, 15 Business Days before the date
of the proposed Borrowing. Each such Borrowing Request shall be irrevocable and
shall be in a form approved by the Administrative Agent and signed by the
Borrower.
(b) Content of Borrowing Requests. Each telephonic and written
Borrowing Request shall specify the following information in compliance with
Section 2.02:
(i) the aggregate amount of the requested Borrowing and the
share of such Borrowing requested from each Lender, which share shall be
determined in accordance with Section 2.02(a);
(ii) the date of such Borrowing, which shall be a Business
Day; and
(iii) the location and number of the Borrower's account to
which funds are to be disbursed, which shall comply with the requirements
of Section 2.04.
SECTION 2.04. Funding of Borrowings. Each Lender shall make each
Loan to be made by it hereunder on the proposed date thereof by wire transfer of
immediately available funds by 12:00 noon, New York City time, to the account of
the Borrower most recently designated by it for such purpose by notice to the
Lenders and the Administrative Agent.
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SECTION 2.05. Termination and Reduction of the Commitments.
(a) Scheduled Termination. Unless previously terminated, the
Commitments shall terminate at 5:00 p.m., New York City time, on the last day of
the Availability Period.
(b) Voluntary Termination or Reduction. The Borrower may at any time
terminate, or from time to time reduce, the Commitments; provided that each
reduction of the Commitments pursuant to this Section shall be in an amount that
is $100,000 or a larger multiple of $100,000.
(c) Notice of Voluntary Termination or Reduction. The Borrower shall
notify the Lenders and the Administrative Agent of any election to terminate or
reduce the Commitments under paragraph (b) of this Section at least three
Business Days prior to the effective date of such termination or reduction,
specifying such election and the effective date thereof. Each notice delivered
by the Borrower pursuant to this Section shall be irrevocable.
(d) Effect of Termination or Reduction. Any termination or reduction
of the Commitments shall be permanent. Each reduction of the Commitments shall
be made ratably among the Lenders in accordance with their respective
Commitments.
(e) Leakage Reduction. The Commitments shall be reduced dollar for
dollar by the amount of all principal and interest payments in respect of
Acquisition Indebtedness (other than regularly scheduled payments of interest at
an annual rate not in excess of 8-1/4% in respect of the $3,125,000 note to be
issued in connection with the PR Boston/NJ Acquisition) that are not Leakage
Payments. At 5:00 p.m., New York City time, on the last day of the Acquisition
Period, the Commitments shall be reduced to the sum of (i) the aggregate amount
of all Loans made hereunder and (ii) the amount of Leakage as of such time, all
as determined by the Administrative Agent in its sole discretion.
SECTION 2.06. Repayment of Loans; Evidence of Debt.
(a) Repayment. The Borrower hereby unconditionally promises to pay
to the Lenders the outstanding principal amount of the Loans on the Maturity
Date.
(b) Ratable Application of Payments. Each payment of a Borrowing
shall be applied ratably to the Loans included in such Borrowing.
(c) Maintenance of Records by Lenders. Each Lender shall maintain in
accordance with its usual practice records evidencing the indebtedness of the
Borrower to such
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Lender resulting from each Loan made by such Lender, including the amounts of
principal and interest payable and paid to such Lender from time to time
hereunder.
(d) Effect of Entries. The entries made in the records maintained
pursuant to paragraph (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender to maintain such records or any error therein shall not in
any manner affect the obligation of the Borrower to repay the Loans in
accordance with the terms of this Agreement.
(e) Promissory Notes. Any Lender may request that Loans made by it
be evidenced by a Note. In such event, the Borrower shall prepare, execute and
deliver to such Lender a Note payable to such Lender (or, if requested by such
Lender, to such Lender and its registered assigns). Thereafter, the Loans
evidenced by such Note and interest thereon shall at all times (including after
assignment pursuant to Section 10.04) be represented by one or more Notes in
such form payable to the payee named therein (or, if such Note is a registered
Note, to such payee and its registered assigns).
SECTION 2.07. Prepayment of Loans.
(a) Optional Prepayments. The Borrower shall have the right at any
time and from time to time to prepay any Borrowing in whole or in part, subject
to the requirements of this Section.
(b) Mandatory Prepayments. The Borrower will prepay the Loans,
and/or the Commitments shall be subject to automatic reduction, as follows:
(i) Equity Issuance. Upon any Equity Issuance, the Borrower
shall prepay the Senior Debt and the Loans, and/or the Commitments shall
be subject to automatic reduction, in an aggregate amount equal to 100% of
the Net Available Proceeds thereof, such prepayment and/or reduction to be
effected in each case in the manner and to the extent specified in clause
(iii) of this paragraph.
(ii) Sale of Assets. Without limiting the obligation of the
Borrower to obtain the consent of the Required Lenders pursuant to Section
7.03 to any Disposition not otherwise permitted hereunder, in the event
that the Net Available Proceeds of any Disposition (herein, the "Current
Disposition"), and of all prior Dispositions as to which a prepayment has
not yet been made under this paragraph, shall exceed $500,000 then, no
later than five Business Days prior to the occurrence of the Current
Disposition, the Borrower will deliver to the Lenders a statement,
certified by a Financial Officer of the Borrower, in form and detail
satisfactory to the Administrative Agent, of the amount of
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the Net Available Proceeds of the Current Disposition and of all such
prior Dispositions and will prepay the Senior Debt and the Loans, and/or
the Commitments shall be subject to automatic reduction, in an aggregate
amount equal to 100% of the Net Available Proceeds of the Current
Disposition and such prior Dispositions, such prepayment and/or reduction
to be effected in each case in the manner and to the extent specified in
clause (iii) of this paragraph.
(iii) Application. Prepayments and/or reductions of
Commitments pursuant to this Section 2.07(b) shall be applied in the
following order (A) to the extent that any portion of the Senior Debt is
then outstanding, to the payment of the Senior Debt, (B) if such
prepayment and/or reduction of the Commitments is required to be made
before the Commitments have terminated, to reduce the aggregate amount of
the Commitments (and to the extent that, after giving effect to such
reduction, the aggregate principal amount of the Loans would exceed the
Commitments, the Borrower shall prepay the Loans in an aggregate amount
equal to such excess), and (C) if such prepayment and/or reduction of the
Commitments is required to be made after the Commitments have terminated,
to prepay the Loans.
(iv) Initial Public Offering. In the event that the initial
public offering of the Borrower occurs before the date that is 180 days
prior to the Maturity Date, the Borrower will prepay the Loans in full on
the date that is 180 days after the date of such initial public offering
and, unless previously terminated, the Commitments shall terminate on such
date.
(c) Notices, Etc. The Borrower shall notify the Lenders and the
Administrative Agent by telephone (confirmed by telecopy) of any prepayment
hereunder not later than 11:00 a.m., New York City time, one Business Day before
the date of prepayment. Each such notice shall be irrevocable and shall specify
the prepayment date, the principal amount of each Borrowing or portion thereof
to be prepaid and, in the case of a mandatory prepayment, a reasonably detailed
calculation of the amount of such prepayment. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of a
Borrowing as provided in Section 2.02, except as necessary to apply fully the
required amount of a mandatory prepayment. Each prepayment of a Borrowing shall
be applied ratably to the Loans included in the prepaid Borrowing. All
prepayments shall be accompanied by accrued interest.
SECTION 2.08. [Reserved].
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SECTION 2.09. Interest.
(a) Loans. Each Loan shall bear interest at a rate per annum equal
to the Applicable Rate.
(b) Default Interest. Notwithstanding the foregoing, if any
principal of or interest on any Loan or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, upon acceleration,
by mandatory prepayment or otherwise, such overdue amount shall bear interest,
after as well as before judgment, at a rate per annum equal to 2% plus the
highest rate applicable to Loans as provided in paragraph (a) of this Section.
(c) Payment of Interest. Accrued interest on each Loan shall be
payable in arrears on each Interest Payment Date for such Loan; provided that
(i) interest accrued pursuant to paragraph (b) of this Section shall be payable
on demand and (ii) in the event of any repayment or prepayment of any Loan,
accrued interest on the principal amount repaid or prepaid shall be payable on
the date of such repayment or prepayment. Notwithstanding the foregoing,
provided that the conditions of Section 5.02 are satisfied on the applicable
Interest Payment Date, each regularly scheduled interest payment due on any
Interest Payment Date (other than the Maturity Date) shall be capitalized
ratably amongst the Lenders in accordance with their respective Commitments. In
the event of such capitalization, the applicable interest payment shall, from
the date of the applicable Interest Payment Date, be deemed to be a Loan made by
the Lenders hereunder, provided that such Loan shall increase the Commitments of
the Lenders by the amount thereof. The Borrower may elect to make any such
interest payment in cash upon irrevocable written notice to the Lenders and the
Administrative Agent, such notice to be given no later than five Business Days
prior to the applicable Interest Payment Date.
(d) Computation. All interest hereunder shall be computed on the
basis of a year of 365 days (or 366 days in a leap year), and shall be payable
for the actual number of days elapsed (including the first day but excluding the
last day).
SECTION 2.10. Taxes.
(a) Payments Free of Taxes. Any and all payments by or on account of
any obligation of the Borrower hereunder or under any other Loan Document shall
be made free and clear of and without deduction for any Indemnified Taxes or
Other Taxes; provided that if the Borrower shall be required to deduct any
Indemnified Taxes or Other Taxes from such payments, then (i) the sum payable
shall be increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this Section)
the Administrative Agent or Lender (as the case may be) receives an amount equal
to the sum it would have received had no such deductions been made, (ii) the
Borrower shall make
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such deductions and (iii) the Borrower shall pay the full amount deducted to the
relevant Governmental Authority in accordance with applicable law.
(b) Payment of Other Taxes by the Borrower. In addition, the
Borrower shall pay any Other Taxes to the relevant Governmental Authority in
accordance with applicable law.
(c) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent and each Lender, within 10 days after written demand
therefor, for the full amount of any Indemnified Taxes or Other Taxes (including
Indemnified Taxes or Other Taxes imposed or asserted on or attributable to
amounts payable under this Section) paid by the Administrative Agent or such
Lender, as the case may be, and any penalties, interest and reasonable expenses
arising therefrom or with respect thereto, whether or not such Indemnified Taxes
or Other Taxes were correctly or legally imposed or asserted by the relevant
Governmental Authority. A certificate as to the amount of such payment or
liability delivered to the Borrower by a Lender, or by the Administrative Agent
on its own behalf or on behalf of a Lender, shall be conclusive absent manifest
error.
(d) Evidence of Payments. As soon as practicable after any payment
of Indemnified Taxes or Other Taxes by the Borrower to a Governmental Authority,
the Borrower shall deliver to the Administrative Agent the original or a
certified copy of a receipt issued by such Governmental Authority evidencing
such payment, a copy of the return reporting such payment or other evidence of
such payment reasonably satisfactory to the Administrative Agent.
(e) Foreign Lenders. Any Foreign Lender that is entitled to an
exemption from or reduction of withholding tax under the law of the jurisdiction
in which the Borrower is located, or any treaty to which such jurisdiction is a
party, with respect to payments under this Agreement shall deliver to the
Borrower (with a copy to the Administrative Agent), at the time or times
prescribed by applicable law or reasonably requested by the Borrower, such
properly completed and executed documentation prescribed by applicable law as
will permit such payments to be made without withholding or at a reduced rate.
SECTION 2.11. Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Payments by the Obligors. Each Obligor shall make each payment
required to be made by it hereunder (whether of principal or interest, or under
Section 2.10, or otherwise) or under any other Loan Document (except to the
extent otherwise provided therein) prior to 12:00 noon, New York City time, on
the date when due, in immediately available funds, without set-off or
counterclaim. Any amounts received after such time on any date may, in the
discretion of the Administrative Agent, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon. All
such payments shall be made to each
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Lender at its office (or directly to such Lender's bank or other financial
institution) designated to the Borrower from time to time by such Lender, except
as otherwise expressly provided in the relevant Loan Document and except
payments pursuant to Sections 2.10 and 10.03, which shall be made directly to
the Persons entitled thereto. If any payment hereunder shall be due on a day
that is not a Business Day, the date for payment shall be extended to the next
succeeding Business Day and, in the case of any payment accruing interest,
interest thereon shall be payable for the period of such extension. All payments
hereunder or under any other Loan Document (except to the extent otherwise
provided therein) shall be made in Dollars.
(b) Application of Insufficient Payments. If at any time
insufficient funds are received by and available to the Lenders to pay fully all
amounts of principal and interest then due hereunder, such funds shall be
applied (i) first, to pay interest then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of interest then due to such
parties, and (ii) second, to pay principal then due hereunder, ratably among the
parties entitled thereto in accordance with the amounts of principal then due to
such parties.
(c) Pro Rata Treatment. Except to the extent otherwise provided
herein: (i) each Borrowing shall be made from the Lenders, each Borrowing shall
be allocated among the Lenders, and each termination or reduction of the amount
of the Commitments under Section 2.05 shall be applied to the respective
Commitments of the Lenders, pro rata according to the amounts of their
respective Commitments; (ii) each payment or prepayment of principal of Loans by
the Borrower shall be made for account of the Lenders pro rata in accordance
with the respective unpaid principal amounts of the Loans held by them; and
(iii) each payment of interest on Loans by the Borrower shall be made for
account of the Lenders pro rata in accordance with the amounts of interest on
such Loans then due and payable to the respective Lenders.
(d) Sharing of Payments by Lenders. If any Lender shall, by
exercising any right of set-off or counterclaim or otherwise, obtain payment in
respect of any principal of or interest on any of its Loans resulting in such
Lender receiving payment of a greater proportion of the aggregate amount of its
Loans and accrued interest thereon then due than the proportion received by any
other Lender, then the Lender receiving such greater proportion shall purchase
(for cash at face value) participations in the Loans of other Lenders to the
extent necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans; provided that (i) if any such
participations are purchased and all or any portion of the payment giving rise
thereto is recovered, such participations shall be rescinded and the purchase
price restored to the extent of such recovery, without interest, and (ii) the
provisions of this paragraph shall not be construed to apply to any payment made
by any Obligor pursuant to and in accordance with the express terms of this
Agreement or any payment obtained by a Lender as consideration for the
assignment of or sale of a participation in any of its Loans to any assignee or
participant, other
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than to the Borrower or any Subsidiary or Affiliate thereof (as to which the
provisions of this paragraph shall apply). Each Obligor consents to the
foregoing and agrees, to the extent it may effectively do so under applicable
law, that any Lender acquiring a participation pursuant to the foregoing
arrangements may exercise against such Obligor rights of set-off and
counterclaim with respect to such participation as fully as if such Lender were
a direct creditor of such Obligor in the amount of such participation.
SECTION 2.12. Mitigation Obligations; Replacement of Lenders.
(a) Designation of a Different Lending Office. If the Borrower is
required to pay any additional amount to any Lender or any Governmental
Authority for account of any Lender pursuant to Section 2.10, then such Lender
shall use reasonable efforts to designate a different lending office for funding
or booking its Loans hereunder or to assign its rights and obligations hereunder
to another of its offices, branches or affiliates, if, in the judgment of such
Lender, such designation or assignment (i) would eliminate or reduce amounts
payable pursuant to Section 2.10 in the future and (ii) would not subject such
Lender to any unreimbursed cost or expense and would not otherwise be
disadvantageous to such Lender. The Borrower hereby agrees to pay all reasonable
costs and expenses incurred by any Lender in connection with any such
designation or assignment.
(b) Replacement of Lenders. If the Borrower is required to pay any
additional amount to any Lender or any Governmental Authority for account of any
Lender pursuant to Section 2.10, or if any Lender defaults in its obligation to
fund Loans hereunder, then the Borrower may, at its sole expense and effort,
upon notice to such Lender and the Administrative Agent, require such Lender to
assign and delegate, without recourse (in accordance with and subject to the
restrictions contained in Section 10.04), all its interests, rights and
obligations under this Agreement to an assignee that shall assume such
obligations (which assignee may be another Lender, if a Lender accepts such
assignment); provided that (i) the Borrower shall have received the prior
written consent of the Administrative Agent, which consent shall not
unreasonably be withheld, (ii) such Lender shall have received payment of an
amount equal to the outstanding principal of its Loans, accrued interest thereon
and all other amounts payable to it hereunder, from the assignee (to the extent
of such outstanding principal and accrued interest) or the Borrower (in the case
of all other amounts) and (iii) in the case of any such assignment resulting
from payments required to be made pursuant to Section 2.10, such assignment will
result in a reduction in such payments. A Lender shall not be required to make
any such assignment and delegation if, prior thereto, as a result of a waiver by
such Lender or otherwise, the circumstances entitling the Borrower to require
such assignment and delegation cease to apply.
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ARTICLE III
GUARANTEE
SECTION 3.01. The Guarantee. The Subsidiary Guarantors hereby
jointly and severally guarantee to each Lender and the Administrative Agent and
their respective successors and assigns the prompt payment in full when due
(whether at stated maturity, by acceleration or otherwise) of the principal of
and interest on the Loans made by the Lenders to the Borrower and all other
amounts from time to time owing to the Lenders or the Administrative Agent by
the Borrower under this Agreement and by any Obligor under any of the other Loan
Documents, in each case strictly in accordance with the terms thereof (such
obligations being herein collectively called the "Guaranteed Obligations"). The
Subsidiary Guarantors hereby further jointly and severally agree that if the
Borrower shall fail to pay in full when due (whether at stated maturity, by
acceleration or otherwise) any of the Guaranteed Obligations, the Subsidiary
Guarantors will promptly pay the same, without any demand or notice whatsoever,
and that in the case of any extension of time of payment or renewal of any of
the Guaranteed Obligations, the same will be promptly paid in full when due
(whether at extended maturity, by acceleration or otherwise) in accordance with
the terms of such extension or renewal.
SECTION 3.02. Obligations Unconditional. The obligations of the
Subsidiary Guarantors under Section 3.01 are absolute and unconditional, joint
and several, irrespective of the value, genuineness, validity, regularity or
enforceability of the obligations of the Borrower under this Agreement or any
other agreement or instrument referred to herein, or any substitution, release
or exchange of any other guarantee of or security for any of the Guaranteed
Obligations, and, to the fullest extent permitted by applicable law,
irrespective of any other circumstance whatsoever that might otherwise
constitute a legal or equitable discharge or defense of a surety or guarantor,
it being the intent of this Section that the obligations of the Subsidiary
Guarantors hereunder shall be absolute and unconditional, joint and several,
under any and all circumstances. Without limiting the generality of the
foregoing, it is agreed that the occurrence of any one or more of the following
shall not alter or impair the liability of the Subsidiary Guarantors hereunder,
which shall remain absolute and unconditional as described above:
(i) at any time or from time to time, without notice to the
Subsidiary Guarantors, the time for any performance of or compliance with
any of the Guaranteed Obligations shall be extended, or such performance
or compliance shall be waived;
(ii) any of the acts mentioned in any of the provisions of
this Agreement or any other agreement or instrument referred to herein
shall be done or omitted;
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(iii) the maturity of any of the Guaranteed Obligations shall
be accelerated, or any of the Guaranteed Obligations shall be modified,
supplemented or amended in any respect, or any right under this Agreement
or any other agreement or instrument referred to herein shall be waived or
any other guarantee of any of the Guaranteed Obligations or any security
therefor shall be released or exchanged in whole or in part or otherwise
dealt with; or
(iv) any lien or security interest granted to, or in favor of,
the Administrative Agent or any Lender or Lenders as security for any of
the Guaranteed Obligations shall fail to be perfected.
The Subsidiary Guarantors hereby expressly waive diligence, presentment, demand
of payment, protest and all notices whatsoever, and any requirement that the
Administrative Agent or any Lender exhaust any right, power or remedy or proceed
against the Borrower under this Agreement or any other agreement or instrument
referred to herein, or against any other Person under any other guarantee of, or
security for, any of the Guaranteed Obligations.
SECTION 3.03. Reinstatement. The obligations of the Subsidiary
Guarantors under this Article shall be automatically reinstated if and to the
extent that for any reason any payment by or on behalf of the Borrower in
respect of the Guaranteed Obligations is rescinded or must be otherwise restored
by any holder of any of the Guaranteed Obligations, whether as a result of any
proceedings in bankruptcy or reorganization or otherwise, and the Subsidiary
Guarantors jointly and severally agree that they will indemnify the
Administrative Agent and each Lender on demand for all reasonable costs and
expenses (including fees of counsel) incurred by the Administrative Agent or
such Lender in connection with such rescission or restoration, including any
such costs and expenses incurred in defending against any claim alleging that
such payment constituted a preference, fraudulent transfer or similar payment
under any bankruptcy, insolvency or similar law.
SECTION 3.04. Subrogation. The Subsidiary Guarantors hereby jointly
and severally agree that until the payment and satisfaction in full of all
Guaranteed Obligations and the expiration and termination of the Commitments of
the Lenders under this Agreement they shall not exercise any right or remedy
arising by reason of any performance by them of their guarantee in Section 3.01,
whether by subrogation or otherwise, against the Borrower or any other guarantor
of any of the Guaranteed Obligations or any security for any of the Guaranteed
Obligations.
SECTION 3.05. Remedies. The Subsidiary Guarantors jointly and
severally agree that, as between the Subsidiary Guarantors and the Lenders, the
obligations of the Borrower under this Agreement may be declared to be forthwith
due and payable as provided in
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Article VIII (and shall be deemed to have become automatically due and payable
in the circumstances provided in Article VIII) for purposes of Section 3.01
notwithstanding any stay, injunction or other prohibition preventing such
declaration (or such obligations from becoming automatically due and payable) as
against the Borrower and that, in the event of such declaration (or such
obligations being deemed to have become automatically due and payable), such
obligations (whether or not due and payable by the Borrower) shall forthwith
become due and payable by the Subsidiary Guarantors for purposes of Section
3.01.
SECTION 3.06. Instrument for the Payment of Money. Each Subsidiary
Guarantor hereby acknowledges that the guarantee in this Article constitutes an
instrument for the payment of money, and consents and agrees that any Lender or
the Administrative Agent, at its sole option, in the event of a dispute by such
Subsidiary Guarantor in the payment of any moneys due hereunder, shall have the
right to bring motion-action under New York CPLR Section 3213.
SECTION 3.07. Continuing Guarantee. The guarantee in this Article
is a continuing guarantee, and shall apply to all Guaranteed Obligations
whenever arising.
SECTION 3.08. Rights of Contribution. The Subsidiary Guarantors
hereby agree, as between themselves, that if any Subsidiary Guarantor shall
become an Excess Funding Guarantor (as defined below) by reason of the payment
by such Subsidiary Guarantor of any Guaranteed Obligations, each other
Subsidiary Guarantor shall, on demand of such Excess Funding Guarantor (but
subject to the next sentence), pay to such Excess Funding Guarantor an amount
equal to such Subsidiary Guarantor's Pro Rata Share (as defined below and
determined, for this purpose, without reference to the properties, debts and
liabilities of such Excess Funding Guarantor) of the Excess Payment (as defined
below) in respect of such Guaranteed Obligations. The payment obligation of a
Subsidiary Guarantor to any Excess Funding Guarantor under this Section shall be
subordinate and subject in right of payment to the prior payment in full of the
obligations of such Subsidiary Guarantor under the other provisions of this
Article and such Excess Funding Guarantor shall not exercise any right or remedy
with respect to such excess until payment and satisfaction in full of all of
such obligations.
For purposes of this Section, (i) "Excess Funding Guarantor" means,
in respect of any Guaranteed Obligations, a Subsidiary Guarantor that has paid
an amount in excess of its Pro Rata Share of such Guaranteed Obligations, (ii)
"Excess Payment" means, in respect of any Guaranteed Obligations, the amount
paid by an Excess Funding Guarantor in excess of its Pro Rata Share of such
Guaranteed Obligations and (iii) "Pro Rata Share" means, for any Subsidiary
Guarantor, the ratio (expressed as a percentage) of (x) the amount by which the
aggregate present fair saleable value of all properties of such Subsidiary
Guarantor (excluding any shares of stock or membership interest of any other
Subsidiary Guarantor) exceeds the amount of all the debts
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and liabilities of such Subsidiary Guarantor (including contingent,
subordinated, unmatured and unliquidated liabilities, but excluding the
obligations of such Subsidiary Guarantor hereunder and any obligations of any
other Subsidiary Guarantor that have been Guaranteed by such Subsidiary
Guarantor) to (y) the amount by which the aggregate fair saleable value of all
properties of all of the Subsidiary Guarantors exceeds the amount of all the
debts and liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities, but excluding the obligations of the Borrower and the
Subsidiary Guarantors hereunder and under the other Loan Documents) of all of
the Subsidiary Guarantors, determined (A) with respect to any Subsidiary
Guarantor that is a party hereto on the Effective Date, as of the Effective
Date, and (B) with respect to any other Subsidiary Guarantor, as of the date
such Subsidiary Guarantor becomes a Subsidiary Guarantor hereunder.
SECTION 3.09. General Limitation on Guarantee Obligations. In any
action or proceeding involving any state corporate law, or any state or Federal
bankruptcy, insolvency, reorganization or other law affecting the rights of
creditors generally, if the obligations of any Subsidiary Guarantor under
Section 3.01 would otherwise, taking into account the provisions of Section
3.08, be held or determined to be void, invalid or unenforceable, or
subordinated to the claims of any other creditors, on account of the amount of
its liability under Section 3.01, then, notwithstanding any other provision
hereof to the contrary, the amount of such liability shall, without any further
action by such Subsidiary Guarantor, any Lender, the Administrative Agent or any
other Person, be automatically limited and reduced to the highest amount that is
valid and enforceable and not subordinated to the claims of other creditors as
determined in such action or proceeding.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
SECTION 4.01. Organization; Powers. Each of the Borrower and its
Subsidiaries is duly organized, validly existing and in good standing under the
laws of the jurisdiction of its organization, has all requisite power and
authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 4.02. Authorization; Enforceability. The Transactions are
within each Obligor's corporate or limited liability company powers and have
been duly authorized by all
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necessary corporate or limited liability company action and, if required, by all
necessary shareholder or member action. This Agreement has been duly executed
and delivered by each Obligor and constitutes, and each of the other Basic
Documents to which it is a party when executed and delivered by such Obligor
will constitute, a legal, valid and binding obligation of such Obligor,
enforceable against each Obligor in accordance with its terms, except as such
enforceability may be limited by (a) bankruptcy, insolvency, reorganization,
fraudulent conveyance, moratorium or similar laws of general applicability
affecting the enforcement of creditors' rights and (b) the application of
general principles of equity (regardless of whether such enforceability is
considered in a proceeding in equity or at law).
SECTION 4.03. Governmental Approvals; No Conflicts. The Transactions
(a) do not require any consent or approval of, registration or filing with, or
any other action by, any Governmental Authority, except for (i) such as have
been obtained or made and are in full force and effect and (ii) filings and
recordings in respect of the Liens created pursuant to the Security Documents,
(b) will not violate any applicable law or regulation or the charter, by-laws or
other organizational documents of the Borrower or any of its Subsidiaries or any
order of any Governmental Authority, (c) will not violate or result in a default
under any indenture, agreement or other instrument binding upon the Borrower or
any of its Subsidiaries or assets, or give rise to a right thereunder to require
any payment to be made by any such Person, and (d) except for the Liens created
pursuant to the Security Documents, will not result in the creation or
imposition of any Lien on any asset of the Borrower or any of its Subsidiaries.
SECTION 4.04. Financial Condition; No Material Adverse Change.
(a) Financial Condition. The Borrower has heretofore furnished to
the Lenders its consolidated balance sheet and statements of income,
stockholders' equity and cash flows (i) as of and for the fiscal year ended
December 31, 1999, reported on by Ernst & Young LLP, independent public
accountants, and (ii) as of and for the fiscal quarter and the portion of the
fiscal year ended September 30, 2000, certified by the chief financial officer
of the Borrower. Such financial statements present fairly, in all material
respects, the financial position and results of operations and cash flows of the
Borrower and its Subsidiaries as of such dates and for such periods in
accordance with GAAP, subject to year-end audit adjustments and the absence of
footnotes in the case of the statements referred to in clause (ii) of the first
sentence of this paragraph.
(b) No Material Adverse Change. Since September 30, 2000, there has
been no material adverse change in the business, assets, operations, prospects
or condition, financial or otherwise, of the Borrower and its Subsidiaries,
taken as a whole.
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SECTION 4.05. Properties.
(a) Property Generally. Each of the Borrower and its Subsidiaries
has good title to, or valid leasehold interests in, all its real and personal
property material to its business, subject only to Liens permitted by Section
7.02 and except for minor defects in title that do not interfere with its
ability to conduct its business as currently conducted or to utilize such
properties for their intended purposes.
(b) Intellectual Property.
(i) The Borrower and each of its Subsidiaries has all right,
title and interest in or a valid and binding right to use all Intellectual
Property used by it in the conduct of its business, and no other
intellectual property is necessary in the conduct of such business, other
than failures that in the aggregate are not material.
(ii) All registrations with and applications to Governmental
Authorities in respect of the Intellectual Property are valid and in full
force and effect except for failures to be so that in the aggregate would
not reasonably be expected to have a Material Adverse Effect.
(iii) There are no restrictions on the direct or indirect
transfer of any contract, or any interest therein, held by the Borrower or
any of its Subsidiaries in respect of its Intellectual Property, except
such restrictions that would not in the aggregate be material to the value
of such Intellectual Property in the hands of, or interfere with its use
by, a collateral assignee following a default and realization on the
collateral pursuant to the Security Agreement.
(iv) The Borrower and each of its Subsidiaries have taken
reasonable security measures to protect the secrecy, confidentiality and
value of their trade secrets.
(v) Neither the Borrower nor any of its Subsidiaries is, or
has received any notice that it is, in default (or with the giving of
notice or lapse of time or both, would be in default) under any contract
to use its Intellectual Property.
(vi) To the knowledge of the Borrower or any of its
Subsidiaries, no Intellectual Property is being infringed by any other
Person except as set forth in Schedule VII.
(vii) Neither the Borrower nor any of its Subsidiaries has
received notice that the Borrower or any Subsidiary is infringing any
intellectual property of any other
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Person, no claim is pending or, to the knowledge of the Borrower, has been
made to such effect that has not been resolved and neither the Borrower
nor any of its Subsidiaries is infringing any intellectual property of any
other Person.
SECTION 4.06. Litigation and Environmental Matters.
(a) Actions, Suits and Proceedings. There are no actions, suits or
proceedings by or before any arbitrator or Governmental Authority now pending
against or, to the knowledge of the Borrower, threatened against or affecting
the Borrower or any of its Subsidiaries (i) as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could
reasonably be expected, individually or in the aggregate, to result in a
Material Adverse Effect (other than the Disclosed Matters) or (ii) that involve
this Agreement or the Transactions.
(b) Environmental Matters. Except for the Disclosed Matters and
except with respect to any other matters that, individually or in the aggregate,
could not reasonably be expected to result in a Material Adverse Effect, neither
the Borrower nor any of its Subsidiaries (i) has failed to comply with any
Environmental Law or to obtain, maintain or comply with any permit, license or
other approval required under any Environmental Law, (ii) has become subject to
any Environmental Liability, (iii) has received notice of any claim with respect
to any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Disclosed Matters. Since the date of this Agreement, there has
been no change in the status of the Disclosed Matters that, individually or in
the aggregate, has resulted in, or materially increased the likelihood of, a
Material Adverse Effect.
SECTION 4.07. Compliance with Laws and Agreements. Each of the
Borrower and its Subsidiaries is in compliance with all laws, regulations and
orders of any Governmental Authority applicable to it or its property and all
indentures, agreements and other instruments binding upon it or its property,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect. No Default has
occurred and is continuing.
SECTION 4.08. Investment and Holding Company Status. Neither the
Borrower nor any of its Subsidiaries is (a) an "investment company" as defined
in, or subject to regulation under, the Investment Company Act of 1940 or (b) a
"holding company" as defined in, or subject to regulation under, the Public
Utility Holding Company Act of 1935.
SECTION 4.09. Taxes. Each of the Borrower and its Subsidiaries has
timely filed or caused to be filed all Tax returns and reports required to have
been filed and has paid or
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caused to be paid all Taxes required to have been paid by it, except (a) Taxes
that are being contested in good faith by appropriate proceedings and for which
such Person has set aside on its books adequate reserves or (b) to the extent
that the failure to do so could not reasonably be expected to result in a
Material Adverse Effect.
SECTION 4.10. ERISA. No ERISA Event has occurred or is reasonably
expected to occur that, when taken together with all other such ERISA Events for
which liability is reasonably expected to occur, could reasonably be expected to
result in a Material Adverse Effect. The present value of all accumulated
benefit obligations under each Plan (based on the assumptions used for purposes
of Statement of Financial Accounting Standards No. 87) did not, as of the date
of the most recent financial statements reflecting such amounts, exceed by more
than $100,000 the fair market value of the assets of such Plan, and the present
value of all accumulated benefit obligations of all underfunded Plans (based on
the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the date of the most recent financial statements
reflecting such amounts, exceed by more than $100,000 the fair market value of
the assets of all such underfunded Plans.
SECTION 4.11. Disclosure. The Borrower has disclosed to the Lenders
all agreements, instruments and corporate or other restrictions to which it or
any of its Subsidiaries is subject, and all other matters known to it, that,
individually or in the aggregate, could reasonably be expected to result in a
Material Adverse Effect. None of the reports, financial statements, certificates
or other information (including without limitation the Registration Statement)
furnished by or on behalf of the Obligors to the Lenders in connection with the
negotiation of this Agreement and the other Loan Documents or delivered
hereunder or thereunder (as modified or supplemented by other information so
furnished) contains any material misstatement of fact or omits to state any
material fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided that, with
respect to projected financial information, the Borrower represents only that
such information was prepared in good faith based upon assumptions believed to
be reasonable at the time.
SECTION 4.12. Use of Credit. Neither the Borrower nor any of its
Subsidiaries is engaged principally, or as one of its important activities, in
the business of extending credit for the purpose, whether immediate, incidental
or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of
any Loan hereunder will be used to buy or carry any Margin Stock.
SECTION 4.13. Material Agreements and Liens.
(a) Material Agreements. Part A of Schedule II is a complete and
correct list of (i) each credit agreement, loan agreement, indenture, purchase
agreement, guarantee, letter of
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credit or other arrangement providing for or otherwise relating to any
Indebtedness or any extension of credit (or commitment for any extension of
credit) to, or guarantee by, the Borrower or any of its Subsidiaries outstanding
on the date hereof the aggregate principal or face amount of which equals or
exceeds (or may equal or exceed) $100,000; (ii) each contract or other agreement
covering goods or services involving the payment or potential payment, pursuant
to the terms thereof, by or to the Borrower or any of its Subsidiaries of more
than $100,000; and (iii) each contract or other arrangement not described in
clause (i) or (ii) of this paragraph that is attached as an exhibit to the
Registration Statement.
Each agreement disclosed in Part A of Schedule II is in full force
and effect and constitutes a legal, valid and binding agreement, enforceable in
accordance with its terms, of each party thereto except where failures to be so,
in the aggregate, would not reasonably be expected to have a Material Adverse
Effect; and except as disclosed in Part A of Schedule II, neither the Borrower,
any Subsidiary nor, to the knowledge of the Borrower, any other party to such
agreement is, or has received notice that it is, in violation or breach of or
default under any such agreement (or with notice or lapse of time or both would
be in violation or breach of or default under any such agreement) in any
material respect.
(b) Liens. Part B of Schedule II is a complete and correct list of
each Lien securing Indebtedness of any Person outstanding on the date hereof the
aggregate principal or face amount of which equals or exceeds (or may equal or
exceed) $500,000 and covering any property of the Borrower or any of its
Subsidiaries, and the aggregate Indebtedness secured (or that may be secured) by
each such Lien and the property covered by each such Lien is correctly described
in Part B of Schedule II.
SECTION 4.14. Capitalization. The information contained in the
Registration Statement in the sections therein entitled "Capitalization" and
"Principal Stockholders" is true and correct as of the date hereof. Each
outstanding share of capital stock of the Borrower is fully paid and
nonassessable. As of the date hereof, except as disclosed in such
"Capitalization" or "Principal Stockholders" sections, (x) there are no
outstanding Equity Rights with respect to the Borrower and (y) there are no
outstanding obligations of the Borrower or any of its Subsidiaries to
repurchase, redeem, or otherwise acquire any shares of capital stock of the
Borrower nor are there any outstanding obligations of the Borrower or any of its
Subsidiaries to make payments to any Person, such as "phantom stock" payments,
where the amount thereof is calculated with reference to the fair market value
or equity value of the Borrower or any of its Subsidiaries.
SECTION 4.15. Subsidiaries and Investments.
(a) Subsidiaries. Set forth in Part A of Schedule VI is a complete
and correct list of all of the Subsidiaries of the Borrower as of the date
hereof, together with, for each such
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Subsidiary, (i) the jurisdiction of organization of such Subsidiary, (ii) each
Person holding ownership interests in such Subsidiary and (iii) the nature of
the ownership interests held by each such Person and the percentage of ownership
of such Subsidiary represented by such ownership interests. Except as disclosed
in Part A of Schedule VI, (x) each of the Borrower and its Subsidiaries owns,
free and clear of Liens (other than Liens created pursuant to the Security
Documents), and has the unencumbered right to vote, all outstanding ownership
interests in each Person shown to be held by it in Part A of Schedule VI, (y)
all of the issued and outstanding capital stock of each such Person organized as
a corporation is validly issued, fully paid and nonassessable and (z) there are
no outstanding Equity Rights with respect to such Person.
(b) Investments. Set forth in Part B of Schedule VI is a complete
and correct list of all Investments (other than Investments disclosed in Part A
of Schedule VI and other than Investments of the types referred to in clauses
(b), (c), (d), (e) and (f) of Section 7.05) held by the Borrower or any of its
Subsidiaries in any Person on the date hereof and, for each such Investment, (x)
the identity of the Person or Persons holding such Investment and (y) the nature
of such Investment. Except as disclosed in Part B of Schedule VI, each of the
Borrower and its Subsidiaries owns, free and clear of all Liens (other than
Liens created pursuant to the Security Documents), all such Investments.
(c) Restrictions on Subsidiaries. None of the Subsidiaries of the
Borrower is, on the date hereof, subject to any indenture, agreement, instrument
or other arrangement of the type described in Section 7.08.
(d) PR Finance. PR Finance conducts no business or operations and
has assets, liabilities and net worth of less than $10,000.
SECTION 4.16. Acquisition Agreements. Each Lender and the
Administrative Agent is an "institutional lender" as such term is used in the
definition of "Senior Indebtedness" in the PR Boston/NJ Acquisition Agreement
and the PR Texas Acquisition Agreement, respectively.
ARTICLE V
CONDITIONS
SECTION 5.01. Effective Date. The obligations of the Lenders to make
Loans hereunder shall not become effective until the date on which the
Administrative Agent shall have received each of the following documents, each
of which shall be satisfactory to the
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Administrative Agent (and to the extent specified below, to each Lender) in form
and substance (or such condition shall have been waived in accordance with
Section 10.02):
(a) Executed Counterparts. From each party hereto either (i) a
counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Administrative Agent (which may
include telecopy transmission of a signed signature page to this
Agreement) that such party has signed a counterpart of this Agreement.
(b) Opinion of Counsel to the Obligors. A favorable written opinion
(addressed to the Administrative Agent and the Lenders and dated the
Effective Date) of Patterson, Belknap, Xxxx & Xxxxx LLP, counsel for the
Obligors, substantially in the form of Exhibit F, and covering such other
matters relating to the Borrower, this Agreement or the Transactions as
the Required Lenders shall reasonably request (and each Obligor hereby
instructs such counsel to deliver such opinion to the Lenders and the
Administrative Agent).
(c) Opinion of Special New York Counsel to RCP. An opinion, dated
the Effective Date, of Milbank, Tweed, Xxxxxx & XxXxxx LLP, special New
York counsel to RCP, substantially in the form of Exhibit G (and RCP
hereby instructs such counsel to deliver such opinion to the Lenders).
(d) Documents. Such documents and certificates as the Administrative
Agent or its counsel may reasonably request relating to the organization,
existence and good standing of each Obligor, the authorization of the
Transactions and any other legal matters relating to the Obligors, this
Agreement or the Transactions, all in form and substance satisfactory to
the Administrative Agent and its counsel.
(e) Officer's Certificate. A certificate, dated the Effective Date
and signed by the President, a Vice President or a Financial Officer of
the Borrower, confirming compliance with the conditions set forth in the
lettered clauses of the first sentence of Section 5.02.
(f) Security Agreement. The Security Agreement, duly executed and
delivered by the Borrower and the Subsidiary Guarantors and the
Administrative Agent and the certificates identified under the name of
such Obligor in Annex 1 thereto, in each case accompanied by undated stock
powers executed in blank. In addition, the Borrower and the Subsidiary
Guarantors shall have taken such other action (including delivering to the
Administrative Agent, for filing, appropriately completed and duly
executed copies of Uniform Commercial Code financing statements) as the
Administrative Agent shall have
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requested in order to perfect the security interests created pursuant to
the Security Agreement.
(g) Subordination Agreement. The Subordination Agreement, duly
executed and delivered by the Borrower, the Subsidiary Guarantors, the
Administrative Agent, the Lenders and Excel.
(h) Warrant Agreement and Warrants. The Warrant Agreement, duly
executed and delivered by the Borrower and the Lenders, together with
evidence that the Warrants have been properly issued in accordance with
the terms of the Warrant Agreement.
(i) Senior Debt. Evidence that the Senior Debt Documents shall have
been duly authorized, executed and delivered, and that the note evidencing
the Senior Debt shall have been duly issued, in each case containing terms
in form and substance satisfactory to each Lender, and the Administrative
Agent shall have received copies of each of the Senior Debt Documents
certified by a Financial Officer of the Borrower. In addition, the
Administrative Agent shall have received a certificate of a Financial
Officer of the Borrower to the effect that the Borrower shall have
received net cash proceeds (prior to the payment of any transaction
expenses) from the issuance of the Senior Debt pursuant to the Senior Debt
Documents in an aggregate amount of $4,500,000.
(j) Notes. The Notes, duly executed and delivered by the Borrower
(if requested by the applicable Lender, or by the Administrative Agent on
behalf of such Lender).
(k) Other Documents. Such other documents as the Administrative
Agent or any Lender or special New York counsel to RCP may reasonably
request.
The obligation of each Lender to make its initial Loan hereunder is
also subject to the payment or delivery by the Borrower of such consideration as
the Borrower shall have agreed to pay or deliver to any Lender or an affiliate
thereof or the Administrative Agent in connection herewith, including pursuant
to the Letter Agreement, and including the reasonable fees and expenses of (1)
Milbank, Tweed, Xxxxxx & XxXxxx LLP, special New York counsel to RCP, in
connection with the negotiation, preparation, execution and delivery of this
Agreement and the other Basic Documents and the Loans hereunder, (2) Xxxxxxx
Xxxxxxx & Xxxxxxxx, (3) PriceWaterhouseCoopers, and (4) The Parthenon Group, in
each case to the extent that statements for such fees and expenses have been
delivered to the Borrower.
The Administrative Agent shall notify the Borrower and the Lenders
of the Effective Date, and such notice shall be conclusive and binding.
Notwithstanding the foregoing, the obligations of the Lenders to make Loans
hereunder shall not become effective unless each
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of the foregoing conditions is satisfied (or waived pursuant to Section 10.02)
on or prior to 3:00 p.m., New York City time, on the date that the Acquisition
Period terminates (and, in the event such conditions are not so satisfied or
waived, the Commitments shall terminate at such time).
SECTION 5.02. Each Credit Event. The obligation of each Lender to
make any Loan is additionally subject to the satisfaction of the following
conditions:
(a) the representations and warranties of the Borrower set forth in
this Agreement, and of each Obligor in each of the other Loan Documents to
which it is a party, shall be true and correct on and as of the date of
such Loan (provided, that any representations and warranties made on or
deemed to be made subsequent to the date of this Agreement that
specifically relate to an earlier date shall be true and correct on and as
of such earlier date);
(b) at the time of and immediately after giving effect to such
Loan, no Default shall have occurred and be continuing;
(c) at the time of and immediately after giving effect to (1) such
Loan, (2) any new Leakage arising at such time, (3) any simultaneous
payment of the Leakage from the proceeds of such Loan, and (4) any
simultaneous deposit of the proceeds of such Loan into the Leakage
Account, the difference of the Leakage minus the balance of the Leakage
Account (such balance not to be less than zero) shall be less than or
equal to the available and unused portion of the Commitments; and
(d) the Administrative Agent shall have received (1) a reasonably
detailed schedule of the Leakage as of the date of such Loan, and (2) a
reasonably detailed statement of the Borrower's intended use of the
proceeds of such Loan, in each case certified by a Financial Officer of
the Borrower as being true and correct in all material respects as of such
date.
Each Borrowing shall be deemed to constitute a representation and warranty by
the Borrower on the date thereof as to the matters specified in the preceding
sentence.
SECTION 5.03. Certain Credit Events. If, following the making of any
Loan, the aggregate amount of all Loans made hereunder not used to fund one or
more of the Acquisitions and/or the Leakage Payments as at such time would
exceed 25% of the aggregate amount of all Loans (other than Loans deemed to be
made pursuant to Section 2.09(c)) made hereunder (it being understood that only
Loans satisfying the following conditions shall be deemed to be
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Loans used to fund one or more of the Acquisitions), the obligation of each
Lender to make such Loan is additionally subject to the satisfaction of the
following conditions:
(a) the Administrative Agent shall have received evidence (in form
and substance satisfactory to the Administrative Agent) that one or more
Acquisitions shall be simultaneously consummated in accordance with the
terms of the applicable Acquisition Agreement (except for any
modifications, supplements or material waivers thereof, or written
consents or determinations made by the parties thereto, that shall be
satisfactory to the Required Lenders), and the Administrative Agent shall
have received a certificate of a Financial Officer of the Borrower to such
effect and to the effect that attached thereto are true and complete
copies of the documents delivered in connection with the closing of such
Acquisition pursuant to the applicable Acquisition Agreement; and
(b) the Administrative Agent shall have received copies of any legal
opinions delivered to the Borrower pursuant to the applicable Acquisition
Agreement in connection with such Acquisition, together with a letter from
each Person delivering such opinion (or authorization within such opinion)
authorizing reliance thereon by the Administrative Agent and the Lenders,
it being understood that the Borrower shall request counsel for the
respective seller to deliver such a reliance letter and that all such
documents shall be in form and substance satisfactory to the
Administrative Agent.
ARTICLE VI
AFFIRMATIVE COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan shall have been paid in full, the
Borrower covenants and agrees with the Lenders that:
SECTION 6.01. Financial Statements and Other Information. The
Borrower will furnish to the Administrative Agent and each Lender:
(a) within 90 days after the end of each fiscal year of the
Borrower, (i) the audited consolidated balance sheet and related
statements of operations, stockholders' equity and cash flows of the
Borrower and its Subsidiaries as of the end of and for such year, setting
forth in each case in comparative form the figures for the previous fiscal
year, all reported on by Ernst & Young LLP or other independent public
accountants of recognized national standing (without a "going concern" or
like qualification or exception and without any qualification or exception
as to the scope of such audit) to the effect that
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such consolidated financial statements present fairly in all material
respects the financial condition and results of operations of the Borrower
and its Subsidiaries on a consolidated basis in accordance with GAAP
consistently applied, together with a statement of such accountants to the
effect that, in making the examination necessary for their opinions,
nothing came to their attention that caused them to believe that the
Borrower was not in compliance with Section 7.10, insofar as such Section
relates to accounting matters, and (ii) a reasonably detailed management
discussion and analysis of the statements described in the foregoing
clause (i);
(b) within 45 days after the end of each of the first eleven
calendar months of each fiscal year of the Borrower, (i) the consolidated
balance sheet and related statements of operations, stockholders' equity
and cash flows of the Borrower and its Subsidiaries as of the end of and
for such month and the then elapsed portion of the fiscal year, setting
forth in each case in comparative form the figures for (or, in the case of
the balance sheet, as of the end of) the corresponding period or periods
of the previous fiscal year, all certified by a Financial Officer of the
Borrower as presenting fairly in all material respects the financial
condition and results of operations of the Borrower and its Subsidiaries
on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes,
and (ii) a reasonably detailed management discussion and analysis of the
statements described in the foregoing clause (i); provided, that if
statements of stockholders' equity and/or management discussion and
analysis are not prepared on a monthly basis, such statements of
stockholders' equity and/or management discussion and analysis, as
applicable, shall be required only at the end of each such calendar month
that is also the end of a fiscal quarter;
(c) concurrently with any delivery of the information set forth
under clause (a) or (b) of this Section, a certificate of a Financial
Officer of the Borrower (i) certifying as to whether a Default has
occurred and, if a Default has occurred, specifying the details thereof
and any action taken or proposed to be taken with respect thereto, (ii)
setting forth reasonably detailed calculations demonstrating compliance
with Sections 7.01, 7.02, 7.05 and 7.10, and (iii) stating whether any
change in GAAP or in the application thereof has occurred since the date
of the audited financial statements referred to in Section 4.04 and, if
any such change has occurred, specifying the effect of such change on the
financial statements accompanying such certificate;
(d) (i) at least 30 days prior to the end of each fiscal year, a
reasonably detailed budget for the Borrower and its Subsidiaries for the
succeeding fiscal year (it being understood that the first such budget
shall be so furnished as soon as reasonably possible following the date
hereof), and (ii) within 45 days of the end of each calendar month, a
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statement setting forth "budgeted versus actual" performance during the
then elapsed portion of the fiscal year relating to the applicable budget
described in the foregoing clause (i), together with a reasonably detailed
management discussion and analysis of the variances set forth therein; and
(e) promptly after the same become publicly available, copies of all
periodic and other reports, proxy statements and other materials filed by
the Borrower or any of its Subsidiaries with the Securities and Exchange
Commission, or any Governmental Authority succeeding to any or all of the
functions of said Commission, or with any national securities exchange, or
distributed by the Borrower to its shareholders generally or to holders of
Senior Debt or of Acquisition Indebtedness, as the case may be; and
(f) promptly following any request therefor, such other information
regarding the operations, business affairs and financial condition of the
Borrower or any of its Subsidiaries, or compliance with the terms of this
Agreement and the other Loan Documents, as the Administrative Agent or any
Lender may reasonably request.
SECTION 6.02. Notices of Material Events. The Borrower will
furnish to the Administrative Agent and each Lender prompt written notice of the
following:
(a) the occurrence of any Default;
(b) the filing or commencement of any action, suit or proceeding by
or before any arbitrator or Governmental Authority against or affecting
the Borrower or any of its Affiliates that, if adversely determined, could
reasonably be expected to result in a loss to the Borrower or any of its
Affiliates in excess of $200,000;
(c) the occurrence of any ERISA Event that, alone or together with
any other ERISA Events that have occurred, could reasonably be expected to
result in liability of the Borrower and its Subsidiaries in an aggregate
amount exceeding $500,000; and
(d) any other development that results in, or could reasonably be
expected to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a statement of
a Financial Officer or other executive officer of the Borrower setting forth the
details of the event or development requiring such notice and any action taken
or proposed to be taken with respect thereto.
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SECTION 6.03. Existence; Conduct of Business. The Borrower will, and
will cause each of its Subsidiaries to, do or cause to be done all things
necessary to preserve, renew and keep in full force and effect its legal
existence and the rights, licenses, permits, privileges and franchises material
to the conduct of its business; provided that the foregoing shall not prohibit
any merger, consolidation, liquidation or dissolution permitted under Section
7.03.
SECTION 6.04. Payment of Obligations. The Borrower will, and will
cause each of its Subsidiaries to, pay its obligations, including tax
liabilities, before the same shall become delinquent or in default, except where
(a) the validity or amount thereof is being contested in good faith by
appropriate proceedings, (b) the Borrower or such Subsidiary has set aside on
its books adequate reserves with respect thereto in accordance with GAAP and (c)
the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 6.05. Maintenance of Properties; Insurance. The Borrower
will, and will cause each of its Subsidiaries to, (a) keep and maintain all
property material to the conduct of its business in good working order and
condition, ordinary wear and tear excepted, and (b) maintain, with financially
sound and reputable insurance companies, insurance in such amounts and against
such risks as are customarily maintained by companies engaged in the same or
similar businesses operating in the same or similar locations.
SECTION 6.06. Books and Records; Inspection Rights. The Borrower
will, and will cause each of its Subsidiaries to, keep proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its business and activities. The Borrower will, and
will cause each of its Subsidiaries to, permit any representatives designated by
the Administrative Agent or any Lender, upon reasonable prior notice, to visit
and inspect its properties, to examine and make extracts from its books and
records, and to discuss its affairs, finances and condition with its officers
and independent accountants, all at such reasonable times and as often as
reasonably requested.
SECTION 6.07. Compliance with Laws. The Borrower will, and will
cause each of its Subsidiaries to, comply with all laws, rules, regulations and
orders of any Governmental Authority applicable to it or its property, except
where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse Effect.
SECTION 6.08. Use of Proceeds. At least 75% of the proceeds of the
Loans, in the aggregate, will be used to fund one or more of the Acquisitions
and/or the Leakage Payments, and the rest of the proceeds of the Loans may be
used for general corporate purposes. All proceeds of the Loans made after the
Acquisition Period shall be used solely to fund Leakage, and for no other
purpose, and shall at all times be kept in the Leakage Account until
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applied to Leakage. No part of the proceeds of any Loan will be used, whether
directly or indirectly, for any purpose that entails a violation of any of the
Regulations of the Board, including Regulations U and X.
SECTION 6.09. Certain Obligations Respecting Subsidiaries; Further
Assurances.
(a) Subsidiary Guarantors. The Borrower will take such action, and
will cause each of its Subsidiaries to take such action, from time to time as
shall be necessary to ensure that all Subsidiaries of the Borrower are
"Subsidiary Guarantors" hereunder. Without limiting the generality of the
foregoing, in the event that the Borrower or any of its Subsidiaries shall form
or acquire any new Subsidiary that shall constitute a Subsidiary hereunder, the
Borrower and its Subsidiaries will cause such new Subsidiary to
(i) become a "Subsidiary Guarantor" hereunder, and a
"Securing Party" under the Security Agreement pursuant to a Guarantee
Assumption Agreement,
(ii) cause such Subsidiary to take such action (including
delivering such shares of stock, executing and delivering such Uniform
Commercial Code financing statements) as shall be necessary to create and
perfect valid and enforceable first priority Liens on substantially all of
the personal property of such new Subsidiary as collateral security for
the obligations of such new Subsidiary hereunder and
(iii) deliver such proof of corporate action, incumbency of
officers, opinions of counsel and other documents as is consistent with
those delivered by each Obligor pursuant to Section 5.01 on the Effective
Date or as the Administrative Agent shall have requested.
Notwithstanding the foregoing, the Borrower and the Lenders agree that the
Borrower shall not be required to cause PR Canada or PR Finance to become
Subsidiary Guarantors on the date hereof, subject to the following conditions:
(1) the Borrower shall use its best efforts to cause PR Canada
promptly to become a Subsidiary Guarantor, but in no event later than 45
days after the date hereof; and
(2) the Borrower shall cause PR Finance to be dissolved and
wound up no later than 45 days after the date hereof.
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(b) Ownership of Subsidiaries. The Borrower will, and will cause
each of its Subsidiaries to, take such action from time to time as shall be
necessary to ensure that the Borrower and each of its Subsidiaries at all times
owns (subject only to the Lien of the Security Agreement) at least the same
percentage of the issued and outstanding shares of each class of stock or
membership interest of each of its Subsidiaries as is owned on the date hereof.
In the event that any additional shares of stock shall be issued by any
Subsidiary, the respective Obligor agrees forthwith to deliver to the
Administrative Agent pursuant to the Security Agreement the certificates
evidencing such shares of stock, accompanied by undated stock powers executed in
blank and to take such other action as the Administrative Agent shall request to
perfect the security interest created therein pursuant to the Security
Agreement.
(c) Further Assurances. The Borrower will, and will cause each of
its Subsidiaries to, take such action from time to time as shall reasonably be
requested by the Administrative Agent to effectuate the purposes and objectives
of this Agreement.
Without limiting the generality of the foregoing, the Borrower will,
and will cause each other Obligor to, take such action from time to time
(including filing appropriate Uniform Commercial Code financing statements and
executing and delivering such assignments, security agreements and other
instruments) as shall be reasonably requested by the Administrative Agent to
create, in favor of the Administrative Agent for the benefit of the Lenders,
perfected security interests and Liens in substantially all of the property of
such Obligor as collateral security for its obligations hereunder; provided that
any such security interest or Lien shall be subject to the relevant requirements
of the Security Documents.
ARTICLE VII
NEGATIVE COVENANTS
Until the Commitments have expired or terminated and the principal
of and interest on each Loan have been paid in full, the Borrower covenants and
agrees with the Lenders that:
SECTION 7.01. Indebtedness. The Borrower will not, nor will it
permit any of its Subsidiaries to, create, incur, assume or permit to exist any
Indebtedness, except:
(a) Indebtedness created hereunder;
(b) Senior Debt;
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(c) Acquisition Indebtedness;
(d) the Varick Letter of Credit; and
(e) Permitted Capital Lease Obligations.
SECTION 7.02. Liens. The Borrower will not, nor will it permit any
of its Subsidiaries to, create, incur, assume or permit to exist any Lien on any
property or asset now owned or hereafter acquired by it, or assign or sell any
income or revenues (including accounts receivable) or rights in respect of any
thereof, except:
(a) Liens created pursuant to the Security Documents and the Senior
Debt Documents; and
(b) Permitted Encumbrances.
SECTION 7.03. Fundamental Changes. The Borrower will not, nor will
it permit any of its Subsidiaries to, enter into any transaction of merger or
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution). The Borrower will not, nor will it
permit any of its Subsidiaries to, acquire any business or property from, or
capital stock of, or be a party to any acquisition of, any Person except for the
Acquisitions, purchases of inventory and other property to be sold or used in
the ordinary course of business, Investments permitted under Section 7.05(g) and
Capital Expenditures that comply with Section 7.10(c). The Borrower will not,
nor will it permit any of its Subsidiaries to, convey, sell, lease, transfer or
otherwise dispose of, in one transaction or a series of transactions, all or any
substantial part of its business or property, whether now owned or hereafter
acquired (including receivables and leasehold interests, but excluding (x)
obsolete or worn-out property, tools or equipment no longer used or useful in
its business so long as the amount thereof sold in any fiscal year by the
Borrower and its Subsidiaries shall not have a fair market value in excess of
$500,000 and (y) any inventory or other property sold or disposed of in the
ordinary course of business and on ordinary business terms).
Notwithstanding the foregoing provisions of this Section:
(a) any Subsidiary of the Borrower may be merged or consolidated
with or into any other such Subsidiary; provided that if any such
transaction shall be between a Subsidiary and a wholly owned Subsidiary,
the wholly owned Subsidiary shall be the continuing or surviving
corporation; and
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(b) the capital stock of any Subsidiary of the Borrower may be sold,
transferred or otherwise disposed of to the Borrower or any wholly owned
Subsidiary of the Borrower.
SECTION 7.04. Lines of Business. The Borrower will not, nor will it
permit any of its Subsidiaries to, engage to any material extent in any business
other than businesses of the type conducted by the Borrower and its Subsidiaries
on the date of execution of this Agreement and business reasonably related
thereto.
SECTION 7.05. Investments. The Borrower will not, nor will it
permit any of its Subsidiaries to, make or permit to remain outstanding any
Investments except:
(a) Investments outstanding on the date hereof and identified in
Part B of Schedule VI;
(b) operating deposit accounts with banks;
(c) Permitted Investments;
(d) Investments by the Borrower and its Subsidiaries in the
Borrower and the Subsidiary Guarantors;
(e) Investments consisting of security deposits with utilities and
other like Persons made in the ordinary course of business (which shall
include, without limitation, security deposits and guarantees in respect
of real property leases of the Borrower or its Subsidiaries made in the
ordinary course of business); and
(f) additional strategic venture capital Investments and/or loans to
the employees of the Borrower and its Subsidiaries, up to but not
exceeding the lesser of $2,000,000 in the aggregate, and $500,000 in or to
any one Person or such Person's Affiliates.
SECTION 7.06. Restricted Payments. The Borrower will not, nor will
it permit any of its Subsidiaries to, declare or make, or agree to pay or make,
directly or indirectly, any Restricted Payment, except that (A) the Borrower may
declare and pay dividends with respect to its capital stock payable solely in
additional shares of its common stock, and (B) the Borrower may, if
contractually obligated to do so, make Restricted Payments of the type described
in clause (ii) of the definition thereof pursuant to and in accordance with
stock option plans or other benefit plans for directors, management, employees
or consultants of the Borrower and its Subsidiaries to the extent that each such
Restricted Payment arises out of the termination of such Person's employment or
relationship with the Borrower and its Subsidiaries.
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Nothing herein shall be deemed to prohibit the payment of dividends
by any Subsidiary of the Borrower to the Borrower or to any Subsidiary
Guarantor.
SECTION 7.07. Transactions with Affiliates. The Borrower will not,
nor will it permit any of its Subsidiaries to, sell, lease or otherwise transfer
any property or assets to, or purchase, lease or otherwise acquire any property
or assets from, or otherwise engage in any other transactions with, any of its
Affiliates, except (a) transactions in the ordinary course of business at prices
and on terms and conditions not less favorable to the Borrower or such
Subsidiary than could be obtained on an arm's-length basis from unrelated third
parties, (b) transactions between or among the Borrower and its wholly owned
Subsidiary Guarantors not involving any other Affiliate and (c) any Restricted
Payment permitted by Section 7.06.
SECTION 7.08. Restrictive Agreements. The Borrower will not, and
will not permit any of its Subsidiaries to, directly or indirectly, enter into,
incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (a) the ability of the Borrower or any
Subsidiary to create, incur or permit to exist any Lien upon any of its property
or assets, or (b) the ability of any Subsidiary to pay dividends or other
distributions with respect to any shares of its capital stock or to make or
repay loans or advances to the Borrower or any other Subsidiary or to Guarantee
Indebtedness of the Borrower or any other Subsidiary; provided that:
(i) the foregoing shall not apply to (w) customary
non-assignment provisions contained in licenses and leases, entered into
in the ordinary course of business consistent with past practice, (x)
restrictions and conditions imposed by law or by this Agreement, (y)
restrictions and conditions existing on the date hereof identified on
Schedule III (but shall apply to any extension or renewal of, or any
amendment or modification expanding the scope of, any such restriction or
condition) and (z) customary restrictions and conditions contained in
agreements relating to the sale of a Subsidiary pending such sale,
provided such restrictions and conditions apply only to the Subsidiary
that is to be sold and such sale is permitted hereunder; and
(ii) clause (a) of the foregoing shall not apply to (x)
restrictions or conditions imposed by any agreement relating to secured
Indebtedness permitted by this Agreement if such restrictions or
conditions apply only to the property or assets securing such Indebtedness
and (y) customary provisions in leases and other contracts restricting the
assignment thereof.
SECTION 7.09. Leakage Account. The Borrower shall make no withdrawal
from the Leakage Account (other than to effect a simultaneous Leakage Payment)
if, at the time
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of and immediately after giving effect to such withdrawal, the difference of
Leakage minus the remaining balance of the Leakage Account would be greater than
the available and unused portion of the Commitments.
SECTION 7.10. Certain Financial Covenants.
(a) Cash Flow. The Borrower will not permit the Cash Flow for the
period of four fiscal quarters ending on or nearest to the following respective
dates to be less than the following respective amounts:
Date Amount
--------------- -----------
January 1, 2002 ($10,350,000)
April 1, 2002 ($ 6,450,000)
July 1, 2002 ($ 1,300,000)
October 1, 2002 $ 4,100,000
January 1, 2003 $ 10,200,000
April 1, 2003 $ 10,500,000
July 1, 2003 $ 10,500,000
October 1, 2003 $ 11,000,000
(b) Current Ratio. The Borrower will not permit the Current Ratio
to be less than 1.0 to 1 at any time on or after March 31, 2001.
(c) Capital Expenditures. The Borrower will not permit Capital
Expenditures for the period of four fiscal quarters ending on or nearest to the
following respective dates to exceed the following respective amounts:
Date Amount
--------------- ----------
January 1, 2002 $7,800,000
April 1, 2002 $7,100,000
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July 1, 2002 $6,500,000
October 1, 2002 $6,100,000
January 1, 2003 $5,900,000
April 1, 2003 $5,800,000
July 1, 2003 $5,700,000
October 1, 2003 $5,600,000
SECTION 7.11. Acquisition Indebtedness. The Borrower will not, nor
will it permit any of its Subsidiaries to, purchase, redeem, retire or otherwise
acquire for value, or set apart any money for a sinking, defeasance or other
analogous fund for the purchase, redemption, retirement or other acquisition of,
or make any voluntary payment or prepayment of the principal of or interest on,
or any other amount owing in respect of, any Acquisition Indebtedness, except
for regularly scheduled payments of principal and interest in respect thereof
required pursuant to the instruments evidencing such Acquisition Indebtedness.
Notwithstanding the foregoing, the Borrower shall not, nor will it permit any of
its Subsidiaries to pay any principal or interest on any Acquisition
Indebtedness upon the occurrence of and during the continuance of an Event of
Default.
SECTION 7.12. Modifications of Certain Documents. The Borrower will
not consent to any modification, supplement or waiver of any of the provisions
of any agreement, instrument or other document evidencing or relating to Senior
Debt or any Acquisition without the prior consent of the Administrative Agent
(with the approval of the Required Lenders).
ARTICLE VIII
EVENTS OF DEFAULT
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of or interest
(other than interest capitalized on such date as permitted by Section
2.09(c)) on any Loan or any other amount payable under this Agreement or
under any other Loan Document when and as
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the same shall become due and payable, whether at the due date thereof or
at a date fixed for prepayment thereof or otherwise;
(b) any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries in or in connection with
this Agreement or any other Loan Document or any amendment or modification
hereof or thereof, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with this Agreement
or any other Loan Document or any amendment or modification hereof or
thereof, shall prove to have been incorrect in any material respect
(individually or in the aggregate) when made or deemed made; or any
representation or warranty made by the seller or any of the shareholders
pursuant to any Acquisition Agreement shall prove to have been false or
misleading as of the time made in any respect except for those which in
the aggregate do not have a Material Adverse Effect on the Borrower;
(c) the Borrower shall fail to observe or perform any covenant,
condition or agreement contained in Section 6.02, 6.03 (with respect to
the Borrower's existence), 6.08 or 6.09 or in Article VII or any Obligor
shall default in the performance of any of its obligations contained in
Section 4.02 or 5.02 of the Security Agreement;
(d) any Obligor shall fail to observe or perform any covenant,
condition or agreement contained in this Agreement (other than those
specified in clause (a) or (c) of this Article) or any other Loan Document
and such failure shall continue unremedied for a period of 30 or more days
after notice thereof from the Administrative Agent (given at the request
of any Lender) to the Borrower;
(e) the Borrower or any of its Subsidiaries shall fail to make any
payment (whether of principal or interest and regardless of amount) in
respect of any Material Indebtedness, when and as the same shall become
due and payable;
(f) any event or condition occurs that results in any Material
Indebtedness becoming due prior to its scheduled maturity or that enables
or permits (with or without the giving of notice, the lapse of time or
both) the holder or holders of any Material Indebtedness or any trustee or
agent on its or their behalf to cause any Material Indebtedness to become
due, or to require the prepayment, repurchase, redemption or defeasance
thereof, prior to its scheduled maturity; provided that this clause (f)
shall not apply to secured Indebtedness that becomes due as a result of
the voluntary sale or transfer of the property or assets securing such
Indebtedness;
(g) an involuntary proceeding shall be commenced or an involuntary
petition shall be filed seeking (i) liquidation, reorganization or other
relief in respect of the
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Borrower or any of its Subsidiaries or its debts, or of a substantial part
of its assets, under any Federal, state or foreign bankruptcy, insolvency,
receivership or similar law now or hereafter in effect or (ii) the
appointment of a receiver, trustee, custodian, sequestrator, conservator
or similar official for the Borrower or any of its Subsidiaries or for a
substantial part of its assets, and, in any such case, such proceeding or
petition shall continue undismissed for a period of 60 or more days or an
order or decree approving or ordering any of the foregoing shall be
entered;
(h) the Borrower or any of its Subsidiaries shall (i) voluntarily
commence any proceeding or file any petition seeking liquidation,
reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in
effect, (ii) consent to the institution of, or fail to contest in a timely
and appropriate manner, any proceeding or petition described in clause (g)
of this Article, (iii) apply for or consent to the appointment of a
receiver, trustee, custodian, sequestrator, conservator or similar
official for the Borrower or any of its Subsidiaries or for a substantial
part of its assets, (iv) file an answer admitting the material allegations
of a petition filed against it in any such proceeding, (v) make a general
assignment for the benefit of creditors or (vi) take any action for the
purpose of effecting any of the foregoing;
(i) the Borrower or any of its Subsidiaries shall become unable,
admit in writing its inability or fail generally to pay its debts as they
become due;
(j) one or more judgments for the payment of money in an aggregate
amount in excess of $500,000 shall be rendered against the Borrower or any
of its Subsidiaries or any combination thereof and the same shall remain
undischarged for a period of 30 consecutive days during which execution
shall not be effectively stayed, or any action shall be legally taken by a
judgment creditor to attach or levy upon any assets of the Borrower or any
of its Subsidiaries to enforce any such judgment;
(k) an ERISA Event shall have occurred that, in the opinion of the
Required Lenders (which determination by the Required Lenders shall be
reasonable and made in good faith), when taken together with all other
ERISA Events that have occurred, could reasonably be expected to result in
a Material Adverse Effect;
(l) a Change in Control shall occur; or
(m) except for failures to be perfected that are not in the
aggregate material, the Liens created by the Security Documents shall at
any time not constitute a valid and perfected Lien on (i) such Collateral
(as defined in the Security Agreement) against
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which perfection is obtained by filings with the Secretary of State of New
York and with the County of New York and (ii) such other Collateral as the
Administrative Agent shall have requested the Borrower and/or the
Subsidiary Guarantors to perfect against, in each case in favor of the
Administrative Agent, free and clear of all other Liens (other than Liens
permitted under Section 7.02 or under the respective Security Documents),
or, except for expiration in accordance with its terms, any of the
Security Documents shall for whatever reason be terminated or cease to be
in full force and effect, or the enforceability thereof shall be contested
by any Obligor;
then, and in every such event (other than an event with respect to any Obligor
described in clause (g) or (h) of this Article), and at any time thereafter
during the continuance of such event, the Administrative Agent may, and at the
request of the Required Lenders shall, by notice to the Borrower, take either or
both of the following actions, at the same or different times (provided that the
Administrative Agent shall not, without the consent of the Required Lenders,
take any such action with respect to a breach of any covenant contained in
Section 7.10): (i) terminate the Commitments, and thereupon the Commitments
shall terminate immediately, and (ii) declare the Loans then outstanding to be
due and payable in whole (or in part, in which case any principal not so
declared to be due and payable may thereafter be declared to be due and
payable), and thereupon the principal of the Loans so declared to be due and
payable, together with accrued interest thereon and all other obligations of the
Obligors accrued hereunder, shall become due and payable immediately, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Obligor; and in case of any event with respect to any
Obligor described in clause (g) or (h) of this Article, the Commitments shall
automatically terminate and the principal of the Loans then outstanding,
together with accrued interest thereon and all other obligations of the Obligors
accrued hereunder, shall automatically become due and payable, without
presentment, demand, protest or other notice of any kind, all of which are
hereby waived by each Obligor.
ARTICLE IX
THE ADMINISTRATIVE AGENT
Each of the Lenders hereby irrevocably appoints the Administrative
Agent as its agent hereunder and under the other Loan Documents and authorizes
the Administrative Agent to take such actions on its behalf and to exercise such
powers as are delegated to the Administrative Agent by the terms hereof or
thereof, together with such actions and powers as are reasonably incidental
thereto.
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The Person serving as the Administrative Agent hereunder shall have
the same rights and powers in its capacity as a Lender as any other Lender and
may exercise the same as though it were not the Administrative Agent, and such
Person and its Affiliates may accept deposits from, lend money to and generally
engage in any kind of business with the Borrower or any Subsidiary or other
Affiliate thereof as if it were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations
except those expressly set forth herein and in the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Administrative Agent shall not
be subject to any fiduciary or other implied duties, regardless of whether a
Default has occurred and is continuing, (b) the Administrative Agent shall not
have any duty to take any discretionary action or exercise any discretionary
powers, except discretionary rights and powers expressly contemplated hereby or
by the other Loan Documents that the Administrative Agent is required to
exercise in writing by the Required Lenders, and (c) except as expressly set
forth herein and in the other Loan Documents, the Administrative Agent shall not
have any duty to disclose, and shall not be liable for the failure to disclose,
any information relating to the Borrower or any of its Subsidiaries that is
communicated to or obtained by the bank serving as Administrative Agent or any
of its Affiliates in any capacity. The Administrative Agent shall not be liable
for any action taken or not taken by it with the consent or at the request of
the Required Lenders or in the absence of its own gross negligence or willful
misconduct. The Administrative Agent shall be deemed not to have knowledge of
any Default unless and until written notice thereof is given to the
Administrative Agent by the Borrower or a Lender, and the Administrative Agent
shall not be responsible for or have any duty to ascertain or inquire into (i)
any statement, warranty or representation made in or in connection with this
Agreement or any other Loan Document, (ii) the contents of any certificate,
report or other document delivered hereunder or thereunder or in connection
herewith or therewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein or therein,
(iv) the validity, enforceability, effectiveness or genuineness of this
Agreement, any other Loan Document or any other agreement, instrument or
document, or (v) the satisfaction of any condition set forth in Article V or
elsewhere herein or therein, other than to confirm receipt of items expressly
required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall
not incur any liability for relying upon, any notice, request, certificate,
consent, statement, instrument, document or other writing believed by it to be
genuine and to have been signed or sent by the proper Person. The Administrative
Agent also may rely upon any statement made to it orally or by telephone and
believed by it to be made by the proper Person, and shall not incur any
liability for relying thereon. The Administrative Agent may consult with legal
counsel (who may be counsel for an Obligor), independent accountants and other
experts selected by it, and shall not
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be liable for any action taken or not taken by it in accordance with the advice
of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and
exercise its rights and powers by or through any one or more sub-agents
appointed by the Administrative Agent. The Administrative Agent and any such
sub-agent may perform any and all its duties and exercise its rights and powers
through their respective Related Parties. The exculpatory provisions of the
preceding paragraphs shall apply to any such sub-agent and to the Related
Parties of the Administrative Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Administrative Agent.
The Administrative Agent may resign at any time by notifying the
Lenders and the Borrower. Upon any such resignation, the Required Lenders shall
have the right, in consultation with the Borrower, to appoint a successor. If no
successor shall have been so appointed by the Required Lenders and shall have
accepted such appointment within 30 days after the retiring Administrative Agent
gives notice of its resignation, then the retiring Administrative Agent's
resignation shall nonetheless become effective and (1) the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder and (2) the Required Lenders shall perform the duties of the
Administrative Agent (and all payments and communications provided to be made
by, to or through the Administrative Agent shall instead be made by or to each
Lender directly) until such time as the Required Lenders appoint a successor
agent as provided for above in this paragraph. Upon the acceptance of its
appointment as Administrative Agent hereunder by a successor, such successor
shall succeed to and become vested with all the rights, powers, privileges and
duties of the retiring (or retired) Administrative Agent and the retiring
Administrative Agent shall be discharged from its duties and obligations
hereunder (if not already discharged therefrom as provided above in this
paragraph). After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 10.03 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent or any other Lender and based on such documents and
information as it shall from time to time deem appropriate, continue to make its
own decisions in taking or not taking action under or based upon this Agreement,
any other Loan Document or any related agreement or any document furnished
hereunder or thereunder.
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Except as otherwise provided in Section 10.02(b) with respect to
this Agreement, the Administrative Agent may, with the prior consent of the
Required Lenders (but not otherwise), consent to any modification, supplement or
waiver under any of the Loan Documents, provided that, without the prior consent
of each Lender, the Administrative Agent shall not (except as provided herein or
in the Security Documents) release all or substantially all of the collateral or
otherwise terminate all or substantially all of the Liens under any Security
Document providing for collateral security, agree to additional obligations
being secured by all or substantially all of such collateral security (unless
the Lien for such additional obligations shall be junior to the Lien in favor of
the other obligations secured by such Security Document, in which event the
Administrative Agent may consent to such junior Lien provided that it obtains
the consent of the Required Lenders thereto), alter the relative priorities of
the obligations entitled to the benefits of the Liens created under the Security
Documents with respect to all or substantially all of such collateral, except
that no such consent shall be required, and the Administrative Agent is hereby
authorized, to release any Lien covering property that is the subject of either
a disposition of property permitted hereunder or a disposition to which the
Required Lenders have consented.
ARTICLE X
MISCELLANEOUS
SECTION 10.01. Notices. Except in the case of notices and other
communications expressly permitted to be given by telephone, all notices and
other communications provided for herein shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail or sent by telecopy, as follows:
(a) if to the Borrower or any Subsidiary Guarantor, to it at 0000
Xxxxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxx X. Xxxxxxx (Telecopy No.
000-000-0000; Telephone No. 000-000-0000), with a copy to Patterson,
Belknap, Xxxx & Tyler LLP, 0000 Xxxxxx xx xxx Xxxxxxxx, Xxx Xxxx, XX
00000, Attention of Xxxx X. Xxxxxxx, Esq. (Telecopy No. 000-000-0000;
Telephone No. 000-000-0000);
(b) if to the Administrative Agent, to Reservoir Capital Partners,
L.P., 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention of Xxxxx Xxxx
(Telecopy No. 000-000-0000; Telephone No. 000-000-0000); and
(c) if to a Lender, to it at its address (or telecopy number) set
forth in its Administrative Questionnaire.
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Any party hereto may change its address or telecopy number for notices and other
communications hereunder by notice to the other parties hereto (or, in the case
of any such change by a Lender, by notice to the Borrower and the Administrative
Agent). All notices and other communications given to any party hereto in
accordance with the provisions of this Agreement shall be deemed to have been
given on the date of receipt.
SECTION 10.02. Waivers; Amendments.
(a) No Deemed Waivers; Remedies Cumulative. No failure or delay by
the Administrative Agent or any Lender in exercising any right or power
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by any Obligor
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan shall not
be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Amendments. Neither this Agreement nor any provision hereof may
be waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Borrower and the Required Lenders or by the Borrower
and the Administrative Agent with the consent of the Required Lenders; provided
that no such agreement shall
(i) increase the Commitment of any Lender without the written
consent of such Lender,
(ii) reduce the principal amount of any Loan or reduce the rate of
interest thereon without the written consent of each Lender affected
thereby,
(iii) postpone the scheduled date of payment of the principal amount
of any Loan, or any interest thereon, or reduce the amount of, waive or
excuse any such payment, or postpone the scheduled date of expiration of
any Commitment, without the written consent of each Lender affected
thereby,
(iv) change Section 2.11(d) without the consent of each Lender
affected thereby,
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(v) change any of the provisions of this Section or the percentage
in the definition of the term "Required Lenders" or any other provision
hereof specifying the number or percentage of Lenders required to waive,
amend or modify any rights hereunder or make any determination or grant
any consent hereunder, without the written consent of each Lender, or
(vi) release all or substantially all of the Subsidiary Guarantors
from their guarantee obligations under Article III without the written
consent of each Lender; and provided further that (x) no such agreement
shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent, and (y) that any modification or supplement of
Article III shall require the consent of each Subsidiary Guarantor.
SECTION 10.03. Expenses; Indemnity; Damage Waiver.
(a) Costs and Expenses. The Borrower shall pay (i) all reasonable
out-of-pocket expenses incurred by the Administrative Agent and its Affiliates,
and any Lender and its Affiliates, including the reasonable fees, charges and
disbursements of counsel for the Administrative Agent and any Lender, in
connection with the syndication of the credit facilities provided for herein,
the preparation and administration of this Agreement and the other Loan
Documents or any amendments, modifications or waivers of the provisions hereof
or thereof (whether or not the transactions contemplated hereby or thereby shall
be consummated), (ii) all out-of-pocket expenses incurred by the Administrative
Agent or any Lender, including the fees, charges and disbursements of any
counsel for the Administrative Agent, or any Lender, in connection with the
enforcement or protection of its rights in connection with this Agreement and
the other Loan Documents, including its rights under this Section, or in
connection with the Loans made hereunder, including in connection with any
workout, restructuring or negotiations in respect thereof and (iii) all costs,
expenses, taxes, assessments and other charges incurred in connection with any
filing, registration, recording or perfection of any security interest
contemplated by any Security Document or any other document referred to therein.
(b) Indemnification by the Borrower. The Borrower shall indemnify
the Administrative Agent and each Lender, and each Related Party of any of the
foregoing Persons (each such Person being called an "Indemnitee") against, and
hold each Indemnitee harmless from, any and all losses, claims, damages,
liabilities and related expenses, including the fees, charges and disbursements
of any counsel for any Indemnitee, incurred by or asserted against any
Indemnitee arising out of, in connection with, or as a result of (i) the
execution or delivery of this Agreement or any agreement or instrument
contemplated hereby, the performance by the parties hereto of their respective
obligations hereunder or the consummation of the Transactions or any other
transactions contemplated hereby, (ii) any Loan or the use of the proceeds
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therefrom, (iii) any actual or alleged presence or release of Hazardous
Materials on or from any property owned or operated by the Borrower or any of
its Subsidiaries, or any Environmental Liability related in any way to the
Borrower or any of its Subsidiaries, or (iv) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee.
(c) Reimbursement by Lenders. To the extent that the Borrower fails
to pay any amount required to be paid by it to the Administrative Agent under
paragraph (a) or (b) of this Section, each Lender severally agrees to pay to the
Administrative Agent such Lender's Applicable Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
(d) Waiver of Consequential Damages, Etc. To the extent permitted by
applicable law, no Obligor shall assert, and each Obligor hereby waives, any
claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages)
arising out of, in connection with, or as a result of, this Agreement or any
agreement or instrument contemplated hereby, the Transactions, any Loan or the
use of the proceeds thereof.
(e) Payments. All amounts due under this Section shall be payable
not later than five days after written demand therefor.
SECTION 10.04. Successors and Assigns.
(a) Assignments Generally. The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and assigns permitted hereby, except that no Obligor may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Lender (and any attempted assignment or transfer by any
Obligor without such consent shall be null and void). Nothing in this Agreement,
expressed or implied, shall be construed to confer upon any Person (other than
the parties hereto, their respective successors and assigns permitted hereby
and, to the extent expressly contemplated hereby, the Related Parties of each of
the Administrative Agent and the Lenders) any legal or equitable right, remedy
or claim under or by reason of this Agreement.
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(b) Assignments by Lenders. Any Lender may assign to one or more
assignees all or a portion of its rights and obligations under this Agreement
(including all or a portion of its Commitment and the Loans at the time owing to
it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate
(or Approved Fund) of a Lender, the Administrative Agent (and, only during
such time that at least a portion of the Commitments remains available,
the Borrower) must give its prior written consent to such assignment
(which consent shall not be unreasonably withheld),
(ii) except in the case of an assignment to a Lender or an Affiliate
(or Approved Fund) of a Lender or an assignment of the entire remaining
amount of the assigning Lender's Commitment, the amount of the Commitment
of the assigning Lender subject to each such assignment (determined as of
the date the Assignment and Acceptance with respect to such assignment is
delivered to the Administrative Agent) shall not be less than $5,000,000
unless each of the Borrower and the Administrative Agent otherwise
consent,
(iii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender's rights and obligations
under this Agreement,
(iv) the parties to each assignment shall execute and deliver to the
Administrative Agent an Assignment and Acceptance, together with a
processing and recordation fee of $2,500 (unless such fee is waived by the
Administrative Agent in its sole discretion), and
(v) the assignee, if it shall not be a Lender, shall deliver to the
Administrative Agent an Administrative Questionnaire;
provided further that any consent of the Borrower otherwise required under this
paragraph shall not be required if an Event of Default under clause (a), (g) or
(h) of Article VIII has occurred and is continuing. Upon acceptance and
recording pursuant to paragraph (d) of this Section, from and after the
effective date specified in each Assignment and Acceptance, the assignee
thereunder shall be a party hereto and, to the extent of the interest assigned
by such Assignment and Acceptance, have the rights and obligations of a Lender
under this Agreement, and the assigning Lender thereunder shall, to the extent
of the interest assigned by such Assignment and Acceptance, be released from its
obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.10 and 10.03). Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does not
comply with this paragraph shall be treated for purposes of this Agreement as a
sale by such Lender of a participation in such rights and obligations in
accordance with paragraph (e) of this Section.
Loan Agreement
66
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(c) Maintenance of Register by the Administrative Agent. The
Administrative Agent, acting for this purpose as an agent of the Borrower, shall
maintain at one of its offices in New York City a copy of each Assignment and
Acceptance delivered to it and a register for the recordation of the names and
addresses of the Lenders, and the Commitment of, and principal amount of the
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
"Register"). The entries in the Register shall be conclusive, and the Borrower,
the Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. The
Register shall be available for inspection by the Borrower and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Effectiveness of Assignments. Upon its receipt of a duly
completed Assignment and Acceptance executed by an assigning Lender and an
assignee, the assignee's completed Administrative Questionnaire (unless the
assignee shall already be a Lender hereunder), the processing and recordation
fee referred to in paragraph (b) of this Section and any written consent to such
assignment required by paragraph (b) of this Section, the Administrative Agent
shall accept such Assignment and Acceptance and record the information contained
therein in the Register. No assignment shall be effective for purposes of this
Agreement unless it has been recorded in the Register as provided in this
paragraph.
(e) Participations. Any Lender may, without the consent of the
Borrower or the Administrative Agent, sell participations to one or more banks
or other entities (a "Participant") in all or a portion of such Lender's rights
and obligations under this Agreement and the other Loan Documents (including all
or a portion of its Commitment and the Loans owing to it); provided that (i)
such Lender's obligations under this Agreement and the other Loan Documents
shall remain unchanged, (ii) such Lender shall remain solely responsible to the
other parties hereto for the performance of such obligations and (iii) the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Loan Documents. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and the
other Loan Documents and to approve any amendment, modification or waiver of any
provision of this Agreement or any other Loan Document; provided that such
agreement or instrument may provide that such Lender will not, without the
consent of the Participant, agree to any amendment, modification or waiver
described in the first proviso to Section 10.02(b) that affects such
Participant. Subject to paragraph (f) of this Section, the Borrower agrees that
each Participant shall be entitled to the benefits of Section 2.10 to the same
extent as if it were a Lender and had acquired its interest by assignment
pursuant to paragraph (b) of this Section.
Loan Agreement
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(f) Limitations on Rights of Participants. A Participant shall not
be entitled to receive any greater payment under Section 2.10 than the
applicable Lender would have been entitled to receive with respect to the
participation sold to such Participant, unless the sale of the participation to
such Participant is made with the Borrower's prior written consent. A
Participant that would be a Foreign Lender if it were a Lender shall not be
entitled to the benefits of Section 2.10 unless the Borrower is notified of the
participation sold to such Participant and such Participant agrees, for the
benefit of the Borrower, to comply with Section 2.10(e) as though it were a
Lender.
(g) Certain Pledges. Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement to
secure obligations of such Lender, including any such pledge or assignment to a
Federal Reserve Bank, and this Section shall not apply to any such pledge or
assignment of a security interest; provided that no such pledge or assignment of
a security interest shall release a Lender from any of its obligations hereunder
or substitute any such assignee for such Lender as a party hereto.
(h) No Assignments to the Obligors or Affiliates. Anything in this
Section to the contrary notwithstanding, no Lender may assign or participate any
interest in any Loan held by it hereunder to the Borrower or any of its
Affiliates or Subsidiaries without the prior consent of each Lender.
SECTION 10.05. Survival. All covenants, agreements, representations
and warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any
Loans, regardless of any investigation made by any such other party or on its
behalf and notwithstanding that the Administrative Agent or any Lender may have
had notice or knowledge of any Default or incorrect representation or warranty
at the time any credit is extended hereunder, and shall continue in full force
and effect as long as the principal of or any accrued interest on any Loan or
any other amount payable under this Agreement is outstanding and unpaid and so
long as the Commitments have not expired or terminated. The provisions of
Sections 2.10, 3.03 and 10.03 and Article IX shall survive and remain in full
force and effect regardless of the consummation of the transactions contemplated
hereby, the repayment of the Loans, the expiration or termination of the
Commitments or the termination of this Agreement or any provision hereof.
SECTION 10.06. Counterparts; Integration; Effectiveness. This
Agreement may be executed in counterparts (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single
Loan Agreement
68
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contract. This Agreement constitutes the entire contract between and among the
parties relating to the subject matter hereof and supersedes any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 5.01, this Agreement shall become
effective when it shall have been executed by the Administrative Agent and when
the Administrative Agent shall have received counterparts hereof which, when
taken together, bear the signatures of each of the other parties hereto, and
thereafter shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns. Delivery of an executed counterpart
of a signature page to this Agreement by telecopy shall be effective as delivery
of a manually executed counterpart of this Agreement.
SECTION 10.07. Severability. Any provision of this Agreement held to
be invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 10.08. Right of Setoff. If an Event of Default shall have
occurred and be continuing, each Lender is hereby authorized at any time and
from time to time, to the fullest extent permitted by law, to set off and apply
any and all deposits (general or special, time or demand, provisional or final)
at any time held and other indebtedness at any time owing by such Lender to or
for the credit or the account of any Obligor against any of and all the
obligations of any Obligor now or hereafter existing under this Agreement held
by such Lender, irrespective of whether or not such Lender shall have made any
demand under this Agreement and although such obligations may be unmatured. The
rights of each Lender under this Section are in addition to other rights and
remedies (including other rights of setoff) which such Lender may have.
SECTION 10.09. Governing Law; Jurisdiction; Etc.
(a) Governing Law. This Agreement shall be construed in accordance
with and governed by the law of the State of New York.
(b) Submission to Jurisdiction. Each Obligor hereby irrevocably and
unconditionally submits, for itself and its property, to the nonexclusive
jurisdiction of the Supreme Court of the State of New York sitting in New York
County and of the United States District Court of the Southern District of New
York, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Agreement, or for recognition or enforcement
of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be
Loan Agreement
69
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conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Agreement shall affect any
right that the Administrative Agent or any Lender may otherwise have to bring
any action or proceeding relating to this Agreement against any Obligor or its
properties in the courts of any jurisdiction.
(c) Waiver of Venue. Each Obligor hereby irrevocably and
unconditionally waives, to the fullest extent it may legally and effectively do
so, any objection which it may now or hereafter have to the laying of venue of
any suit, action or proceeding arising out of or relating to this Agreement in
any court referred to in paragraph (b) of this Section. Each of the parties
hereto hereby irrevocably waives, to the fullest extent permitted by law, the
defense of an inconvenient forum to the maintenance of such action or proceeding
in any such court.
(d) Service of Process. Each party to this Agreement irrevocably
consents to service of process in the manner provided for notices in Section
10.01. Nothing in this Agreement will affect the right of any party to this
Agreement to serve process in any other manner permitted by law.
SECTION 10.10. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY
WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE
TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF
OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER
BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES
THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT
AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 10.11. Headings. Article and Section headings and the Table
of Contents used herein are for convenience of reference only, are not part of
this Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 10.12. Treatment of Certain Information; Confidentiality.
(a) Treatment of Certain Information. The Borrower acknowledges that
from time to time financial advisory, investment banking and other services may
be offered or provided to the Borrower or one or more of its Subsidiaries (in
connection with this Agreement or otherwise) by any Lender or by one or more
subsidiaries or affiliates of such Lender and the
Loan Agreement
70
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Borrower hereby authorizes each Lender to share any information delivered to
such Lender by the Borrower and its Subsidiaries pursuant to this Agreement, or
in connection with the decision of such Lender to enter into this Agreement, to
any such subsidiary or affiliate, it being understood that any such subsidiary
or affiliate receiving such information shall be bound by the provisions of
paragraph (b) of this Section as if it were a Lender hereunder. Such
authorization shall survive the repayment of the Loans, the expiration or
termination of the Commitments or the termination of this Agreement or any
provision hereof.
(b) Confidentiality. Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (i) to its Affiliates, (ii) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (iii) to the extent requested by any regulatory authority, (iv)
to the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (v) to any other party to this Agreement, (vi) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (vii)
subject to an agreement containing provisions substantially the same as those of
this paragraph, to any assignee of or Participant in, or any prospective
assignee of or Participant in, any of its rights or obligations under this
Agreement, (viii) with the consent of the Borrower or (ix) to the extent such
Information (A) becomes publicly available other than as a result of a breach of
this paragraph or (B) becomes available to the Administrative Agent or any
Lender on a nonconfidential basis from a source other than an Obligor. For the
purposes of this paragraph, "Information" means all information received from
any Obligor relating to any Obligor or its business, other than any such
information that is available to the Administrative Agent or any Lender on a
nonconfidential basis prior to disclosure by an Obligor; provided that, in the
case of information received from an Obligor after the date hereof, such
information is clearly identified at the time of delivery as confidential. Any
Person required to maintain the confidentiality of Information as provided in
this Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.
SECTION 10.13. Representations of the Lenders. Each Lender
represents that it is acquiring the Loans for its own account and not with a
view to the distribution thereof, provided that the disposition of such Lender's
property shall at all times be within its control. Each Lender understands that
the Loans have not been registered under the Securities Act of 1933, as amended
from time to time (the "Securities Act"), and may be resold only if registered
pursuant to the provisions of the Securities Act or if an exemption from
registration is available,
Loan Agreement
71
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except under circumstances where neither such registration nor such an exemption
is required by law, and the Borrower is not required to register such Loans.
[Signature pages follow.]
Loan Agreement
72
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed by their respective authorized officers as of the day and year
first above written.
THE PRINCETON REVIEW, INC.
By /s/ Xxxx Xxxxxxx
_______________________________
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
Loan Agreement
73
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SUBSIDIARY GUARANTORS
PRINCETON REVIEW PUBLISHING, L.L.C.
By /s/ Xxxx Xxxxxxx
_________________________
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
PRINCETON REVIEW PRODUCTS, L.L.C.
By /s/ Xxxx Xxxxxxx
_________________________
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
PRINCETON REVIEW OPERATIONS, L.L.C.
By /s/ Xxxx Xxxxxxx
_________________________
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
PRINCETON REVIEW MANAGEMENT, L.L.C.
By /s/ Xxxx Xxxxxxx
_________________________
Name: Xxxx Xxxxxxx
Title: Chief Executive Officer
Loan Agreement
74
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XXXXXXX
XXXXXXXXX CAPITAL PARTNERS, L.P.,
individually and as Administrative Agent
By: Reservoir Capital Group, L.L.C.,
General Partner
By /s/ Xxxxx Xxxx
_________________________
Name: Xxxxx Xxxx
Title: Managing Director
RESERVOIR CAPITAL ASSOCIATES L.P.
By: Reservoir Capital Group, L.L.C.,
General Partner
By /s/ Xxxxx Xxxx
_________________________
Name: Xxxxx Xxxx
Title: Managing Director
RESERVOIR CAPITAL MASTER FUND, L.P.
By: Reservoir Capital Group, L.L.C.,
General Partner
By /s/ Xxxxx Xxxx
_________________________
Name: Xxxxx Xxxx
Title: Managing Director
Loan Agreement
75
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SGC PARTNERS II, LLC
By: SG Merchant Banking Fund L.P., its
managing member
By: SG Capital Partners L.L.C., its
general partner
By /s/ V. Xxxxx Xxxxxx
_________________________
Name: V. Xxxxx Xxxxxx
Title: Managing Director
OLYMPUS GROWTH FUND III, L.P.
By: OGP III, LLC, its general partner
By /s/ Xxxxx Xxxxxxxxxx
_________________________
Name: Xxxxx Xxxxxxxxxx
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.
By: OEF, L.P., its general partner
By: LJM, L.L.C., a general partner
By /s/ Xxxxx Xxxxxxxxxx
_________________________
Name: Xxxxx Xxxxxxxxxx
Title: Member
Loan Agreement
76
SCHEDULE I
Commitments
[See definitions of "Commitment" and "Lenders" in Section 1.01]
Name of Lender Commitment ($)
-------------- --------------
Reservoir Capital Partners, L.P. $12,814,500
Reservoir Capital Master Fund, L.P. 2,154,000
Reservoir Capital Associates L.P. 31,500
SGC Partners II, LLC 5,000,000
Olympus Growth Fund III, L.P. 4,967,000
Olympus Executive Fund, L.P. 33,000
Schedule I to Loan Agreement
77
EXHIBIT A
[Form of Assignment and Acceptance]
ASSIGNMENT AND ACCEPTANCE
Reference is made to the Loan Agreement dated as of December __,
2000 (as amended and in effect on the date hereof, the "Loan Agreement"),
between The Princeton Review, Inc., the Subsidiary Guarantors party thereto, the
Lenders named therein and Reservoir Capital Partners, L.P., as Administrative
Agent for the Lenders. Terms defined in the Loan Agreement are used herein with
the same meanings.
The Assignor named below hereby sells and assigns, without
recourse, to the Assignee named below, and the Assignee hereby purchases and
assumes, without recourse, from the Assignor, effective as of the Assignment
Date set forth below, the interests set forth below (the "Assigned Interest") in
the Assignor's rights and obligations under the Loan Agreement, including the
interests set forth below in the Commitment of the Assignor on the Assignment
Date and Loans owing to the Assignor which are outstanding on the Assignment
Date, together with unpaid interest accrued on the assigned Loans to the
Assignment Date, and the amount, if any, set forth below of the fees accrued to
the Assignment Date for account of the Assignor. The Assignee hereby
acknowledges receipt of a copy of the Loan Agreement. From and after the
Assignment Date (i) the Assignee shall be a party to and be bound by the
provisions of the Loan Agreement and, to the extent of the interests assigned by
this Assignment and Acceptance, have the rights and obligations of a Lender
thereunder and (ii) the Assignor shall, to the extent of the interests assigned
by this Assignment and Acceptance, relinquish its rights and be released from
its obligations under the Loan Agreement.
This Assignment and Acceptance is being delivered to the
Administrative Agent together with (i) if the Assignee is a Foreign Lender, any
documentation required to be delivered by the Assignee pursuant to Section
2.10(e) of the Loan Agreement, duly completed and executed by the Assignee, and
(ii) if the Assignee is not already a Lender under the Loan Agreement, an
Administrative Questionnaire in the form supplied by the Administrative Agent,
duly completed by the Assignee. The [Assignee/Assignor] shall pay the fee
payable to the Administrative Agent pursuant to Section 10.04(b) of the Loan
Agreement.
This Assignment and Acceptance shall be governed by and construed
in accordance with the laws of the State of New York.
Assignment and Acceptance
78
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Date of Assignment:
Legal Name of Assignor:
Legal Name of Assignee:
Assignee's Address for Notices:
Effective Date of Assignment
("Assignment Date")(3):
Principal Amount
Facility Assigned
-------- ----------------
Commitment Assigned: $
Loans:
Fees Assigned (if any):
The terms set forth above and below are hereby agreed to:
[NAME OF ASSIGNOR] , as Assignor
------------------------
By:_________________________
Name:
Title:
[NAME OF ASSIGNEE] , as Assignee
------------------------
By:_________________________
Name:
Title:
---------
(3) Must be at least five Business Days after execution hereof by all required
parties.
Assignment and Acceptance
79
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The undersigned hereby consent to the within assignment:(4)
THE PRINCETON REVIEW, INC.
By:_________________________
Name:
Title:
RESERVOIR CAPITAL PARTNERS, L.P.,
as Administrative Agent
By: Reservoir Capital Group, L.L.C.,
General Partner
By_________________________
Name:
Title:
----------
(4) Consents to be included to the extent required by Section 10.04(b) of the
Loan Agreement.
Assignment and Acceptance
80
EXHIBIT B
[Form of Security Agreement]
[To be supplied.]
Security Agreement
81
EXHIBIT C
[Form of Subordination Agreement]
[To be supplied.]
Subordination Agreement
82
EXHIBIT D
[Form of Guarantee Assumption Agreement]
GUARANTEE ASSUMPTION AGREEMENT
GUARANTEE ASSUMPTION AGREEMENT dated as of ________ __, ____ by
[NAME OF ADDITIONAL SUBSIDIARY GUARANTOR], a ________ corporation (the
"Additional Subsidiary Guarantor"), in favor of Reservoir Capital Partners,
L.P., as administrative agent for the lenders or other financial institutions or
entities party as "Lenders" to the Loan Agreement referred to below (in such
capacity, together with its successors in such capacity, the "Administrative
Agent").
The Princeton Review, Inc., a Delaware corporation, the
Subsidiary Guarantors referred to therein, the Lenders referred to therein and
the Administrative Agent are parties to a Loan Agreement dated as of December
__, 2000 (as modified and supplemented and in effect from time to time, the
"Loan Agreement").
Pursuant to Section 6.09(a) of the Loan Agreement, the Additional
Subsidiary Guarantor hereby agrees to become a "Subsidiary Guarantor" for all
purposes of the Loan Agreement, and a "Debtor" for all purposes of the Security
Agreement (and hereby supplements Annexes 1 and 2 to said Security Agreement as
specified in Appendix A). Without limiting the foregoing, the Additional
Subsidiary Guarantor hereby, jointly and severally with the other Subsidiary
Guarantors, guarantees to each Lender and the Administrative Agent and their
respective successors and assigns the prompt payment in full when due (whether
at stated maturity, by acceleration or otherwise) of all Guaranteed Obligations
(as defined in Section 3.01 of the Loan Agreement) in the same manner and to the
same extent as is provided in Article III of the Loan Agreement. In addition,
the Additional Subsidiary Guarantor hereby makes the representations and
warranties set forth in Sections 4.01, 4.02 and 4.03 of the Loan Agreement, and
in Section 2 of the Security Agreement, with respect to itself and its
obligations under this Agreement, as if each reference in such Sections to the
Basic Documents included reference to this Agreement.
The Additional Subsidiary Guarantor hereby instructs its counsel
to deliver the opinions referred to in Section 6.09(a) of the Loan Agreement to
the Lenders and the Administrative Agent.
Guarantee Assumption Agreement
83
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IN WITNESS WHEREOF, the Additional Subsidiary Guarantor has
caused this Guarantee Assumption Agreement to be duly executed and delivered as
of the day and year first above written.
[NAME OF ADDITIONAL SUBSIDIARY
GUARANTOR]
By:_________________________
Name:
Title:
Accepted and agreed:
RESERVOIR CAPITAL PARTNERS, L.P., as
Administrative Agent
By: Reservoir Capital Group, L.L.C.,
General Partner
By_________________________
Name:
Title:
Guarantee Assumption Agreement
84
Appendix A
SUPPLEMENT[S] TO ANNEX[ES] TO SECURITY AGREEMENT
Supplement to Annex 1:
[to be completed]
[Supplement to Annex 2:
[to be completed]
Supplement to Annex 3:
[to be completed]
Supplement to Annex 4:
[to be completed]
Supplement to Annex 5:
[to be completed]
Supplement to Annex 6:
[to be completed]]
Appendix A to Guarantee Assumption Agreement
85
EXHIBIT E
[Form of Note]
PROMISSORY NOTE
New York, New York
December __, 2000
For value received, THE PRINCETON REVIEW, INC., a Delaware
corporation (the "Borrower"), promises to pay to the order of __________________
(the "Lender") the unpaid principal amount of each Loan made by the Lender to
the Borrower pursuant to the Loan Agreement referred to below on the Maturity
Date. The Borrower promises to pay interest on the unpaid principal amount of
each such Loan on the dates, at the rate or rates and in the manner provided for
in the Loan Agreement. All such payments of principal and interest shall be made
in lawful money of the United States of America and in immediately available
funds at the office specified from time to time by the Lender to the Borrower in
accordance with the Loan Agreement.
All Loans made by the Lender and all repayments of the principal
thereof shall be recorded by the Lender and, prior to any transfer hereof,
appropriate notations to evidence the foregoing information with respect to each
such Loan then outstanding shall be endorsed by the Lender on the schedule
attached hereto, or on a continuation of such schedule attached to and made a
part hereof; provided that the failure of the Lender to make any such
recordation or endorsement shall not affect the obligations of the Borrower
hereunder or under the Loan Agreement.
This Promissory Note is one of the Notes referred to in the Loan
Agreement dated as of December __, 2000 (as the same shall be modified and
supplemented and in effect from time to time, the "Loan Agreement"), among the
Borrower, the Subsidiary Guarantors party thereto, the lenders party thereto and
Reservoir Capital Partners, L.P., as Administrative Agent. Terms used but not
otherwise defined herein have the respective meanings assigned to them in the
Loan Agreement. Reference is made to the Loan Agreement for provisions for the
prepayment, the acceleration of the maturity and the limitations on the
transferability of this Promissory Note. Reference is made to the Security
Agreement and the pledge made by the Borrower and the Subsidiary Guarantors
therein securing, among other things, the obligations of the Borrower hereunder.
This Promissory Note shall be construed in accordance with and governed by the
law of the State of New York.
THE PRINCETON REVIEW, INC.
By ____________________________
Name:
Title:
Note
86
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Promissory Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
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Amount of
Date Amount of Principal Notation
Loan Repaid Made By
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Note
87
EXHIBIT F
[Form of Opinion of Counsel to the Obligors]
[final draft of PBWT opinion to be inserted]
[Opinion of Counsel to the Obligors]
88
EXHIBIT G
[Form of Opinion of Special New York Counsel to RCP]
[final draft of MTHM opinion to be inserted]
[Opinion of Special New York Counsel to RCP]
