EXHIBIT 10.4
EXECUTION COPY
CREDIT AGREEMENT
dated as of March 26, 2002
among
XXX XXXXXXXX HOLDINGS INC.,
XXX XXXXXXXX CORPORATION,
H&S GRAPHICS, INC.,
PRECISION OFFSET PRINTING COMPANY, INC.,
PREFACE, INC.,
ONE THOUSAND REALTY & INVESTMENT COMPANY
and
CERTAIN OTHER SUBSIDIARIES OF XXX XXXXXXXX CORPORATION,
as the Borrowers,
VARIOUS FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTIES HERETO,
as the Lenders,
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent for the Lenders,
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH,
as the Syndication Agent for the Lenders,
and
U.S. BANK NATIONAL ASSOCIATION,
as the Documentation Agent for the Lenders.
CREDIT SUISSE FIRST BOSTON, CAYMAN ISLANDS BRANCH,
as Sole Lead Arranger and Sole Book Running Manager
CREDIT AGREEMENT
This CREDIT AGREEMENT, dated as of March 26, 2002, is among XXX XXXXXXXX
HOLDINGS INC. a Delaware corporation formerly known as Xxx Xxxxxxxx Corporation
(the "PARENT"), XXX XXXXXXXX CORPORATION, a Delaware corporation formerly known
as Xxx Xxxxxxxx Press, Inc. ("VHC"), H&S GRAPHICS, INC., PRECISION OFFSET
PRINTING COMPANY, INC., PREFACE, INC., ONE THOUSAND REALTY & INVESTMENT COMPANY
and certain other Subsidiaries of VHC which shall become parties hereto as
Borrowers after the Closing Date in accordance with SECTIONS 7.1.8 and 11.15
(together with VHC, each a "BORROWER" and, collectively, the "BORROWERS"), the
various financial institutions and other Persons from time to time party hereto
as lenders (each a "LENDER" and, collectively, the "LENDERS"), THE CIT
GROUP/BUSINESS CREDIT, INC., as administrative agent for the Lenders (in such
capacity, the "ADMINISTRATIVE AGENT"), CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH ("CSFB"), as syndication agent for the Lenders (in such capacity,
the "SYNDICATION AGENT" and, together with the Administrative Agent, the
"AGENTS"), U.S. BANK NATIONAL ASSOCIATION, as documentation agent for the
Lenders (in such capacity, the "DOCUMENTATION AGENT"), and CSFB, as sole lead
arranger and sole book running manager (in such capacity, the "LEAD ARRANGER").
W I T N E S S E T H:
WHEREAS, effective February 25, 2002, Xxx Xxxxxxxx Graphics, Inc., a
Delaware corporation ("VHG"), merged (such transaction being referred to herein
as the "MERGER") with and into Xxx Xxxxxxxx Press, Inc., a Delaware corporation,
and Xxx Xxxxxxxx Press, Inc., as the surviving entity of the Merger,
simultaneously changed its name to "Xxx Xxxxxxxx Corporation";
WHEREAS, concurrently with the effectiveness of the Merger, the Parent
changed its name from "Xxx Xxxxxxxx Corporation" to "Xxx Xxxxxxxx Holdings
Inc.";
WHEREAS, VHC is a wholly-owned, direct Subsidiary of the Parent;
WHEREAS, VHC intends to refinance (the "REFINANCING") all existing senior
secured indebtedness outstanding under the Credit Agreement, dated as of May 22,
1997 (as amended, supplemented, amended and restated or otherwise modified prior
to the Closing Date, the "EXISTING CREDIT AGREEMENT"), among VHC, the banks and
other financial institutions party thereto as lenders, Credit Suisse First
Boston, as successor to DLJ Capital Funding, Inc., as syndication agent, The
Bank of Nova Scotia, as administrative agent, Fleet National Bank, as
documentation agent, and Mercantile Bank National Association, as co-agent;
WHEREAS, approximately $250,000,000 in cash will be required to effect the
Refinancing, to pay accrued interest and fees, if any, payable in respect of the
Indebtedness being refinanced in the Refinancing, to pay fees, costs and
expenses associated with the new Indebtedness incurred to effect the Refinancing
(including fees, costs and expenses related hereto and to the Senior Note
Issuance described below), and to consummate all other transactions related
hereto or thereto (collectively, the "TRANSACTIONS");
WHEREAS, concurrently with the execution and delivery of, and the initial
Borrowing under, this Agreement, VHC will issue its 10 1/4% senior notes, due
2009 (the "SENIOR NOTES", with the issuance thereof being herein referred to as
the "SENIOR NOTE ISSUANCE") for gross cash proceeds of $215,000,000;
WHEREAS, subject to the terms and conditions of this Agreement, the Lenders
and the Issuers have committed to provide the Borrowers with the following:
(a) a Revolving Loan Commitment, in an aggregate principal amount of
$90,000,000 (inclusive of the Letter of Credit Commitment and the Swingline
Loan Commitment described below), pursuant to which Revolving Loans will be
made to the Borrowers from time to time on and subsequent to the Closing
Date but prior to the Commitment Termination Date;
(b) a Letter of Credit Commitment, in an aggregate principal amount of
$10,000,000, pursuant to which Letters of Credit will be issued for the
account of the Borrowers from time to time on and subsequent to the Closing
Date but prior to the Commitment Termination Date; and
(c) a Swingline Loan Commitment, in an aggregate principal amount of
$10,000,000, pursuant to which Swingline Loans will be made to the
Borrowers from time to time on and subsequent to the Closing Date but prior
to the fifth Business Day immediately preceding the Commitment Termination
Date;
WHEREAS, on the Closing Date, subject to the terms and conditions hereof,
the Borrowers intend to continue certain letters of credit outstanding under the
Existing Credit Agreement as Letters of Credit hereunder, to borrow Revolving
Loans under this Agreement and to use the proceeds thereof, together with the
net cash proceeds received by VHC from the Senior Note Issuance and cash on hand
of the Borrowers, for purposes of effecting the Refinancing and consummating the
remaining Transactions;
WHEREAS, additional Revolving Loans, Swingline Loans and Letters of Credit
made or issued from time to time hereunder on and after the Closing Date will be
used for the ongoing working capital needs and other general corporate purposes
of the Borrowers; and
WHEREAS, the Lenders and the Issuers are willing, on the terms and subject
to the conditions hereinafter set forth, to extend the Commitments, to make the
Loans and to issue or continue (or participate in) the Letters of Credit
contemplated hereunder;
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. DEFINED TERMS. The following terms (whether or not
underscored) when used in this Agreement, including its preamble and recitals,
shall, except where the context otherwise requires, have the following meanings
(such meanings to be equally applicable to the singular and plural forms
thereof):
-2-
"ACCOUNT" means any "account" (as defined in the UCC).
"ACCOUNT DEBTOR" means an "account debtor" (as defined in the UCC).
"ADMINISTRATIVE AGENT" is defined in the PREAMBLE and includes each other
Person appointed as the successor Administrative Agent pursuant to SECTION 9.4.
"ADMINISTRATIVE AGENT'S FEE LETTER" means the confidential letter, dated
the Closing Date, among the Administrative Agent and the VHC.
"AFFILIATE" of any Person means any other Person which, directly or
indirectly, controls, is controlled by or is under common control with such
Person (excluding (x) any trustee under, or any committee with responsibility
for administering, any Plan and (y) CSFB and its affiliates (other than the
DLJMB Entities that hold directly, or are general partners or managers of DLJMB
Entities that hold directly, equity interests in the Parent)). "CONTROL" (and
its derivatives) means, with respect to any Person, the power, directly or
indirectly, (i) to vote 10% or more of the Capital Securities (determined on a
fully diluted basis) of such Person having ordinary voting power for the
election of directors, managing members or general partners (as applicable) or
(ii) to direct or cause the direction of the management and policies of such
Person (whether by contract or otherwise).
"AGENTS" is defined in the PREAMBLE.
"AGREEMENT" means, on any date, this Credit Agreement as originally in
effect on the Closing Date and as thereafter amended, supplemented, amended and
restated or otherwise modified from time to time in accordance with the terms
hereof and in effect on such date.
"ALTERNATE BASE RATE" means, on any date and with respect to all Base Rate
Loans, a fluctuating rate of interest per annum equal to the higher of (i) the
Base Rate in effect for such day and (ii) the Federal Funds Rate in effect on
such day plus 1/2 of 1%. Changes in the rate of interest on that portion of any
Loans maintained as Base Rate Loans will take effect simultaneously with each
change in the Alternate Base Rate. The Administrative Agent will promptly notify
the Borrowers and the Lenders of changes in the Alternate Base Rate; PROVIDED
that the failure to give such notice shall not affect the Alternate Base Rate in
effect after such change.
"APPLICABLE MARGIN" means with respect to all Loans, the applicable
percentage set forth below determined by reference to the Leverage Ratio as
certified in the most recent Compliance Certificate delivered as of such date
pursuant to CLAUSE (d) of SECTION 7.1.1 (PROVIDED, HOWEVER, that at all times
prior to the date of delivery of the Compliance Certificate (pursuant to CLAUSE
(d) of SECTION 7.1.1) for the second Fiscal Quarter ended after the Closing
Date, the Applicable Margin shall be (i) 1.75%, in the case of Base Rate Loans,
and (ii) 3.00%, in the case of LIBO Rate Loans):
-3-
Then the Then the
Applicable Applicable
If the Margin For Margin For
Leverage Ratio is: Base Rate Loans is: LIBO Rate Loans is:
----------------- ------------------ ------------------
GREATER THAN 5.0:1.0 2.00% 3.25%
GREATER THAN 4.0:1.0 LESS THAN OR EQUAL TO 5.0:1.0 1.75% 3.00%
GREATER THAN 3.0:1.0 LESS THAN OR EQUAL TO 4.0:1.0 1.50% 2.75%
LESS THAN OR EQUAL TO 3.0:1.0 1.25% 2.50%
Changes in the Applicable Margin resulting from a change in the Leverage Ratio
shall become effective upon delivery by VHC to the Administrative Agent of a new
Compliance Certificate pursuant to CLAUSE (d) of SECTION 7.1.1. If VHC fails to
deliver a Compliance Certificate on or before the date specified for such
delivery in CLAUSE (d) of SECTION 7.1.1, the Applicable Margin from and
including the 61st (or 91st, as the case may be) day after the end of such
Fiscal Quarter to but excluding the date on which VHC delivers to the
Administrative Agent a Compliance Certificate shall be the highest Applicable
Margin set forth above.
"APPROVED FUND" means any Person (other than a natural Person) that (i) is
or will be engaged in making, purchasing, holding or otherwise investing in
commercial loans and similar extensions of credit in the ordinary course of its
business and (ii) is administered or managed by a Lender, an affiliate of a
Lender or a Person or an affiliate of a Person that administers or manages a
Lender.
"ASSET APPRAISAL" means (i) initially, an appraisal of the orderly
liquidation value of the Inventory and property (including real property), plant
and Equipment (including fixtures) of the Borrowers prepared by Xxxxx-Xxxxxx
Appraisal Corporation and delivered to the Lead Arranger on or prior to the
Closing Date in accordance with SECTION 5.1.24 hereof and (ii) at any time after
the performance of an asset appraisal by or on behalf of the Administrative
Agent pursuant to SECTION 7.1.5(c) hereof, the asset appraisal most recently
performed by or on behalf of the Administrative Agent pursuant to SECTION
7.1.5(c) hereof.
"ASSUMED INDEBTEDNESS" means Indebtedness of a Person existing at the time
such Person becomes a Subsidiary of a Borrower or assumed in connection with an
Eligible Acquisition and not incurred by such Person in connection with, or in
anticipation or contemplation of, such Person becoming a Subsidiary of a
Borrower or such Eligible Acquisition.
"AUTHORIZED OFFICER" means, relative to any Obligor, those of its officers
(including, without limitation, its chief executive officer, president, chief
financial officer, treasurer, assistant treasurer, secretary or assistant
secretary), general partners or managing members (as applicable) whose
signatures and incumbency shall have been certified to the Administrative Agent,
the Lenders and the Issuers pursuant to SECTION 5.1.1.
"AVAILABLE BALANCE" means, on any day, with respect to any Deposit Account
(i) without duplication, all funds on deposit in such Deposit Account on such
day which the depositary bank maintaining such Deposit Account, in accordance
with its standard practices for posting of debits
-4-
and credits to demand deposit accounts of a type similar to such Deposit Account
deems to be collected funds, including, without limitation, all wire transfers
credited to such Deposit Account on such day and all other Federal or other
immediately available funds on deposit in or deposited into such Deposit
Account, on such day less (ii) all Items deducted from such Deposit Account on
such day.
"AVERAGE LIFE" means, at any date of determination with respect to any
Indebtedness, the quotient obtained by dividing (i) the sum of the products of
the number of years from such date of determination to the dates of each
successive scheduled principal payment of such Indebtedness multiplied by the
amount of such principal payment by (ii) the sum of all such principal payments.
"BASE RATE" means, at any time, the rate of interest then most recently
announced or established by the Administrative Agent in
New York City as its
prime rate for Dollars loaned in the United States. The Base Rate is not
necessarily intended to be the lowest rate of interest determined by the
Administrative Agent in connection with extensions of credit.
"BASE RATE LOAN" means a Loan bearing interest at a fluctuating rate
determined by reference to the Alternate Base Rate.
"BORROWER" and "BORROWERS" are defined in the PREAMBLE.
"BORROWING" means Loans made hereunder to a Borrower which are of the same
type and, in the case of LIBO Rate Loans, have the same Interest Period and that
are made or to be made by all Lenders required to make such Loans on the same
Business Day and pursuant to the same Borrowing Request.
"BORROWING BASE AMOUNT" means, at any time with respect to the Borrowers,
an amount equal to the lesser of (i) the Revolving Loan Commitment Amount then
in effect and (ii) the sum of (A) 85% of the Net Asset Value of all Eligible
Accounts of the Borrowers PLUS (B) 38.25% of the Net Asset Value of all Eligible
Inventory of the Borrowers PLUS (C) the lesser of (y) 50% of the Orderly
Liquidation Value of Eligible PP&E of the Borrowers and (z) the Maximum PP&E
Advance Amount, in the case of each amount referred to in CLAUSES (A), (B) and
(C) above, as certified by the VHC to the Administrative Agent and the Lenders
in the most recently delivered Borrowing Base Certificate, including the
Borrowing Base Certificate delivered on the Closing Date pursuant to SECTION
5.1.22 MINUS (D) such reserves in respect of trade payables which are 90 days or
more overdue as the Administrative Agent[, in its commercially reasonable
discretion after consultation with VHC,] shall determine to be necessary or
appropriate at such time.
"BORROWING BASE AUDIT" means, (i) initially, the written audit of the
accounts receivable, inventory, accounts payable and cash accounts of the
Borrowers prepared by PricewaterhouseCoopers LLP and delivered to the Lead
Arranger on or prior to the Closing Date in accordance with SECTION 5.1.23
hereof or (ii) at any time after the performance of an audit of the accounts
receivable, inventory, accounts payable and cash accounts of the Borrowers by or
on behalf of the Administrative Agent pursuant to CLAUSE (b) of SECTION 7.1.5,
the most recent such audit so performed by or on behalf of the Administrative
Agent pursuant to CLAUSE (b) of SECTION 7.1.5 hereof.
-5-
"BORROWING BASE CERTIFICATE" means a certificate duly completed and
executed by the president, chief executive officer, treasurer, assistant
treasurer, controller or chief financial Authorized Officer of VHC,
substantially in the form of EXHIBIT E-2 hereto.
"BORROWING REQUEST" means a request and certificate for a Loan which has
been duly executed by an Authorized Officer of a Borrower, substantially in the
form of EXHIBIT B-1 hereto.
"BUSINESS DAY" means (i) any day which is neither a Saturday or Sunday nor
a legal holiday on which commercial banks are authorized or required to be
closed in
New York,
New York, and (ii) relative to the making, continuing,
prepaying or repaying of any LIBO Rate Loans, any day which is a Business Day
described in CLAUSE (i) above and which is also a day on which dealings in
Dollars are carried on in the London interbank eurodollar market.
"CAPITAL EXPENDITURES" means, for any period, the aggregate amount (without
duplication) of (i) all expenditures of the Parent and its Subsidiaries for
fixed or capital assets made during such period which, in accordance with GAAP,
would be classified as capital expenditures and (ii) Capitalized Lease
Liabilities incurred by the Parent and its Subsidiaries during such period.
"CAPITAL SECURITIES" means, with respect to any Person, all shares of
capital stock or equivalent shares, interests, participations or similar
equivalents, including options, warrants and the like (however designated,
whether voting or non-voting), whether now outstanding or issued after the
Closing Date.
"CAPITALIZED LEASE LIABILITIES" means, with respect to any Person, all
monetary obligations of such Person and its Subsidiaries under any leasing or
similar arrangement which, in accordance with GAAP, should be classified as
capitalized leases, and for purposes of each Loan Document the amount of such
obligations shall be the capitalized amount thereof, determined in accordance
with GAAP, and the stated maturity thereof shall be the date of the last payment
of rent or any other amount due under such lease prior to the first date upon
which such lease may be terminated by the lessee without payment of a premium or
a penalty.
"CASH COLLATERALIZE" means, with respect to a Letter of Credit, the deposit
of immediately available funds into a cash collateral account maintained with
(or on behalf of) the Administrative Agent on terms reasonably satisfactory to
the Administrative Agent in an amount equal to the Stated Amount of such Letter
of Credit.
"CASH EQUIVALENT INVESTMENT" means, at any time:
(a) any direct obligation of (or unconditionally guaranteed by)
the United States or a State thereof (or any agency or political
subdivision thereof, to the extent such obligations are supported by
the full faith and credit of the United States or a State thereof)
maturing not more than one year after such time;
(b) commercial paper maturing not more than 270 days from the
date of issue, which is issued by (i) a corporation (other than an
Affiliate of any Obligor) organized under the laws of any State of the
United States or of the District of
-6-
Columbia and rated A-1 by S&P or P-1 by Xxxxx'x, or (ii) any Lender
(or its holding company);
(c) any certificate of deposit, cash demand deposit, time deposit
or bankers acceptance, maturing not more than one year after its date
of issuance, which is issued by either (i) any bank organized under
the laws of the United States (or any State thereof) or any U.S.
branch of a foreign banking institution which has a combined capital
and surplus greater than $500,000,000, or (ii) any Lender (or its
holding company);
(d) debt instruments of a domestic issuer that mature in one year
or less and that are rated Baa1 or higher by Xxxxx'x or A- or higher
by S&P on the date of acquisition of such investment;
(e) short-term tax-exempt securities rated MIG-1/1+ or higher by
either Xxxxx'x or S&P with provisions for liquidity or maturity
accommodations of 183 days or less;
(f) repurchase agreements with respect to any securities referred
to in CLAUSE (a) above entered into with any entity referred to in
CLAUSE (b), (c) or (d) above or any other financial institution whose
unsecured long-term debt (or the unsecured long-term debt of whose
holding company) is rated A- or higher by S&P or Baa1 or higher by
Xxxxx'x and maturing not more than one year after such time; or
(g) any money market or similar fund at least 95% of the assets
of which consist of any of the items specified in CLAUSES (a) through
(f) above and as to which withdrawals are permitted at least every 90
days.
"CASUALTY EVENT" means, with respect to any Person, the damage, destruction
or condemnation, as the case may be, of any property of such Person.
"CASUALTY PROCEEDS" means, with respect to any Casualty Event, the amount
of any insurance proceeds or condemnation awards received by the Parent or any
of its Subsidiaries in connection therewith, but excluding any proceeds or
awards required to be paid to a creditor (other than the Lenders) which holds a
first-priority Lien permitted by SECTION 7.2.3 on the property which is the
subject of such Casualty Event.
"CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended.
"CERCLIS" means the Comprehensive Environmental Response Compensation
Liability Information System List.
"CERTIFICATE OF MERGER" means the Certificate of Merger relating to the
Merger of VHG with and into VHC, as filed with the Secretary of State of
Delaware on February 25, 2002.
-7-
"CHANGE IN CONTROL" means
(i) the failure of the Permitted Holders at any time (A) to
own, directly or indirectly, beneficially, on a fully-diluted,
as-if-converted basis, at least 51% of the issued and outstanding
Voting Securities of the Parent or (B) to have the right to elect a
majority of the Board of Directors of the Parent; or
(ii) the failure of the Parent at any time to own, directly or
indirectly, beneficially and of record, on a fully-diluted,
as-if-converted basis, 100% of the outstanding Capital Securities of
VHC, free and clear of all Liens (other than Liens permitted to exist
under CLAUSES (a), (f) and (l) of SECTION 7.2.3); or
(iii) the occurrence of any "Change of Control" or similar term
under (and as defined in) the Senior Note Indenture, the Senior
Subordinated Note Indenture or the Parent Debenture Indenture.
"CLOSING DATE" means the date of the initial Credit Extension hereunder,
which shall not be later than April 15, 2002.
"CLOSING DATE CERTIFICATE" means the closing date certificate executed and
delivered by an Authorized Officer of VHC, substantially in the form of EXHIBIT
D hereto.
"CODE" means the Internal Revenue Code of 1986, and the regulations
thereunder, in each case as amended, reformed or otherwise modified from time to
time.
"COLLECTION ACCOUNTS" means the Concentration Account and each other
Deposit Account of VHC and its Subsidiaries designated as a Collection Account
on SCHEDULE VI hereto.
"COMMITMENT" means, as the context may require, (i) a Lender's Revolving
Loan Commitment, (ii) an Issuer's Letter of Credit Commitment or (iii) the
Swingline Lender's Swingline Loan Commitment.
"COMMITMENT AMOUNT" means, as the context may require, the Revolving Loan
Commitment Amount, the Letter of Credit Commitment Amount or the Swingline Loan
Commitment Amount.
"COMMITMENT INCREASE DATE" is defined in SECTION 2.2.3.
"COMMITMENT LETTER" means the senior bank financing commitment letter
(together with the term sheet annexed thereto), dated March 5, 2002, between the
Lead Arranger and VHC.
"COMMITMENT TERMINATION DATE" means the earliest of (i) April 15, 2002 (if
the initial Credit Extension has not occurred on or prior to such date), (ii)
November 15, 2006 or if, prior to May 15, 2006, either (A) the Senior
Subordinated Notes have been refinanced on No More Favorable Terms And
Conditions (or other terms and conditions reasonably satisfactory to the
Agents), with any such refinancing indebtedness having a stated maturity date
not earlier than
-8-
the 366th day after the fifth anniversary of the Closing Date, or (B) the
maturity thereof has otherwise been extended to a date which is at least 366
days after the fifth anniversary of the Closing Date, the fifth anniversary of
the Closing Date, (iii) the date on which the Revolving Loan Commitment Amount
is terminated in full or reduced to zero pursuant to the terms of this
Agreement, and (iv) the date on which any Commitment Termination Event occurs.
"COMMITMENT TERMINATION EVENT" means
(i) the occurrence of any Event of Default with respect to the
Parent or any Borrower described in CLAUSES (b) through (d) of SECTION
8.1.9; or
(ii) the occurrence and continuance of any other Event of Default
and either (A) the declaration of all or any portion of the Loans to
be due and payable pursuant to SECTION 8.3, or (B) the giving of
notice by the Administrative Agent, acting at the direction of the
Required Lenders, to the Borrowers that the Commitments have been
terminated.
"COMPLIANCE CERTIFICATE" means a certificate duly completed and executed by
an Authorized Officer of VHC, substantially in the form of EXHIBIT E-1 hereto.
"CONCENTRATION ACCOUNT" means the demand deposit account designated as such
to be maintained by VHC with the Administrative Agent.
"CONTINGENT LIABILITY" means any agreement, undertaking or arrangement by
which any Person guarantees, endorses or otherwise is or becomes contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the Indebtedness of any
other Person (other than by endorsements of instruments in the course of
collection), or guarantees the payment of dividends or other distributions upon
the Capital Securities of any other Person. The amount of any Person's
obligation under any Contingent Liability shall (subject to any limitation set
forth therein) be deemed to be the outstanding principal amount of the debt,
obligation or other liability guaranteed thereby.
"CONTINUATION/CONVERSION NOTICE" means a notice of continuation or
conversion and certificate duly executed by an Authorized Officer of a Borrower,
substantially in the form of EXHIBIT B-3 hereto.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all members of a controlled group of trades or businesses (whether or not
incorporated) under common control which, together with any Borrower, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001 of ERISA.
"COPYRIGHT SECURITY AGREEMENT" means any Copyright Security Agreement
executed and delivered by any Obligor in substantially the form of Exhibit C to
the Pledge and Security Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
-9-
"CREDIT EXTENSION" means, as the context may require, (i) the making of a
Loan by a Lender or (ii) the issuance of any Letter of Credit (including as a
result of the continuation of the Existing Letters of Credit on the Closing Date
as Letters of Credit hereunder), or the extension of any Stated Expiry Date of
any existing Letter of Credit, by an Issuer.
"CSFB" is defined in the PREAMBLE.
"DEBT FOR BORROWED MONEY" means, with respect to any Person, Indebtedness
of such Person of a type described in CLAUSE (a), (b) (other than undrawn
commercial letters of credit and undrawn letters of credit in respect of
workers' compensation, insurance, performance and surely bonds, rental and other
payments in respect of operating leases and similar obligations, in each case
incurred in the ordinary course of business) or (c) of the definition of
Indebtedness, or any Contingent Liability of such Person in respect of any such
type of Indebtedness incurred or owed by another Person.
"DEFAULT" means any Event of Default or any condition, occurrence or event
which, after notice or lapse of time or both, would constitute an Event of
Default.
"DEFAULT LOANS" is defined in SECTION 2.3.2(a).
"DEFAULTING LENDER" means a Lender that shall have failed to fund any Loan
hereunder that it was required to have funded in accordance with the terms
hereof, which Loan was included in any Borrowing in respect of which a majority
of the aggregate principal amount of all Loans included in such Borrowing were
funded by the Lenders party thereto.
"DEPOSIT ACCOUNT" means a "deposit account" (as defined in the UCC).
"DEPOSITARY BANK" means U.S. Bank National Association, and it successors.
"DISBURSEMENT" is defined in SECTION 2.6.2.
"DISBURSEMENT ACCOUNT" means the Operating Account and each other Deposit
Account of VHC and its Subsidiaries designated as a Disbursement Account on
SCHEDULE VI hereto.
"DISBURSEMENT DATE" is defined in SECTION 2.6.2.
"DISBURSEMENT DUE DATE" is defined in SECTION 2.6.2.
"DISCLOSURE SCHEDULE" means the Disclosure Schedule attached hereto as
SCHEDULE I, as it may be amended, supplemented, amended and restated or
otherwise modified from time to time by the Borrowers with the written consent
of the Required Lenders.
"DISPOSITION" (or similar words such as "DISPOSE") means any sale, transfer
or other disposition (including by way of merger) of any of the Parent's or its
Subsidiaries' assets (including accounts receivable and Capital Securities of
Subsidiaries) to any other Person (other than any such transfer or conveyance to
any Borrower or any Subsidiary Guarantor) in a single transaction or series of
transactions. Without limiting the foregoing, a Disposition shall include any
sale, transfer or other conveyance of any Capital Securities of any Subsidiary
of the Parent
-10-
(other than by the issuer thereof) other than to a Borrower or a wholly-owned
Subsidiary of a Borrower.
"DLJMB ENTITIES" means DLJ Merchant Banking Partners II, L.P., DLJ
Diversified Partners, L.P., DLJ EAB Partners, L.P., DLJ Offshore Partners II,
C.V., DLJMB Funding II, Inc., DLJ First ESC L.P., UK Investment Plan 1997
Partners, DLJ Diversified Partners-A, L.P., DLJ Merchant Banking Partners II-A,
L.P., DLJ Millennium Partners, L.P. and DLJ Millennium Partners-A L.P, and their
respective affiliates.
"DOCUMENTATION AGENT" is defined in the PREAMBLE.
"DOLLAR" and the sign "$" mean lawful money of the United States.
"DOMESTIC OFFICE" means the office of a Lender designated as its "Domestic
Office" on SCHEDULE II hereto or in a Lender Assignment Agreement, or such other
office within the United States as may be designated from time to time by notice
from such Lender to the Administrative Agent and VHC.
"EARN-OUTS" means any obligations of any Borrower or any of their
respective Subsidiaries to pay any amounts constituting the payment of deferred
purchase price with respect to any acquisition of a business (whether through
the purchase of assets or shares of Capital Securities), the amount of which
payments is calculated on the basis of, or by reference to, the bona fide
financial or other operating performance of such business or specified portion
thereof or any other similar arrangement.
"EBITDA" means, for any applicable period, the sum (without duplication)
for VHC and its Subsidiaries on a consolidated basis of
(i) Net Income,
PLUS
(ii) the amount deducted in determining Net Income representing
non-cash charges or expenses, including depreciation, amortization and
non-cash LIFO reserve adjustments to Inventory,
PLUS
(iii) the amount deducted in determining Net Income representing
income taxes (whether paid or deferred),
PLUS
(iv) the amount deducted in determining Net Income representing
Interest Expense and fees, expenses, management bonuses (to the extent
paid at or prior to the Closing Date) and financing costs incurred (x)
prior to the Closing Date, (y) in connection with the Transaction or
(z) in connection with any Eligible Acquisition,
-11-
PLUS
(v) non-recurring cash out-of-pocket expenses representing
severance payments reasonably made, or reasonable consulting fees paid
in respect of services rendered, in connection with plant closures
and/or the integration of acquisitions,
MINUS
(vi) an amount equal to the amount of all non-cash gains included
in determining Net Income,
MINUS
(vii) Restricted Payments of the type referred to in CLAUSE
(b)(i) of SECTION 7.2.6 made during such period.
"ELIGIBLE ACCOUNT" means, with respect to the Borrowers at the time of any
determination thereof, any Account as to which each of the following
requirements has been fulfilled to the reasonable satisfaction of the
Administrative Agent:
(a) such Account is a legal, valid, binding and enforceable
obligation of each Account Debtor with respect thereto;
(b) a Borrower has the full and unqualified right to assign and
xxxxx x Xxxx on such Account to the Administrative Agent, for its
benefit and that of the Lenders, as security for the Obligations;
(c) such Account is evidenced by an invoice rendered to the
Account Debtor (which shall include computer records) or is reflected
by computer records maintained by a Borrower evidencing such Account;
(d) such Account arose from the sale of goods or services by a
Borrower in the ordinary course of such Borrower's business, and such
goods or services have been shipped or delivered (in the case of
goods) or rendered in full (in the case of services) to the Account
Debtor for such Account; and
(e) such Account shall not have been billed on a date materially
later than it would have been billed in accordance with such
Borrower's past practice;
in each case other than the following (none of which shall be considered
Eligible Accounts for purposes of this Agreement):
(i) Accounts owing from any Person that is an Affiliate of a Borrower;
(ii) Accounts more than 90 days past the original billing date
therefor (in the case of Accounts accounted for on an invoice basis) or
more than 60 days past the due date therefor (in the case of Accounts
accounted for on a due date basis);
-12-
(iii) Accounts of any Account Debtor if, at the time of determination,
in excess of 50% of the aggregate amount of all outstanding Accounts of
such Account Debtor (other than Accounts which are the subject of BONA FIDE
disputes between such Account Debtor and any Borrower or any U.S.
Subsidiary, as the case may be) are more than 90 days past the original
billing date therefor (in the case of Accounts accounted for on an invoice
basis) therefor or more than 60 days past the due date therefor (in the
case of Accounts accounted for on a due date basis);
(iv) Accounts the liability for which has been disputed by the Account
Debtor or which are otherwise subject to any offsetting contra-account,
setoff, counterclaim or other claim or defense on the part of the Account
Debtor or any other Person denying liability thereunder; PROVIDED, HOWEVER,
that any such Account shall constitute an Eligible Account to the extent it
is not subject to any such dispute, offsetting contra-account, setoff,
counterclaim or other claim or defense;
(v) Accounts owing from any Person that, to the knowledge of any
Borrower, shall take or be the subject of any action or proceeding of the
type described in CLAUSES (b) through (d) of SECTION 8.1.9 hereof;
(vi) Accounts owing from any Person that is also a supplier to or
creditor of any Borrower or to whom any Borrower is otherwise indebted,
unless such Borrower and the applicable Account Debtor shall have entered
into an enforceable agreement whereby the Account Debtor is prohibited from
exercising any right of setoff with respect to the Accounts of such
Borrower; PROVIDED that in any event, if such an agreement prohibiting
setoff rights is not delivered by the Account Debtor, then only up to the
amount that such Borrower is indebted to such Account Debtor shall be
excluded as an Eligible Account pursuant to this clause);
(vii) Accounts arising out of sales to Account Debtors outside the
United States, Canada and Puerto Rico, unless the Account is (A) fully
backed by an irrevocable letter of credit containing terms acceptable to
the Administrative Agent issued by a financial institution satisfactory to
the Administrative Agent or (B) otherwise on terms acceptable to the
Administrative Agent;
(viii) Accounts arising out of sales on a xxxx-and-hold (other than
xxxx-and-hold Accounts not constituting, individually or in the aggregate,
more than 15% of the aggregate amount of all Eligible Accounts under which,
pursuant to a written contract reasonably acceptable to the Administrative
Agent signed by the applicable Account Debtor, (A) the applicable Account
Debtor has contractually taken title to all goods covered thereby and (B)
the applicable Account Debtor is obligated to remit payment on normal trade
terms without regard to whether delivery of any goods thereunder has
occurred) guaranteed sale, sale-and-return, sale on approval or consignment
basis or subject to any right of return or charge-back;
-13-
(ix) Accounts owing from an Account Debtor that is an agency,
department or instrumentality of the United States or any state
Governmental Authority in the United States; PROVIDED, HOWEVER, that such
Accounts shall not be excluded from the calculation of "Eligible Accounts"
by reason of this CLAUSE (ix) (A) during the 90-day period immediately
following the Closing Date or (B) thereafter to the extent, as of the
relevant date of determination, (y) the applicable Borrower shall have
satisfied (or delivered to the Administrative Agent all filings, documents
and other materials necessary to satisfy (which filings, documents and
other materials shall be in a form expressly approved by the applicable
Governmental Authority and shall be fully executed and ready for delivery
to the applicable Governmental Authority)) the requirements of the
Assignment of Claims Act of 1940, as amended, and any similar state
legislation in respect thereof and (z) the Administrative Agent is
satisfied as to the absence of set-offs, counterclaims and other defenses
to payment on the part of the United States or such state Governmental
Authority;
(x) Accounts in respect of which the Pledge and Security Agreement
does not or has ceased to create a valid and perfected first priority Lien
in favor of the Administrative Agent, subject only to Permitted Liens; and
(xi) Accounts owing from any Person to the extent that, at the time of
determination, the aggregate amount of all outstanding Accounts owed by
such Account Debtor exceeds 10% of the aggregate amount of all Eligible
Accounts of the Borrowers; PROVIDED, HOWEVER, that Accounts owed to any
Borrower by any of XxXxxx-Xxxx, Inc., Pearson Inc., Xxxxxxx Corporation or
Xxxx Elsevier Inc. individually may constitute up to 20% of the aggregate
amount of all Eligible Accounts of the Borrowers so long as such Account
Debtor's senior unsecured debt is rated at least BBB by Xxxxx'x and Baa2 by
S&P.
"ELIGIBLE ACQUISITION" means any purchase or acquisition by VHC or any of
its Subsidiaries of all or any part of the assets or Capital Securities of a
Person engaged in business activities of the type in which VHC and its
Subsidiaries are engaged on the Closing Date and such activities as may be
incidental, similar or related thereto; PROVIDED that (i) the representations
and warranties made by the Obligors in each Loan Document shall be true and
correct in all material respects at and as of the date of such acquisition (as
if made on such date after giving effect to such acquisition), except to the
extent such representations and warranties expressly relate to an earlier date
or dates (in which case such representations and warranties shall be true and
correct in all material respects at and as of such earlier date or dates); (ii)
the Administrative Agent shall have received all guaranties and all items in
respect of the Capital Securities or property or assets acquired in such
acquisition required to be delivered by SECTIONS 7.1.8 and 7.1.9; (iii) in the
case of an acquisition of the Capital Securities of another Person, (A) except
in the case of the incorporation of a new Subsidiary or the acquisition of
Capital Securities that are not publicly held, the board of directors (or other
comparable governing body) of such other Person shall have duly approved such
acquisition and (B) the Capital Securities acquired shall constitute at least a
majority of the total Capital Securities of the issuer thereof or shall increase
a controlling interest of VHC or one or more of its Subsidiaries in such issuer;
and (iv) no Default or Event of Default shall have occurred and be continuing
-14-
immediately before or immediately after giving effect to such acquisition and,
in the case of each such acquisition made or to be made for aggregate
consideration (including cash, Earn-outs, assumption of Indebtedness and
non-cash consideration) equal to or in excess of $25,000,000, VHC shall have
delivered to the Administrative Agent a pro-forma Compliance Certificate
demonstrating that, upon giving effect to such acquisition on a pro-forma basis
(calculated in accordance with SECTION 1.4(c)), (A) VHC shall be in compliance
with all of the financial covenants set forth in SECTION 7.2.4 hereof as of the
last day of the most recent period of four consecutive fiscal quarters of VHC
which precedes or ends on the date of such acquisition and with respect to which
the Administrative Agent has received the consolidated financial information
required under CLAUSES (a) and (b) of SECTION 7.1.1 and the certificate required
by CLAUSE (d) of SECTION 7.1.1 and (B) the Excess Availability after giving
effect to such acquisition and all Credit Extensions made or to be made on such
date shall equal or exceed $20,000,000.
"ELIGIBLE ASSIGNEE" means (i) a Lender, (ii) an affiliate of a Lender (so
long as such assignment is not made in conjunction with the sale of such
affiliate), (iii) an Approved Fund or (iv) any other Person (other than a
natural Person) approved (in the case of this CLAUSE (iv)) by the Administrative
Agent and the Issuer (but with respect to the Administrative Agent and the
Issuer only in the case of any assignment of the Revolving Loan Commitment) and,
unless (x) such assignment is by the Syndication Agent in connection with the
primary syndication of the Revolving Loan Commitment Amount, (y) such Person is
taking delivery of an assignment in connection with physical settlement of a
credit derivatives transaction or (z) an Event of Default has occurred and is
continuing, VHC (such approval not to be unreasonably withheld or delayed).
"ELIGIBLE INVENTORY" means, with respect to the Borrowers at the time of
any determination thereof and without duplication, all raw materials and
finished goods Inventory of the Borrowers which, in the case of finished goods
Inventory, is held by them for sale or to be furnished under contracts of sale
which conforms in all respects to the representations and warranties contained
herein and in the Pledge and Security Agreement and which is subject to a valid
and perfected first priority lien and security interest in favor of the
Administrative Agent, for the benefit of the Secured Parties, but (A) excluding
in any event (i) Inventory subject to any Lien (other than the Liens of the Loan
Documents and Liens described in CLAUSES (d), (f), (j) and (l) of SECTION
7.2.3), (ii) Inventory which is not in good condition or fails to meet standards
for sale or use imposed by any Governmental Authority, (iii) raw materials
Inventory consisting of bindery, packaging materials, plates, film, ink,
cartons, laminate, CD sleeves or diskettes, (iv) Inventory located outside the
United States, (v) Inventory located at a leased location or in the possession
of any vendor or supplier, in either case in a jurisdiction whose laws provide
for a statutory landlords' or vendors' lien, with respect to which the
Administrative Agent shall not have received a waiver reasonably satisfactory to
the Administrative Agent, and (vi) Inventory which is leased or on consignment,
and (B) less (A) all reserves for obsolescence, market value declines, special
order goods, discontinued Inventory, slow moving Inventory, shrinkage,
applicable customs, freight, duties, Taxes, inventory adjustments and damages
(including, but not limited to, foreign exchange adjustments) and (B) such
additional reserves as the Administrative Agent deems necessary in its
reasonable judgment after consultation with VHC as a result of negative trends
in the business, industry, profits, operations or financial conditions of VHC
and its U.S. Subsidiaries, taken as a whole, which could reasonably be expected
to either
-15-
impair the value of the Collateral or impair the ability of VHC and its U.S.
Subsidiaries to repay their Obligations.
"ELIGIBLE PP&E" means, with respect to the Borrowers at the time of any
determination thereof and without duplication, all property (including real
property), plant and Equipment (including fixtures) of the Borrowers which
conforms in all respects to the representations and warranties contained herein,
in the Pledge and Security Agreement (in the case of Equipment) and in any
applicable Mortgage, but (A) excluding in any event (i) property, plant and
Equipment assets subject to any Lien (other than the Liens of the Loan Documents
and Liens described in CLAUSE (d), (f), (g), (h), (j) and (l) of SECTION 7.2.3),
(ii) property, plant and Equipment assets which are not in good condition or
materially fail to meet standards for use imposed by any Governmental Authority,
(iii) property, plant and Equipment assets which are not useable in the ordinary
course of business, (iv) property, plant and Equipment assets located outside
the United States, (v) property, plant and Equipment assets located at a leased
location or in the possession of any vendor or supplier, in either case in a
jurisdiction whose laws provide for a statutory landlord's or vendor's lien,
with respect to which the Administrative Agent shall not have received a waiver
reasonably satisfactory to the Administrative Agent, (vi) property, plant and
Equipment assets which are leased and (vii) property, plant and Equipment assets
in which the Administrative Agent does not have, for the benefit of the Secured
Parties, a valid, enforceable and perfected Lien (it being understood and agreed
that during the period from the Closing Date until the date upon which all of
the obligations of the Borrower set forth in SECTIONS 7.1.12 and 7.1.13 have
been satisfied in full or, in the event such obligations have not been satisfied
within 60 days following the Closing Date, at all times and on and after the
Closing Date, $25,540,000, representing the orderly liquidation value of the
real property assets of the Borrowers reflected in the initial Asset Appraisal,
shall be excluded from Eligible PP&E pursuant to this CLAUSE (vii)), and (B)
less such reserves as the Administrative Agent deems necessary in its reasonable
judgment after consultation with VHC as a result of negative trends in the
business, industry, profits, operations or financial condition of VHC and its
U.S. Subsidiaries, taken as a whole, which could reasonably be expected to
either impair the value of the Collateral or impair the ability of VHC and its
U.S. Subsidiaries to repay their Obligations.
"ENVIRONMENTAL LAWS" means all applicable federal, state or local statutes,
laws, ordinances, codes, rules and regulations (including consent decrees and
administrative orders) relating to the protection of the environment or the
effect of the environment on human health.
"EQUIPMENT" means all "equipment" (as defined in the UCC).
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and any successor statute thereto of similar import, together with the
regulations thereunder, in each case as in effect from time to time. References
to Sections of ERISA also refer to any successor Sections thereto.
"EVENT OF DEFAULT" is defined in SECTION 8.1.
"EXCESS AVAILABILITY" means, at any time, the excess of (i) the Borrowing
Base Amount in effect at such time over (ii) the aggregate Revolving
Outstandings at such time.
-16-
"EXCHANGE ACT" means the Securities Exchange Act of 1934, as amended.
"EXISTING
CREDIT AGREEMENT" is defined in the FOURTH RECITAL.
"EXISTING LETTERS OF CREDIT" means the letters of credit issued before the
Closing Date pursuant to the Existing
Credit Agreement and described by date of
issuance, letter of credit number, undrawn amount, name of beneficiary and date
of expiry on SCHEDULE V hereto, and "EXISTING LETTER OF CREDIT" means any one of
them.
"FEDERAL FUNDS RATE" means, for any day, a fluctuating interest rate per
annum equal to (i) the weighted average of the rates on overnight federal funds
transactions with members of the Federal Reserve System arranged by federal
funds brokers, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of
New York, or
(ii) if such rate is not so published for any day which is a Business Day, the
average of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by it.
"FEE LETTER" means the confidential fee letter, dated March 5, 2002,
between the Lead Arranger and VHC.
"FILING AGENT" is defined in SECTION 5.1.11.
"FILING STATEMENTS" is defined in SECTION 5.1.11.
"FISCAL QUARTER" means any fiscal quarter of a Fiscal Year.
"FISCAL YEAR" means any 52 or 53 week period ending on the last Sunday in a
calendar year; any reference to a Fiscal Year with a number corresponding to any
calendar year refers to the Fiscal Year ended on the last Sunday of such
calendar year (E.G., "2002 Fiscal Year" refers to the Fiscal Year ending on the
last Sunday in such calendar year).
"FIXED CHARGE COVERAGE RATIO" means, at the end of any Fiscal Quarter, the
ratio computed for the period consisting of such Fiscal Quarter and each of the
three immediately preceding Fiscal Quarters of:
(i) the difference of (A) EBITDA for all such Fiscal Quarters less (B)
Capital Expenditures actually made during all such Fiscal Quarters pursuant
to CLAUSE (a) of SECTION 7.2.7 (excluding Capital Expenditures constituting
Capitalized Lease Liabilities and by way of the incurrence of Indebtedness
permitted pursuant to CLAUSE (c) of SECTION 7.2.2 to a financier of any
assets permitted to be acquired pursuant to SECTION 7.2.7 to finance the
acquisition of such assets);
TO
(ii) the sum (without duplication) of:
-17-
(A) the cash portion of Interest Expenses (net of interest
income) for all such Fiscal Quarters;
PLUS
(B) all scheduled payments of principal of funded Debt for
Borrowed Money (including the principal portion of any Capitalized
Lease Liabilities) during all such Fiscal Quarters;
PLUS
(C) all taxes actually paid in cash during all such Fiscal
Quarters;
PLUS
(D) all Restricted Payments actually made during all such Fiscal
Quarters pursuant to CLAUSE (b)(ii) of SECTION 7.2.6.
"F.R.S. BOARD" means the Board of Governors of the Federal Reserve System
or any successor thereto.
"GAAP" is defined in CLAUSE (a) of SECTION 1.4.
"GRANTING BANK" has the meaning specified in CLAUSE (f) of SECTION 11.10.
"GOVERNMENTAL AUTHORITY" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other Person exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"GUARANTOR" means the Parent and each Subsidiary Guarantor.
"HAZARDOUS MATERIAL" means (i) any "hazardous substance", as defined by
CERCLA, (ii) any "hazardous waste", as defined by the Resource Conservation and
Recovery Act, as amended, or (iii) any pollutant or contaminant or hazardous,
dangerous or toxic chemical, material or substance (including any petroleum
product) within the meaning of any other applicable federal, state or local law,
regulation, ordinance or requirement (including consent decrees and
administrative orders) relating to or imposing liability or standards of conduct
concerning any hazardous, toxic or dangerous waste, substance or material, all
as amended.
"HEDGING OBLIGATIONS" means, with respect to any Person, all liabilities of
such Person under currency exchange agreements, interest rate swap agreements,
interest rate cap agreements and interest rate collar agreements, and all other
agreements or arrangements designed to protect such Person against fluctuations
in interest rates, currency exchange rates or commodity prices.
-18-
"HEREIN", "HEREOF", "HERETO", "HEREUNDER" and similar terms contained in
any Loan Document refer to such Loan Document as a whole and not to any
particular Section, paragraph or provision of such Loan Document.
"IMPERMISSIBLE QUALIFICATION" means any qualification or exception to the
opinion or certification of any independent public accountant as to any
financial statement of VHC (i) which is of a "going concern" or similar nature,
(ii) which relates to the limited scope of examination of matters relevant to
such financial statement, or (iii) which relates to the treatment or
classification of any item in such financial statement and which, as a condition
to its removal, would require an adjustment to such item the effect of which
would be to cause the occurrence of in Event of Default under SECTION 7.2.4.
"INCLUDING" and "INCLUDE" means including without limiting the generality
of any description preceding such term, and, for purposes of each Loan Document,
the parties hereto agree that the rule of EJUSDEM GENERIS shall not be
applicable to limit a general statement, which is followed by or referable to an
enumeration of specific matters, to matters similar to the matters specifically
mentioned.
"INDEBTEDNESS" of any Person means:
(a) all obligations of such Person for borrowed money or for the
deferred purchase price of property or services (exclusive of (i)
deferred purchase price arrangements in the nature of open or other
accounts payable owed to suppliers on normal terms in connection with
the purchase of goods and services in the ordinary course of business
and (ii) Earn-outs which at such time of determination are not
recorded or required to be recorded as a liability of such Person in
accordance with GAAP) and all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments;
(b) all obligations, contingent or otherwise, relative to the
face amount of all letters of credit, whether or not drawn, and
banker's acceptances issued for the account of such Person;
(c) all obligations of such Person constituting Capitalized Lease
Liabilities;
(d) net Hedging Obligations of such Person;
(e) whether or not included as liabilities on the balance sheet
of such Person in accordance with GAAP, all Indebtedness of such
Person of the types referred to in CLAUSES (a) through (d) above
(excluding prepaid interest thereon) secured by a Lien on property
owned or being acquired by such Person (including indebtedness arising
under conditional sales or other title retention agreements), whether
or not such Indebtedness shall have been assumed by such Person or is
limited in recourse; PROVIDED, HOWEVER, that, to the extent such
Indebtedness is limited in recourse to the assets securing such
Indebtedness, the amount of such Indebtedness shall be limited to the
fair market value of such assets; and
-19-
(f) without duplication, all Contingent Liabilities of such
Person in respect of any of the foregoing types of Indebtedness.
The Indebtedness of any Person shall include the Indebtedness of any other
Person (including any partnership or joint venture in which such Person is a
general partner or joint venturer) to the extent such Person is liable therefor
as a result of such Person's ownership interest in or other relationship with
such Person.
"INDEMNIFIED LIABILITIES" is defined in SECTION 11.4.
"INDEMNIFIED PARTIES" is defined in SECTION 11.4.
"INITIAL PUBLIC OFFERING" means, for any Person, any sale of the Capital
Securities of such Person to the public pursuant to an initial primary offering
registered under the Securities Act of 1933.
"INTEREST EXPENSE" means, for any Person during any applicable period, the
aggregate interest expense, both accrued and paid, of such Person during such
applicable period, including the portion of any payments made in respect of
Capitalized Lease Liabilities allocable to interest expense (in accordance with
GAAP) but excluding (to the extent included in interest expense) up-front fees
and expenses and other deferred financing costs incurred (i) prior to the
Closing Date, (ii) in connection with the Transaction or (iii) in connection
with any Eligible Acquisition.
"INTEREST PERIOD" means, relative to any LIBO Rate Loan, the period
beginning on (and including) the date on which such LIBO Rate Loan is made or
continued as, or converted into, a LIBO Rate Loan pursuant to SECTIONS 2.3 or
2.4 and ending on the day which numerically corresponds to such date one, two,
three or six (or, if made available by all Revolving Lenders, nine or twelve)
months thereafter, as a Borrower may select in its relevant notice pursuant to
SECTIONS 2.3 or 2.4; PROVIDED, HOWEVER, that
(a) no more than 8 Interest Periods may be in effect at any one
time;
(b) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day);
(c) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period; and
(d) no Interest Period for any Loan may end later than the stated
maturity date for such Loan determined pursuant to this Agreement.
"INVENTORY" means all "inventory" (as defined in the UCC).
-20-
"INVESTMENT" means, relative to any Person, (i) the beneficial ownership by
such Person of any Indebtedness or Capital Securities issued or incurred by
another Person or (ii) any loan, advance or extension of credit made by such
Person to any other Person, including the purchase by such Person of any bonds,
notes, debentures or other debt securities of such other Person. The amount of
any Investment shall be the stated principal amount (in the case of Debt for
Borrowed Money) or capital amount (in the case of Capital Securities), less all
returns of principal or equity thereon and shall, if made by the transfer or
exchange of property other than cash, be deemed to have been made in an original
principal or capital amount equal to the fair market value of such property at
the time of such Investment.
"ISP RULES" is defined in SECTION 11.9.
"ISSUANCE" is defined in SECTION 7.2.9.
"ISSUANCE REQUEST" means a request and certificate for a Letter of Credit
which has been duly executed by an Authorized Officer of a Borrower,
substantially in the form of EXHIBIT B-2 hereto.
"ISSUER" means U.S. Bank National Association and any other Lender or
affiliate of a Lender selected by a Borrower with the consent of the
Administrative Agent (which consent shall not be unreasonably withheld or
delayed) and such Lender or affiliate, in each case in its capacity as the
Issuer of one or more Letters of Credit.
"ITEM" means any "item" as defined in Section 4-104 of the UCC.
"JOINDER AGREEMENT" means a Joinder Agreement, substantially in the form of
EXHIBIT F hereto, duly executed and delivered by an Authorized Officer of the
applicable Borrower in accordance with SECTIONS 7.1.8 and 11.15 hereof.
"LEAD ARRANGER" is defined in the PREAMBLE.
"LENDER" and "LENDERS" are defined in the PREAMBLE and includes any Person
which becomes a Lender hereunder pursuant to a Lender Assignment Agreement.
"LENDER ASSIGNMENT AGREEMENT" means an assignment agreement substantially
in the form of EXHIBIT I hereto.
"LENDER PARTIES" means the Lenders, the Issuers and the Agents,
collectively.
"LETTER OF CREDIT" is defined in SECTION 2.1.2 and, on and after the
Closing Date, shall also include each outstanding Existing Letter of Credit.
"LETTER OF CREDIT COMMITMENT" means the Issuer's obligation to issue
Letters of Credit pursuant to SECTION 2.1.2.
"LETTER OF CREDIT COMMITMENT AMOUNT" means, on any date, a maximum amount
of $10,000,000, as such amount may be permanently reduced from time to time
pursuant to SECTION 2.2.
-21-
"LETTER OF CREDIT OUTSTANDINGS" means, on any date, an amount equal to the
sum of (i) the then aggregate amount which is undrawn and available under all
issued and outstanding Letters of Credit, and (ii) the then aggregate amount of
all unpaid and outstanding Reimbursement Obligations.
"LEVERAGE RATIO" means, at the end of any Fiscal Quarter, the ratio of:
(a) the sum of (i) total Debt for Borrowed Money of VHC and its
Subsidiaries on a consolidated basis outstanding at such time, other
than Revolving Outstandings and net of cash and Cash Equivalent
Investments (other than cash and Cash Equivalent Investments
constituting proceeds of capital contributions to or sales of Capital
Securities of the Parent which have been contributed to the capital of
VHC), plus (ii) the average of the Revolving Outstandings (other than
Revolving Outstandings in respect of undrawn commercial Letters of
Credit and undrawn Letters of Credit in respect of workers'
compensation, insurance, performance and surety bonds, rental and
other payments in respect of operating leases and similar obligations)
as of the last day of each of the three fiscal months ended most
recently on or prior to the last day of such Fiscal Quarter;
TO
(b) EBITDA for the period of four consecutive Fiscal Quarters
ended on such date.
"LIBO RATE" means, relative to any Interest Period for LIBO Rate Loans, the
applicable London interbank offered rate for deposits in Dollars appearing on
Moneyline Telerate Page 3750 (or the applicable successor page on the Telerate
Service) as of 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period, and having a maturity equal to such Interest Period;
PROVIDED, HOWEVER, that, if Moneyline Telerate Page 3750 (or the applicable
successor page on the Telerate Service) is not available for any reason, the
applicable LIBO Rate for the relevant Interest Period shall instead be the
applicable London interbank offered rate for deposits in Dollars appearing on
Reuters Screen FRBD (or the applicable successor page) as of 11:00 a.m. (London
time) two Business Days prior to the first day of such Interest Period, and
having a maturity equal to such Interest Period; PROVIDED, FURTHER, that if
neither Moneyline Telerate Page 3750 (or the applicable successor page) nor
Reuters Screen FRBD (or the applicable successor page) is available for any
reason, the applicable LIBO Rate shall be the interest rate per annum at which
the Administrative Agent or one of its affiliate banks offers deposits in
Dollars to leading banks in the London interbank market at approximately 11:00
a.m. (London time) two Business Days prior to the first day of such Interest
Period for a period equal to such Interest Period in the approximate amount of
Loans of the Administrative Agent (or its affiliate) to which such LIBO Rate is
to apply.
"LIBO RATE LOAN" means a Revolving Loan bearing interest at a rate
determined by reference to a LIBO Rate (Reserve Adjusted).
-22-
"LIBO RATE (RESERVE ADJUSTED)" means, relative to any Revolving Loan to be
made, continued or maintained as, or converted into, a LIBO Rate Loan for any
Interest Period, a rate per annum (rounded upwards, if necessary, to the nearest
1/100 of 1%) determined pursuant to the following formula:
LIBO Rate = LIBO Rate
(Reserve Adjusted) --------------------------------------
1.00 - LIBOR Reserve Percentage
The LIBO Rate (Reserve Adjusted) for any Interest Period for LIBO Rate Loans
will be adjusted automatically as to all LIBO Rate Loans then outstanding as of
the effective date of any change in the LIBOR Reserve Percentage.
"LIBOR OFFICE" means, relative to any Lender, the office of such Lender
designated as its "LIBOR Office" on SCHEDULE II hereto or in a Lender Assignment
Agreement, or such other office designated from time to time by notice from such
Lender to VHC and the Administrative Agent, whether or not outside the United
States, which shall be making or maintaining the LIBO Rate Loans of such Lender.
"LIBOR RESERVE PERCENTAGE" means, relative to any Interest Period for LIBO
Rate Loans, the reserve percentage (expressed as a decimal) equal to the maximum
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transitional adjustments
or other scheduled changes in reserve requirements) specified under regulations
issued from time to time by the F.R.S. Board and then applicable to assets or
liabilities consisting of or including "Eurocurrency Liabilities", as currently
defined in Regulation D of the F.R.S. Board, having a term approximately equal
or comparable to such Interest Period.
"LIEN" means any security interest, mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or otherwise),
charge against or interest in property, or other priority or preferential
arrangement of any kind or nature whatsoever that is intended, directly or
indirectly, to have the practical effect of securing payment of a debt or
performance of an obligation.
"LOAN" means, as the context may require, a Revolving Loan or a Swingline
Loan.
"LOAN DOCUMENTS" means, collectively, this Agreement, the Notes, the
Letters of Credit, each Qualified Hedging Obligation, the Administrative Agent's
Fee Letter, the Fee Letter, each agreement pursuant to which the Administrative
Agent is granted a Lien to secure the Obligations and each other agreement,
certificate, document or instrument delivered in connection with any Loan
Document, whether or not specifically mentioned herein or therein.
"MATERIAL ADVERSE EFFECT" means (a) material adverse effect on the
financial condition, operations, assets, business, properties or prospects of
VHC or VHC and its Subsidiaries, taken as a whole, (b) a material impairment of
the ability of any Borrower or any other Obligor to perform its respective
material obligations under the Loan Documents to which it is or will be a party,
or (c) a material impairment of the validity or enforceability of, or the
rights, remedies or benefits available to the Lender Parties under, this
Agreement or any other Loan Document.
-23-
"MAXIMUM PP&E ADVANCE AMOUNT" means $40,000,000, unless the PP&E Release
Event shall have occurred, in which case the "Maximum PP&E Advance Amount" shall
be $0 for all purposes of this Agreement.
"MERGER" is defined in the FIRST RECITAL.
"MOODY'S" means Xxxxx'x Investors Service, Inc.
"MORTGAGE" means each mortgage or deed of trust executed and delivered by
any Obligor in favor of the Administrative Agent for the benefit of the Lender
Parties pursuant to the requirements of this Agreement in substantially the form
of EXHIBIT H hereto under which a Lien is granted on the real property and
fixtures described therein, in each case as amended, supplemented, amended and
restated or otherwise modified from time to time.
"NET ASSET VALUE" means, at any time of any determination with respect to
the Borrowers, (i) with respect to Eligible Accounts, an amount equal to (A) the
book value of all Eligible Accounts as reflected on the books of the Borrowers
in accordance with GAAP, net of (B) all reserves, credits, discounts and
allowances (and net of all unissued credits in the form of competitive
allowances or otherwise) in respect of such Eligible Accounts and (C) such
additional reserves as the Administrative Agent deems necessary in its
reasonable judgment after consultation with VHC as a result of negative trends
in the business, industry, profits, operations or financial condition of VHC and
its U.S. Subsidiaries, taken as a whole, which could reasonably be expected to
either impair the value of the Collateral or impair the ability of VHC and its
U.S. Subsidiaries to repay their Obligations, and (ii) with respect to Eligible
Inventory, an amount equal to the lesser of the cost (determined on a first-in,
first-out basis) or fair market value of all Eligible Inventory as reflected on
the books of the Borrowers as at such time in accordance with GAAP.
"NET CASUALTY PROCEEDS" means, with respect to any Casualty Event, (i) the
amount of any insurance proceeds or condemnation awards actually received by the
Parent or any of its Subsidiaries (or the Administrative Agent on their behalf)
in connection with such Casualty Event, net of (ii) the sum of (A) all
reasonable and customary fees, costs and expenses in respect thereof, (B) any
such proceeds or awards required to be paid to a creditor (other than the
Lenders) which holds a first priority Lien permitted by SECTION 7.2.3 on the
property which is the subject of such Casualty Event, (C) in the case of any
proceeds received by any Non-U.S. Subsidiary, any taxes or other costs or
expenses resulting from repatriating any such proceeds to the United States and
(D) in the case of any proceeds received by a Subsidiary that is not a
wholly-owned Subsidiary, an amount equal to the product of such proceeds (as
reduced pursuant to CLAUSES (ii)(A), (ii)(B) and (ii)(C)) multiplied by the
percentage equity interest in such Subsidiary not held, directly or indirectly,
by the Parent.
"NET DEBT PROCEEDS" means, with respect to the sale or issuance by the
Parent or any of its Subsidiaries of any Debt for Borrowed Money to any other
Person after the Closing Date which is not expressly permitted by SECTION 7.2.2,
the excess of (i) the gross cash proceeds actually received by such Person from
such sale or issuance OVER (ii) the sum of (A) all reasonable and customary
underwriting fees and commissions, and all legal, investment banking, brokerage
and accounting and other professional fees, sales commissions and disbursements
and
-24-
other reasonable and customary fees, expenses and charges actually incurred in
connection with such sale or issuance (other than any such fees, commissions or
disbursements paid to the Parent or any of its Subsidiaries in connection
therewith), (B) in the case of any Debt for Borrowed Money sold or issued by any
Non-U.S. Subsidiary, any taxes or other costs or expenses resulting from
repatriating any such proceeds to the United States and (C) in the case of any
Debt for Borrowed Money sold or issued by a Subsidiary that is not a
wholly-owned Subsidiary, an amount equal to the product of such gross cash
proceeds (as reduced pursuant to CLAUSES (ii)(A) and (i)(B)) multiplied by the
percentage equity interest in such Subsidiary not held, directly or indirectly,
by the Parent.
"NET DISPOSITION PROCEEDS" means, with respect to any Disposition by the
Parent or any of its Subsidiaries (other than a Disposition permitted pursuant
to CLAUSE (a), (b) (except to the extent of Dispositions permitted under CLAUSE
(ii) of SECTION 7.2.9), (c), (d), (f) (to the extent the proceeds of the
Deposition permitted thereunder constitute Net Casualty Proceeds) or (g) of
SECTION 7.2.11), the excess of (i) the gross cash proceeds actually received by
the Parent or any of its Subsidiaries from any such Disposition, together with
any cash actually received (but only when received) in respect of promissory
notes or other non-cash consideration previously delivered to the Parent or any
of its Subsidiaries in respect of any such Disposition, OVER (ii) the sum of (A)
all reasonable and customary legal, investment banking, brokerage and accounting
and other professional fees, sales commissions and expenses and other reasonable
and customary fees, expenses and charges actually incurred in connection with
such Disposition (other than any such fees, commissions or disbursements paid to
the Parent or any of its Subsidiaries in connection therewith), (B) all taxes
and other governmental charges actually paid or estimated by the Parent or such
Subsidiary to be payable in cash in connection with such Disposition, (C) all
payments made by the Parent or such Subsidiary to retire Indebtedness (other
than the Credit Extensions) where payment of such Indebtedness is required in
connection with such Disposition, (D) liability reserves established by the
Parent or such Subsidiary in respect of such Disposition in accordance with
GAAP, (E) reserves for purchase price adjustments and retained fixed liabilities
reasonably expected to be payable by VHC and its Subsidiaries in cash in
connection therewith and (F) in the case of any Disposition by a Subsidiary that
is not a wholly-owned Subsidiary, an amount equal to the product of such gross
cash proceeds (as reduced pursuant to CLAUSES (ii)(A) through (ii)(D))
multiplied by the percentage equity interest in such Subsidiary not held,
directly or indirectly, by the Parent; PROVIDED, HOWEVER, that if, 15 days after
the payment of all taxes, purchase price adjustments and/or retained fixed
liabilities with respect to such Disposition, in each case as and when due, the
amount of estimated taxes, purchase price adjustments or retained fixed
liabilities, if any, pursuant to CLAUSE (ii)(B) or (ii)(E) above exceeded the
taxes, purchase price adjustments or retained fixed liabilities actually paid in
cash in respect of such Disposition, the aggregate amount of such excess shall
constitute Net Disposition Proceeds.
"NET EQUITY PROCEEDS" means with respect to any Issuance occurring after
the Closing Date by the Parent or any of its Subsidiaries of any Capital
Securities of the Parent or any of its Subsidiaries or any warrants or options
in respect thereof or the exercise of any such warrants or options (other than
pursuant to (i) any subscription agreement, option plan, incentive plan or
similar arrangement with any officer, employee or director of the Parent, any
Borrower or any Subsidiary of any Borrower, (ii) any loan by any Borrower or the
Parent, to any such officer, employee or director solely for the purpose of
purchasing such shares pursuant to CLAUSE (i) of
-25-
SECTION 7.2.5, (iii) proceeds from the sale of any Capital Securities of the
Parent or any of its Subsidiaries to any officer, director or employee of the
Parent, any Borrower or any Subsidiary of any Borrower in an amount not to
exceed $2,000,000 in the aggregate after the Closing Date or (iv) the exercise
of any options or warrants issued to any officer, employee or director pursuant
to any agreement, plan or arrangement referred to in CLAUSE (ii) above), the
EXCESS of (i) the gross cash proceeds actually received by or on behalf of the
Parent or such Subsidiary in connection with such Issuance, OVER (ii) all
reasonable and customary arranging or underwriting fees and commissions, and all
legal, investment banking, brokerage and accounting and other professional fees,
sales commissions and disbursements and other reasonable and customary fees,
closing costs and expenses actually incurred in connection with such Issuance
(other than any such fees, costs and expenses which have been paid to the Parent
or any of its Subsidiaries in connection therewith).
"NET INCOME" means, for any period, consolidated net income of VHC and its
Subsidiaries for such period (exclusive of (x) extraordinary gains and
extraordinary losses and (y) other gains or losses on Dispositions of assets
other than Inventory Disposed of in the ordinary course of business).
"NET PROCEEDS" means, as the context may require, either Net Casualty
Proceeds, Net Debt Proceeds, Net Disposition Proceeds or Net Equity Proceeds.
"NO MORE FAVORABLE TERMS AND CONDITIONS" means, with respect to any
refinancing or other replacement of the Indebtedness in respect of the Senior
Notes, the Senior Subordinated Notes or the Parent Debentures (i) such
Indebtedness has a maturity date no earlier than the maturity date of the Senior
Notes, the Senior Subordinated Notes or the Parent Debentures as applicable,
(ii) such Indebtedness has an Average Life at the time such Indebtedness is
incurred that is equal to or greater than the Average Life of the Senior Notes,
the Senior Subordinated Notes or the Parent Debentures as applicable, (iii) in
the case of, the Senior Subordinated Notes or the Parent Debentures such
Indebtedness is subordinated to the Obligations to the same or greater extent as
such, the Senior Subordinated Notes or the Parent Debentures, and (iv) such
Indebtedness contains covenants, events of default, remedies, acceleration
rights, amortization schedules and other material terms that, taken as a whole,
(x) are not materially more favorable to the holders of such Indebtedness than
the similar terms contained in the Senior Notes, the Senior Subordinated Notes
or the Parent Debentures, as applicable, and (y) no less favorable to the Lender
Parties under the Loan Documents as of the date of such refinancing or
replacement.
"NON-CONSENTING LENDER" means any Lender that, in response to any request
by VHC or any Agent for a departure from, waiver of or amendment to any
provision of any Loan Document that requires the agreement of all Lenders, and
with respect to which the Required Lenders have granted consent, shall not have
given its consent to such departure, waiver or amendment.
"NON-U.S. LENDER" means any Lender that is not a "United States person", as
defined under Section 7701(a)(30) of the Code.
"NON-U.S. SUBSIDIARY" means a Subsidiary of any Borrower that is not a U.S.
Subsidiary.
-26-
"NOTE" means, as the context may require, a Revolving Note or the Swingline
Note.
"NOTICE OF CASH DOMINION" means a notice by the Administrative Agent to the
Depositary Bank and each other bank maintaining any Collection Account of any
Borrower or one or more of its Subsidiaries (with a copy to such Borrower),
substantially in the form of EXHIBIT B-4 hereto, notifying the Depositary Bank,
such other banks and such Borrower that the Administrative Agent has elected to
effect the cash dominion procedures in accordance with SECTION 2.8.
"OBLIGATIONS" means all obligations (monetary or otherwise, whether
absolute or contingent, matured or unmatured) of each Borrower and each other
Obligor arising under or in connection with a Loan Document, including
Reimbursement Obligations and the principal of and interest (including interest
accruing during the pendency of any proceeding of the type described in SECTION
8.1.9, whether or not allowed in such proceeding) on the Loans and Reimbursement
Obligations.
"OBLIGOR" means, as the context may require, a Borrower or any other Person
(other than a Secured Party or a bank, securities intermediary or issuer party
in its capacity as such to a control agreement with respect to a deposit or
securities account maintained with, or securities issued by, such bank,
securities intermediary or issuer) obligated under any Loan Document.
"OPERATING ACCOUNT" means the demand deposit account numbered 1001613379
maintained with the Depositary Bank by VHC on which the VHC draws checks to pay
operating expenses.
"ORDERLY LIQUIDATION VALUE" means, at any time of determination with
respect to Eligible PP&E, the orderly liquidation value of all Eligible PP&E of
the Borrowers existing at such time, which orderly liquidation value was
attributed to such Eligible PP&E in the Asset Appraisal.
"ORGANIC DOCUMENT" means, relative to any Obligor, as applicable, its
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of formation, limited liability agreement, operating
agreement and all shareholder agreements, voting trusts and similar arrangements
to which, in the case of any such shareholder agreement, voting trust or similar
arrangement, such Obligor is a party applicable to any of such Obligor's
partnership interests, limited liability company interests or authorized shares
of Capital Securities.
"OVERADVANCE LOANS" is defined in SECTION 2.3.2(a).
"PARENT" is defined in the PREAMBLE.
"PARENT DEBENTURE DOCUMENTS" mean, collectively, the Parent Debenture
Indenture, and any other indentures, note purchase agreements, promissory notes,
registration rights agreements, guarantees and other instruments and agreements
evidencing the terms of the Parent Debentures, as amended, supplemented, amended
and restated or otherwise modified in accordance with SECTION 7.2.12.
"PARENT DEBENTURE INDENTURE" means the Indenture dated as of October 16,
1998 among the Parent and Marine Midland Bank, as Trustee, as in effect on the
Closing Date (as the same
-27-
may be amended or otherwise modified from time to time thereafter in accordance
with the terms hereof and thereof), pursuant to which the Parent Debentures were
issued.
"PARENT DEBENTURES" means the Parent's 13.5% Subordinate Exchange
Debentures due 2009 and shall also include any and all registered exchange
debentures issued in exchange therefore in accordance with the Parent Debenture
Documents.
"PARTICIPANT" is defined in SECTION 11.10.
"PATENT SECURITY AGREEMENT" means any Patent Security Agreement executed
and delivered by any Obligor in substantially the form of Exhibit A to the
Pledge and Security Agreement, as amended, supplemented, amended and restated or
otherwise modified from time to time.
"PBGC" means the Pension Benefit Guaranty Corporation and any Person
succeeding to any or all of its functions under ERISA.
"PENSION PLAN" means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA (other than a multiemployer
plan as defined in Section 4001(a)(3) of ERISA), and to which the Parent or any
corporation, trade or business that is, along with the Parent, a member of a
Controlled Group, has or within the past six years has had liability, including
any liability by reason of having been a substantial employer within the meaning
of Section 4063 of ERISA at any time during the preceding five years, or by
reason of being deemed to be a contributing sponsor under Section 4069 of ERISA.
"PERCENTAGE" means, relative to any Lender, the applicable percentage
relating to Revolving Loans set forth opposite its name on SCHEDULE II hereto or
set forth in a Lender Assignment Agreement, as such percentage may be adjusted
from time to time pursuant to Lender Assignment Agreements executed by such
Lender and its assignee Lender and delivered pursuant to SECTION 11.10. A Lender
shall not have any Revolving Loan Commitment if its Percentage is zero.
"PERFECTION CERTIFICATE" means a Perfection Certificate executed and
delivered by an Authorized Officer of a Borrower pursuant to SECTION 5.1.19,
substantially in the form of EXHIBIT C hereto.
"PERMITTED HOLDERS" means the DLJMB Entities and their Affiliates,
collectively.
"PERMITTED PURPOSE" means with respect to proceeds of capital contributions
to and Issuance of Capital Securities by the Parent: (i) to the extent no
Default or Event of Default has occurred and is continuing at the time of any
such prepayment, purchase or redemption, to prepay, purchase or otherwise redeem
Parent Debentures, (ii) the holding of such proceeds by the Parent as cash or
Cash Equivalent Investments or (iii) the contribution of such proceeds by the
Parent to the capital of VHC and the use by VHC and its Subsidiaries of such
proceeds, within 30 days following its receipt of such contribution, (A) so long
as no Default or Event of Default shall have occurred and be continuing at the
time thereof, to make Eligible Acquisitions pursuant to SECTION 7.2.5(g), (B) to
make Capital Expenditures pursuant to SECTION 7.2.7(b)(i); PROVIDED, HOWEVER,
that if a Default or an Event of Default shall have occurred and be continuing,
the
-28-
aggregate amount of Capital Expenditures which shall constitute a "Permitted
Purpose" shall not exceed that amount which is necessary to maintain (and is not
accretive to) the Borrowers' existing capital assets, (C) so long as no Default
or Event of Default shall have occurred and be continuing, to prepay, purchase
or otherwise redeem Senior Notes or Senior Subordinated Notes pursuant to
SECTION 7.2.8, (D) so long as no Default or Event of Default shall have occurred
and be continuing, to make regularly schedule interest payments with respect to
the Senior Notes pursuant to SECTION 7.2.8, or (E) to make voluntary prepayments
of Revolving Loans pursuant to SECTION 3.1.1(a).
"PERSON" means any natural person, corporation, limited liability company,
partnership, association, trust or unincorporated organization, Governmental
Authority or any other legal entity, whether acting in an individual, fiduciary
or other capacity.
"PLEDGE AND SECURITY AGREEMENT" means the Pledge and Security Agreement
executed and delivered by an Authorized Officer of each Obligor, substantially
in the form of EXHIBIT G hereto, as amended, supplemented, amended and restated
or otherwise modified from time to time.
"PLEDGED SUBSIDIARY" means each Subsidiary of the Parent in respect of
which the Administrative Agent has been granted a security interest in or a
pledge of (i) any of the Capital Securities issued by such Subsidiary or (ii)
any intercompany notes of such Subsidiary owing to the Parent, any Borrower or
any other Subsidiary of the Parent.
"PP&E RELEASE EVENT" is defined in SECTION 7.2.15.
"QUALIFIED BY MATERIALITY" means, with respect to any provision of any
representation or warranty set forth herein or in any Loan Document, that such
provision is qualified by the concept of Material Adverse Effect, a materiality
standard or a similar qualification.
"QUALIFIED HEDGING OBLIGATION" means, collectively, any interest rate swap,
cap, collar or similar agreement entered into by the Parent or any of its
Subsidiaries under which the counterparty of such agreement is (or at the time
such agreement was entered into, was) a Lender or an affiliate of a Lender.
"QUARTERLY PAYMENT DATE" means the last day of March, June, September and
December, or, if any such day is not a Business Day, the next succeeding
Business Day.
"REDEMPTION" is defined in CLAUSE (b) of SECTION 7.2.6.
"REFINANCING" is defined in the FOURTH RECITAL.
"REFUNDED SWINGLINE LOANS" is defined in CLAUSE (b) of SECTION 2.3.2.
"REGISTER" is defined in CLAUSE (c) of SECTION 2.7.
"REIMBURSEMENT OBLIGATION" is defined in SECTION 2.6.3.
"RELEASE" means a "RELEASE", as such term is defined in CERCLA.
-29-
"REPLACEMENT NOTICE" is defined in SECTION 4.11.
"REPLACEMENT LENDER" is defined in SECTION 4.11.
"REQUIRED LENDERS" means, at any time, Lenders holding at least 51% of the
Total Exposure Amount.
"RESOURCE CONSERVATION AND RECOVERY ACT" means the Resource Conservation
and Recovery Act, 42 U.S.C. Section 6901, ET SEQ., as amended.
"RESTRICTED PAYMENT" means the declaration or payment of any dividend on,
or the making of any payment or distribution on account of, or the setting apart
assets for a sinking or other analogous fund for, the purchase, redemption,
defeasance, retirement or other acquisition of, any class of Capital Securities
of any Borrower or any Subsidiary of any Borrower or any warrants or options to
purchase any such Capital Securities, whether now or hereafter outstanding, or
the making of any other distribution in respect thereof, either directly or
indirectly, whether in cash or property, obligations of any Borrower or any
Subsidiary of any Borrower or otherwise (other than (i) dividends or
distributions payable solely in, or exchanges of Capital Securities for, common
stock of any Borrower or any Subsidiary of any Borrower, (ii) splits or
reclassifications of any Borrower's or any Subsidiary of any Borrower's Capital
Securities into additional or other shares of its common stock or Capital
Securities of the same class as the Capital Securities in respect of which such
split or reclassification occurs or (iii) in the case of any class of Capital
Securities, dividends or distributions payable solely in, or exchanges of such
Capital Securities for, additional or other shares of Capital Securities of the
same class as the Capital Securities in respect of which such dividend or
distribution is being made).
"REVOLVING LENDER" means, as of any time of determination, any Lender which
(i) holds outstanding Revolving Loans or (ii) has a Percentage pursuant to
SCHEDULE II hereto or pursuant to a Lender Assignment Agreement which, in either
case, is greater than 0%.
"REVOLVING LOAN" is defined in SECTION 2.1.1.
"REVOLVING LOAN COMMITMENT" is defined in CLAUSE (a) of SECTION 2.1.1.
"REVOLVING LOAN COMMITMENT AMOUNT" means, on any date, $90,000,000, as such
amount may be reduced from time to time or increased pursuant to SECTION 2.2.
"REVOLVING NOTE" means a promissory note of the Borrowers payable to any
Revolving Lender, in the form of EXHIBIT A-1 hereto (as such promissory note may
be amended, endorsed or otherwise modified from time to time), evidencing the
Indebtedness of the Borrowers to such Revolving Lender resulting from
outstanding Revolving Loans, and also means all other promissory notes accepted
from time to time in substitution therefor or renewal thereof.
"REVOLVING OUTSTANDINGS" means, at any time, (i) the aggregate outstanding
principal amount of all Loans at such time PLUS (ii) all Letter of Credit
Outstandings at such time.
"S&P" means Standard & Poor's Rating Services, a division of XxXxxx-Xxxx,
Inc.
-30-
"SALE AND LEASEBACK TRANSACTION" is defined in SECTION 7.2.15.
"SEC" means the Securities and Exchange Commission.
"SECURED PARTIES" means, collectively, the Lenders, each of the Issuers,
each of the Agents, each counterparty to a Qualified Hedging Obligation that is
(or at the time such Qualified Hedging Obligation was entered into, was) a
Lender or an affiliate thereof, together, in each case, with each of their
respective successors, transferees and assigns.
"SENIOR NOTE DOCUMENTS" means, collectively, the Senior Note Indenture, and
any other indentures, note purchase agreements, promissory notes, registration
rights agreements, guarantees, and other instruments and agreements evidencing
the terms of the Senior Notes, as amended, supplemented, amended and restated or
otherwise modified in accordance with SECTION 7.2.12.
"SENIOR NOTE INDENTURE" means the indenture dated as of March 26, 2002
among VHC, the guarantors set forth therein, and U.S. Bank National Association,
as Trustee, as in effect on the Closing Date (as the same may be amended or
otherwise modified from time to time thereafter in accordance with the terms
hereof and thereof), pursuant to which the Senior Notes were issued.
"SENIOR NOTE ISSUANCE" is defined in the SIXTH RECITAL.
"SENIOR NOTES" is defined in the SIXTH RECITAL and shall also include any
and all registered exchange notes issued in exchange therefor in accordance with
the Senior Note Documents.
"SENIOR SUBORDINATED NOTE DOCUMENTS" means, collectively, the Senior
Subordinated Note Indenture, and any other indentures, note purchase agreements,
promissory notes, registration rights agreements guarantees and other
instruments and agreements evidencing the terms of the Senior Subordinated
Notes, as amended, supplemented, amended and restated or otherwise modified in
accordance with SECTION 7.2.12.
"SENIOR SUBORDINATED NOTE INDENTURE" means the Indenture dated as of March
22, 1997 among VHC, the guarantors set forth therein, and Marine Midland Bank,
as Trustee, as in effect on the Closing Date (as the same may be amended or
otherwise modified from time to time thereafter in accordance with the terms
hereof and thereof), pursuant to which the Senior Subordinated Notes were
issued.
"SENIOR SUBORDINATED NOTES" means VHC's 10 3/8% Senior Subordinated Notes
due 2007 and shall also include any and all registered exchange notes issued in
exchange therefor in accordance with the Senior Subordinated Notes Documents.
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement dated as of May
22, 1997 among the Parent, the DLJMB Entities and certain other equity owners
and employees of the Parent, as amended, supplemented, amended and restated or
otherwise modified prior to the Closing Date and as the same may be further
amended, supplemented, amended and restated or otherwise modified in accordance
with the terms hereof and thereof.
-31-
"SOLVENCY CERTIFICATE" means a certificate duly completed and executed by
Authorized Officers of each of the Parent and each Borrower, in the form of
EXHIBIT E-3 hereto.
"SOLVENT" means, with respect to any Person and its Subsidiaries on any
date of determination, that on such date (i) the fair value of the property of
such Person and its Subsidiaries on a consolidated basis is greater than the
total amount of liabilities, including contingent liabilities, of such Person
and its Subsidiaries on a consolidated basis, (ii) the present fair salable
value of the assets of such Person and its Subsidiaries on a consolidated basis
is not less than the amount that will be required to pay the probable liability
of such Person and its Subsidiaries on a consolidated basis on its debts as they
become absolute and matured, (iii) such Person does not intend to, and does not
believe that it or its Subsidiaries will, incur debts or liabilities beyond the
ability of such Person and its Subsidiaries to pay as such debts and liabilities
mature, and (iv) such Person and its Subsidiaries on a consolidated basis are
not engaged in business or a transaction, and such Person and its Subsidiaries
on a consolidated basis are not about to engage in business or a transaction,
for which the property of such Person and its Subsidiaries on a consolidated
basis would constitute unreasonably small capital. The amount of contingent
liabilities at any time shall be computed as the amount that, in light of all
the facts and circumstances existing at such time, can reasonably be expected to
become an actual or matured liability.
"SPC" has the meaning specified in CLAUSE (f) of SECTION 11.10.
"SPECIFIED PERCENTAGE" means, at any time of determination with respect to
a mandatory prepayment or commitment reduction in respect of Net Equity Proceeds
pursuant to CLAUSE (c) of SECTION 3.1.1, (i) if the Leverage Ratio set forth in
the Compliance Certificate most recently delivered by VHC to the Administrative
Agent was equal to or greater than 3.5:1.0, 50% and (ii) if the Leverage Ratio
set forth in such Compliance Certificate was less than 3.5:1.0, 25%.
"STATED AMOUNT" means, on any date and with respect to any Letter of
Credit, the total amount then available to be drawn under such Letter of Credit.
"STATED EXPIRY DATE" is defined in SECTION 2.6.
"SUB DEBT DOCUMENTS" means, collectively, the Parent Debenture Documents,
the Senior Subordinated Note Documents and any other indentures, note purchase
agreements, promissory notes, guarantees and other instruments and agreements
evidencing the terms of any Subordinated Debt, as amended, supplemented, amended
and restated or otherwise modified in accordance with SECTION 7.2.12.
"SUBORDINATED DEBT" means the Parent Debentures, the Senior Subordinated
Notes and any other Debt for Borrowed Money which, by its terms, is subordinated
in right of payment to the Obligations.
"SUBORDINATION PROVISIONS" is defined in SECTION 8.1.11.
"SUBSIDIARY" means, with respect to any Person, any other Person of which
more than 50% of the outstanding Voting Securities of such other Person
(irrespective of whether at the time Capital Securities of any other class or
classes of such other Person shall or might have
-32-
voting power upon the occurrence of any contingency) is at the time directly or
indirectly owned by such Person, by such Person and one or more other
Subsidiaries of such Person, or by one or more other Subsidiaries of such
Person.
"SUBSIDIARY GUARANTOR" means each U.S. Subsidiary of a Borrower required to
execute a supplement to the Subsidiary Guaranty pursuant to SECTION 7.1.8 and,
at the election of VHC in its sole discretion, any other Subsidiary of a
Borrower; PROVIDED, HOWEVER, that any Non-U.S. Subsidiary which becomes a
Subsidiary Guarantor shall not, unless VHC so elects in its sole discretion, be
treated as if it was a U.S. Subsidiary for purposes of SECTION 7.1.8(a) or
Section 7.1.9.
"SUBSIDIARY GUARANTY" means a guaranty in form and substance reasonably
satisfactory to the Administrative Agent executed and delivered by each
Subsidiary Guarantor pursuant to the terms of this Agreement, as the same may be
amended, supplemented, amended and restated or otherwise modified from time to
time.
"SWINGLINE LENDER" means, subject to the terms of this Agreement, the
Administrative Agent.
"SWINGLINE LOAN" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWINGLINE LOAN COMMITMENT" is defined in CLAUSE (b) of SECTION 2.1.1.
"SWINGLINE LOAN COMMITMENT AMOUNT" means, on any date, $10,000,000, as such
amount may be reduced from time to time pursuant to SECTION 2.2.
"SWINGLINE NOTE" means a promissory note of the Borrowers payable to the
Swingline Lender, in the form of EXHIBIT A-2 hereto (as such promissory note may
be amended, endorsed or otherwise modified from time to time), evidencing the
Indebtedness of the Borrowers to the Swingline Lender resulting from outstanding
Swingline Loans, and also means all other promissory notes accepted from time to
time in substitution therefor or renewal thereof.
"SYNDICATION AGENT" is defined in the PREAMBLE.
"TAXES" is defined in SECTION 4.6.
"TERMINATION DATE" means the date on which all Obligations have been paid
in full in cash, all Letters of Credit have been terminated or expired (or been
Cash Collateralized) and all Commitments shall have terminated.
"TOTAL EXPOSURE AMOUNT" means, on any date of determination (and without
duplication), the outstanding principal amount of all Loans, the aggregate
amount of all Letter of Credit Outstandings and the unused amount of all
Commitments.
"TRADEMARK SECURITY AGREEMENT" means any Trademark Security Agreement
executed and delivered by any Obligor substantially in the form of Exhibit B to
the Pledge and Security Agreement, as amended, supplemented, amended and
restated or otherwise modified from time to time.
-33-
"TRANSACTIONS" is defined in the FIFTH RECITAL.
"TYPE" means, relative to any Revolving Loan, the portion thereof, if any,
being maintained as a Base Rate Loan or a LIBO Rate Loan.
"UCC" means the Uniform Commercial Code as in effect from time to time in
the State of
New York; PROVIDED, HOWEVER, that if, by reason of any provisions
of law, the perfection or the effect of perfection or non-perfection of the
security interests granted to the Administrative Agent pursuant to the
applicable Loan Document is governed by the Uniform Commercial Code as in effect
in a jurisdiction of the United States other than
New York, then "UCC" means the
Uniform Commercial Code as in effect from time to time in such other
jurisdiction for purposes of the provisions of each Loan Document and relating
to such perfection or effect of perfection or non-perfection.
"UNITED STATES" or "U.S." means the United States of America, its fifty
states and the District of Columbia.
"U.S. SUBSIDIARY" means any Subsidiary that is incorporated or organized
under the laws of the United States.
"VHC" is defined in the PREAMBLE.
"VHG" is defined in the FIRST RECITAL.
"VOTING SECURITIES" means, with respect to any Person, Capital Securities
of any class or kind ordinarily having the power to vote for the election of
directors, managers or other voting members of the governing body of such
Person.
"WELFARE PLAN" means a "welfare plan", as such term is defined in Section
3(1) of ERISA.
"WHOLLY-OWNED SUBSIDIARY" means with respect to any Person any Subsidiary
of such Person all of the outstanding Capital Securities of which (other than
any director's qualifying shares or investments by foreign nationals mandated by
applicable laws) is owned directly or indirectly by such Person.
SECTION 1.2. USE OF DEFINED TERMS. Unless otherwise defined or the context
otherwise requires, terms for which meanings are provided in this Agreement
shall have the same meanings when used in any other Loan Document and in the
Disclosure Schedule.
SECTION 1.3. CROSS-REFERENCES. Unless otherwise specified, references in a
Loan Document to any Article or Section are references to such Article or
Section of such Loan Document, and references in any Article, Section or
definition to any clause are references to such clause of such Article, Section
or definition.
SECTION 1.4. ACCOUNTING AND FINANCIAL DETERMINATIONS. (a) Unless otherwise
specified and subject to CLAUSE (c) of this SECTION 1.4, all accounting terms
used herein or in any other Loan Document shall be interpreted, all accounting
determinations and computations
-34-
hereunder or thereunder shall be made, and all financial statements required to
be delivered hereunder or thereunder shall be prepared in accordance with, those
generally accepted accounting principles as in effect from time to time in the
United States, applied on a basis consistent (except for changes concurred in by
VHC's independent public accountants) with the most recent audited consolidated
financial statements of VHC and its Subsidiaries delivered to the Lenders
("GAAP"); PROVIDED, HOWEVER, that, if VHC notifies the Administrative Agent that
the Borrowers wish to amend any covenant in SECTION 7.2.4, the definition of
EBITDA, Leverage Ratio, Fixed Charge Coverage Ratio, Capital Expenditure, Net
Income or Interest Expense to eliminate the effect of any change in GAAP on the
operation of such covenant or definition (or if the Administrative Agent
notifies the Borrowers that the Required Lenders wish to amend any such covenant
or definition for such purpose), then VHC's compliance with such covenant shall
be determined, and such definitions shall be applied, on the basis of GAAP in
effect immediately before the relevant change in GAAP became effective, until
either such notice is withdrawn or such covenant or definition is amended in a
manner satisfactory to the Borrowers and the Required Lenders.
(b) Unless otherwise expressly provided, all financial covenants and
defined financial terms shall be computed on a consolidated basis for VHC and
its Subsidiaries, in each case without duplication, and shall be appropriately
adjusted to take into account any minority ownership interests in the assets,
Subsidiaries or businesses of VHC and its Subsidiaries.
(c) For purposes of computing the Fixed Charge Coverage Ratio and Leverage
Ratio (and any financial calculations required to be made or included within
such ratios) as of the end of any Fiscal Quarter, all components of such ratios,
including Capital Expenditures, in the case of any Disposition, but excluding
Capital Expenditures, in the case of any acquisition, for the period of four
Fiscal Quarters ending at the end of such Fiscal Quarter shall include or
exclude, as the case may be, without duplication, such components of such ratios
attributable to any business or assets that have been acquired or Disposed of by
VHC or any of its Subsidiaries (including through mergers or consolidations)
after the first day of such period of four Fiscal Quarters and prior to the end
of such period, as determined in good faith by VHC on a PRO FORMA basis for such
period of four Fiscal Quarters as if such acquisition or Disposition had
occurred on such first day of such period (including cost savings that would
have been realized had such acquisition occurred on such day and which inclusion
when not otherwise permitted under GAAP has been approved by a majority of the
board of directors of VHC).
(d) If any determination of Interest Expense hereunder is required by the
terms hereof to be made for a period of four consecutive Fiscal Quarters at a
time at which fewer than four full Fiscal Quarters have elapsed since the
Closing Date, such determination shall be made for the period elapsed from the
Closing Date through the end of the most recent Fiscal Quarter then ended
(annualized on a simple arithmetic basis, if such determination is to be used in
a ratio with a balance sheet item).
-35-
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE
PROCEDURES, NOTES AND LETTERS OF CREDIT
SECTION 2.1. COMMITMENTS. On the terms and subject to the conditions of
this Agreement, the Lenders and the Issuers severally agree to make Credit
Extensions as set forth below.
SECTION 2.1.1. REVOLVING LOAN COMMITMENT AND SWINGLINE LOAN COMMITMENT.
(a) From time to time on any Business Day occurring from and
after the Closing Date to but excluding the Commitment Termination
Date, each Revolving Lender hereby commits to make loans ("REVOLVING
LOANS") to one or more Borrowers in an aggregate principal amount
equal to such Revolving Lender's Percentage of each Borrowing of
Revolving Loans requested by the applicable Borrower or Borrowers to
be made on such day. The commitment of each Revolving Lender described
in this clause is herein referred to as its "REVOLVING LOAN
COMMITMENT".
(b) From time to time on any Business Day occurring from and
after the Closing Date to but excluding the Commitment Termination
Date, the Swingline Lender hereby commits to make loans (its
"SWINGLINE LOANS") to one or more Borrowers in an aggregate principal
amount equal to the amount of any Swingline Loans requested by the
applicable Borrower or Borrowers to be made on such day. The
Commitment of the Swingline Lender described in this clause is herein
referred to as its "SWINGLINE LOAN COMMITMENT".
(c) On the terms and subject to the conditions hereof, each
Borrower may from time to time borrow, prepay and reborrow Revolving
Loans and Swingline Loans.
SECTION 2.1.2. LETTER OF CREDIT COMMITMENT. From time to time on any
Business Day occurring from and after the Closing Date to but excluding the
fifth Business Day prior to the Commitment Termination Date, the Issuer hereby
commits (i) to issue one or more standby or commercial letters of credit
(relative to such Issuer, its "LETTER OF CREDIT") for the account of any
Borrower in the Stated Amount requested by such Borrower on such day, or (ii) to
extend the Stated Expiry Date of an existing Letter of Credit previously issued
hereunder. No Issuer shall be permitted or required to issue any Letter of
Credit if, after giving effect thereto, (A) the aggregate amount of all Letter
of Credit Outstandings would exceed the Letter of Credit Commitment Amount or
(B) the aggregate amount of all Revolving Outstandings would exceed the
Borrowing Base Amount.
SECTION 2.1.3. LENDERS NOT PERMITTED OR REQUIRED TO MAKE THE LOANS. No
Lender shall be permitted or required to, and the Borrower shall not request any
Lender to, make
(a) any Revolving Loan if, after giving effect thereto and the
application of the proceeds thereof, such Lender's Percentage of the
aggregate Revolving
-36-
Outstandings would exceed such Lender's Percentage of the Borrowing
Base Amount; or
(b) any Swingline Loan (other than Overadvance Loans) if, after
giving effect thereto, (y) the aggregate outstanding principal amount
of all Swingline Loans would exceed the Swingline Loan Commitment
Amount or (z) the aggregate Revolving Outstandings would exceed the
Borrowing Base Amount; or
(c) any Overadvance Loan if, after giving effect thereto, (x) the
aggregate outstanding principal amount of all Swingline Loans would
exceed the Swingline Loan Commitment, (y) the aggregate Revolving
Outstandings would exceed the Borrowing Base Amount by more than
$2,500,000 or (z) the aggregate Revolving Outstandings would exceed
the Revolving Loan Commitment Amount.
SECTION 2.2. REDUCTION OR INCREASE OF COMMITMENT AMOUNTS. VHC may, at its
option, reduce any Commitment Amount or increase the Revolving Loan Commitment
Amount, and the Revolving Loan Commitment Amount shall be automatically reduced,
in each case as set forth below.
SECTION 2.2.1. OPTIONAL REDUCTIONS. VHC may, from time to time on any
Business Day occurring after the Closing Date, voluntarily reduce the amount of
the Revolving Loan Commitment Amount, the Swingline Loan Commitment Amount or
the Letter of Credit Commitment Amount effective as of a Business Day specified
in writing by VHC; PROVIDED, HOWEVER, that all such reductions shall require at
least three Business Days' prior notice to the Administrative Agent and be
permanent, and any partial reduction of the Revolving Loan Commitment Amount
shall be in a minimum amount of $1,000,000 and in an integral multiple of
$100,000. Any optional or mandatory reduction of the Revolving Loan Commitment
Amount pursuant to the terms of this Agreement which reduces the Revolving Loan
Commitment Amount below the Swingline Loan Commitment Amount shall result in an
automatic and corresponding reduction of the Swingline Loan Commitment Amount to
an aggregate amount not in excess of the Revolving Loan Commitment Amount, as so
reduced, without any further action on the part of the Swingline Lender. Any
optional or mandatory reduction of the Revolving Loan Commitment Amount pursuant
to the terms of this Agreement which reduces the Revolving Loan Commitment
amount below the Letter of Credit Commitment Amount shall result in an automatic
and corresponding reduction of the Letter of Credit Commitment Amount to an
aggregate amount not in excess of the Revolving Loan Commitment amount, as so
reduced, without any further action on the part of any Issuer.
SECTION 2.2.2. OPTIONAL INCREASE OF REVOLVING LOAN COMMITMENT AMOUNT.
(a) VHC shall have the right on a one-time basis on any date on or after
the Closing Date and prior to the Commitment Termination Date to increase the
Revolving Loan Commitment Amount by an amount not to exceed $10,000,000 by
requesting that the Syndication Agent arrange for one or more existing Lenders
to increase the amount of their respective Revolving Loan Commitments or one or
more Eligible Assignees to become Revolving Lenders under this Agreement;
PROVIDED that (i) if VHC in good faith objects to the terms upon which the
Syndication Agent is willing to arrange such increase or the Syndication Agent
is unwilling or
-37-
unable after diligent effort to arrange such increase, VHC (but no Lender or
other financial institution) may arrange such increase; (ii) before offering
Revolving Loan Commitments to Eligible Assignees, VHC or the Syndication Agent,
as applicable, shall first offer the additional Revolving Loan Commitments to
existing Lenders on a pro rata basis; and (iii) no Lender shall at any time be
required to agree to increase its Revolving Loan Commitment or other obligations
hereunder.
(b) Any increase in the aggregate Revolving Loan Commitment Amount pursuant
to CLAUSE (a) above shall be effective only upon the execution and delivery by
each Eligible Assignee or existing Lender, as the case may be, to VHC and the
Syndication Agent at least five Business Days before any such increase is to
become effective of an instrument reasonably satisfactory to VHC and the
Syndication Agent:
(i) in the case of an Eligible Assignee, setting forth the amount of
its Revolving Loan Commitment, the resulting Percentage and the date upon
which its Revolving Loan Commitment and related Percentage are to become
effective (the "COMMITMENT INCREASE DATE") and containing its agreement to
become, and to perform all the obligations of, a Lender hereunder; and
(ii) in the case of an existing Lender, setting forth the amount by
which its Revolving Loan Commitment and related Percentage hereunder is to
be increased and the Commitment Increase Date applicable thereto.
(c) Any increase in the Revolving Loan Commitment Amount pursuant to CLAUSE
(a) above shall not be effective unless:
(i) no Default or Event of Default shall have occurred and be
continuing on the Commitment Increase Date;
(ii) each of the representations and warranties of each Borrower and
each other Obligor contained in this Agreement and the other Loan Documents
shall be true and correct on and as of the Commitment Increase Date;
(iii) each Lender (including each Eligible Assignee which becomes a
Lender pursuant to this SECTION 2.2.3) shall have received a certificate of
the secretary or assistant secretary of each Borrower as to the taking of
any corporate action necessary in connection with such increase; and
(iv) in the case of increases arranged by the Syndication Agent, the
Borrowers shall have paid to the Syndication Agent such syndication,
commitment or other upfront fees as shall be required by the Syndication
Agent in connection with such increase of the Revolving Loan Commitment
Amount.
(d) From and after the Commitment Increase Date, the term "Lenders", as
used herein, shall include all Eligible Assignees which become Lenders pursuant
to this SECTION 2.2.2.
(e) From and after the Commitment Increase Date, (A) the Revolving Loan
Commitment Amount shall be increased by the amount of the additional Revolving
Loan Commitments agreed
-38-
to be so provided, (B) the Percentages of the respective Lenders in respect of
the increased Revolving Loan Commitment Amount shall be proportionately adjusted
(PROVIDED, HOWEVER, that the amount equal to the adjusted Percentage of a Lender
multiplied by the Revolving Loan Commitment Amount as increased pursuant to
CLAUSE (A) may not exceed the amount equal to the Percentage of such Lender
immediately prior to any adjustment made pursuant to this CLAUSE (B) multiplied
by the Revolving Loan Commitment Amount immediately prior to the corresponding
increase thereof pursuant to CLAUSE (A) without the consent of such Lender) and
such adjustment shall be recorded in the Register and (C) at such time and in
such manner as the Borrowers and the Syndication Agent shall agree (it being
understood that the Borrowers and the Agents will use commercially reasonable
efforts to avoid the prepayment or assignment of any LIBO Rate Loan on a day
other than the last day of the Interest Period applicable thereto), the Lenders
shall assign and assume outstanding Revolving Loans and participations in
outstanding Letters of Credit so as to cause amounts of such Revolving Loans and
participations in Letters of Credit held by each Lender with a Percentage in
excess of zero to conform to its Percentage of the Revolving Loan Commitment.
SECTION 2.3. BORROWING PROCEDURES. Loans (other than Swingline Loans) shall
be made by the Lenders in accordance with SECTION 2.3.1, and Swingline Loans
shall be made by the Swingline Lender in accordance with SECTION 2.3.2.
SECTION 2.3.1. REVOLVING LOANS. By delivering a Borrowing Request to the
Administrative Agent on or before 12:00 Noon on a Business Day, any Borrower may
from time to time irrevocably request, on not less than one Business Day's
notice in the case of Base Rate Loans, or three Business Days' notice in the
case of LIBO Rate Loans, and in either case not more than five Business Days'
notice, that a Borrowing be made by the Revolving Lenders. Revolving Loans
(other than Revolving Loans made pursuant to SECTION 2.3.2(a)(ii), SECTION
2.3.2(b) or SECTION 2.6.2, which Revolving Loans shall be made in the amounts
specified therein) will be made in a minimum amount of $500,000 and integral
multiples of $100,000 or in an amount equal to the unused amount of the
Revolving Loan Commitment Amount. On the terms and subject to the conditions of
this Agreement, each Borrowing shall be comprised of the type of Loans, and
shall be made on the Business Day, specified in such Borrowing Request. Each
Lender that has a Commitment to make the Revolving Loans being requested shall
deposit with the Administrative Agent, on or before 11:00 a.m. on the date of
Borrowing, same day funds in an amount equal to such Lender's Percentage of the
requested Borrowing. Such deposit will be made to an account which the
Administrative Agent shall specify from time to time by notice to the Lenders.
To the extent funds are received from the Lenders, the Administrative Agent
shall make such funds available to the applicable Borrower by wire transfer to
the accounts such Borrower shall have specified in its Borrowing Request.
Neither the Administrative Agent's nor any Lender's obligation to make any Loan
shall be affected by any other Lender's failure to make any Loan.
SECTION 2.3.2. SWINGLINE LOANS. (a) (i) By telephonic notice to the
Swingline Lender on or before 3:00 p.m. on a Business Day (followed on such day
by the delivery to the Swingline Lender of a confirming Borrowing Request), any
Borrower may from time to time irrevocably request that Swingline Loans be made
by the Swingline Lender in an aggregate minimum principal amount of $500,000 and
integral multiples of $100,000 or (ii) if on any day on which a Notice of Cash
Dominion is in effect or on which any Borrower shall have requested that
-39-
Swingline Loans be made available to such Borrower pursuant to this CLAUSE (ii),
Items are presented to the Depositary Bank for payment against the Operating
Account which Items, in the aggregate, would, if paid in full, cause the
Available Balance in the Operating Account on such day to be less than $0, such
presentation shall be deemed to be a request by the Borrowers for a Swingline
Loan on the date of such presentation in an amount equal to the amount (rounded
upward to the nearest $1,000) required to cause such Available Balance in the
Operating Account to equal $0. All Swingline Loans shall be made as Base Rate
Loans and shall not be entitled to be converted into LIBO Rate Loans. The
proceeds of each Swingline Loan requested pursuant to CLAUSE (i) above shall be
made available by the Swingline Lender to applicable Borrower by wire transfer
to the Operating Account or such other account as such Borrower shall have
specified in its notice therefor by the close of business on the Business Day
telephonic notice is received by the Swingline Lender. The proceeds of each
Swingline Loan deemed to be requested under CLAUSE (ii) above shall be disbursed
by the Swingline Lender by way of direct payment of the relevant Item or by way
of deposit to the Operating Account of the amount set forth in CLAUSE (ii)
above, as the case may be. Notwithstanding any contrary provision set forth in
this Agreement (including, without limitation, SECTION 5.2.1(b)), in the event
any Default or Event of Default occurs, the Swingline Lender shall, upon receipt
of a Notice of Borrowing pursuant to SECTION 2.3.2(a)(i) above or, if CLAUSE
(ii) above is then in effect, the presentation of an Item for payment from the
Operating Account in accordance with SECTION 2.3.2(a)(ii) above, make Swingline
Loans (such Swingline Loans being referred to herein as "DEFAULT LOANS") to the
applicable Borrower (which Swingline Loans shall be refunded by the Revolving
Lenders in accordance with SECTION 2.3.2(b) below regardless of the existence of
such Default or Event of Default) in an aggregate principal amount which, when
taken together with the aggregate amount of all cash and Cash Equivalent
Investments, permitted to be retained by the Borrowers and their respective
Subsidiaries in accordance with SECTION 3.1.1(d)(ii), shall not exceed
$2,500,000 at any time outstanding, the proceeds of which shall be used to pay
payroll and other operating expenses approved by the Administrative Agent.
Notwithstanding any contrary provision set forth in this Agreement, but in all
respects subject to SECTION 2.1.3(c), the Swingline Lender may, in its
discretion, upon receipt of a Notice of Borrowing pursuant to SECTION
2.3.2(a)(i) above or, if CLAUSE (ii) above is then in effect, the presentation
of an Item for payment from the Operating Account in accordance with SECTION
2.3.2(a)(ii) above, make Swingline Loans (such Swingline Loans being referred to
herein as "OVERADVANCE LOANS") to the Borrowers (which Swingline Loans shall be
refunded by the Revolving Lenders in accordance with SECTION 2.3.2(b) below
regardless of the existence of any Default or Event of Default) in an aggregate
principal amount not to exceed $2,500,000 at any time outstanding.
(b) If (i) any Swingline Loan (including any Default Loan or Overadvance
Loan) shall be outstanding for more than four Business Days, (ii) any Swingline
Loan (including any Default Loan or Overadvance Loan) is or will be outstanding
on a date when a Borrower requests that a Revolving Loan be made, or (iii) any
Default shall occur and be continuing, then each Revolving Lender (other than
the Swingline Lender) irrevocably agrees that it will, at the request of the
Swingline Lender, make a Revolving Loan (which shall initially be funded as a
Base Rate Loan) in an amount equal to such Lender's Percentage of the aggregate
principal amount of all Swingline Loans then outstanding (such outstanding
Swingline Loans hereinafter referred to as the "REFUNDED SWINGLINE LOANS"). On
or before 11:00 a.m. on the first Business Day following receipt by each
Revolving Lender of a request to make Revolving Loans as provided in the
preceding sentence, each Revolving Lender shall deposit in an account specified
by the
-40-
Swingline Lender the amount so requested in same day funds and such funds shall
be applied by the Swingline Lender to repay the Refunded Swingline Loans. At the
time the Revolving Lenders make the above referenced Revolving Loans, the
Swingline Lender shall be deemed to have made, in consideration of the making of
the Refunded Swingline Loans, Revolving Loans in an amount equal to the
Swingline Lender's Percentage of the aggregate principal amount of the Refunded
Swingline Loans. Upon the making (or deemed making, in the case of the Swingline
Lender) of any Revolving Loans pursuant to this clause, the amount so funded
shall become outstanding as such Revolving Lender's Revolving Loan and shall no
longer be owed to the Swingline Lender as a Swingline Loan. All interest payable
with respect to any Revolving Loans made (or deemed made, in the case of the
Swingline Lender) pursuant to this clause shall be appropriately adjusted to
reflect the period of time during which the Swingline Lender had outstanding
Swingline Loans in respect of which such Revolving Loans were made. Each
Revolving Lender's obligation to make the Revolving Loans referred to in this
clause shall be absolute and unconditional and shall not be affected by any
circumstance, including (i) any set-off, counterclaim, recoupment, defense or
other right which such Lender may have against the Swingline Lender, any Obligor
or any Person for any reason whatsoever; (ii) the occurrence or continuance of
any Default; (iii) any adverse change in the condition (financial or otherwise)
of any Obligor; (iv) the acceleration or maturity of any Obligations or the
termination of any Commitment after the making of any Swingline Loan; (v) any
breach of any Loan Document by any Person or any amendment or other modification
to this Agreement or any other Loan Document; or (vi) any other circumstance,
occurrence or event whatsoever, whether or not similar to any of the foregoing.
SECTION 2.4. CONTINUATION AND CONVERSION ELECTIONS. By delivering a
Continuation/ Conversion Notice to the Administrative Agent on or before 12:00
noon on a Business Day, the applicable Borrower may from time to time
irrevocably elect, on not less than one Business Day's notice in the case of a
conversion of LIBO Rate Loans to Base Rate Loans, or three Business Days' notice
in the case of a continuation of LIBO Rate Loans for an additional Interest
Period or a conversion of Base Rate Loans to LIBO Rate Loans, and in either case
not more than five Business Days' notice, that all, or any portion in an
aggregate minimum amount of $500,000 and integral multiples of $100,000 of the
Revolving Loans outstanding to such Borrower be, in the case of Base Rate Loans,
converted into LIBO Rate Loans or be, in the case of LIBO Rate Loans, converted
into Base Rate Loans or continued as LIBO Rate Loans (in the absence of delivery
of a Continuation/Conversion Notice with respect to any LIBO Rate Loan at least
three Business Days (but not more than five Business Days) before the last day
of the then current Interest Period with respect thereto, such LIBO Rate Loan
shall, on such last day, automatically convert to a Base Rate Loan); PROVIDED,
HOWEVER, that (x) each such conversion or continuation shall be pro rated among
the applicable outstanding Loans to such Borrower of all Lenders that have made
such Loans, and (y) no portion of the outstanding principal amount of any Loans
may be continued as, or be converted into, LIBO Rate Loans when any Event of
Default has occurred and is continuing.
SECTION 2.5. FUNDING. Each Lender may, if it so elects, fulfill its
obligation to make, continue or convert LIBO Rate Loans hereunder by causing one
of its foreign branches or affiliates (or an international banking facility
created by such Lender) to make or maintain such LIBO Rate Loan; PROVIDED,
HOWEVER, that such LIBO Rate Loan shall nonetheless be deemed to have been made
and to be held by such Lender, and the obligation of the Borrowers to repay
-41-
such LIBO Rate Loan shall nevertheless be to such Lender for the account of such
foreign branch, affiliate or international banking facility; and PROVIDED,
FURTHER, HOWEVER, that, except for purposes of determining whether any such
increased costs are payable by a Borrower, such Lender shall cause such foreign
branch, affiliate or international banking facility to comply with the
applicable provisions of CLAUSE (b) of SECTION 4.6 with respect to such LIBO
Rate Loan. In addition, the Borrowers hereby consent and agree that, for
purposes of any determination to be made for purposes of SECTIONS 4.1, 4.2, 4.3
or 4.4, it shall be conclusively assumed that each Lender elected to fund all
LIBO Rate Loans by purchasing Dollar deposits in its LIBOR Office's interbank
eurodollar market.
SECTION 2.6. ISSUANCE PROCEDURES, ETC. (a) On the Closing Date, each Issuer
that has issued an Existing Letter of Credit shall be deemed, without further
action by any party hereto, to have sold to each Revolving Lender, and each such
Revolving Lender shall be deemed, without further action by any party hereto, to
have purchased from each such Issuer, without recourse or warranty, an undivided
participation interest in its Percentage of such Existing Letter of Credit and
the related Letter of Credit Outstandings (although any fronting fee payable
under SECTION 3.3.2 shall be payable directly to the Administrative Agent for
the accounting of each applicable Issuer, and the Lenders (other than such
Issuer) shall have no right to receive any portion of such fronting fee) and any
security therefore or guaranty pertaining thereto. On and after the Closing
Date, each Existing Letter of Credit shall constitute a Letter of Credit for all
purposes hereof.
(b) On or after the Closing Date, by delivering to the Administrative Agent
an Issuance Request on or before 12:00 noon on a Business Day, any Borrower may
from time to time irrevocably request on not less than three nor more than ten
Business Days' notice, in the case of an initial issuance of a Letter of Credit,
and not less than three Business Days' prior notice, in the case of a request
for the extension of the Stated Expiry Date of an outstanding Letter of Credit
(in each case, unless a shorter notice period is agreed to by the Issuer, in its
sole discretion), that an Issuer issue, or extend the Stated Expiry Date of, a
Letter of Credit in such form as may be requested by such Borrower and approved
by such Issuer (such approval not to be unreasonably withheld), solely for the
purposes described in SECTION 7.1.7. Each Letter of Credit shall by its terms be
stated to expire on a date (its "STATED EXPIRY DATE") no later than the earlier
to occur of (i) the fifth Business Day immediately preceding the date specified
in CLAUSE (ii) of the definition of "Commitment Termination Date" or (ii)
(unless otherwise agreed to by an Issuer, in its sole discretion), one year from
the date of its issuance (subject to automatic renewal provisions); PROVIDED,
HOWEVER, that, notwithstanding the terms of this CLAUSE (ii), a Letter of Credit
may, if required by the beneficiary thereof, contain automatic renewal
provisions pursuant to which the Stated Expiry Date shall be automatically
extended (to a date not beyond the date specified in CLAUSE (i) above), unless
notice to the contrary shall have been given to the beneficiary prior to the
then existing Stated Expiry Date in accordance with the terms specified in such
Letter of Credit by the applicable Issuer or the account party of such Letter of
Credit (which notice by the account party shall also have been provided to the
applicable Issuer in writing). Each Issuer will make available to the
beneficiary thereof the original of the Letter of Credit which it issues.
SECTION 2.6.1. OTHER LENDERS' PARTICIPATION. Upon the issuance of each
Letter of Credit, and without further action, each Revolving Lender (other than
such Issuer) shall be deemed to have irrevocably purchased, to the extent of its
Percentage, a participation interest in
-42-
such Letter of Credit (including the Contingent Liability and any Reimbursement
Obligation with respect thereto), and such Revolving Lender shall, to the extent
of its Percentage, be responsible for reimbursing within one Business Day the
Issuer for Reimbursement Obligations which have not been reimbursed by the
Borrowers in accordance with SECTION 2.6.3. In addition, such Revolving Lender
shall, to the extent of its Percentage, be entitled to receive a ratable portion
of the Letter of Credit fees payable pursuant to SECTION 3.3.2 with respect to
each Letter of Credit (other than the issuance fees payable to an Issuer of such
Letter of Credit pursuant to the last sentence of SECTION 3.3.2) and of interest
payable pursuant to SECTION 3.2 with respect to any Reimbursement Obligation. To
the extent that any Revolving Lender has reimbursed any Issuer for a
Disbursement, such Lender shall be entitled to receive its ratable portion of
any amounts subsequently received (from the Borrowers or otherwise) in respect
of such Disbursement.
SECTION 2.6.2. DISBURSEMENTS. An Issuer will notify the applicable Borrower
and the Administrative Agent promptly of the presentment for payment of any
drawing under Letter of Credit issued by such Issuer, together with notice of
the date (the "DISBURSEMENT DATE") such payment shall be made (each such
payment, a "DISBURSEMENT"). Subject to the terms and provisions of such Letter
of Credit and this Agreement, the applicable Issuer shall make such payment to
the beneficiary (or its designee) of such Letter of Credit. Prior to 12:30 p.m.
on the first Business Day following the Disbursement Date (the "DISBURSEMENT DUE
DATE"), the applicable Borrower will reimburse the Administrative Agent (any
such reimbursement obligation to be a joint and several obligation of the
Borrowers), for the account of the applicable Issuer, for all amounts which such
Issuer has disbursed under such Letter of Credit, together with interest thereon
at a rate per annum equal to the rate per annum then in effect for Base Rate
Loans (with the then Applicable Margin for Revolving Loans accruing on such
amount) pursuant to SECTION 3.2 for the period from the Disbursement Date
through the date of such reimbursement; PROVIDED, HOWEVER, that, if no Default
shall have then occurred and be continuing, unless the applicable Borrower has
notified the Administrative Agent no later than one Business Day prior to the
Disbursement Due Date that it will reimburse the Issuer for the applicable
Disbursement, then the amount of the Disbursement shall be deemed to be a
Borrowing of Revolving Loans by the applicable Borrower constituting Base Rate
Loans and, following the giving of notice thereof by the Administrative Agent to
the Lenders, each Lender (other than the Issuer) will deliver to the Issuer on
the Disbursement Due Date immediately available funds in an amount equal to such
Lender's Percentage of such Borrowing. Each conversion of Disbursement amounts
into Revolving Loans shall constitute a representation and warranty by each
Borrower that on the date of the making of such Revolving Loans all of the
statements set forth in SECTION 5.2.1 are true and correct. Without limiting in
any way the foregoing and notwithstanding anything to the contrary contained
herein or in any separate application for any Letter of Credit, each Borrower
hereby acknowledges and agrees that it shall jointly and severally be obligated
to reimburse the applicable Issuer upon each Disbursement of a Letter of Credit,
and it shall be deemed to be the obligor for purposes of each such Letter of
Credit issued hereunder (whether the account party on such Letter of Credit is
such Borrower or any other Borrower).
SECTION 2.6.3. REIMBURSEMENT. The joint and several obligation (a
"REIMBURSEMENT OBLIGATION") of the Borrowers under SECTION 2.6.2 to reimburse an
Issuer with respect to each Disbursement (including interest thereon) not
converted into a Base Rate Loan pursuant to
-43-
SECTION 2.6.2 and, upon the failure of the Borrowers to reimburse an Issuer,
each Revolving Lender's obligation under SECTION 2.6.1 to reimburse an Issuer or
fund its Percentage of any Disbursement converted into a Base Rate Loan, shall
be absolute and unconditional under any and all circumstances and irrespective
of any setoff, counterclaim or defense to payment which any Borrower or such
Revolving Lender, as the case may be, may have or have had against such Issuer
or any Lender, including any defense based upon the failure of any Disbursement
to conform to the terms of the applicable Letter of Credit (if, in such Issuer's
good faith opinion, such Disbursement is determined to be appropriate) or any
non-application or misapplication by the beneficiary of the proceeds of such
Letter of Credit; PROVIDED, HOWEVER, that after paying in full its Reimbursement
Obligation hereunder, nothing herein shall adversely affect the right of any
Borrower or such Lender, as the case may be, to commence any proceeding against
an Issuer for any wrongful Disbursement made by such Issuer under a Letter of
Credit as a result of acts or omissions constituting gross negligence or willful
misconduct on the part of such Issuer.
SECTION 2.6.4. DEEMED DISBURSEMENTS. Upon the occurrence and during the
continuation of any Event of Default of the types described in CLAUSES (b)
through (d) of SECTION 8.1.9 with respect to the Parent or any Borrower or upon
notification by the Administrative Agent (acting at the direction of the
Required Lenders) to the Borrowers of their respective obligations under this
Section, following the occurrence and during the continuation of any other Event
of Default, (i) the aggregate Stated Amount of all Letters of Credit shall,
without demand upon or notice to any Borrower or any other Person, be deemed to
have been paid or disbursed by the Issuers of such Letters of Credit
(notwithstanding that such amount may not in fact have been paid or disbursed),
and (ii) the Borrowers shall be immediately obligated, jointly and severally, to
reimburse the Issuers for the amount deemed to have been so paid or disbursed by
such Issuers. Amounts payable by the Borrowers pursuant to this Section shall be
deposited in immediately available funds with the Administrative Agent and held
as collateral security for the Reimbursement Obligations. When all Events of
Default giving rise to the deemed disbursements under this Section have been
cured or waived the Administrative Agent shall return to VHC, on behalf of the
Borrowers, all amounts then on deposit with the Administrative Agent pursuant to
this Section which have not been applied to the satisfaction of the
Reimbursement Obligations.
SECTION 2.6.5. NATURE OF REIMBURSEMENT OBLIGATIONS. Each Borrower and the
Parent and, to the extent set forth in SECTION 2.6.1, each Revolving Lender
shall assume all risks of the acts, omissions or misuse of any Letter of Credit
by the beneficiary thereof. No Issuer (except to the extent of its own gross
negligence or willful misconduct) shall be responsible for:
(a) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any Letter of Credit or any document submitted by any
party in connection with the application for and issuance of a Letter
of Credit, even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged;
(b) the form, validity, sufficiency, accuracy, genuineness or
legal effect of any instrument transferring or assigning or purporting
to transfer or assign a Letter of Credit or the rights or benefits
thereunder or the proceeds thereof in whole or in part, which may
prove to be invalid or ineffective for any reason;
-44-
(c) failure of the beneficiary to comply fully with conditions
required in order to demand payment under a Letter of Credit;
(d) errors, omissions, interruptions or delays in transmission or
delivery of any messages, by mail, cable, telegraph, telex or
otherwise; or
(e) any loss or delay in the transmission or otherwise of any
document or draft required in order to make a Disbursement under a
Letter of Credit.
None of the foregoing shall affect, impair or prevent the vesting of any of the
rights or powers granted to any Issuer or any Revolving Lender hereunder. In
furtherance and not in limitation or derogation of any of the foregoing, any
action taken or omitted to be taken by an Issuer in good faith (and not
constituting gross negligence or willful misconduct) shall be binding upon each
Obligor and each such Lender Party, and shall not put such Issuer under any
resulting liability to any Obligor or any Lender Party, as the case may be.
SECTION 2.7. NOTES. (a) The Borrowers agree that, upon the request to the
Administrative Agent by any Lender, the Borrowers will execute and deliver to
such Lender a Note evidencing the Loans made by, and payable to the order of,
such Lender in a maximum principal amount equal to such Lender's Percentage of
the original applicable Commitment Amount. The Borrowers hereby irrevocably
authorize each Lender to make (or cause to be made) appropriate notations on the
grid attached to such Lender's Note (or on any continuation of such grid), which
notations, if made, shall evidence, INTER ALIA, the date of, the outstanding
principal amount of, the interest rate and Interest Period applicable to the
Loans evidenced thereby and the Borrower to whom each such Loan was made. Such
notations shall, to the extent not inconsistent with notations made by the
Administrative Agent in the Register, constitute prima facie evidence and shall
be binding on each Obligor absent manifest error; PROVIDED, HOWEVER, that the
failure of any Lender to make any such notations shall not limit or otherwise
affect any Obligations of any Obligor.
(b) Each Borrower hereby designates the Administrative Agent to serve as
its agent, solely for the purpose of this clause, to maintain a register (the
"REGISTER") on which the Administrative Agent will record each Lender's
Commitment, the Loans made by each Lender to each Borrower and each repayment in
respect of the principal amount of the Loans, annexed to which the
Administrative Agent shall retain a copy of each Lender Assignment Agreement
delivered to the Administrative Agent pursuant to SECTION 11.10. Failure to make
any recordation, or any error in such recordation, shall not affect any
Obligor's Obligations. The entries in the Register shall constitute prima facie
evidence and shall be binding on the Obligors absent manifest error, and the
Borrowers, the Administrative Agent and the Lenders shall treat each Person in
whose name a Loan is registered (or, if applicable, to which a Note has been
issued) as the owner thereof for the purposes of all Loan Documents,
notwithstanding notice or any provision herein to the contrary. Any assignment
or transfer of a Commitment or the Loans made pursuant hereto shall be
registered in the Register only upon delivery to the Administrative Agent of a
Lender Assignment Agreement that has been executed by the requisite parties
pursuant to SECTION 11.10. No assignment or transfer of a Lender's Commitment or
Loans shall be effective unless such assignment or transfer shall have been
recorded in the Register by the Administrative Agent as provided in this
Section.
-45-
SECTION 2.8. NOTICE OF CASH DOMINION. The parties hereto agree that (i)
upon the occurrence and during the continuance of any Default or Event of
Default or (ii) at any time at which the Excess Availability has been less than
$10,000,000 for any period of 5 consecutive Business Days, the Administrative
Agent may (and at the request of the Required Lenders shall) give a Notice of
Cash Dominion (with a copy to VHC), which Notice of Cash Dominion shall remain
in full force and effect until revoked or terminated in writing by the
Administrative Agent. When all Defaults and Events of Default, whether giving
rise to such Notice of Cash Dominion or otherwise, have been cured or waived and
the Excess Availability has been greater than or equal to $10,000,000 for a
period of 5 consecutive Business Days, the Administrative Agent, at the request
of VHC, shall terminate the effectiveness of such Notice of Cash Dominion, and
such Notice of Cash Dominion shall thereafter cease to be effective.
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. REPAYMENTS AND PREPAYMENTS; APPLICATION. Each Borrower agrees
that the Loans shall be repaid and prepaid pursuant to the following terms.
SECTION 3.1.1. REPAYMENTS AND PREPAYMENTS. The Borrowers shall be
obligated, jointly and severally, to repay in full the unpaid principal amount
of each Loan on the Commitment Termination Date. Prior thereto, payments and
prepayments of the Loans shall or may be made as set forth below.
(a) From time to time on any Business Day, a Borrower may make a
voluntary prepayment, in whole or in part, of the outstanding
principal amount of any:
(i) Revolving Loans; PROVIDED, HOWEVER, that (x) any such
prepayment of Revolving Loans shall be made PRO RATA among the
Revolving Loans of all Lenders of the same type and, if
applicable, having the same Interest Period; (y) all such
voluntary prepayments shall require at least one but no more than
five Business Days' prior notice to the Administrative Agent; and
(z) all such voluntary partial prepayments shall be in an
aggregate minimum amount of $100,000 and integral multiples
thereof; and
(ii) Swingline Loans; PROVIDED, HOWEVER, that (x) all such
voluntary prepayments shall require prior telephonic notice to
the Swingline Lender on or before 1:00 p.m. on the day of such
prepayment (such notice to be confirmed in writing within 24
hours thereafter); and (y) all such voluntary partial prepayments
shall be in an aggregate minimum amount of $50,000 and integral
multiples of $10,000.
(b) On each date when the aggregate Revolving Outstandings
(excluding Overadvance Loans) exceed the Borrowing Base Amount
(including as a result of a reduction in the Borrowing Base Amount in
effect on such date), the Borrowers shall make a mandatory prepayment
of Revolving Loans or Swingline Loans (or
-46-
both) and, if necessary, Cash Collateralize Letter of Credit Outstandings,
in an aggregate amount equal to such excess. On the 10th day immediately
following the date of any Overadvance Loan, the Borrowers shall, unless the
aggregate Revolving Outstandings (including any Overadvance Loans) are then
equal to or less than the Borrowing Base Amount in effect on such date,
repay such Overadvance Loan in full.
(c) Concurrently with the receipt by the Parent or any of its
Subsidiaries of any Net Proceeds, the Borrowers shall be obligated,
jointly and severally, to make mandatory prepayments of the Loans, as
set forth below, and each such prepayment shall be applied as set
forth in SECTION 3.1.2:
(i) NET EQUITY PROCEEDS. In the event the Parent or any of its
Subsidiaries receives any Net Equity Proceeds, VHC shall deliver to
the Administrative Agent a calculation of the amount of such Net
Equity Proceeds, and the Borrowers shall make a mandatory prepayment
of the Loans in an amount equal to the Specified Percentage of such
Net Equity Proceeds; PROVIDED, HOWEVER, that Net Equity Proceeds
(other than the Specified Percentage of Net Equity Proceeds from an
Initial Public Offering) may be used for one or more Permitted
Purposes and, to the extent such proceeds are so used in all cases as
provided in the definition of "Permitted Purpose", the Borrowers shall
not be required to prepay Loans or Cash Collateralize Letter of Credit
Outstanding pursuant to this SECTION 3.1.1(c).
(ii) NET DISPOSITION PROCEEDS. In the event the Parent or any of
its Subsidiaries receives any Net Disposition Proceeds, VHC shall
deliver to the Administrative Agent a calculation of the amount of
such Net Disposition Proceeds, and, to the extent the aggregate amount
of such proceeds received by the Parent and its Subsidiaries in
connection with any single transaction or series of related
transactions exceeds $2,000,000, the Borrowers shall within 30 days
after receipt of such Net Disposition Proceeds, be obligated, jointly
and severally, to make a mandatory prepayment of the Loans in an
amount equal to 100% of such Net Disposition Proceeds; PROVIDED,
HOWEVER, that, upon written notice by VHC to the Administrative Agent
not less than 30 days following receipt of any Net Disposition
Proceeds, an aggregate amount of up to $25,000,000 (as such amount may
be increased with the consent of the Required Lenders) of such
proceeds over the term of this Agreement may be retained by VHC and
its Subsidiaries (and be excluded from the prepayment requirements of
this clause) if (x) VHC informs the Administrative Agent in such
notice of its good faith intention to apply (or cause one or more of
its Subsidiaries to apply) such Net Disposition Proceeds to the
acquisition of other assets or properties consistent with the
businesses permitted to be conducted pursuant to SECTION 7.2.1
(including by way of merger or Investment), and (y) within 365 days
following the receipt of such Net Disposition Proceeds, such proceeds
are applied or
-47-
committed to such acquisition. The amount of such Net Disposition
Proceeds unused or uncommitted after such 365-day period shall be
applied to the Loans as set forth in SECTION 3.1.2. At any time
after receipt of any such Net Disposition Proceeds in excess of
$2,000,000 but prior to the application thereof to a mandatory
prepayment or the acquisition of other assets or properties as
described above, the Borrowers shall prepay Loans pursuant to
SECTION 3.1.1(a) (with the amount of any such prepayment to
continue to be considered to be Net Disposition Proceeds for
purposes of this Agreement and the other Loan Documents) or, to
the extent it elects not to so prepay Loans, upon written demand
by the Administrative Agent (in its reasonable discretion) to the
Borrowers, deposit an amount equal to such Net Disposition
Proceeds into a cash collateral account maintained with (and
reasonably satisfactory to) the Administrative Agent for the
benefit of the Secured Parties (and over which the Administrative
Agent shall have sole dominion and control) pending such
application as a prepayment or to be released as requested by VHC
in respect of such acquisition. Amounts deposited in such cash
collateral account shall be invested in Cash Equivalent
Investments, as directed by VHC.
(iii) NET CASUALTY PROCEEDS. In the event the Parent or any
of its Subsidiaries receives any Net Casualty Proceeds, VHC shall
deliver to the Administrative Agent a calculation of the amount
of such Net Casualty Proceeds and, to the extent the aggregate
amount of such proceeds received by the Parent and its
Subsidiaries in respect of any single Casualty Event or series of
related Casualty Events exceeds $2,000,000, the Borrowers shall,
within 60 days after the receipt of such Casualty Proceeds be
obligated, jointly and severally, to make a mandatory prepayment
of the Loans in an amount equal to 100% of such Net Casualty
Proceeds; PROVIDED, HOWEVER, that, upon written notice by VHC to
the Administrative Agent not less than 60 days following receipt
of any Net Casualty Proceeds, up to 100% of such proceeds may be
retained by VHC and its Subsidiaries (and be excluded from the
prepayment requirements of this clause) if (x) VHC informs the
Administrative Agent in such notice of its good faith intention
to apply (or cause one or more of its Subsidiaries to apply) such
Net Casualty Proceeds to the repair or replacement of the assets
or properties which have been lost or damaged as a result of the
Casualty Event giving rise to such Net Casualty Proceeds or to
the acquisition of other property or assets consistent with the
businesses permitted to be conducted under SECTION 7.2.1, and (y)
within 365 days following the receipt of such Net Casualty
Proceeds such proceeds are applied or committed to such repair,
replacement or acquisition. The amount of any such Net Casualty
Proceeds unused or uncommitted after such 365-day period shall be
applied to the Loans as set forth in SECTION 3.1.2. At any time
after receipt of any such Net Casualty Proceeds in excess of
$2,000,000 but prior to the application thereof to a mandatory
prepayment or the repair, replacement or acquisition of lost or
-48-
damaged assets or property or other property or assets as
described above, the Borrowers shall prepay Loans pursuant to
SECTION 3.1.1(a) (with the amount of any such prepayment to be
continued to be Net Casualty Proceeds for purposes of this
Agreement and the other Loan Documents) or, to the extent it
elects not to so prepay Loans, upon written demand by the
Administrative Agent (in its reasonable discretion) to the
Borrowers, deposit an amount equal to such Net Casualty Proceeds
into a cash collateral account maintained with (and reasonably
satisfactory to) the Administrative Agent for the benefit of the
Secured Parties (and over which the Administrative Agent shall
have sole dominion and control) pending such application as a
prepayment or to be released as requested by VHC in respect of
such repair, replacement or acquisition. Amounts deposited in
such cash collateral account shall be invested in Cash Equivalent
Investments, as directed by the VHC.
(iv) NET DEBT PROCEEDS. In the event the Parent or any of its
Subsidiaries receives any Net Debt Proceeds, the Borrowers shall be
obligated, jointly and severally, to make a mandatory prepayment of
the Loans in an amount equal to 100% of such Net Debt Proceeds.
(d) MANDATORY REPAYMENTS FROM COLLECTION ACCOUNTS.
(i) DEPOSITS OF PROCEEDS TO COLLECTION ACCOUNTS. At all times
during which a Notice of Cash Dominion is in effect, the Obligors
shall instruct all Account Debtors and other Persons obligated in
respect of Accounts to make all payments in respect of the Accounts
directly to one or more Collection Accounts. So long as no Event of
Default has occurred and is continuing, all such payments shall be
deposited in a Collection Account. In addition to the foregoing, each
Borrower agrees that if the proceeds of any Accounts shall be received
by it or by any of the other Obligors at any time during which a
Notice of Cash Dominion is in effect, such Borrower shall, and shall
cause each of the other Obligors to, as promptly as possible deposit
such proceeds in a Collection Account. Until so deposited, all such
proceeds shall be held in trust by such Obligors for the
Administrative Agent on behalf of the Secured Parties and shall not be
commingled with any other funds or property of such Obligors. Each
Borrower hereby irrevocably authorizes and empowers the Administrative
Agent, its officers, employees and authorized agents at any time
during which a Notice of Cash Dominion is in effect, to endorse and
sign its name or the name of any other Obligor on all checks, drafts,
money orders or other media of payment so delivered, and such
endorsements or assignments shall, for all purposes, be deemed to have
been made by the applicable Obligor prior to any endorsement or
assignment thereof by the Administrative Agent. The Administrative
Agent may use any convenient or customary means for the purpose of
collecting such checks, drafts, money orders or other media of
payment.
-49-
(ii) WITHDRAWALS TO PAY OBLIGATIONS. On any date on which a
Notice of Dominion is in effect, (A) the aggregate Available Balance
of all Disbursement Accounts in excess of an aggregate amount equal to
(x) if Excess Availability on such date exceeds $5,000,000 and no
Event of Default shall have occurred and be continuing, $5,000,000,
(y) if Excess Availability on such date exceeds $5,000,000 and an
Event of Default shall have occurred and be continuing, $2,500,000 or
(z) if Excess Availability on such date is less than or equal to
$5,000,000, $0 (PROVIDED that the limitations set forth in this CLAUSE
(ii) shall not affect or impair any rights or remedies of the
Administrative Agent under the Pledge and Security Agreement or any
other Loan Document if an Event of Default has occurred and is
continuing), shall be transferred by the Borrowers and their
Subsidiaries into one or more Collection Accounts, (B) the aggregate
Available Balance of all Collection Accounts shall be transferred by
the respective banks maintaining such Collection Accounts into the
Concentration Account and (C) following the transfers referred to in
CLAUSE (B) above, to the extent necessary to pay in full the Loans
and/or to Cash Collateralize in full all Letter of Credit
Outstandings, the Available Balance in the Concentration Account shall
be withdrawn by the Administrative Agent and applied to repay Loans or
Cash Collateralize Letter of Credit Outstandings.
(e) On the Commitment Termination Date, the Borrowers shall be
obligated, jointly and severally, to repay all the Loans, unless,
pursuant to SECTION 8.3, only a portion of all the Loans has been
accelerated (in which case the portion so accelerated shall be so
repaid).
Each prepayment of any Loans made pursuant to this Section shall be without
premium or penalty, except as may be required by SECTION 4.4.
SECTION 3.1.2. APPLICATION. Amounts prepaid pursuant to SECTION 3.1.1 shall
be applied as set forth in this Section.
(a) Subject to CLAUSE (b), each prepayment or repayment of the
principal of the Loans shall be applied, to the extent of such
prepayment or repayment, FIRST, to the principal amount thereof being
maintained as Base Rate Loans, and SECOND, subject to the terms of
SECTION 4.4, to the principal amount thereof being maintained as LIBO
Rate Loans.
(b) each prepayment of the Loans made pursuant to CLAUSES (b),
(c), (d) and (e) of SECTION 3.1.1 shall be applied, FIRST, to the
repayment of any outstanding Revolving Loans, and, SECOND, to the Cash
Collateralization of Letter of Credit Outstandings, if necessary.
SECTION 3.2. INTEREST PROVISIONS. Interest on the outstanding principal
amount of the Loans shall accrue and be payable in accordance with the terms set
forth below.
-50-
SECTION 3.2.1. RATES. Subject to SECTION 2.3.2, pursuant to an
appropriately delivered Borrowing Request or Continuation/Conversion Notice, the
applicable Borrower may elect that the Loans comprising a Borrowing accrue
interest:
(a) for each day on which such Loans are maintained as Base Rate
Loans, at a rate per annum equal to the sum of the Alternate Base Rate
in effect for such day plus the Applicable Margin for such day; and
(b) on that portion of any Loans maintained as a LIBO Rate Loan,
for each day during each Interest Period applicable thereto, at a rate
per annum equal to the sum of the LIBO Rate (Reserve Adjusted) for
such Interest Period plus the Applicable Margin for such day.
All LIBO Rate Loans shall bear interest from and including the first day of the
applicable Interest Period to (but not including) the last day of such Interest
Period at the interest rate determined as applicable to such LIBO Rate Loan.
SECTION 3.2.2. POST-DEFAULT RATES. After the date any principal amount of
any Loan shall have become due and payable (whether on the applicable Stated
Maturity Date, upon acceleration or otherwise), or any other monetary Obligation
of any Borrower shall have become due and payable, the Borrowers shall pay, but
only to the extent permitted by law, interest (after as well as before judgment)
on such amounts at a rate per annum equal to the rate that would otherwise be
applicable to Base Rate Loans plus 2%.
SECTION 3.2.3. PAYMENT DATES. Interest accrued on each Loan shall be
payable, without duplication:
(a) on the Commitment Termination Date;
(b) in the case of a LIBO Rate Loan, on the date of any payment
or prepayment, in whole or in part, of principal outstanding on such
Loan on the principal amount so paid or prepaid;
(c) with respect to Base Rate Loans, on each Quarterly Payment
Date occurring on or after June 30, 2002;
(d) with respect to LIBO Rate Loans, on the last day of each
applicable Interest Period (and, if such Interest Period shall exceed
three months, on the date occurring on each three-month interval
occurring after the first day of such Interest Period); and
(e) with respect to the principal amount of any Base Rate Loans
converted into LIBO Rate Loans on a day when interest would not
otherwise have been payable pursuant to CLAUSE (c), on the date of
such conversion.
Interest accrued on Loans or other monetary Obligations after the date such
amount is due and payable (whether on the stated maturity date, upon
acceleration or otherwise) shall be payable upon demand.
-51-
SECTION 3.3. FEES. The Borrowers agree, jointly and severally, to pay the
fees set forth below. All such fees shall be non-refundable.
SECTION 3.3.1. COMMITMENT FEE. The Borrowers agree, jointly and severally,
to pay to the Administrative Agent, for the account of each Lender, for each day
during the period (including any portion thereof when any of its Commitments are
suspended by reason of the Borrowers' inability to satisfy any condition of
ARTICLE V) commencing on the Closing Date and continuing to but excluding the
Commitment Termination Date, a commitment fee at a rate equal to 0.625% per
annum, on such Lender's Percentage of the difference on such day of the
Revolving Loan Commitment Amount less the Revolving Outstandings (net of
Swingline Loans); PROVIDED, HOWEVER, that during the period from the Closing
Date to but excluding the earlier of (i) the date upon which all of the
obligations of the Borrowers under SECTIONS 7.1.12 and 7.1.13 have been
satisfied in full and (ii) the 60th day immediately following the Closing Date,
the commitment fee shall not accrue or otherwise be payable with respect to that
portion of the Revolving Loan Commitment Amount, if any, which exceeds the
Borrowing Base Amount solely as a result of the exclusion of the orderly
liquidation value of real property assets of the Borrowers from the Borrowing
Base Amount in accordance with CLAUSE (A)(vii) of the definition of "Eligible
PP&E". All commitment fees payable pursuant to this Section shall be calculated
on a year comprised of 360 days and shall be paid by the Borrowers in arrears on
each Quarterly Payment Date, commencing with the first Quarterly Payment Date on
or following June 30, 2002, and on the Commitment Termination Date.
SECTION 3.3.2. LETTER OF CREDIT FEE. The Borrowers agree, jointly and
severally, to pay to the Administrative Agent, (i) for the PRO RATA account of
each Revolving Lender, a Letter of Credit fee for each day on which there shall
be any Letters of Credit outstanding, at a per annum rate equal to (A) the
Applicable Margin for such day for Revolving Loans maintained as LIBO Rate
Loans, in the case of standby Letters of Credit or (B) the Applicable Margin for
such day for Revolving Loans maintained as LIBO Rate Loans less 50 basis points,
in the case of trade Letters of Credit, in each case on the Stated Amount of
each such Letter of Credit, such fees being payable quarterly in arrears on each
Quarterly Payment Date following the date of issuance of each Letter of Credit
and on the Commitment Termination Date and (ii) for the account of the
applicable Issuer, for each day on which there shall be any Letters of Credit
issued by such Issuer outstanding, a fronting fee at a rate per annum of 0.125%
on the undrawn amount of each such Letter of Credit outstanding on such day,
payable quarterly in arrears on each Quarterly Payment Date, commencing with the
first Quarterly Payment Date on or following June 30, 2002.
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO RATE LENDING UNLAWFUL. If any Lender shall determine
(which determination shall, upon notice thereof to the Borrowers and the
Administrative Agent, be prima facie evidence thereof and shall be binding on
the Borrowers absent manifest error) that the introduction of or any change in
or in the interpretation of any law, in each case after the later of (i) the
Closing Date and (ii) the date upon which such Lender shall have become a Lender
hereunder (unless, in the case of this CLAUSE (ii), such introduction or change
shall have similarly affected substantially all of the other Lenders) makes it
unlawful, or any Governmental Authority asserts, after such date, that it is
unlawful, for such Lender to make or continue any Loan as, or
-52-
to convert any Loan into, a LIBO Rate Loan, the obligations of such Lender to
make or continue any Loan as a LIBO Rate Loan, or convert any Loan into a LIBO
Rate Loan shall, upon such determination, forthwith be suspended until such
Lender shall notify the Administrative Agent that the circumstances causing such
suspension no longer exist (with the date of such notice being the
"REINSTATEMENT DATE"), and (a) all LIBO Rate Loans previously made by such
Lender shall automatically convert into Base Rate Loans at the end of the then
current Interest Periods with respect thereto or sooner, if required by such law
or assertion and (b) all Loans thereafter made by such Lender and outstanding
prior to the Reinstatement Date shall be made as Base Rate Loans, with interest
thereon being payable on the same date that interest is payable with respect to
the corresponding Borrowing of LIBO Rate Loans made by Lenders not so affected.
SECTION 4.2. DEPOSITS UNAVAILABLE. If the Administrative Agent shall have
determined that
(a) Dollar deposits in the relevant amount and for the relevant
Interest Period are not available to it in its relevant market; or
(b) by reason of circumstances affecting it's relevant market,
adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBO Rate Loans;
then, upon notice from the Administrative Agent to the Borrowers and the
Lenders, the obligations of all Lenders under SECTION 2.3 and SECTION 2.4 to
make or continue any Loans as, or to convert any Loans into, LIBO Rate Loans
shall forthwith be suspended until the Administrative Agent shall notify the
Borrowers and the Lenders that the circumstances causing such suspension no
longer exist.
SECTION 4.3. INCREASED LIBO RATE LOAN COSTS, ETC. The Borrowers agree,
jointly and severally, to reimburse each Lender for any increase in the cost to
such Lender of, or any reduction in the amount of any sum receivable by such
Lender in respect of, such Lender Commitments and the making of Credit
Extensions hereunder related to the making, continuing or maintaining (or of its
obligation to make, continue or maintain) any Loans as, or of converting (or of
its obligation to convert) any Loans into, LIBO Rate Loans) that arise as a
result of any change in, or the introduction, adoption, effectiveness,
interpretation, reinterpretation or phase-in after the later of (i) the Closing
Date and (ii) the date upon which such Lender shall have become a Lender
hereunder (unless, in the case of this CLAUSE (ii), such change, introduction,
adoption, effectiveness, interpretation, reinterpretation or phase-in shall have
similarly effected substantially all of the Lenders) of, any law or regulation,
directive, guideline, decision or request (whether or not having the force of
law) of any Governmental Authority, except for such changes with respect to
increased capital costs and taxes which are governed by SECTIONS 4.5 and 4.6,
respectively. Each affected Lender shall promptly notify the Administrative
Agent and the Borrowers in writing of the occurrence of any such event, stating
in reasonable detail the reasons therefor and the additional amount required
fully to compensate such Lender for such increased cost or reduced amount. Such
additional amounts shall be payable by the Borrowers directly to such Lender
within five days of its receipt of such notice, and such notice shall be prima
facie evidence thereof and shall be binding upon the Borrowers absent manifest
error.
-53-
SECTION 4.4. FUNDING LOSSES. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the liquidation
or reemployment of deposits or other funds acquired by such Lender to make or
continue any portion of the principal amount of any Loan as, or to convert any
portion of the principal amount of any Loan into, a LIBO Rate Loan, but
excluding loss of margin after the date of any such conversion, repayment,
prepayment or failure to borrow, continue or convert) as a result of
(a) any conversion or repayment or prepayment of the principal
amount of any LIBO Rate Loan on a date other than the scheduled last
day of the Interest Period applicable thereto, whether pursuant to
ARTICLE III or otherwise;
(b) any Loans not being borrowed as LIBO Rate Loans in accordance
with the Borrowing Request therefor; or
(c) any Loans not being continued as, or converted into, LIBO
Rate Loans in accordance with the Continuation/Conversion Notice
therefor;
then, upon the written notice of such Lender to the Borrowers (with a copy to
the Administrative Agent), the Borrowers shall, within five days of its receipt
thereof, pay directly to such Lender such amount as will (in the reasonable
determination of such Lender) reimburse such Lender for such loss or expense.
Such written notice (which shall include calculations thereof in reasonable
detail) shall be prima facie evidence thereof and shall be binding upon the
Borrowers absent manifest error.
SECTION 4.5. INCREASED CAPITAL COSTS. If any change in, or the
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in of, any law or regulation, directive, guideline, decision or request
(whether or not having the force of law) of any Governmental Authority after the
later of (i) the Closing Date and (ii) the date upon which the applicable Lender
becomes a Lender hereunder (unless, in the case of this CLAUSE (ii) such change,
introduction, adoption, effectiveness, interpretation, reinterpretation or
phase-in shall have similarly effected substantially all of the Lenders) affects
or would affect the amount of capital required or expected to be maintained by
any Lender Party or any Person controlling such Lender Party, and such Lender
Party determines (in good faith but in its sole and absolute discretion) that as
a result thereof the rate of return on its or such controlling Person's capital
as a consequence of the Commitments or the Credit Extensions made, or the
Letters of Credit participated in, by such Lender Party is reduced to a level
below that which such Lender Party or such controlling Person could have
achieved but for the occurrence of any such circumstance, then upon notice from
time to time by such Lender Party to the Borrowers, the Borrowers shall be
obligated within five days following receipt of such notice to pay directly to
such Lender Party additional amounts sufficient to compensate such Lender Party
or such controlling Person for such reduction in rate of return. A statement of
such Lender Party as to any such additional amount or amounts (which shall
include calculations thereof in reasonable detail) shall be prima facie evidence
thereof and shall be binding upon the Borrowers absent manifest error. In
determining such amount, such Lender Party may use any method of averaging and
attribution that it (in its sole and absolute discretion) shall deem applicable;
PROVIDED, HOWEVER, that such Lender may not impose materially greater costs on
the Borrowers than on similarly situated borrowers by virtue of any such
averaging or attribution method.
-54-
SECTION 4.6. TAXES. (a) All payments by any Obligor of principal of, and
interest on, the Loans and all other amounts payable hereunder or under any
other Loan Document (including Reimbursement Obligations, fees and expenses)
shall be made free and clear of and without deduction for any present or future
income, excise, stamp or franchise taxes and other taxes, fees, duties,
withholdings or other charges of any nature whatsoever imposed by any taxing
authority from or through which payments originate or are made or deemed made by
or to any Obligor, but excluding (i) any income, excise, stamp or franchise
taxes and other similar taxes, fees, duties, withholdings or other charges
imposed on any Lender or either of the Agents by a jurisdiction under the laws
of which such Lender or Agent is organized or in which its principal executive
office is located, or otherwise as a result of a present or former connection
between the applicable lending office (or office through which it performs any
of its actions as Lender or Agent) of such Lender or Agent and the jurisdiction
of the governmental authority imposing such tax or any political subdivision or
taxing authority thereof or therein (other than any such connection arising
solely from such Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or taken any action to enforce,
this Agreement and any Note) or (ii) any income, excise, stamp or franchise
taxes and other similar taxes, fees, duties, withholdings or other charges to
the extent that they are in effect and would apply as of the date any Person
becomes a Lender or Assignee Lender, or as of the date that any Lender changes
its applicable lending office, to the extent such taxes become applicable as a
result of such change (other than a change in an applicable lending office made
pursuant to SECTION 4.10 below) (such non-excluded items being called "TAXES").
In the event that any withholding or deduction from any payment to be made by
any Obligor hereunder is required in respect of any Taxes pursuant to any
applicable law, rule or regulation, then (i) the applicable Obligor will pay
directly to the relevant taxing authority the full amount required to be so
withheld or deducted, (ii) the applicable Obligor will promptly forward to the
Administrative Agent an official receipt or other documentation available to
such Obligor reasonably satisfactory to the Administrative Agent evidencing such
payment to such authority, and (iii) the Borrowers shall be obligated, jointly
and severally, to pay to the Administrative Agent for the account of the Lenders
such additional amount or amounts as is necessary to ensure that the net amount
actually received by each Lender will equal the full amount such Lender would
have received had no such withholding or deduction been required; PROVIDED,
HOWEVER, that the Obligors shall not be required to pay any such additional
amounts in respect of amounts payable to any Lender that is not organized under
the laws of the United States or a state thereof to the extent that the related
tax is imposed (or an exemption therefrom is not available) as a result of such
Lender or Agent failing to comply with the requirements of CLAUSE (b) of
SECTION 4.6.
Moreover, if any Taxes are directly asserted against either of the Agents
or any Lender with respect to any payment received by such Agents or such Lender
hereunder, such Agent or such Lender may pay such Taxes and the Borrowers will
promptly pay to such Person such additional amount (including any penalties,
interest or expenses) as is necessary in order that the net amount received by
such Person (including any Taxes on such additional amount) shall equal the
amount of such Taxes paid by such Person; PROVIDED, HOWEVER, that the Borrowers
shall not be obligated to make payment to the Lenders or the Agents (as the case
may be) pursuant to this sentence in respect of penalties or interest
attributable to any Taxes, if written demand therefor has not been made by such
Lenders or the Agents within 60 days from the date on which such Lenders or the
Agents knew of the imposition of Taxes by the relevant taxing authority or for
any additional imposition which may arise from the failure of the Lenders or the
Agents to apply
-55-
payments in accordance with the tax law after the Obligors have made the
payments required hereunder; PROVIDED, FURTHER that the Borrowers shall not be
required to pay any such additional amounts in respect of any amounts payable to
any Lender or any Agent (as the case may be) that is not organized under the
laws of the United States or a state thereof to the extent the related Tax is
imposed as a result of such Lender failing to comply with the requirements of
CLAUSE (b) of SECTION 4.6. After the Lenders or the Agents (as the case may be)
learn of the imposition of Taxes, such Lenders and the Agents will act in good
faith to notify the Borrowers of their obligations hereunder as soon as
reasonably possible.
If any Obligor fails to pay any Taxes when due to the appropriate taxing
authority or fails to remit to the Administrative Agent, for the account of the
respective Lenders, the required receipts or other required documentary
evidence, the Borrowers, jointly and severally, shall indemnify the Lenders for
any incremental Taxes, interest or penalties that may become payable by any
Lender as a result of any such failure.
(b) Each Non-U.S. Lender shall, (i) on or prior to the date of the
execution and delivery of this Agreement, in the case of each Lender listed on
the signature pages hereof, or, in the case of an Assignee Lender, on or prior
to the date it becomes a Lender, execute and deliver to the Borrowers and the
Administrative Agent, two or more (as the Borrowers or the Agents may reasonably
request) United States Internal Revenue Service Forms W-8ECI or Forms W-8BEN (or
successor forms) establishing the Lender's exemption from United States federal
withholding tax, or, solely if such Lender is claiming exemption from United
States withholding tax under Section 871(h) or 881(c) of the Code with respect
to payments of "portfolio interest", United States Internal Revenue Service
Forms W-8BEN and a certificate signed by a duly authorized officer of such
Lender representing that such Lender is not a "bank" within the meaning of
Section 881(c)(3)(A) of the Code, or such other form or documents (or successor
forms or documents), appropriately completed, establishing that payments to such
Lender are exempt from withholding or deduction of United States federal
withholding taxes; and (ii) deliver to the Borrowers and the Administrative
Agent two further copies of any such form or documents on or before the date
that any such forms or document expires or becomes obsolete and after the
occurrence of any event requiring a change in the most recent such forms or
document previously delivered by it to the Borrowers. Each Lender and each Agent
agrees, to the extent reasonable and without material cost to it, to provide to
the Borrowers and the Administrative Agent such other applicable forms or
certificates as would reduce or eliminate any Tax otherwise applicable.
(c) If the Borrowers determine in good faith that a reasonable basis exists
for contesting the imposition of a Tax with respect to a Lender or either of the
Agents, the relevant Lender or Agent, as the case may be, shall cooperate with
the Borrowers in challenging such Tax at the Borrowers' expense if requested by
the Borrowers; PROVIDED, HOWEVER, that nothing in this SECTION 4.6 shall require
any Lender or Agent to submit to the Borrowers or any person any tax returns or
any part thereof, or to prepare or file any tax returns other than as such
Lender or Agent at its sole discretion shall determine.
(d) If a Lender or an Agent shall receive a refund (including any offset or
credit from a taxing authority (as a result of any error in the imposition of
Taxes by such taxing authority)) of any Taxes paid by a Borrower pursuant to
CLAUSE (a) above, such Lender or such Agent (as the
-56-
case may be) shall promptly pay such Borrower the amount so received, with
interest from the taxing authority with respect to such refund, net of any tax
liability incurred by such Lender or Agent that is attributable to the receipt
of such refund and such interest.
(e) Each Lender and each Agent agrees, to the extent reasonable and without
material cost to it, to cooperate with the Borrowers to minimize any amounts
payable by the Borrowers under this SECTION 4.6; PROVIDED, HOWEVER, that nothing
in this SECTION 4.6 shall require any Lender or Agent to take any action which,
in the sole discretion of such Lender or Agent, is inconsistent with its
internal policy and legal and regulatory restrictions.
(f) If the Borrowers are required to pay additional amounts to or for
the account of any Lender or Agent pursuant to CLAUSE (a) above as a result
of a change of law occurring after the date hereof, then such Lender or
Agent, at the request of the Borrowers, will change the jurisdiction of its
applicable lending office (or office through which it performs any of its
actions as Agent) if such change (i) would eliminate or reduce any such
additional payment which may thereafter accrue and (ii) is not, in the good
faith determination of such Lender or Agent, otherwise disadvantageous to
such Lender or Agent.
SECTION 4.7. PAYMENTS, COMPUTATIONS, ETC. Unless otherwise expressly
provided in a Loan Document, all payments by the Borrowers pursuant to each Loan
Document shall be made to the Administrative Agent for the PRO RATA account of
the Lender Parties entitled to receive such payment. All payments shall be made
without setoff, deduction or counterclaim not later than 12:30 p.m. on the date
due in same day or immediately available funds to such account as the
Administrative Agent shall specify from time to time by notice to the Borrowers.
Funds received after that time may be deemed by the Administrative Agent to have
been received by the Administrative Agent on the next succeeding Business Day.
Each Borrower shall, at the time it makes any payment under this Agreement,
specify to the Administrative Agent the Loan, Letter of Credit, fees or other
amounts payable by such Borrower hereunder to which such payment is to be
applied (and if it fails to specify or if such application would be inconsistent
with the terms hereof, the Administrative Agent shall, subject to SECTION 4.8,
distribute such payment to the Lender Parties in such manner as the
Administrative Agent may deem appropriate). The Administrative Agent shall
promptly remit in same day funds to each Lender Party its share, if any, of such
payments received by the Administrative Agent for the account of such Lender
Party. All interest and fees shall be computed on the basis of the actual number
of days (including the first day but excluding the last day) occurring during
the period for which such interest or fee is payable over a year comprised of
360 days (or, in the case of interest on a Base Rate Loan (calculated at other
than the Federal Funds Rate), 365 days or, if appropriate, 366 days). Payments
due on other than a Business Day shall (except as otherwise required by
CLAUSE (c) of the definition of "Interest Period") be made on the next
succeeding Business Day and such extension of time shall be included in
computing interest and fees in connection with that payment.
SECTION 4.8. SHARING OF PAYMENTS. If any Lender Party shall obtain any
payment or other recovery (whether voluntary, involuntary, by application of
setoff or otherwise) on account of any Credit Extension or Reimbursement
Obligation (other than pursuant to the terms of SECTIONS 4.3, 4.4, 4.5 or 4.6)
in excess of its PRO RATA share of payments obtained by all Lender Parties, such
Lender Party shall purchase from the other Lender Parties such participations in
-57-
Credit Extensions made by them as shall be necessary to cause such purchasing
Lender Party to share the excess payment or other recovery ratably (to the
extent such other Lender Parties were entitled to receive a portion of such
payment or recovery) with each of them; PROVIDED, HOWEVER, that if all or any
portion of the excess payment or other recovery is thereafter recovered from
such purchasing Lender Party, the purchase shall be rescinded and each Lender
Party which has sold a participation to the purchasing Lender Party shall repay
to the purchasing Lender Party the purchase price to the ratable extent of such
recovery together with an amount equal to such selling Lender Party's ratable
share (according to the proportion of (a) the amount of such selling Lender
Party's required repayment to the purchasing Lender Party in respect of such
recovery TO (b) the total amount so recovered from the purchasing Lender Party)
of any interest or other amount paid or payable by the purchasing Lender Party
in respect of the total amount so recovered. Each Borrower agrees that any
Lender Party purchasing a participation from another Lender Party pursuant to
this Section may, to the fullest extent permitted by law, exercise all its
rights of payment (including pursuant to SECTION 4.9) with respect to such
participation as fully as if such Lender Party were the direct creditor of the
applicable Borrower in the amount of such participation. If under any applicable
bankruptcy, insolvency or other similar law any Lender Party receives a secured
claim in lieu of a setoff to which this Section applies, such Lender Party
shall, to the extent practicable, exercise its rights in respect of such secured
claim in a manner consistent with the rights of the Lender Parties entitled
under this Section to share in the benefits of any recovery on such secured
claim.
SECTION 4.9. SETOFF. Each Lender Party shall, upon the occurrence and
during the continuance of any Default described in CLAUSES (b) through (d) of
SECTION 8.1.9 with respect to the Parent or any Borrower or, with the consent of
the Required Lenders, upon the occurrence and during the continuance of any
other Event of Default, to the fullest extent permitted by law, have the right
to appropriate and apply to the payment of the Obligations to it then due, and
(as security for such Obligations) each Borrower and the Parent hereby grant to
each Lender Party a continuing security interest in, any and all balances,
credits, deposits, accounts or moneys of such Borrower or the Parent then or
thereafter maintained with such Lender Party; PROVIDED, HOWEVER, that any such
appropriation and application shall be subject to the provisions of SECTION 4.8.
Each Lender Party agrees promptly to notify the applicable Borrower or the
Parent, as applicable, and the Administrative Agent after any such setoff and
application made by such Lender Party; PROVIDED, HOWEVER, that the failure to
give such notice shall not affect the validity of such setoff and application.
The rights of each Lender Party under this Section are in addition to other
rights and remedies (including other rights of setoff under applicable law or
otherwise) which such Lender Party may have.
SECTION 4.10. MITIGATION. Each Lender agrees that if it makes any demand
for payment under SECTIONS 4.3, 4.5 or 4.6, or if its obligation to fund LIBO
Rate Loans is suspended under SECTION 4.1, it will use reasonable efforts
(consistent with its internal policy and legal and regulatory restrictions and
so long as such efforts would not be disadvantageous to it, as determined in its
sole discretion) to designate a different lending office if the making of such a
designation would reduce or obviate the need for the Borrowers to make payments
under SECTION 4.3, 4.5 or 4.6. or would alleviate or reduce the effect of any
adoption or change described in SECTION 4.1.
-58-
SECTION 4.11. REPLACEMENT OF LENDERS. Each Lender hereby severally agrees
as set forth in this Section. If any Lender (a "SUBJECT LENDER") (a) makes
demand upon any Borrower for (or if any Borrower is otherwise required to pay)
amounts pursuant to SECTION 4.3, 4.5 or 4.6, (b) gives notice pursuant to
SECTION 4.1 requiring a conversion of such Subject Lender's LIBO Rate Loans to
Base Rate Loans or suspending such Lender's obligation to make Loans as, or to
convert Loans into, LIBO Rate Loans, (c) becomes a Non-Consenting Lender or (d)
becomes a Defaulting Lender, VHC may, within 180 days of receipt by it of such
demand or notice (or the occurrence of such other event causing any Borrower to
be required to pay such compensation) or within 180 days of such Lender becoming
a Non-Consenting Lender or a Defaulting Lender, as the case may be, give notice
(a "REPLACEMENT NOTICE") in writing to the Administrative Agent and such Subject
Lender of its intention to replace such Subject Lender with a financial
institution (a "REPLACEMENT LENDER") designated in such Replacement Notice. If
the Administrative Agent shall, in the exercise of its reasonable discretion and
within 30 days of its receipt of such Replacement Notice, notify VHC and such
Subject Lender in writing that the designated financial institution is
satisfactory to the Administrative Agent (such consent not to be unreasonably
withheld or delayed and not to be required where the Replacement Lender is
already a Lender), then such Subject Lender shall, subject to the payment of any
amounts due pursuant to SECTION 4.4, assign, in accordance with SECTION 11.10,
all of its Commitments, Loans, Notes (if applicable) and other rights and
obligations under this Agreement and all other Loan Documents (including,
without limitation, Reimbursement Obligations) to such designated financial
institution; PROVIDED, HOWEVER, that (i) such assignment shall be without
recourse, representation or warranty and shall be on terms and conditions
reasonably satisfactory to such Subject Lender and such designated financial
institution and (ii) the purchase price paid by such designated financial
institution shall be in the amount of such Subject Lender's Loans and its
Percentage of outstanding Reimbursement Obligations, together with all accrued
and unpaid interest and fees in respect thereof, plus all other amounts
(including the amounts demanded and unreimbursed under SECTIONS 4.3, 4.5 and
4.6), owing to such Subject Lender hereunder. Upon the effective date of an
assignment described above, if requested by the applicable Replacement Lender,
the Borrowers shall issue a replacement Note or Notes, as the case may be, to
such designated financial institution or Replacement Lender, as applicable, and
such institution shall become a "Lender" for all purposes under this Agreement
and the other Loan Documents.
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. INITIAL CREDIT EXTENSION. The obligations of the Lenders and,
if applicable, the Issuer to fund the initial Credit Extension shall be subject
to the prior or concurrent satisfaction of each of the conditions precedent set
forth in this Article.
SECTION 5.1.1. RESOLUTIONS, ETC. The Lead Arranger shall have received from
each Obligor, as applicable, (i) a copy of a good standing certificate, dated a
date reasonably close to the Closing Date, for each such Obligor and (ii) a
certificate, dated the Closing Date, duly executed and delivered by such
Obligor's Secretary or Assistant Secretary, managing member or general partner,
as applicable, as to
(a) resolutions of each such Obligor's Board of Directors (or
other managing body, in the case of an Obligor which is not a
corporation) then in full
-59-
force and effect authorizing, to the extent relevant, the execution,
delivery and performance of each Loan Document to be executed by such
Obligor and the transactions contemplated hereby and thereby;
(b) the incumbency and signatures of those officers, managing
members or general partners, as applicable, authorized to act on
behalf of such Obligor with respect to each Loan Document to be
executed and delivered by such Obligor; and
(c) the full force and validity of each Organic Document (other
than shareholder agreements, voting trusts and other similar
arrangements) of such Obligor and copies thereof.
Each Lender Party may conclusively rely upon such certificates until it shall
have received a further certificate of the Secretary, Assistant Secretary,
managing member or general partner, as applicable, of any such Person canceling
or amending the prior certificate of such Person.
SECTION 5.1.2. TRANSACTION DOCUMENTS. The Agents shall have received (with
copies for each Lender that shall have expressly requested copies thereof)
copies of fully executed versions of the Certificate of Merger and each of the
Senior Note Documents, certified to be true and complete copies thereof by an
Authorized Officer of VHC.
SECTION 5.1.3. CLOSING DATE CERTIFICATE. The Lead Arranger shall have
received the Closing Date Certificate, dated the Closing Date, duly executed and
delivered by an Authorized Officer of VHC.
SECTION 5.1.4. CONSUMMATION OF TRANSACTIONS.
(a) The Agents shall have received evidence reasonably
satisfactory to them that (i) all actions necessary to consummate the
Refinancing and the other Transactions shall have been, or shall
substantially simultaneously be, consummated in accordance with all
applicable laws, (ii) all Indebtedness (except Credit Extensions made
hereunder, the Parent Debentures, the Senior Subordinated Notes and
Indebtedness identified in ITEM 7.2.2(b) of the Disclosure Schedule)
together with all interest, all prepayment premiums and other amounts
due and payable with respect thereto, shall have been or shall
substantially simultaneously be paid in full from the proceeds of the
initial Credit Extension and proceeds of the Senior Note Issuance,
(iii) the Commitments in respect of such Indebtedness shall have been
or shall substantially simultaneously be terminated and (iv) all Liens
securing payment of any such Indebtedness shall have been or shall
substantially simultaneously be released and appropriate payoff
letters shall have been executed and delivered.
(b) The Senior Note Issuance shall have been or shall
substantially simultaneously be consummated pursuant to a public
offering or a Rule 144A private offering on terms and conditions
reasonably satisfactory to the Lead Arranger (including as to events
of default), and VHC shall have received not less than $215,000,000 in
gross cash proceeds as a result of such issuance. The Lead
-60-
Arranger shall be reasonably satisfied with the terms and conditions
of all documentation related to the Senior Note Issuance, including
the Senior Notes and the Senior Note Indenture.
(c) In addition to, and not in limitation of, the foregoing, the
Lead Arranger shall be satisfied with (i) the final structure of the
Transactions, including the Refinancing and the Senior Note Issuance,
(ii) the sources and uses of the proceeds used to effect the
Refinancing and to consummate the other Transactions and (iii) the
terms and conditions of the documents relating to the consummation of
the Transactions.
SECTION 5.1.5. CLOSING FEES, EXPENSES, ETC. The Agents shall have received
for their own account, or for the account of each Lender, as the case may be,
all fees, costs and expenses due and payable pursuant to the Fee Letter, and, if
invoiced at least one Business Day prior to the Closing Date, SECTION 11.3.
SECTION 5.1.6. FINANCIAL INFORMATION, MATERIAL ADVERSE CHANGE, ETC. (a) The
Lead Arranger shall have received a PRO FORMA estimated consolidated balance
sheet (the "PRO FORMA BALANCE SHEET") of VHC and its Subsidiaries, as of the
Closing Date certified as complete and correct in all material respects by the
treasurer, chief financial or accounting Authorized Officer of VHC, giving
effect to the consummation of the Refinancing and the Transactions and all the
transactions contemplated by this Agreement and reflecting the proposed capital
structure of the Borrowers, which shall be reasonably satisfactory to the Lead
Arranger.
(b) Since December 30, 2001, there shall not have been any material adverse
change in the financial condition, operations, assets, business, properties or
prospects of VHC and its Subsidiaries, taken as a whole.
SECTION 5.1.7. COMPLIANCE CERTIFICATE. VHC shall have prepared and
delivered to the Lead Arranger, an initial Compliance Certificate, prepared on a
PRO FORMA basis, duly executed (and with all schedules thereto duly completed)
and delivered by the treasurer, chief financial or accounting Authorized Officer
of VHC, which Compliance Certificate shall reflect an unaudited estimated PRO
FORMA ratio (estimated by VHC in good faith) of (A) total Debt for Borrowed
Money, net of cash and Cash Equivalent Investments, of VHC and its Subsidiaries
as of the Closing Date after giving effect to the Transactions to (B) EBITDA for
the period of twelve consecutive fiscal months ended on or about January 31,
2002 of no more than 4.8:1.0.
SECTION 5.1.8. OPINIONS OF COUNSEL. The Agents shall have received
opinions, dated the Closing Date and addressed to the Agents and all Lenders,
from
(a) Xxxxx, Xxxx & Xxxxxxxx, special
New York counsel to each of
the Obligors, in form and substance reasonably satisfactory to the
Lead Arranger; and
(b) local counsel to each of the Obligors in Delaware, in form
and substance, and from counsel, satisfactory to the Administrative
Agent.
SECTION 5.1.9. [Reserved]
-61-
SECTION 5.1.10. PLEDGE AND SECURITY AGREEMENT. The Lead Arranger shall have
received the Pledge and Security Agreement, dated as of the Closing Date, duly
executed by the Parent and each Borrower, together with
(a) certificates evidencing all of the issued and outstanding
Capital Securities owned by the Parent and the Borrowers in each
Borrower, which certificates in each case shall be accompanied by
undated instruments of transfer duly executed in blank, or, if any
Capital Securities are uncertificated Capital Securities, confirmation
and evidence satisfactory to the Administrative Agent that the
security interest therein has been transferred to and perfected by the
Administrative Agent for the benefit of the Secured Parties in
accordance with Articles 8 and 9 of the UCC and all laws otherwise
applicable to the perfection of the pledge of such Capital Securities;
(b) Filing Statements naming the Parent and each Borrower as a
debtor and the Administrative Agent as the secured party, or other
similar instruments or documents to be filed under the UCC of all
jurisdictions as may be necessary or, in the opinion of the
Administrative Agent, desirable to perfect the security interests of
the Administrative Agent pursuant to such Pledge and Security
Agreement;
(c) proper payoff letters and UCC Form UCC-3 termination
statements, if any, necessary to release all Liens and other rights of
any Person in any collateral described in the Pledge and Security
Agreement previously granted by any Person, together with such other
UCC Form UCC-3 termination statements related thereto as the
Administrative Agent may reasonably request from such Obligors;
(d) certified copies of UCC Requests for Information or Copies
(Form UCC-11), or a similar search report certified by a party
acceptable to the Administrative Agent, dated a date reasonably near
to the Closing Date, listing all effective financing statements which
name the Parent or any Borrower (under its present name and any
previous names) as the debtor, together with copies of such financing
statements (none of which, except as set forth in paragraph (c) and
otherwise evidencing Permitted Liens hereunder, shall cover any
collateral described in any Loan Document).
SECTION 5.1.11. [Reserved]
SECTION 5.1.12. FILING AGENT, ETC. All Uniform Commercial Code financing
statements or other similar financing statements and Uniform Commercial Code
(Form UCC-3) termination statements required pursuant to the Loan Documents
(collectively, the "FILING STATEMENTS") shall have been delivered to CT
Corporation System or another similar filing service company acceptable to the
Administrative Agent (the "FILING AGENT") on behalf of the Administrative Agent.
The Filing Agent shall have acknowledged in a writing satisfactory to the
Administrative Agent and its counsel (i) the Filing Agent's receipt of all
Filing Statements, (ii) that the Filing Statements have either been submitted
for filing in the appropriate filing
-62-
offices or will be submitted for filing in the appropriate offices within ten
days following the Closing Date and (iii) that the Filing Agent will notify the
Administrative Agent and its counsel of the results of such submissions within
30 days following the Closing Date.
SECTION 5.1.13. [Reserved]
SECTION 5.1.14. INSURANCE. The Lead Arranger shall have received
certificates of insurance evidencing the insurance coverage required to be
maintained pursuant to SECTION 7.1.4.
SECTION 5.1.15. DELIVERY OF NOTES. The Administrative Agent shall have
received, for the account of each Lender, such Lender's Note duly executed and
delivered by an Authorized Officer of each Borrower.
SECTION 5.1.16. LITIGATION, ETC. There shall exist no action, suit,
investigation, litigation or proceeding pending or overtly threatened in any
court or before any arbitrator or Governmental Authority that (i) could
reasonably be expected to have a Material Adverse Effect or (ii) contests the
consummation of the Transaction (or any part thereof).
SECTION 5.1.17. GOVERNMENTAL APPROVALS. All material governmental and third
party consents and approvals necessary as of the Closing Date to be obtained by
the Borrowers or the Parent in connection with the Refinancing or any other
Transaction, or this Agreement or any other Loan Document, shall have been
obtained (without the imposition of any conditions that are not acceptable to
the Lead Arranger in its reasonable judgment) and shall remain in effect, and no
law or regulation shall be applicable in the judgment of the Lead Arranger that
restrains, prevents or imposes materially adverse conditions upon the
Transactions.
SECTION 5.1.18. SATISFACTORY LEGAL FORM. All documents executed or
submitted pursuant to this Agreement or any other Loan Document by or on behalf
of any Obligor shall be reasonably satisfactory in form and substance to the
Lead Arranger and its counsel, and the Lead Arranger and its counsel shall have
received all additional information, approvals, opinions, documents or
instruments in connection herewith and the transactions contemplated in
connection herewith as the Lead Arranger or its counsel may reasonably request.
SECTION 5.1.19. PERFECTION CERTIFICATE. The Administrative Agent shall have
received a Perfection Certificate from each Obligor, dated as of the date of the
initial Credit Extension, duly executed and delivered by an Authorized Officer
such Obligor.
SECTION 5.1.20. SOLVENCY CERTIFICATE. The Lead Arranger shall have
received, with copies for each Lender, a Solvency Certificate, dated the Closing
Date.
SECTION 5.1.21. CASH MANAGEMENT ARRANGEMENTS, ETC. Unless otherwise waived
by the Administrative Agent, the Borrowers and the Administrative Agent shall
have entered into cash management, lock-box, blocked account and similar
arrangements satisfactory to the Administrative Agent.
SECTION 5.1.22. INITIAL BORROWING BASE CERTIFICATE. On the Closing Date,
after giving effect to all extensions of credit made under the
Credit Agreement
on such date, the aggregate Revolving Outstandings shall not exceed the
Borrowing Base Amount in effect on such date, and
-63-
the Lead Arranger shall have received a Borrowing Base Certificate, dated as of
the Closing Date, certifying as to the estimated Borrowing Base Amount
(estimated by VHC in good faith) in effect on such date and certifying that the
estimated Excess Availability (estimated by the VHC in good faith) on such date
is not less than $30,000,000.
SECTION 5.1.23. AUDIT OF ACCOUNTS RECEIVABLE, ACCOUNTS PAYABLE, INVENTORY,
ETC. The Lead Arranger shall have received the initial Borrowing Base Audit,
together with such other reports as the Lead Arranger shall reasonably request,
each in form and substance reasonably satisfactory to the Lead Arranger.
SECTION 5.1.24. ASSET APPRAISAL. The Lead Arranger shall have received the
initial Asset Appraisal, together with such other reports and supporting
documentation as the Lead Arranger shall reasonably request, each in form and
substance reasonably satisfactory to the Lead Arranger and, based upon such
Asset Appraisal and the Borrowing Base Audit, shall be satisfied in its sole
discretion with the projected Excess Availability for the period from the
Closing Date through the Commitment Termination Date.
SECTION 5.2. ALL CREDIT EXTENSIONS. The obligation of each Lender and each
Issuer to make any Credit Extension shall be subject to the satisfaction of each
of the conditions precedent set forth below.
SECTION 5.2.1. COMPLIANCE WITH WARRANTIES, NO DEFAULT, ETC. Both before and
after giving effect to any Credit Extension (but, if any Default of the nature
referred to in SECTION 8.1.5 shall have occurred with respect to any other
Indebtedness, without giving effect to the application, directly or indirectly,
of the proceeds thereof) the following statements shall be true and correct:
(a) except in the case of a Default Loan for a Default or Event
of Default which has been identified by a Borrower to the Swingline
Lender and the Administrative Agent in writing, the provisions of
representations and warranties set forth in this Agreement and each
other Loan Document which are Qualified By Materiality shall, in each
case, be true and correct, and the provisions of representations and
warranties set forth in this Agreement and each other Loan Agreement
which are not Qualified By Materiality shall, in each case, be true
and correct in all material respects, in both cases with the same
effect as if then made (unless the facts on which such representations
and warranties are based have been changed by transactions or
circumstances permitted by the Loan Documents or unless stated to
relate solely to an earlier date or dates, in which case such
representations and warranties shall be true and correct in all
material respects as of such earlier date or dates);
(b) except in the case of a Default Loan for a Default or Event
of Default which has been identified by a Borrower to the Swingline
Lender and the Administrative Agent in writing, no Default shall have
then occurred and be continuing; and
-64-
(c) except in the case of an Overadvance Loan, after giving
effect to such Credit Extension, the aggregate Revolving Outstandings
shall not exceed the Borrowing Base Amount then in effect.
SECTION 5.2.2. CREDIT EXTENSION REQUEST, ETC. Except as otherwise provided
in SECTION 2.3.2 or SECTION 2.6.2, the Administrative Agent shall have received
a Borrowing Request, if Loans are being requested, or an Issuance Request, if a
Letter of Credit is being requested or extended. Each of the delivery of a
Borrowing Request or Issuance Request and the acceptance by the applicable
Borrower of the proceeds or other benefits of such Credit Extension shall
constitute a representation and warranty by each Borrower that on the date of
such Credit Extension (both immediately before and after giving effect to such
Credit Extension and the application of the proceeds thereof) the statements
made in SECTION 5.2.1, to the extent applicable, are true and correct.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
In order to induce the Lender Parties to enter into this Agreement and to
make Credit Extensions hereunder, the Parent and each Borrower represent and
warrant to each Lender Party as set forth in this Article.
SECTION 6.1. ORGANIZATION, ETC. Each Obligor is (i) validly organized and
existing and in good standing under the laws of the state or jurisdiction of its
incorporation or organization, (ii) is duly qualified to do business and is in
good standing as a foreign entity in each jurisdiction where the nature of its
business requires such qualification except where the failure to be so qualified
could not reasonably be expected to have a Material Adverse Effect, and (iii)
has full power and authority and holds all requisite governmental licenses,
permits and other approvals to enter into and perform its Obligations under each
Loan Document to which it is a party, to own and hold under lease its property
and to conduct its business substantially as currently conducted by it except
where the failure to do so could not reasonably be expected to have a Material
Adverse Effect.
SECTION 6.2. DUE AUTHORIZATION, NON-CONTRAVENTION, ETC. The execution,
delivery and performance by each Obligor of each Loan Document executed or to be
executed by it, each Obligor's participation in the consummation of the
Transactions are in each case within such Person's powers, have been duly
authorized by all necessary corporate, partnership, limited liability company or
similar action, as the case may be, and do not
(a) (i) contravene such Obligor's Organic Documents, (ii) result
in a default under any contractual restriction binding on or affecting
such Obligor except where such contravention or default could not
reasonably be expected to have a Material Adverse Effect, (iii)
contravene any court decree or order binding on or affecting such
Obligor except where such contravention could not reasonably be
expected to have a Material Adverse Effect or (iv) contravene any law
or governmental regulation binding on or affecting such Obligor except
where such contravention could not reasonably be expected to have a
Material Adverse Effect; or
-65-
(b) result in, or require the creation or imposition of, any Lien
on any Obligor's properties (except as permitted by this Agreement).
SECTION 6.3. GOVERNMENT APPROVAL, REGULATION, ETC. No authorization or
approval or other action by, and no notice to or filing with, any Governmental
Authority or other Person (other than (i) those that have been, or on the
Closing Date will be, duly obtained or made and which are, or on the Closing
Date will be, in full force and effect, (ii) filings and recordings necessary to
perfect the Liens created under the Loan Documents and (iii) authorizations,
approvals, actions, notices and filings whose failure to obtain or make could
not reasonably be expected to have a Material Adverse Effect) is required for
the due execution, delivery or performance by any Obligor of any Loan Document
to which it is a party or the consummation of the Transactions. Neither the
Parent nor any of its Subsidiaries is an "investment company" within the meaning
of the Investment Company Act of 1940, as amended, or a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a "holding
company" or of a "subsidiary company" of a "holding company", within the meaning
of the Public Utility Holding Company Act of 1935, as amended.
SECTION 6.4. VALIDITY, ETC. This Agreement constitutes, and the Notes and
each other Loan Document executed by any Borrower will, on the due execution and
delivery thereof, constitute, valid and binding agreements of such Borrower
enforceable in accordance with its terms; and each Loan Document executed
pursuant hereto by each other Obligor will, on the due execution and delivery
thereof by such Obligor, constitute valid and binding agreements of such Obligor
enforceable in accordance with its terms, in each case with respect to this
SECTION 6.4 subject to applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium and other similar laws relating to or affecting
creditors' rights generally, general equitable principles (whether considered in
a proceeding in equity or at law) and an implied covenant of good faith and fair
dealing.
SECTION 6.5. FINANCIAL INFORMATION. VHC has delivered to the Agents and
each Lender copies of (i) the consolidated balance sheet of VHC as at December
30, 2001 and the related consolidated statements of income and cash flows for
the Fiscal Year then ended, reported on by Ernst & Young LLP (the "BASE
FINANCIAL STATEMENTS") and (ii) the Pro Forma Balance Sheet. The Base Financial
Statements have been prepared in accordance with GAAP consistently applied and
the Pro Forma Balance Sheet has been prepared on a basis consistent with the
basis used to prepare the Base Financial Statements. The Base Financial
Statements present fairly the consolidated financial condition of the
corporations covered thereby as at the date thereof and the results of their
operations for the periods then ended. The Pro Forma Financial Statements
include appropriate PRO FORMA adjustments to give PRO FORMA effect to the
Transaction.
SECTION 6.6. NO MATERIAL ADVERSE CHANGE. Since December 30, 2001, no event,
circumstance or condition has occurred which has had a Material Adverse Effect.
SECTION 6.7. LITIGATION, LABOR CONTROVERSIES, ETC. There is no pending or,
to the knowledge of VHC, threatened action, suit, investigation, litigation,
proceeding or labor controversy (i) except as disclosed in ITEM 6.7 of the
Disclosure Schedule, affecting the Parent or any of its Subsidiaries, or any of
their respective properties, businesses, assets or revenues, which
-66-
could reasonably be expected to have a Material Adverse Effect, or (ii) which
could reasonably be expected to affect the legality, validity or enforceability
of any Loan Document or the Transactions. No material adverse development has
occurred with respect to any action, suit, investigation, litigation, proceeding
or labor controversy disclosed in ITEM 6.7 of the Disclosure Schedule
SECTION 6.8. SUBSIDIARIES. Nether the Parent nor any Borrower has any
Subsidiaries, except those Subsidiaries which are identified in ITEM 6.8 of the
Disclosure Schedule, or which are permitted to have been organized or acquired
in accordance with SECTIONS 7.2.5 or 7.2.10. Subject to the effect of any
transactions permitted by, and consummated pursuant to, SECTIONS 7.2.5, 7.2.10
or 7.2.11, the Parent owns, directly or indirectly, beneficially and of record,
100% of all issued and outstanding shares of Capital Securities of each Borrower
and each Subsidiary Guarantor.
SECTION 6.9. OWNERSHIP OF PROPERTIES. Except to the extent that the failure
to do so could not reasonably be expected to have a Material Adverse Effect, the
Parent and each of its Subsidiaries owns (i) in the case of owned real property,
good and valid fee title to, (ii) in the case of owned personal property, good
and valid title to, or (iii) in the case of leased real or personal property,
valid and enforceable leasehold interests (as the case may be) in, all of its
properties and assets, real and personal, tangible and intangible, of any nature
whatsoever, free and clear in each case of all Liens or claims, except for Liens
and title conditions permitted pursuant to SECTION 7.2.3.
SECTION 6.10. TAXES. The Parent and each of its Subsidiaries has filed all
United States Federal income tax returns and all other material tax returns and
reports required by law to have been filed by it and has paid all material taxes
thereby shown to be due and owing, except any such taxes which are being
diligently contested in good faith by appropriate proceedings and for which
adequate reserves in accordance with GAAP shall have been set aside on its
books.
SECTION 6.11. PENSION AND WELFARE PLANS. During the
twelve-consecutive-month period prior to the Closing Date, no steps have been
taken to terminate any Pension Plan, and no contribution failure has occurred
with respect to any Pension Plan sufficient to give rise to a Lien under
Section 302(f) of ERISA which, in either case is reasonably expected to
lead to a liability of such Pension Plan in excess of $3,000,000. No
condition exists or event or transaction has occurred with respect to any
Pension Plan which could reasonably be expected to result in the incurrence
by the Parent or any member of the Controlled Group of any material
liability, fine or penalty other than such condition, event or transaction
which would not reasonably be expected to have a Material Adverse Effect.
Except as disclosed in ITEM 6.11 of the Disclosure Schedule or otherwise
approved by the Agents, since the date of the last financial statements of
VHC delivered pursuant to CLAUSE (a) or (b) of SECTION 7.1.1, neither the
Parent nor any member of the Controlled Group has increased any contingent
liability with respect to post-retirement benefits under a Welfare Plan,
other than liability for continuation coverage described in Part 6 of Title
I of ERISA, except as would not have a Material Adverse Effect.
SECTION 6.12. ENVIRONMENTAL WARRANTIES. Except as set forth in ITEM 6.12 of
the Disclosure Schedule, or as, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect:
-67-
(a) All facilities and property owned or leased by the Parent or
any of its Subsidiaries are in compliance with all Environmental Laws.
(b) There are no pending or, to the knowledge of the Parent or
any of its Subsidiaries (after due inquiry), threatened (i) written
claims, complaints, notices or requests for information received by
the Parent or any of its Subsidiaries with respect to any alleged
violation of any Environmental Law, or (ii) written complaints,
notices or inquiries to the Parent or any of its Subsidiaries
regarding potential liability under any Environmental Law.
(c) To the best knowledge of VHC, there are no Releases of
Hazardous Materials at, on or under any property owned or leased by
the Parent or any of its Subsidiaries or previously owned or leased by
the Parent or any of its Subsidiaries.
(d) The Parent and its Subsidiaries possess, and are in
compliance with, all permits, certificates, approvals, licenses and
other authorizations relating to environmental matters and necessary
or desirable for their business.
(e) No property now or previously owned or leased by the Parent
or any of its Subsidiaries is listed or, to the best knowledge of VHC
or any of its Subsidiaries, proposed for listing (with respect to
owned property only) on the National Priorities List pursuant to
CERCLA, on the CERCLIS or on any similar state list of sites requiring
investigation or clean-up.
(f) To the best knowledge of VHC, there are no underground
storage tanks, active or abandoned, including petroleum storage tanks,
on or under any property now owned or leased by the Parent or any of
its Subsidiaries.
(g) Neither the Parent nor any of its Subsidiaries has directly
transported or directly arranged for the transportation of any
Hazardous Material to any location which (i) is listed or, to the
knowledge of VHC or any of its Subsidiaries, proposed for listing on
the National Priorities List pursuant to CERCLA, on the CERCLIS or on
any similar state list or (ii) which is the subject of federal, state
or local enforcement actions or other investigations in respect of any
Environmental Laws.
(h) To the best knowledge of VHC, there are no polychlorinated
biphenyls or friable asbestos present at any property now owned or
leased by the Parent or any of its Subsidiaries.
SECTION 6.13. ACCURACY OF INFORMATION. The factual information (other than
projections) heretofore or contemporaneously furnished in writing to any Lender
Party by or on behalf of any Obligor (including information contained in the
Offering Memorandum, dated March 15, 2002, prepared by VHC in connection with
the Senior Note Issuance and in the Confidential Information Memorandum dated
March 2002, prepared by VHC in connection with the credit facilities and
Commitments provided hereunder) in connection with this Agreement, any other
Loan Document, any Loan or other Credit Extension contemplated hereunder or any
-68-
transaction contemplated hereby or in connection herewith (including the
Transactions) taken as a whole, does not contain any untrue statement of a
material fact, and does not omit to state any material fact necessary to make
any such information not misleading in any material respect as of the date such
information is delivered, dated or certified.
SECTION 6.14. REGULATIONS U AND X. No Obligor is engaged in the business of
extending credit for the purpose of purchasing or carrying margin stock, and no
proceeds of any Credit Extensions will be used in violation of F.R.S. Board
Regulation U or Regulation X. Terms for which meanings are provided in F.R.S.
Board Regulation U or Regulation X or any regulations substituted therefor, as
from time to time in effect, are used in this Section with such meanings.
SECTION 6.15. ISSUANCE OF SENIOR NOTES; STATUS OF OBLIGATIONS AS SENIOR
INDEBTEDNESS, ETC. The Subordination Provisions contained in or related to the
Senior Subordinated Notes Indenture are enforceable against the holders thereof
by (or on behalf of) the Lender Parties in respect of any Obligations hereunder
owed to such Lender Parties. All Obligations, including those to pay principal
of and interest (including post-petition interest, whether or not allowed as a
claim under bankruptcy or similar laws) on the Loans, the Reimbursement
Obligations, all other Obligations arising hereunder and all fees, costs and
expenses in connection therewith, constitute "Senior Debt", as defined in the
Senior Subordinated Notes Indenture, and all such Obligations are entitled to
the benefits of the subordination created by the Subordination Provisions set
forth in such document and the documents and instruments related thereto. This
Agreement and the other Loan Documents constitute "Credit Facilities" (as
defined in the Senior Note Indenture) and part of the "New Credit Agreement" (as
defined in the Senior Subordinated Note Indenture). The Parent and each Borrower
each acknowledge and agree that each Lender Party is entering into this
Agreement and the other Loan Documents to which it is a party, and is extending
its Commitments, in reliance upon the effectiveness and enforceability of the
Subordination Provisions of the Senior Subordinated Notes Indenture.
SECTION 6.16. SOLVENCY. On the Closing Date, the Transaction (including the
incurrence of the initial Credit Extensions hereunder, the incurrence by each
applicable Borrower of the Indebtedness represented by the Notes and the Senior
Notes and the application of the proceeds of such Credit Extensions) does not
involve or result in any fraudulent transfer or fraudulent conveyance under the
provisions of Section 548 of the Bankruptcy Code (11 U.S.C. Section 101 ET SEQ.,
as from time to time hereafter amended, and any successor or similar statute) or
any applicable state law respecting fraudulent transfers or fraudulent
conveyances. On the Closing Date, after giving effect to the Transaction, each
of the Borrowers and the Parent is Solvent.
SECTION 6.17. ACCOUNTS. Except to the extent the same could not reasonably
be expected, individually or in the aggregate, to have a Material Adverse
Effect, with respect to each Account, all records, papers and documents relating
thereto (if any) are genuine and in all respects what they purport to be, and
all papers and documents (if any) relating thereto: (i) represent legal, valid
and binding obligations of the respective Account Debtor, subject to adjustments
customary in the business of the Borrowers and their respective Subsidiaries,
with respect to unpaid obligations incurred by such Account Debtor in respect of
the performance of labor or services or the sale or lease and delivery of the
merchandise listed therein, or both, (ii) are the only original writings
evidencing and embodying such obligation of the Account
-69-
Debtor named therein (other than copies created for general accounting purposes)
and are in compliance with all applicable federal, state and local laws and
applicable laws of any relevant foreign jurisdiction.
SECTION 6.18. FAIR LABOR STANDARDS ACT. Except for immaterial violations
the effect of which could not impair the validity, perfection or enforceability
of the Lien of the Loan Documents with respect to any material amount of
Inventory of the Borrowers, all Inventory has or will have been produced in
compliance with the applicable requirements of the Fair Labor Standards Act, as
amended from time to time, or any successor statute, and regulations promulgated
thereunder.
ARTICLE VII
COVENANTS
SECTION 7.1. AFFIRMATIVE COVENANTS. The Parent and each Borrower each
hereby covenants and agrees, for the benefit of each Lender Party, that until
the Termination Date has occurred the Parent and each Borrower will, and will
cause each of their Subsidiaries to, perform or cause to be performed the
covenants and agreements set forth below.
SECTION 7.1.1. FINANCIAL INFORMATION, REPORTS, NOTICES, ETC. VHC will
furnish the Administrative Agent copies of the following financial statements,
reports, notices and information.
(a) As soon as available and in any event within 60 days after
the end of each of the first three Fiscal Quarters of each Fiscal Year
of VHC (or if VHC is required to file such information on a Form 10-Q
with the Securities and Exchange Commission, promptly following such
filing), VHC will provide (i) an unaudited consolidated balance sheet
of VHC and its Subsidiaries as at the end of such Fiscal Quarter, (ii)
the related unaudited consolidated statement of income of such
Borrower and its Subsidiaries for such Fiscal Quarter and (iii) the
related consolidated statements of income and cash flows of VHC and
its Subsidiaries for the portion of VHC's Fiscal Year ended at the end
of such Fiscal Quarter (it being understood that the foregoing
requirement may be satisfied by the delivery of VHC's report to the
Securities and Exchange Commission on Form 10-Q, if any). Such
financial statements shall set forth in comparative form the figures
(A) the corresponding Fiscal Quarter of the immediately preceding
Fiscal Year and (B) the corresponding portion of VHC's immediately
preceding Fiscal Year, and all such financial statements shall be
certified on behalf of VHC as of the end of such Fiscal Quarter by its
treasurer, chief financial or accounting Authorized Officer, as fairly
presenting, in all material respects, the financial condition, results
of operations and cash flows as at the end of, and for, the Fiscal
Quarter and portion of VHC's Fiscal Year covered thereby, in each case
in accordance with GAAP.
(b) As soon as available and in any event within 90 days after
the end of each Fiscal Year of VHC (or if VHC is required to file such
information on a Form 10-K with the Securities and Exchange
Commission, promptly following
-70-
such filing), VHC will provide a consolidated balance sheet of VHC and
its Subsidiaries as at the end of such Fiscal Year, and the related
consolidated statements of income and cash flows of VHC and its
Subsidiaries for such Fiscal Year, setting forth in comparative form
the figures for the immediately preceding Fiscal Year and the figures
for such Fiscal Year in the projected financial information included
in the Confidential Information Memorandum with respect to this
Agreement dated March 2002 (it being understood that the foregoing
requirement may be satisfied by the delivery of VHC's report to the
Securities and Exchange Commission on Form 10-K, if any), all audited
(without any Impermissible Qualification) by Ernst & Young LLP (or
other "Big Five" firm of independent accountants), which shall include
a statement from such accountants that, in performing the examination
necessary to deliver their opinion with respect to the financial
statements of VHC and its Subsidiaries, they have not become aware of
any Event of Default relating to accounting matters that has occurred
and is continuing or, if in the opinion of such accounting firm such
an Event of Default has occurred and is continuing, a statement as to
the nature thereof.
(c) As soon as available and in any event within 30 days after
the end of each of the first eleven fiscal months of each Fiscal Year,
VHC will provide (i) an unaudited consolidated balance sheet of VHC
and its Subsidiaries for such month, (ii) the related unaudited
consolidated statements of income and cash flows of VHC and its
Subsidiaries for such month and (iii) the related consolidated
statements of income and cash flows of VHC and its Subsidiaries for
the portion of VHC's Fiscal Year ended as of such month. Such
financial statements shall set forth in comparative form the figures
for (A) the corresponding month of VHC's immediately preceding Fiscal
Year and (B) the corresponding portion of VHC's immediately preceding
Fiscal Year, and all such financial statements shall be certified, on
behalf of VHC as of the end of such month by its treasurer, chief
financial or accounting Authorized Officer, as fairly presenting, in
all material respects, the financial condition, results of operations
and cash flows as at the end of, and for, the month and portion of
VHC's Fiscal Year covered thereby, in each case in accordance with
GAAP.
(d) Concurrently with the delivery of the financial information
pursuant to CLAUSES (a) and (b), VHC will provide a Compliance
Certificate, executed by the treasurer, chief financial or accounting
Authorized Officer of the VHC.
(e) As soon as possible and in any event within five Business
Days after an executive or financial officer of VHC obtains knowledge
of the occurrence of a Default if such Default is then continuing,
such Borrower shall deliver a statement of an Authorized Officer of
VHC setting forth details of such Default and the action which the
Borrower or any other Obligor has taken and proposes to take with
respect thereto.
(f) As soon as possible and in any event within five Business
Days after an executive or financial officer of VHC obtains knowledge
of (i) the occurrence of any material adverse development with respect
to any litigation, action,
-71-
proceeding or labor controversy described in ITEM 6.7 of the
Disclosure Schedule or (ii) the commencement of any litigation,
action, proceeding or labor controversy of the type and materiality
described in SECTION 6.7, VHC shall deliver notice thereof and, to the
extent the Administrative Agent reasonably requests, copies of
non-privileged documentation relating thereto.
(g) Promptly after the sending or filing thereof, VHC will
provide copies of all reports, notices, prospectuses and registration
statements (other than exhibits thereto and any registration statement
on Form S-8 or its equivalent) which it or any other Obligor files
with the SEC or any national securities exchange.
(h) As soon as practicable after the chief financial officer or
the chief executive officer of VHC or a member of any VHC's Controlled
Group becomes aware of (i) the taking of formal steps in writing to
terminate any Pension Plan which could reasonably be expected to
result in a liability of any Obligor in excess of $3,000,000, (ii) any
failure to make a required contribution to any Pension Plan if such
failure is sufficient to give rise to a Lien under Section 302(f) of
ERISA in an amount in excess of $3,000,000, (iii) the taking of any
action (or the failure to take any action) by any Person with respect
to a Pension Plan which could reasonably be expected to result in the
requirement that any Obligor furnish a bond or other security to the
PBGC or such Pension Plan in an amount in excess of $3,000,000, or
(iv) the occurrence of any event with respect to any Pension Plan
which could reasonably be expected to result in the incurrence by any
Obligor of any liability, fine or penalty in an amount in excess of
$3,000,000, the Parent or VHC, as the case may be, will provide notice
thereof and copies of all documentation relating thereto.
(i) Unless otherwise provided (or required to be provided)
hereunder, promptly following the mailing or receipt of any notice or
report delivered under the terms of the Senior Notes, the Senior
Subordinated Notes or the Parent Debentures, VHC will provide copies
of such notice or report.
(j) Following the occurrence and during the continuance of an
Event of Default, at the reasonable request of the Administrative
Agent, the Borrowers will hire a company reasonably acceptable to the
Administrative Agent to prepare environmental reports on any of real
estate owned by any Obligor.
(k) As soon as available and in any event within 20 days after
the end of each fiscal month, a Borrowing Base Certificate that is
calculated as of the last day of such fiscal month.
(l) As soon as available and in any event within 20 days after
the end of each fiscal month:
(A) a report listing all Accounts of the Borrowers as of the
last Business Day of such month, which report shall include the
amount and
-72-
age of each Account, the name and mailing address of each Account
Debtor, a list of all Account Debtors known to VHC to be subject
to a proceeding described in CLAUSE (b), (c) or (d) of
SECTION 8.1.9, a list of all xxxx and hold transactions, a list
of all customer deposits, an extended terms report, a list of all
chargebacks, a description of all warranty reserves, a report of
sales discount accruals, backlog credit memos, a report of sales
tax accruals, a progress billing report, a reconciliation of
accounts receivable of the Borrowers to the general ledger of VHC
and such other information as the Administrative Agent may
require in order to verify the Eligible Accounts, all in
reasonable detail and in form satisfactory to the Administrative
Agent;
(B) a report listing all Inventory of the Borrowers as of
the last Business Day of such month, which shall include the cost
and location thereof, a report of slow moving Inventory, a
reconciliation of such Inventory to the general ledger of VHC and
such other information as the Administrative Agent may require in
order to verify the Eligible Inventory, all in reasonable detail
and in form satisfactory to the Administrative Agent;
(C) a report listing all accounts payable of the Borrowers
in reasonable detail, including agings and summary availability
by division, and in form satisfactory to the Administrative
Agent; and
(D) a report of any significant Dispositions or purchases or
acquisition of significant assets during such month.
(m) The Borrowers will promptly provide such other financial and
other information as any Lender or Issuer through the Administrative
Agent may from time to time reasonably request with respect to the
financial condition and operations of the Parent, the Borrowers and
their respective Subsidiaries; provided that the Borrowers shall not
be required to provide separate financial statements or Borrowing Base
Amount calculations for individual Borrowers.
SECTION 7.1.2. MAINTENANCE OF EXISTENCE; COMPLIANCE WITH LAWS, ETC. The
Parent and each Borrower will, and will cause each of their respective
Subsidiaries to, preserve and maintain its legal existence (except as otherwise
permitted by SECTION 7.2.10), and, except to the extent that the failure to do
so could not reasonably be expected to have a Material Adverse Effect, comply in
all material respects with all applicable laws, rules, regulations and orders,
including the payment (before the same become delinquent) of all taxes imposed
upon such Person or upon its property except to the extent being diligently
contested in good faith by appropriate proceedings and for which adequate
reserves in accordance with GAAP have been set aside on the books of the
Borrowers or their respective Subsidiaries, as applicable.
SECTION 7.1.3. MAINTENANCE OF PROPERTIES. Except to the extent that the
failure to do so could not reasonably be expected to have a Material Adverse
Effect, the Parent and each Borrower will, and will cause each of their
respective Subsidiaries to, maintain, preserve, protect
-73-
and keep its and their respective properties (other than insignificant
properties) in good repair, working order and condition (ordinary wear and tear
excepted), and make necessary repairs, renewals and replacements so that its
business may be properly conducted at all times, unless such Borrower determines
in good faith that the continued maintenance of any of its properties is no
longer economically desirable, and in each case the failure to do so could not
reasonably be expected to have a Material Adverse Effect.
SECTION 7.1.4. INSURANCE. The Parent and each Borrower will, and will cause
each of their respective Subsidiaries to maintain with responsible insurance
companies insurance with respect to properties and business against casualties
and contingencies in at least the amounts customarily maintained, and against
such risks as are typically insured against in the same general area, by Persons
of comparable size engaged in the same or similar business as the Parent and its
Subsidiaries. Without limiting the foregoing, all insurance policies required
pursuant to this Section shall name the Administrative Agent on behalf of the
Secured Parties as loss payee (in the case of property insurance) or additional
insured (in the case of liability insurance), as applicable, and provide that no
cancellation or modification of the policies will be made without thirty days'
prior written notice to the Administrative Agent.
SECTION 7.1.5. BOOKS AND RECORDS; BORROWING BASE AUDITS.
(a) The Parent and each Borrower will, and will cause each of their
respective Subsidiaries to, keep books and records in accordance with GAAP which
accurately reflect in all material respects all of its business affairs and
transactions and permit (i) each Agent and any of its respective
representatives, and (ii) at any time during which an Event of Default is
continuing, each Lender and any of its respective representatives, in each case
at reasonable times and intervals upon reasonable notice to each Borrower, to
visit each Obligor's offices, to discuss such Obligor's financial matters with
its officers and employees, and its independent public accountants (and the
Parent and each Borrower hereby authorize such independent public accountant to
discuss each Obligor's financial matters with each Agent and each Lender or
their representatives whether or not any representative of such Obligor is
present, so long as the applicable Borrower has been afforded a reasonable
opportunity to be present) and to examine (and photocopy extracts from) any of
its books and records. The cost and expense of each such visit shall be borne by
the applicable Agent or Lender, except that each Agent may make one such visit
each Fiscal Year and the cost and expense thereof shall be borne by the
Borrowers.
(b) Without limiting the generality of the foregoing, upon request of the
Administrative Agent (i) on or before each anniversary of the Closing Date, (ii)
on or before the 20th day immediately following the last day of any Fiscal
Quarter, if, the average of the Excess Availability in effect on the last day of
such Fiscal Quarter and each of the two fiscal months ended most recently prior
to the last day of such Fiscal Quarter is less than $15,000,000 or (iii) at any
time during which any Default or Event of Default has occurred and is
continuing, the Administrative Agent shall have the option to perform (solely
with its own personnel), at the Borrowers' expense (as provided in SECTION
11.3(d)), an audit of the accounts receivable, inventory, accounts payable and
cash accounts of the Borrowers and their respective Subsidiaries, in each case
in a
-74-
manner consistent with the Borrowing Base Audit delivered on or prior to the
Closing Date.
(c) At the request of the Administrative Agent, in its sole discretion
(unless the PP&E Release Event shall have occurred, in which case no such
appraisal shall be required), the Borrowers shall permit the Administrative
Agent or one or more agents to perform, at the Borrowers' expense, an appraisal
of the inventory, property, plant and equipment of the Borrowers, in each case
in a manner consistent with the Asset Appraisal delivered on or prior to the
Closing Date; PROVIDED, HOWEVER, that (i) the Administrative Agent shall not be
entitled to perform more than one such appraisal in any calendar year and (ii)
the cost to the Borrowers of performing such appraisals shall not exceed
$100,000 per appraisal.
SECTION 7.1.6. ENVIRONMENTAL LAW COVENANT. The Parent and the Borrowers
will, and will cause each of their respective Subsidiaries to, (i) use and
operate all of its and their facilities and properties in compliance with all
Environmental Laws, keep all necessary permits, approvals, certificates,
licenses and other authorizations relating to environmental matters in effect
and remain in compliance therewith, and handle all Hazardous Materials in
compliance with all applicable Environmental Laws, unless the failure to do so
could not reasonably be expected to have a Material Adverse Effect, (ii)
promptly notify the Administrative Agent and provide copies upon request of all
written notices of violations, claims or complaints relating to the condition of
its facilities and properties or its compliance with Environmental Laws which
relate to environmental matters that could reasonably be expected to have a
Material Adverse Effect, and shall promptly resolve any non-compliance with
Environmental Laws and (iii) provide such information and certifications which
the Agents may reasonably request from time to time to evidence compliance with
this SECTION 7.1.6. Nothing in this provision shall be construed to limit the
ability to contest in good faith any such notices of violations, written claims
or complaints.
SECTION 7.1.7. USE OF PROCEEDS. The Borrowers will apply the proceeds of
the Credit Extensions as follows:
(a) to consummate the Refinancing;
(b) to pay fees and expenses incurred in connection with the
Transactions; and
(c) for working capital and general corporate purposes of the
Borrowers and the Subsidiary Guarantors, including (in the case of
Loans other than Default Loans) Eligible Acquisitions by such Persons.
SECTION 7.1.8. FUTURE SUBSIDIARIES. Upon any Person becoming, after the
Closing Date, a direct Subsidiary of any Borrower or any Subsidiary Guarantor,
or (in the case of CLAUSE (b) below only) upon any Borrower or any Subsidiary
Guarantor acquiring additional Capital Stock of any existing direct Subsidiary
of such Borrower or Subsidiary Guarantor, VHC shall notify the Agents of such
acquisition, and
-75-
(a) if such new Subsidiary is a U.S. Subsidiary, VHC shall
promptly cause such Subsidiary to execute and deliver to the
Administrative Agent, with counterparts for each Lender, a supplement
to the Subsidiary Guaranty or, in the case of a wholly-owned U.S.
Subsidiary a Joinder Agreement pursuant to SECTION 11.15 hereof,
together in each case with a supplement to the Pledge and Security
Agreement (and, if such Subsidiary owns any real property, to the
extent required by CLAUSE (b) of SECTION 7.1.9 a Mortgage with respect
to all such real property), together with Uniform Commercial Code
financing statements (Form UCC-1) naming the Subsidiary as the debtor
and the Administrative Agent as the secured party, or other similar
instruments or documents, in appropriate form for filing under the
Uniform Commercial Code and any other applicable recording statutes,
in the case of real property, of all jurisdictions as may be necessary
or, in the reasonable opinion of the Administrative Agent, desirable
to perfect the security interest of the Administrative Agent pursuant
to the Pledge and Security Agreement or a Mortgage, as the case may be
(other than the perfection of security interests in motor vehicles,
leasehold interests in real property (except to the extent required by
SECTION 7.1.9) and non-U.S. intellectual property); and
(b) such Borrower or Subsidiary Guarantor shall promptly deliver,
or cause to be delivered, to the Administrative Agent under the Pledge
and Security Agreement (or a supplement thereto) certificates (if any)
representing all of the issued and outstanding shares of Capital Stock
of such Subsidiary owned by such Borrower or such Subsidiary
Guarantor, as the case may be, along with undated stock powers for
such certificates, executed in blank, or, if any securities subject
thereto are uncertificated securities or are held through a securities
intermediary, confirmation and evidence satisfactory to the Agents
that appropriate book entries have been made in the relevant books or
records of a securities intermediary or the issuer of such securities,
as the case may be, or other appropriate steps shall have been taken
under applicable law resulting in the perfection of the security
interest granted in favor of the Administrative Agent pursuant to the
terms of the Pledge and Security Agreement;
together, in each case, with such opinions, in form and substance and from
counsel satisfactory to the Agents, as the Agents may reasonably require;
PROVIDED that not more than 65% of the Voting Securities of any Non-U.S.
Subsidiary shall be required to be pledged unless such Non-U.S. Subsidiary is
treated for U.S. federal income tax purposes as a branch of a Borrower or is a
partnership in which the partners are Borrowers.
SECTION 7.1.9. FUTURE LEASED PROPERTY AND FUTURE ACQUISITIONS OF REAL
PROPERTY: FUTURE ACQUISITION OF OTHER PROPERTY. (a) Prior to entering into any
new lease of real property or renewing any existing lease of real property
following the Closing Date, each Borrower shall, and shall cause each of its
U.S. Subsidiaries to, use its (and their) best efforts (which shall not require
the expenditure of cash or the making of any material concessions under the
relevant lease) to deliver to the Administrative Agent a waiver executed by the
lessor of any real property that is to be leased by such Borrower or such U.S.
Subsidiary for a term in excess of one year in any state whose statutes grant
such lessor a "landlord's" (or similar) Lien which is superior to the
Administrative Agent's, to the extent the value of any personal property of any
Borrower or any
-76-
of its U.S. Subsidiaries to be held at such leased property exceeds (or it is
anticipated that the value of such personal property will, at any point in time
during the term of such leasehold term, exceed) $5,000,000.
(b) In the event that any Borrower or any of their respective U.S.
Subsidiaries shall acquire any real property having a value as determined in
good faith by the Administrative Agent in excess of $1,000,000, such Borrower or
the applicable U.S. Subsidiary shall, promptly after such acquisition, execute a
Mortgage and provide the Administrative Agent with (i) evidence of the
completion (or satisfactory arrangements for the completion) of all recordings
and filings of such Mortgage as may be necessary or, in the reasonable opinion
of the Administrative Agent, desirable effectively to create a valid, perfected
first priority Lien, subject to Liens permitted by SECTION 7.2.3, against the
properties purported to be covered thereby, (ii) mortgagee's title insurance
policies in favor of the Agents and the Secured Parties in amounts and in form
and substance and issued by insurers, reasonably satisfactory to the Agents,
with respect to the property purported to be covered by such Mortgage, insuring
that title to such property is marketable and that the interests created by the
Mortgage constitute valid first Liens thereon free and clear of all defects and
encumbrances other than as approved by the Agents, and such policies shall, if
available on commercially reasonable terms, also include a revolving credit
endorsement and such other endorsements as the Agents shall request and shall be
accompanied by evidence of the payment in full of all premiums thereon, and
(iii) such other approvals, or documents as the Agents may reasonably request.
(c) In accordance with the terms and provisions of the Loans Documents,
provide the Administrative Agent with evidence of all recordings and filings as
may be necessary or, in the reasonable opinion of the Administrative Agent,
desirable to create a valid, perfected first priority Lien, subject to the Liens
permitted by SECTION 7.2.3, against all property acquired after the Closing Date
(excluding motor vehicles, leases of real property and non-U.S. intellectual
property).
SECTION 7.1.10. COLLECTION OF ACCOUNTS. Each Borrower shall use
commercially reasonable efforts to cause to be collected from each Account
Debtor, as and when due, any and all amounts owing under or on account of each
Account (including, without limitation, Accounts which are delinquent, such
Accounts to be collected in accordance with lawful collection procedures) and
shall apply forthwith upon receipt thereof all such amounts as are so collected
to the outstanding balance of such Account, except that an Obligor may allow in
the ordinary course of business as adjustments to amounts owing under its
Accounts (i) an extension or renewal of the time or times of payment, or
settlement for less than the total unpaid balance, which such Obligor finds
appropriate in accordance with sound business judgment and (ii) a refund or
credit due as a result of discounts, over xxxxxxxx and miscellaneous credits,
all in accordance with such Obligor's ordinary course of business. The costs and
expenses (including, without limitation, attorneys' fees) of collection, whether
incurred by an Obligor or the Administrative Agent, shall be borne by such
Obligors.
SECTION 7.1.11. NOTIFICATION TO ACCOUNT DEBTORS. Upon the request of the
Administrative Agent at any time following the occurrence of and during the
continuance of an Event of Default, each Borrower will promptly notify each
Account Debtor in respect of any Account that any payments due or to become due
in respect of such Account are to be made in
-77-
the name of the applicable Obligor to such address and post office box as shall
be specified by the Administrative Agent. Each such payment shall, upon receipt
by the Administrative Agent, be deposited in the Concentration Account. Upon
request of the Administrative Agent at any time following the occurrence of and
during the continuance of an Event of Default, each Borrower shall promptly
notify (and each Borrower hereby authorizes the Administrative Agent so to
notify) each Account Debtor in respect of any Account that such Account has been
assigned to the Administrative Agent for the benefit of the Secured Parties and
that any payments due or to become due in respect of such Account are to be made
directly to the Administrative Agent in accordance with SECTION 3.1.1(d).
SECTION 7.1.12. MORTGAGES. Each Borrower shall deliver to the
Administrative Agent on or before the 60th day following the Closing Date a
Mortgage, with respect to each of the properties identified in SCHEDULE III duly
executed and delivered by the applicable Obligor, together with
(a) evidence of the completion (or reasonably satisfactory
arrangements for the completion) of all recordings and filings of each
Mortgage as may be necessary or, in the reasonable opinion of the Lead
Arranger, desirable to create a valid, perfected first priority Lien,
subject to SECTION 7.2.3, against the properties purported to be
covered thereby;
(b) mortgagee's title insurance policies in favor of the
Administrative Agent for the benefit of the Secured Parties in form
and substance and issued by insurers, reasonably satisfactory to the
Lead Arranger, with respect to the property set forth on SCHEDULE III
in the amounts set forth thereon, insuring that title to such property
is marketable and that the interests created by such Mortgage
constitute valid first Liens thereon free and clear of all defects and
encumbrances other than as approved by the Lead Arranger and, if
required by the Lead Arranger and if available on commercially
reasonable terms, revolving credit endorsement, comprehensive
endorsement, variable rate endorsement, access and utilities
endorsements, mechanic's lien endorsement and such other endorsements
as the Lead Arranger shall reasonably request and shall be accompanied
by evidence of the payment in full of all premiums thereon; and
(c) such other environmental reports, approvals, or documents as
the Lead Arranger may reasonably request in form and substance
reasonably satisfactory to the Lead Arranger.
SECTION 7.1.13. PHASE I ENVIRONMENTAL REPORTS. On or prior to the 30th day
immediately following the Closing Date, the Borrowers shall deliver or cause to
be delivered to the Administrative Agent environmental and hazardous substance
analyses and reports from Xxxxxxx Group Services, Inc. with respect to each of
the properties listed on SCHEDULE III, in each case in scope, form and substance
satisfactory to the Administrative Agent, together with reliance letters with
respect thereto.
SECTION 7.1.14. DEPOSIT ACCOUNT CONTROL AGREEMENTS. On or prior to the 30th
day immediately following the Closing Date, the Borrowers shall deliver to the
Administrative Agent
-78-
deposit account control agreements and other documents and agreements, in each
case duly executed by the applicable Borrower and the applicable bank, as the
Administrative Agent deems necessary or desirable to grant to the Administrative
Agent, for the benefit of the Secured Parties, control over, and a perfected
security interest in, each of the Deposit Accounts listed on SCHEDULE VI hereto;
PROVIDED that the Borrowers' obligations under this SECTION 7.1.14 shall be
deemed to be satisfied if, after such 30th day, (i) each and every Deposit
Account maintained with U.S. Bank National Association is subject to a deposit
account control agreement which is in full force and effect and effective to
provide to the Administrative Agent for the benefit of the Secured Parties
control of each such Deposit Account and (ii) the aggregate amount of funds on
deposit in Deposit Accounts maintained with banks other than U.S. Bank National
Association with respect to which a deposit account control agreement has not
been so delivered does not exceed $200,000 for any period of three consecutive
Business Days.
SECTION 7.2. NEGATIVE COVENANTS. The Parent and each Borrower each hereby
covenant and agree with each Lender, each Issuer, each Agent and each other
Lender Party that, until the Termination Date has occurred, the Parent and each
Borrower will, and will cause each of their respective Subsidiaries to, perform
or cause to be performed the covenants and agreements set forth below.
SECTION 7.2.1. BUSINESS ACTIVITIES.
(a) Each Borrower will not, and will not permit any of their
respective Subsidiaries to, engage in any business activity except
those business activities engaged in on the date of this Agreement and
activities which may be incidental, similar or reasonably related
thereto.
(b) The Parent will not (i) hold any assets other than the
Capital Securities of VHC and cash and Cash Equivalent Investments
referred to in CLAUSE (iii)(E) below, (ii) have any material
liabilities other than (A) liabilities under the Loan Documents (B)
liabilities under the Parent Debentures, (C) liabilities for taxes
incurred in the ordinary course of business and (D) Contingent
Liabilities in respect of the Senior Notes and the Senior Subordinated
Notes or (iii) engage in any business or activity other than (A)
owning the Capital Securities of VHC (including purchasing additional
Capital Securities after the Closing Date) and activities incidental
or related thereto or to the maintenance of the corporate existence of
the Parent or compliance with applicable law, (B) acting as a
Guarantor hereunder and pledging its assets to the Administrative
Agent, for the benefit of the Lenders, pursuant to the Loan Documents
to which it is a party, (C) acting as the issuer of the Parent
Debentures, (D) issuing its Capital Securities, (E) holding cash
received as Restricted Payments permitted under SECTION 7.2.6 or as
proceeds of its issuance of Capital Securities and investing and
reinvesting such cash in Cash Equivalent Investments, (F) utilizing
Net Equity Proceeds for Permitted Purposes and (G) acting as a
guarantor under the Senior Notes and/or the Senior Subordinated Notes
and otherwise carrying out its obligations under the Senior Note
Documents and Senior Subordinated Note Documents to the extent not
otherwise in contravention of this Agreement.
-79-
SECTION 7.2.2. INDEBTEDNESS. Neither the Parent nor any Borrower will, or
will permit any of their respective Subsidiaries to, create, incur, assume or
permit to exist any Indebtedness, other than:
(a) Indebtedness in respect of the Obligations;
(b) Indebtedness existing as of the Closing Date which is
identified in ITEM 7.2.2(b) of the Disclosure Schedule, and
refinancings and replacements of such Indebtedness in a principal
amount not in excess of the principal amount being refinanced or
replaced; PROVIDED, HOWEVER, that after giving effect to any such
refinancings the Average Life of such Indebtedness shall not be less
than the Average Life of such Indebtedness immediately prior to such
refinancings;
(c) Indebtedness incurred by a Borrower or any of its
Subsidiaries that is represented by (i) Capitalized Lease Liabilities,
mortgage financings or purchase money obligations (but only to the
extent otherwise permitted by SECTION 7.2.7); PROVIDED that the
maximum aggregate amount of all Indebtedness permitted under this
CLAUSE (c) shall not at any time exceed $20,000,000 or (ii)
Capitalized Lease Liabilities incurred in connection with a sale and
leaseback transaction permitted under SECTION 7.2.15;
(d) intercompany Indebtedness of (x) any Subsidiary of VHC owing
to VHC or any of its Subsidiaries or (y) VHC to any of its
Subsidiaries, which Indebtedness: (i) shall be evidenced by one or
more promissory notes in form and substance satisfactory to the Agents
which (except in the case of any such notes held by a Non-U.S.
Subsidiary) have been duly executed and delivered to (and indorsed to
the order of) the Administrative Agent in pledge pursuant to the
Pledge and Security Agreement, and (ii) shall not be forgiven or
otherwise discharged for any consideration other than payment (Dollar
for Dollar) in cash unless the Agents otherwise consent;
(e) the Senior Notes and the Senior Subordinated Notes of VHC in
a principal amount not to exceed $315,000,000, and unsecured
Contingent Liabilities of the Borrowers and the Guarantors in respect
thereof, so long as, in the case of Contingent Liabilities in respect
of the Senior Subordinated Notes, such Contingent Liabilities are
subordinated to the Obligations on the same terms as the Senior
Subordinated Notes, and refinancings of such Senior Notes, Senior
Subordinated Notes and related Contingent Liabilities; PROVIDED,
HOWEVER, that any such refinancing must be on No More Favorable Terms
And Conditions than the Indebtedness being refinanced;
(f) the Parent Debentures in an aggregate principal amount at
maturity not to exceed approximately $125,000,000 and refinancings
thereof; PROVIDED, HOWEVER, that any such refinancing must be on No
More Favorable Terms and Conditions than the Indebtedness being
refinanced;
-80-
(g) Assumed Indebtedness of a Borrower or any of its Subsidiaries
in connection with Eligible Acquisitions in an aggregate amount not to
exceed $25,000,000 at any one time outstanding;
(h) Hedging Obligations of any Borrower or any of its
Subsidiaries entered into by any Borrower or any such Subsidiary to
hedge against interest rate, currency exchange rate or commodity price
risk, in each case arising in the ordinary course of business of any
Borrower and its Subsidiaries and not for speculative purposes; and
(i) other unsecured Indebtedness of the Borrowers and their
respective Subsidiaries in an aggregate amount at any time outstanding
not to exceed $25,000,000;
PROVIDED, HOWEVER, that no Indebtedness otherwise permitted by CLAUSE (c), (d)
(as such CLAUSE (d) relates to loans made by a Borrower to Subsidiaries of VHC
which are not Borrowers or Subsidiary Guarantors), (g) or (h) may be incurred or
assumed, as applicable, if, after giving effect to the incurrence thereof, any
Default shall have occurred and be continuing, and PROVIDED, FURTHER, HOWEVER,
that all such Indebtedness of the type described in CLAUSE (d)(y) above that is
owed to Subsidiaries which are not Borrowers or Subsidiary Guarantors, shall be
subordinated, in writing, to the Obligations upon terms satisfactory to the
Agents.
SECTION 7.2.3. LIENS. The Parent and each Borrower will not, and will not
permit any of their respective Subsidiaries to, create, incur, assume or permit
to exist any Lien upon any of its property (including Capital Securities of any
Person), revenues or assets, whether now owned or hereafter acquired, except:
(a) Liens securing payment of the Obligations;
(b) Liens, exceptions and title conditions existing as of the
Closing Date and disclosed in ITEM 7.2.3(b) of the Disclosure Schedule
securing Indebtedness outstanding as of the Closing Date and described
in CLAUSE (b) of SECTION 7.2.2; PROVIDED, HOWEVER, that no such Lien
shall encumber any property other than that encumbered as of the
Closing Date, and the amount of Indebtedness secured by such Lien
shall not increase from that existing on the Closing Date (as such
Indebtedness may have been permanently reduced subsequent to the
Closing Date);
(c) Liens securing Indebtedness of the type permitted under
CLAUSE (c) of SECTION 7.2.2; PROVIDED, HOWEVER, that (i) such Lien is
granted within 180 days after such Indebtedness is incurred and (ii)
such Lien secures only the assets that are the subject of the
Indebtedness referred to in such clause;
(d) Liens in favor of carriers, warehousemen, mechanics,
materialmen, contractors, laborers, landlords and similar liens
incurred in the ordinary course of business for amounts not overdue
for a period of more than 30 days or being contested in good faith by
appropriate proceedings and for which adequate reserves in accordance
with GAAP shall have been set aside on its books;
-81-
(e) Liens incurred or deposits made in the ordinary course of
business in connection with worker's compensation, unemployment
insurance or other forms of governmental insurance or benefits, or to
secure performance of tenders, statutory or regulatory obligations,
bids, leases, insurance obligations or contracts or other similar
obligations (other than for Debt for Borrowed Money) entered into in
the ordinary course of business or to secure obligations on surety and
appeal bonds or performance bonds or similar obligations;
(f) judgment Liens that are being appealed in good faith or have
been in existence for less than 30 days after the entry thereof or
with respect to which execution has been stayed or the payment of
which is covered in full (subject to a customary deductible) by
insurance maintained with responsible insurance companies and which do
not result in an Event of Default under SECTION 8.1.6;
(g) (i) Liens with respect to minor imperfections of title and
easements, rights-of-way, restrictions, reservations, permits,
servitudes and other similar encumbrances on real property and
fixtures which do not materially detract from the value or materially
impair the use by any Obligor in the ordinary course of their business
of the property subject thereto; (ii) in the case of any property
covered by a Mortgage, encumbrances disclosed in the title insurance
policy issued to, and reasonably approved by, the Agents insuring the
Mortgage and (iii) in the case of any property covered by a Mortgage,
upon certification by the applicable Borrower that an easement,
right-of-way, restriction, reservation, permit, servitude or other
similar encumbrance granted or to be granted by such Borrower or any
Subsidiary of such Borrower does not materially detract from the value
of or materially impair the use by such Borrower or such Subsidiary in
the ordinary course of its business of the property subject to or to
be subject to such encumbrance, the Administrative Agent shall execute
such documents as shall be reasonably requested to subordinate its
Mortgage to such encumbrance, leases or subleases granted by any
Borrower or any of its Subsidiaries to any other Person in the
ordinary course of business;
(h) leases or subleases granted by any Borrower or any of its
Subsidiaries to any other Person in the ordinary course of business;
(i) Liens in the nature of trustees' Liens granted pursuant to
any indenture governing any Indebtedness permitted by SECTION 7.2.2,
in each case in favor of the trustee under such indenture and securing
only obligations to pay compensation to such trustee, to reimburse its
expenses and to indemnify it under the terms thereof;
(j) Liens of sellers of goods to a Borrower or any of its
Subsidiaries arising under Article 2 of the Uniform Commercial Code or
similar provisions of applicable law in the ordinary course of
business, covering only the goods sold and securing only the unpaid
purchase price for such goods and related expenses;
-82-
(k) Liens on property forming a part of an Eligible Acquisition
securing Assumed Indebtedness of the Borrowers and their respective
Subsidiaries pursuant to CLAUSE (g) of SECTION 7.2.2; PROVIDED,
HOWEVER, that (i) any such Liens attach only to the property acquired
in connection with such Assumed Indebtedness and shall not attach to
any assets of any Borrower or any of its Subsidiaries then existing or
which arise after the date thereof (other than proceeds of the
property otherwise permitted to be subject to such Lien) and (ii) the
Assumed Indebtedness and other secured Indebtedness of the Borrowers
and their respective Subsidiaries secured by any such Lien shall not
exceed 100% of the fair market value of the assets being acquired in
connection with such Assumed Indebtedness;
(l) Liens for taxes, assessments and other governmental charges
or levies (including Liens pursuant to Section 107(e) of CERCLA or
other similar laws) not at the time delinquent or thereafter payable
without penalty or being contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP
shall have been set aside on its books; and
(m) other Liens securing Indebtedness and other obligations in an
aggregate principal amount not to exceed $2,000,000.
SECTION 7.2.4. FINANCIAL CONDITION AND OPERATIONS.
(a) LEVERAGE RATIO. VHC will not permit the Leverage Ratio as of
the end of any Fiscal Quarter occurring during any period set forth
below to be greater than the ratio set forth opposite such period:
PERIOD LEVERAGE RATIO
June 15, 2002 through July 15, 2003 6.00 to 1.00
July 16, 2003 through October 15, 2003 5.75 to 1.00
October 16, 2003 through July 15, 2004 5.50 to 1.00
July 16, 2004 through October 15, 2004 5.25 to 1.00
October 16, 2004 through July 15, 2005 4.50 to 1.00
July 16, 2005 through October 15, 2005 4.25 to 1.00
October 16, 2005 through July 15, 2006 3.65 to 1.00
July 16, 2006 through October 15, 2006 3.50 to 1.00
October 16, 2006 and thereafter 3.00 to 1.00
-83-
(b) FIXED CHARGE COVERAGE RATIO. VHC will not permit the Fixed
Charge Coverage Ratio as of the end of any Fiscal Quarter occurring
during any period set forth below to be less than the ratio set forth
opposite such period:
Fixed Charge
Coverage
Period Ratio
------ ------------
June 15, 2002 through January 15, 2004 1.00 to 1.00
January 16, 2004 through July 15, 2005 1.05 to 1.00
July 16, 2005 and thereafter 1.10 to 1.00
SECTION 7.2.5. INVESTMENTS. The Parent and each Borrower will not, and will
not permit any of their respective Subsidiaries to, purchase, make, incur,
assume or permit to exist any Investment in any other Person, except:
(a) Investments existing on the Closing Date and identified in
ITEM 7.2.5(a) of the Disclosure Schedule;
(b) cash and Cash Equivalent Investments; PROVIDED, HOWEVER, that
if a Notice of Cash Dominion is in effect, the aggregate amount of
cash and Cash Equivalent Investments held by the Borrowers and their
respective Subsidiaries (other than cash and Cash Equivalent
Investments being held for application to a Permitted Purpose) shall
not exceed (i) $2,500,000 for any period of 5 or more consecutive days
during which Excess Availability is greater than $5,000,000 and an
Event of Default has occurred and is continuing, (ii) $5,000,000 for
any period of 5 or more consecutive days during which Excess
Availability is greater than $5,000,000 but no Event of Default has
occurred or is continuing or (iii) $0 for any period during which
Excess Availability is less than or equal to $5,000,000;
(c) without duplication, Investments permitted as Indebtedness
pursuant to SECTION 7.2.2 (excluding SECTION 7.2.2(d), in the case of
Indebtedness owed by Subsidiaries which are not Subsidiary
Guarantors);
(d) Investments received in connection with the bankruptcy or
reorganization of, or settlement of delinquent Accounts and disputes
with, customers and suppliers, in each case in the ordinary course of
business;
(e) Investments made by the Borrowers and their respective
Subsidiaries constituting Capital Expenditures permitted pursuant to
SECTION 7.2.7;
(f) Investments by way of contributions to capital or purchases
of Capital Securities by the Parent in a Borrower or any Subsidiary of
a Borrower, or by a Borrower or any Subsidiary of a Borrower in a
Borrower or any Subsidiary of a Borrower; PROVIDED, HOWEVER, that the
aggregate amount of Investments under this clause in Subsidiaries that
are not Borrowers or Subsidiary Guarantors, when
-84-
taken together with the aggregate amount of all Restricted Payments
made by Subsidiaries which are not Borrowers or Subsidiary Guarantors
in accordance with SECTION 7.2.6(a)(iii)(B) hereof, shall not exceed
$2,500,000 in the aggregate over the term of this Agreement;
(g) Investments made by VHC or any of its Subsidiaries, solely
with proceeds which have been contributed, directly or indirectly
after the Closing Date, to VHC or such Subsidiary as cash equity from
holders of the Parent's common stock for the purpose of making an
Eligible Acquisition identified in a notice to the Agents on or prior
to the date that such capital contribution is made;
(h) Investments to the extent the consideration received pursuant
to CLAUSE (c)(i) of SECTION 7.2.11 is not all cash;
(i) non-cash loans or advances (including cash loans and advances
pursuant to transactions in which the cash loaned or advanced is
simultaneously repaid in full to the lender thereof directly or
indirectly for the purchase price of the applicable common stock of
the Parent) to officers, directors and employees of the Borrowers and
their respective Subsidiaries that are made for the sole purpose of
purchasing common stock of the Parent; and
(j) other Investments (exclusive of any such Investments made in
or in respect of Subsidiaries of the Parent which are not Borrowers or
Subsidiary Guarantors) which constitute Eligible Acquisitions in an
amount not to exceed $25,000,000 for any such Investment or
$75,000,000 in the aggregate during the term of this Agreement;
PROVIDED, HOWEVER, that
(k) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may
continue to be held notwithstanding that such Investment if made
thereafter would not comply with such requirements; and
(l) no Investment otherwise permitted by CLAUSES (c), (f) (in
each case, to the extent constituting Investments in a Subsidiary
which is not a Borrower or a Subsidiary Guarantor) or (j) shall be
permitted to be made if any Default has occurred and is continuing or
would result therefrom.
SECTION 7.2.6. RESTRICTED PAYMENTS, ETC. No Borrower will or will permit
any of its Subsidiaries to, declare or make a Restricted Payment, or make any
deposit for any Restricted Payment, other than the following:
(a) Restricted Payments (i) made by Subsidiaries of a Borrower or
a Subsidiary Guarantor to any Borrower or any Subsidiary Guarantor,
(ii) made by Subsidiaries of the Parent which are not Borrowers or
Subsidiary Guarantors to other Subsidiaries of the Parent which are
not Borrowers or Subsidiary Guarantors or (iii) in the case of
Subsidiaries which are not wholly-owned, made
-85-
by such Subsidiaries (A) on a pro rata basis to each holder of Capital
Securities of the applicable class of such Subsidiary or (B) in
connection with non-pro rata redemptions of its Capital Securities
(other than Capital Securities held by the Borrowers and their
respective Subsidiaries); PROVIDED that the aggregate amount of
Restricted Payments made pursuant to this CLAUSE (B) by Subsidiaries
which are not Borrowers or Subsidiary Guarantors, when taken together
with the aggregate amount of all Investments made in Subsidiaries
which are not Borrowers or Subsidiary Guarantors in accordance with
SECTION 7.2.5(f) hereof, shall not exceed $2,500,000 over the term of
this Agreement;
(b) Restricted Payments made by VHC to the Parent to the extent
necessary to enable the Parent to (i) pay its overhead expenses
(including fees in respect of advisory services) in an amount not to
exceed $500,000 (which amount shall include not more than $250,000 in
respect of advisory services) in the aggregate in any Fiscal Year,
(ii) make payments in respect of taxes, (iii) so long as (A) no
Default shall have occurred and be continuing on the date such
Restricted Payment is declared or to be made, nor would a Default
result from the making of such Restricted Payment, (B) after giving
effect to the making of such Restricted Payment VHC shall be in PRO
FORMA compliance with the covenants set forth in SECTION 7.2.4 for the
most recent full Fiscal Quarter immediately preceding the date of the
payment of such Restricted Payment for which the relevant financial
information has been delivered pursuant to CLAUSE (a) or CLAUSE (b) of
SECTION 7.1.1, and (C) an Authorized Officer of VHC shall have
delivered a certificate to the Agents in form and substance
satisfactory to the Agents (including a calculation of VHC's
compliance with the covenants set forth in SECTION 7.2.4) certifying
as to the accuracy of CLAUSES (b)(iii)(A) and (b)(iii)(B) above,
purchase, redeem, acquire or otherwise retire for value shares of
Capital Securities of the Parent held by directors, officers or
employees of the Parent or any of its Subsidiaries, or options on any
such shares or related stock appreciation rights or similar securities
owned by such directors, officers or employees (or their estates or
beneficiaries under their estates), in all cases only upon death,
disability, retirement, termination of employment or pursuant to the
terms of such stock option plan or any other agreement under which
such shares of Capital Securities, options, related rights or similar
securities were issued (collectively referred to as a "REDEMPTION") in
an aggregate amount, in the case of this CLAUSE (b)(iii), not to
exceed $1,000,000 in any Fiscal Year; PROVIDED, that VHC can carry
forward to each succeeding Fiscal Year the aggregate amount of
Restricted Payments permitted (but not made) pursuant to this
CLAUSE (b)(iii) in prior Fiscal Years, with up to a maximum amount of
$5,000,000 over the term of this Agreement of the Restricted Payments
permitted to be made pursuant to this CLAUSE (b)(iii) and (iv)
repurchase the shares of common stock of the Parent held by Xxxxxx X.
Xxxxxxxx and related trusts as of the Closing Date for an aggregate
purchase price not to exceed $2,000,000 and, in connection therewith,
forgive some or all of the loans made to Xx. Xxxxxxxx and/or such
trusts in connection with their purchase of such shares;
-86-
(c) Restricted Payments made by VHC to the Parent in an aggregate
amount not exceeding the aggregate amount of capital contributions
made by the Parent to VHC with Net Equity Proceeds, net of the amount
of such capital contributions received by VHC and used for a Permitted
Purpose or which are required to be used to prepay Loans in accordance
with SECTION 3.1.1(c)(i).
SECTION 7.2.7. CAPITAL EXPENDITURES, ETC. (a) The Parent and each Borrower
will not, and will not permit any of their respective Subsidiaries to, make or
commit to make Capital Expenditures in any Fiscal Year, except (i) Capital
Expenditures which do not exceed $25,000,000 in any Fiscal Year and (ii)
additional Capital Expenditures which do not exceed $20,000,000 in the aggregate
during the term of this Agreement: PROVIDED, HOWEVER, that to the extent the
amount of Capital Expenditures permitted to be made in any Fiscal Year pursuant
to CLAUSE (i) of this Section exceeds the aggregate amount of Capital
Expenditures actually made during such Fiscal Year (other than pursuant to
CLAUSE (ii) of this Section), up to 50% of such excess amount may be carried
forward to (but only to) the next succeeding Fiscal Year (any such amount to be
certified by VHC to the Agents in the Compliance Certificate delivered for the
last Fiscal Quarter of such Fiscal Year, and any such amount carried forward to
the succeeding Fiscal Year shall be deemed to be used prior to the Borrowers and
their Subsidiaries using the amount of Capital Expenditures permitted by this
Section without giving effect to such carry-forward).
(b) The parties acknowledge and agree that the permitted Capital
Expenditure level set forth in CLAUSE (a) above shall be exclusive of (i) the
amount of Capital Expenditures actually made with cash capital contributions
made, directly or indirectly, by any Person other than the Borrowers and their
Subsidiaries, after the Closing Date to a Borrower or any of its Subsidiaries
and specifically identified in a certificate delivered by an Authorized Officer
of the Borrower to the Agents on or about the time such capital contribution is
made, (ii) any portion of any Eligible Acquisition that is accounted for as a
Capital Expenditure or (iii) any Capital Expenditures funded with (x) any
Casualty Proceeds, as permitted under CLAUSE(c)(iii) of SECTION 3.1.1 or (y) any
Net Deposition Proceeds of any Disposition permitted under CLAUSE (c) of
SECTION 7.2.11 or any disposition of obsolete or worn out equipment
permitted under CLAUSE (a) of SECTION 7.2.11.
SECTION 7.2.8. NO PREPAYMENT OF OTHER DEBT. Other than in connection with a
refinancing permitted pursuant to SECTION 7.2.2, neither the Parent nor any
Borrower will or will permit any of its respective Subsidiaries to, directly or
indirectly, make any payment or prepayment of principal of, or premium or
interest on, or redeem, retire, purchase, defease or otherwise acquire (or make
any deposit (including the payment of amounts into a sinking fund or other
similar fund) for any of the foregoing purposes) any Senior Notes, any Senior
Subordinated Notes or any the Parent Debentures; PROVIDED that, (i) so long as
such payment would not violate the terms of this Agreement, the Senior Notes
Documents or the applicable Sub Debt Documents, VHC may make payments of accrued
and unpaid interest on the Senior Notes and the Senior Subordinated Notes (and
accrued interest on the Parent Debentures may be capitalized and added to the
outstanding principal amount thereof in accordance with the Parent Debenture
Documents) on the stated, scheduled date for payment thereof set forth in the
Senior Note Documents or the Senior Subordinated Note Documents, as applicable,
and may make mandatory redemptions of Senior Notes following a Change of Control
as required by the Senior Note Documents; (ii) the Parent may repay Indebtedness
permitted pursuant to SECTION 7.2.2(f)
-87-
using Net Equity Proceeds to the extent such repayment constitutes a Permitted
Purpose; (iii) VHC may repay, repurchase or otherwise redeem or acquire Senior
Notes and/or Senior Subordinated Notes using Net Equity Proceeds, in each case
to the extent such repayment, repurchase or other redemption or acquisition
constitutes a Permitted Purpose. Furthermore, neither the Parent, any Borrower
nor any of their respective Subsidiaries will designate any Indebtedness other
than the Obligations as "Designated Senior Debt" pursuant to any Senior
Subordinated Note Document or Parent Debenture Document.
SECTION 7.2.9. ISSUANCE OF CAPITAL SECURITIES. The Parent will not and will
not permit any of its Subsidiaries to issue, sell or otherwise transfer or
assign (an "ISSUANCE") any of its Capital Securities to any Person (whether for
value or otherwise), except:
(i) an Issuance of Capital Securities to a Borrower or a
Subsidiary Guarantor;
(ii) an Issuance of Capital Securities by a Non-U.S.
Subsidiary of VHC to another Non-U.S. Subsidiary of VHC; or
(iii) any other Issuance; PROVIDED, HOWEVER, that all Net
Equity Proceeds resulting from such Issuance shall be applied, to
the extent applicable, pursuant to SECTION 3.1.1.
SECTION 7.2.10. CONSOLIDATION, MERGER, ETC. The Parent will not permit any
of its Subsidiaries to, liquidate or dissolve, consolidate with, or merge into
or with, any other Person, or purchase or otherwise acquire all or substantially
all of the assets of any Person (or any division thereof), except
(a) any Subsidiary of VHC may liquidate or dissolve voluntarily
into, and may merge with and into, VHC or any other Subsidiary of VHC
(PROVIDED, HOWEVER, that a Borrower may only liquidate or dissolve
into, or merge with and into, another Borrower and a Subsidiary
Guarantor may only liquidate or dissolve into, or merge with and into,
a Borrower or another Subsidiary Guarantor), and the assets or Capital
Securities of any Subsidiary may be purchased or otherwise acquired by
a Borrower or a Subsidiary Guarantor; PROVIDED, HOWEVER, that in no
event shall any Pledged Subsidiary consolidate with or merge with and
into any Subsidiary other than another Pledged Subsidiary unless after
giving effect thereto, the Administrative Agent shall have a perfected
pledge of, and security interest in and to, at least the same
percentage of the issued and outstanding interests of Capital
Securities (on a fully diluted basis) of the surviving Person as the
Administrative Agent had immediately prior to such merger or
consolidation;
(b) so long as no Default has occurred and is continuing or would
occur after giving effect thereto, any Borrower or any of its
Subsidiaries may purchase all or substantially all of the assets of
any Person (or any division thereof) not then a Subsidiary, or acquire
such Person by merger, if permitted (without duplication) pursuant to
SECTION 7.2.7 or CLAUSE (g) or (j) of SECTION 7.2.5;
-88-
SECTION 7.2.11. PERMITTED DISPOSITIONS. Neither the Parent nor any Borrower
will, or will permit any of its respective Subsidiaries to, Dispose of any
assets of the Parent, or any of its Subsidiaries (including Accounts and Capital
Securities of Subsidiaries of the Parent) to any Person in one transaction or a
series of transactions, except for the following:
(a) Dispositions in respect of Inventory, immaterial assets or
properties and obsolete or worn-out property which, in each case, are
being Disposed of in the ordinary course of business and which do not
constitute a Disposition of all or a substantial portion of VHC's and
its Subsidiaries' assets, taken as a whole.
(b) Dispositions which are permitted by SECTIONS 7.2.9 or 7.2.10.
(c) Dispositions (i) that constitute Investments permitted under
SECTION 7.2.5, (ii) Liens permitted under SECTION 7.2.3 or (iii)
Restricted Payments permitted under SECTION 7.2.6;
(d) Dispositions among VHC and its Subsidiaries; PROVIDED,
HOWEVER, that to the extent any Disposition to any Subsidiary of VHC
which is not a Borrower or a Subsidiary Guarantor is for less than
fair market value, such Disposition shall constitute an Investment in
such Subsidiary for all purposes of this Agreement, including, without
limitation, SECTION 7.2.5(f) above.
(e) Dispositions which (x) are for fair market value and the
consideration received consists of no less than 75% in cash, (y)
result in gross proceeds which, when taken together with the sum of
gross proceeds received from the Disposition of all other assets
Disposed of pursuant to this clause since the Closing Date, do not
exceed (individually or in the aggregate) $25,000,000 over the term of
this Agreement and (z) an amount equal to the Net Disposition Proceeds
generated from such Disposition are reinvested in the business of the
Borrowers and their Subsidiaries or, to the extent required
thereunder, applied pursuant to SECTIONS 3.1.1 and 3.1.2.
(f) Dispositions resulting from casualties or condemnations in
respect of such property or assets.
(g) Dispositions consisting of sales or discounts of overdue
accounts receivable in the ordinary course of business, but only in
connection with the compromise or collection thereof.
(h) The Disposition effectuating the PP&E Release.
SECTION 7.2.12. MODIFICATION OF CERTAIN AGREEMENTS. The Parent and the
Borrowers will not, and will not permit any of their respective Subsidiaries to,
enter into any amendment, supplement, waiver or other modification of, or enter
into any forbearance from exercising any rights with respect to the terms or
provisions contained in, the Senior Note Documents, the Senior Subordinated Note
Documents or the Parent Debenture Documents, in each case which would (a)
increase the principal amount of, or increase the interest rate on, or add or
increase any fee with respect to the Indebtedness evidenced by such Senior Note
Document, Senior
-89-
Subordinated Note Document or Parent Debenture Document, advance any dates upon
which payments of principal or interest are due thereon, (b) in the case of any
Senior Subordinated Note Document or Parent Debenture Document, change the
subordination provisions thereof (including any default or conditions to an
event of default relating thereto), or change any collateral therefor (other
than to release such collateral), if (in the case of this CLAUSE (b)) the effect
of such amendment or change, individually or together with all other amendments
or changes made, is to increase the obligations of the obligor thereunder or to
confer any additional rights on the holders of the Senior Subordinated Notes or
the Parent Debentures, as the case may be (or a trustee or other representative
on their behalf), or (c) add or modify any covenants or defaults or events of
default relating thereto, if (in the case of this CLAUSE (c)), the effect of
such addition or modification, individually or together with all other additions
or changes made, is to materially increase the obligations of the obligor
thereunder or to confer any material additional rights on the holders of such
Indebtedness (or a trustee or other representative on their behalf).
SECTION 7.2.13. TRANSACTIONS WITH AFFILIATES. Neither the Parent nor any
Borrower will or will permit any of its respective Subsidiaries to, enter into
or cause or permit to exist any arrangement, transaction or contract (including
for the purchase, lease or exchange of property or the rendering of services)
with any of its other Affiliates that is not a Borrower or a Subsidiary
Guarantor, unless such arrangement, transaction or contract is fair and
equitable to the Parent, such Borrower or such Subsidiary and is of the kind
which would be entered into by a prudent Person in the position of the Parent,
such Borrower or such Subsidiary with a Person that is not one of its Affiliates
PROVIDED, HOWEVER, that the Borrowers and their Subsidiaries shall be permitted
to (a) enter into arrangements with CSFB and its affiliates for underwriting,
investment banking and advisory services (including payments of the fee in
respect of advisory services pursuant to CLAUSE (b)(i) of SECTION 7.2.6) on
usual and customary terms, (b) make any Restricted Payment permitted under
SECTION 7.2.6, (c) make payment of reasonable and customary fees and
reimbursement of expenses payable to directors of the Parent, (d) enter into
employment arrangements with respect to the procurement of services of
directors, officers and employees in the ordinary course of business and pay
reasonable fees in connection therewith and (e) consummate the Transaction.
SECTION 7.2.14. RESTRICTIVE AGREEMENTS, ETC. Neither the Parent nor any
Borrower will or will permit any of its respective Subsidiaries to, enter into
any agreement prohibiting
(a) the creation or assumption of any Lien upon its properties,
revenues or assets, whether now owned or hereafter acquired, to secure
the Obligations (other than, (i) in the case of any assets acquired
with the proceeds of any Indebtedness permitted under CLAUSE (c) of
SECTION 7.2.2, customary limitations and prohibitions contained in
such Indebtedness or (ii) provisions of any lease prohibiting the
lessee thereunder from granting a Lien on the assets subject to such
lease);
(b) the ability of any Obligor to amend or otherwise modify any
Loan Document; or
(c) the ability of any Subsidiary of any Borrower to make any
payments, directly or indirectly, to any Borrower, including by way of
dividends, advances,
-90-
repayments of loans, reimbursements of management and other
intercompany charges, expenses and accruals or other returns on
investments.
The foregoing prohibitions shall not apply to restrictions contained (i) in any
Loan Document, (ii) in the case of CLAUSE (a), any agreement governing any
Indebtedness permitted by CLAUSE (c) of SECTION 7.2.2 as to the creation of
Liens on the assets financed with the proceeds of such Indebtedness, or (iii) in
the case of CLAUSES (a) and (c), any agreement of a Non-U.S. Subsidiary
governing the Indebtedness permitted by CLAUSE (g) of SECTION 7.2.2.
SECTION 7.2.15. SALE AND LEASEBACK. The Parent and the Borrowers will not,
and will not permit any of their respective Subsidiaries to, directly or
indirectly enter into any agreement or arrangement providing for the sale or
transfer by it of any property (now owned or hereafter acquired) to a Person and
the subsequent lease or rental of such property or other similar property from
such Person (a "SALE AND LEASEBACK TRANSACTION"), except that upon (i) the
delivery by VHC to the Agents of projections of the Excess Availability for each
fiscal month during the ensuing twelve-month period, which projections shall be
in form and substance reasonably satisfactory to the Agents, and (ii) the
concurrent permanent reduction of the Revolving Loan Commitment Amount by the
amount of the Maximum PP&E Advance Amount then in effect, the Borrowers and
their respective Subsidiaries may engage in a Sale And Leaseback Transaction
involving all or any substantial portion of their respective property, plant and
equipment assets on terms and conditions reasonably satisfactory to the Agents
(such Sale And Leaseback Transaction being referred to herein as the "PP&E
RELEASE EVENT"); PROVIDED that, prior to the consummation of such Sale and
Leaseback Transaction, the Borrowers and their respective Subsidiaries shall
have complied, to the extent applicable, with SECTION 7.1.9(a) with respect to
any lease entered into in connection with such Sale and Leaseback Transaction.
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. LISTING OF EVENTS OF DEFAULT. Each of the following events or
occurrences described in this Section shall constitute an "EVENT OF DEFAULT".
SECTION 8.1.1. NON-PAYMENT OF OBLIGATIONS. Any Obligor shall default in the
payment or prepayment when due (whether pursuant hereto or pursuant to the
Subsidiary Guaranty) of (i) any principal on any Loan, or any Reimbursement
Obligation or any deposit of cash for collateral purposes pursuant to SECTION
2.6.4, or (ii) any interest on any Loan or any Reimbursement Obligation, any fee
described in ARTICLE III or any other monetary Obligation and such default shall
continue unremedied for a period of three Business Days after such amount was
due.
SECTION 8.1.2. BREACH OF WARRANTY. Any representation or warranty of any
Obligor made or deemed to be made hereunder or pursuant to any other Loan
Document (including any certificates delivered pursuant to ARTICLE V or ARTICLE
VII) is or shall be incorrect when made or deemed to have been made in any
material respect.
-91-
SECTION 8.1.3. NON-PERFORMANCE OF CERTAIN COVENANTS AND OBLIGATIONS. Any
Default shall occur in the due performance or observance of any provision of
SECTION 7.1.1 or SECTION 7.2.
SECTION 8.1.4. NON-PERFORMANCE OF OTHER COVENANTS AND OBLIGATIONS. Any
Obligor shall default in the due performance and observance of any other
agreement contained herein or in any other Loan Document executed by it, and
such default shall continue unremedied for a period of 30 days after notice
thereof shall have been given to the Borrowers by the Administrative Agent.
SECTION 8.1.5. DEFAULT ON OTHER INDEBTEDNESS. A default shall occur in the
payment of any amount when due (subject to any applicable grace period), whether
by acceleration or otherwise, of any principal or stated amount of, or interest
or fees on, any Indebtedness (other than Indebtedness described in SECTION
8.1.1) of the Parent or any of its Subsidiaries or any other Obligor having a
principal or stated amount, individually or in the aggregate, in excess of
$3,000,000, or a default shall occur in the performance or observance of any
obligation or condition with respect to such Indebtedness, if the effect of such
default is to accelerate the maturity of any such Indebtedness or such default
shall continue unremedied for any applicable period of time sufficient to permit
the holder or holders of such Indebtedness, or any trustee or agent for such
holders, to cause or declare such Indebtedness or other monetary obligation to
become due and payable or to require such Indebtedness to be prepaid, redeemed,
purchased or defeased, or require an offer to purchase, redeem or defease such
Indebtedness to be made, in each case prior to its expressed maturity, stated
redemption or when otherwise due.
SECTION 8.1.6. JUDGMENTS. Any judgment or order for the payment of money in
excess of $3,000,000 (exclusive of any amounts fully covered by insurance from
an insurance company that is not denying liability with respect thereto (less
any applicable deductible) shall be rendered against the Parent or any of its
Subsidiaries and remain unpaid and either (i) enforcement proceedings shall have
been commenced by any creditor upon such judgment or order or (ii) there shall
be a period of 30 consecutive days during which a stay of enforcement of such
judgment or order, by reason of a pending appeal or otherwise, shall not be in
effect.
SECTION 8.1.7. PENSION PLANS. Any of the following events shall occur with
respect to any Pension Plan: (i) the termination of any Pension Plan if, as a
result of such termination, the Parent or any of its Subsidiaries would be
required to make a contribution to such Pension Plan, or would reasonably expect
to incur a liability or obligation to such Pension Plan, in excess of
$3,000,000, or (ii) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under section 302(f) of ERISA in an
amount in excess of $3,000,000.
SECTION 8.1.8. CHANGE IN CONTROL. Any Change in Control shall occur.
SECTION 8.1.9. BANKRUPTCY, INSOLVENCY, ETC. The Parent, any Borrower or any
of their respective Subsidiaries shall
(a) become insolvent or generally fail to pay, or admit in
writing its inability or unwillingness generally to pay, debts as they
become due;
-92-
(b) apply for, consent to, or acquiesce in the appointment of a
trustee, receiver, sequestrator or other custodian for any substantial
part of the property of any thereof, or make a general assignment for
the benefit of creditors;
(c) in the absence of such application, consent or acquiescence
in or permit or suffer to exist the appointment of a trustee,
receiver, sequestrator or other custodian for a substantial part of
the property of any thereof, and such trustee, receiver, sequestrator
or other custodian shall not be discharged within 60 days; PROVIDED
that the Parent and the Borrowers hereby expressly authorize each
Lender Party to appear in any court conducting any relevant proceeding
during such 60-day period to preserve, protect and defend their rights
under the Loan Documents;
(d) permit or suffer to exist the commencement of any bankruptcy,
reorganization, debt arrangement or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution, winding up or
liquidation proceeding, in respect thereof, and, if any such case or
proceeding is not commenced by any Obligor, such case or proceeding
shall be consented to or acquiesced in by the Parent, any Borrower or
any Obligor, as the case may be, or shall result in the entry of an
order for relief or shall remain for 60 days undismissed; PROVIDED
that the Parent and the Borrowers hereby expressly authorize each
Lender Party to appear in any court conducting any such case or
proceeding during such 60-day period to preserve, protect and defend
their rights under the Loan Documents; or
(e) take any action authorizing, or in furtherance of, any of the
foregoing.
SECTION 8.1.10. IMPAIRMENT OF SECURITY, ETC. Any Loan Document or any Lien
granted thereunder shall (except in accordance with its terms), in whole or in
part, terminate, or cease to be the legally valid, binding and enforceable
obligation of any Obligor party thereto; any Obligor or any other party shall,
directly or indirectly, contest in any manner such effectiveness, validity,
binding nature or enforceability of any Lien; or, except as permitted under any
Loan Document, any Lien securing any Obligation shall, in whole or in part,
cease to be a perfected first priority Lien subject only to those exceptions
expressly permitted by the Loan Documents, except to the extent of any event
referred to above (a) relates to assets of the Borrowers and their respective
Subsidiaries which are immaterial, (b) results from the failure of the
Administrative Agent to maintain possession of certificates representing
securities pledged under the Pledge and Security Agreement or to file financing
or continuation statements under the Uniform Commercial Code of any applicable
jurisdiction or (c) is covered by a lender's title insurance policy and the
relevant insurer promptly after the occurrence thereof shall have acknowledged
in writing that the same is covered by such title insurance policy.
SECTION 8.1.11. FAILURE OF SUBORDINATION. Unless otherwise waived or
consented to by the Agents and the Required Lenders in writing, the
subordination provisions relating to any Senior Subordinated Notes or Parent
Debentures (the "SUBORDINATION PROVISIONS") shall fail to be enforceable by the
Administrative Agent, the Lenders and the Issuers in accordance with the terms
thereof, or the monetary Obligations shall fail to constitute "Designated Senior
Debt"; or
-93-
the Parent or any of its Subsidiaries shall, directly or indirectly, disavow or
contest in any manner (i) the effectiveness, validity or enforceability of any
of the Subordination Provisions, (ii) that the Subordination Provisions exist
for the benefit of the Lender Parties or (iii) that all payments of principal of
or premium and interest on such Subordinated Debt shall be subject to any of
such Subordination Provisions.
SECTION 8.2. ACTION IF BANKRUPTCY. If any Event of Default described in
CLAUSES (b) through (d) of SECTION 8.1.9 with respect to any Borrower shall
occur, the Commitments shall automatically terminate and the outstanding
principal amount of all outstanding Loans and all other Obligations (including
Reimbursement Obligations) shall automatically be and become immediately due and
payable, without notice or demand to any Person and each Obligor shall
automatically and immediately be obligated to Cash Collateralize all Letter of
Credit Outstandings.
SECTION 8.3. ACTION IF OTHER EVENT OF DEFAULT. If any Event of Default
(other than any Event of Default described in CLAUSES (b) through (d) of
SECTION 8.1.9 with respect to any Borrower) shall occur for any reason,
whether voluntary or involuntary, and be continuing, the Administrative
Agent, upon the direction of the Required Lenders, shall by notice to the
Borrowers declare all or any portion of the outstanding principal amount of
the Loans and other Obligations (including Reimbursement Obligations) to be
due and payable and/or the Commitments (if not theretofore terminated) to
be terminated, whereupon the full unpaid amount of such Loans and other
Obligations which shall be so declared due and payable shall be and become
immediately due and payable, without further notice, demand or presentment,
and/or, as the case may be, the Commitments shall terminate and the
Borrowers shall automatically and immediately be obligated, jointly and
severally, to Cash Collateralize all Letter of Credit Outstandings.
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. ACTIONS. Each Lender hereby appoints The CIT Group/Business
Credit, Inc. as its Administrative Agent under and for purposes of each Loan
Document. Each Lender authorizes the Administrative Agent to act on behalf of
such Lender under each Loan Document and, in the absence of other written
instructions from the Required Lenders received from time to time by the
Administrative Agent (with respect to which the Administrative Agent agrees that
it will comply, except as otherwise provided in this Section or as otherwise
advised by counsel in order to avoid contravention of applicable law), to
exercise such powers hereunder and thereunder as are specifically delegated to
or required of the Administrative Agent by the terms hereof and thereof,
together with such powers as may be incidental thereto. Each Lender hereby
indemnifies (which indemnity shall survive any termination of this Agreement)
the Administrative Agent, PRO RATA according to such Lender's proportionate
Total Exposure Amount, from and against any and all liabilities, obligations,
losses, damages, claims, costs or expenses of any kind or nature whatsoever
which may at any time be imposed on, incurred by, or asserted against, the
Administrative Agent in any way relating to or arising out of any Loan Document,
(including attorneys' fees and including any expenses, reimbursements and/or
indemnities paid by the Administrative Agent to any bank pursuant to any deposit
account control agreement relating to any Deposit Account), and as to which the
Administrative Agent is
-94-
not reimbursed by the Borrowers; PROVIDED, HOWEVER, that no Lender shall be
liable for the payment of any portion of such liabilities, obligations, losses,
damages, claims, costs or expenses which are determined by a court of competent
jurisdiction in a final proceeding to have resulted from the Administrative
Agent's gross negligence or willful misconduct. The Administrative Agent shall
not be required to take any action under any Loan Document, or to prosecute or
defend any suit in respect of any Loan Document, unless it is indemnified
hereunder to its satisfaction. If any indemnity in favor of the Administrative
Agent in respect of any indemnified act shall, in the Administrative Agent's
determination, be inadequate to compensate the Administrative Agent for all
indemnified losses resulting from such act or shall become impaired, the
Administrative Agent may call for additional indemnification from the Lenders
and cease to do the acts indemnified against hereunder until such additional
indemnity is given to its satisfaction.
SECTION 9.2. FUNDING RELIANCE, ETC. Unless the Administrative Agent shall
have been notified by telephone, confirmed in writing by any Lender by 5:00
p.m.,
New York time, on the Business Day prior to a Borrowing that such Lender
will not make available the amount which would constitute its Percentage of such
Borrowing on the date specified therefor, the Administrative Agent may assume
that such Lender has made such amount available to the Administrative Agent and,
in reliance upon such assumption, make available to the applicable Borrowers a
corresponding amount. If and to the extent that such Lender shall not have made
such amount available to the Administrative Agent, such Lender and each Borrower
severally agree to repay the Administrative Agent forthwith on demand such
corresponding amount together with interest thereon, for each day from the date
the Administrative Agent made such amount available to the applicable Borrower
to the date such amount is repaid to the Administrative Agent, at the interest
rate applicable at the time to Loans comprising such Borrowing (in the case of
the Borrowers) and (in the case of a Lender), at the Federal Funds Rate (for the
first two Business Days after which such amount has not been repaid), and
thereafter at the interest rate applicable to Loans comprising such Borrowing.
SECTION 9.3. EXCULPATION. Neither the Administrative Agent nor any of its
directors, officers, employees or agents shall be liable to any Lender Party for
any action taken or omitted to be taken by it under any Loan Document, or in
connection therewith, except for its own willful misconduct or gross negligence,
nor responsible for any recitals or warranties herein or therein, nor for the
effectiveness, enforceability, validity or due execution of any Loan Document,
nor for the creation, perfection or priority of any Liens purported to be
created by any of the Loan Documents, or the validity, genuineness,
enforceability, existence, value or sufficiency of any collateral security, nor
to make any inquiry respecting the performance by any Obligor of its
Obligations. Any such inquiry which may be made by the Administrative Agent
shall not obligate it to make any further inquiry or to take any action. The
Administrative Agent shall be entitled to rely upon advice of counsel concerning
legal matters and upon any notice, consent, certificate, statement or writing
which the Administrative Agent believes to be genuine and to have been presented
by a proper Person.
SECTION 9.4. SUCCESSOR. The Administrative Agent may resign as such at any
time upon at least 30 days' prior notice to the Borrowers and all Lenders. If
the Administrative Agent at any time shall resign, the Required Lenders may
appoint another Lender as a successor Administrative Agent which shall thereupon
become the Administrative Agent hereunder. If no
-95-
successor Administrative Agent shall have been so appointed by the Required
Lenders, and shall have accepted such appointment, within 30 days after the
retiring Administrative Agent's giving notice of resignation, then the retiring
Administrative Agent may, on behalf of the Lenders, appoint a successor
Administrative Agent, which shall be one of the Lenders or a commercial banking
institution organized under the laws of the United States (or any State thereof)
or a United States branch or agency of a commercial banking institution, and
having a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Administrative Agent hereunder by a successor
Administrative Agent, such successor Administrative Agent shall be entitled to
receive from the retiring Administrative Agent such documents of transfer and
assignment as such successor Administrative Agent may reasonably request, and
shall thereupon succeed to and become vested with all rights, powers, privileges
and duties of the retiring Administrative Agent, and the retiring Administrative
Agent shall be discharged from its duties and obligations under the Loan
Documents. After any retiring Administrative Agent's resignation hereunder as
the Administrative Agent, the provisions of this Article shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Loan Documents, and SECTION 11.3 and SECTION 11.4
shall continue to inure to its benefit.
SECTION 9.5. CREDIT EXTENSIONS BY EACH AGENT. Each Agent shall have the
same rights and powers with respect to (x) the Credit Extensions made by it or
any of its affiliates, and (y) the Notes held by it or any of its affiliates as
any other Lender and may exercise the same as if it were not an Agent. Each
Agent and its affiliates may accept deposits from, lend money to, and generally
engage in any kind of business with any Borrower or any Subsidiary or Affiliate
of any Borrower as if such Agent were not an Agent hereunder.
SECTION 9.6. CREDIT DECISIONS. Each Lender acknowledges that it has,
independently of the Agents and each other Lender, and based on such Lender's
review of the financial information of VHC, the Loan Documents (the terms and
provisions of which being satisfactory to such Lender) and such other documents,
information and investigations as such Lender has deemed appropriate, made its
own credit decision to extend its Commitments. Each Lender also acknowledges
that it will, independently of the Agents and each other Lender, and based on
such other documents, information and investigations as it shall deem
appropriate at any time, continue to make its own credit decisions as to
exercising or not exercising from time to time any rights and privileges
available to it under the Loan Documents.
SECTION 9.7. COPIES, ETC. The Administrative Agent shall give prompt notice
to each Lender of each notice or request required or permitted to be given to
the Administrative Agent by any Borrower pursuant to the terms of the Loan
Documents (unless concurrently delivered to the Lenders by such Borrower). The
Administrative Agent will distribute to each Lender each document or instrument
received for its account and copies of all other communications received by the
Administrative Agent from any Borrower for distribution to the Lenders by the
Administrative Agent in accordance with the terms of the Loan Documents.
SECTION 9.8. RELIANCE BY ADMINISTRATIVE AGENT. The Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telecopy, telegram or cable) believed by it
to be genuine and correct and to have been signed or sent by or on behalf of the
proper Person, and upon advice and statements of legal
-96-
counsel, independent accountants and other experts selected by the
Administrative Agent. As to any matters not expressly provided for by the Loan
Documents, the Administrative Agent shall in all cases be fully protected in
acting, or in refraining from acting, thereunder in accordance with instructions
given by the Required Lenders or all of the Lenders as is required in such
circumstance, and such instructions of such Lenders and any action taken or
failure to act pursuant thereto shall be binding on all Lender Parties. For
purposes of applying amounts in accordance with this Section, the Administrative
Agent shall be entitled to rely upon any Lender Party that has entered into a
Qualified Hedging Obligation with any Obligor for a determination (which such
Lender Party agrees to provide or cause to be provided upon request of the
Administrative Agent) of the outstanding Obligations owed to such Lender Party
under any Qualified Hedging Obligation. Unless it has actual knowledge evidenced
by way of written notice from any such Lender Party or any Borrower to the
contrary, the Administrative Agent, in acting in such capacity under the Loan
Documents, shall be entitled to assume that no Qualified Hedging Obligation or
Obligations in respect thereof are in existence or outstanding between any
Lender Party and any Obligor.
SECTION 9.9. DEFAULTS. The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of a Default unless the Administrative
Agent has sent to the Borrowers or received from a Lender or a Borrower a
written notice specifying such Default and stating that such notice is a "Notice
of Default". In the event that the Administrative Agent receives such a notice
of the occurrence of a Default, the Administrative Agent shall give prompt
notice thereof to the Lenders. The Administrative Agent shall (subject to
SECTION 11.1) take such action with respect to such Default as shall be directed
by the Required Lenders; PROVIDED, that unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default as it shall deem advisable in the best interest of
the Lender Parties except to the extent that this Agreement expressly requires
that such action be taken, or not be taken, only with the consent or upon the
authorization of the Required Lenders or all Lenders.
SECTION 9.10. LEAD ARRANGER. Notwithstanding anything else to the contrary
contained in this Agreement or any other Loan Document, the Lead Arranger, in
its capacity as such, shall have no duties or responsibilities under this
Agreement or any other Loan Document nor any fiduciary relationship with any
Lender, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or otherwise exist
against the Lead Arranger in such capacity except as are explicitly set forth
herein or in the other Loan Documents. The Lead Arranger shall at all times have
the right to receive a current copy of the Register and any other information
relating to the Lenders and the Loans that it may request from the
Administrative Agent.
SECTION 9.11. THE SYNDICATION AGENT, THE DOCUMENTATION AGENT AND THE
ADMINISTRATIVE AGENT. Notwithstanding anything else to the contrary contained in
this Agreement or any other Loan Document, the Syndication Agent, the
Documentation Agent and the Administrative Agent, each in such capacity, shall
have no duties or responsibilities under this Agreement or any other Loan
Document nor any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or otherwise exist against the Syndication Agent,
the Documentation Agent
-97-
or Administrative Agent, as applicable, in such capacity, except as are
explicitly set forth herein or in the other Loan Documents.
ARTICLE X
GUARANTY
SECTION 10.1. GUARANTY. The Parent and each Borrower (with respect to the
obligations of each other Borrower) hereby absolutely, unconditionally and
irrevocably:
(a) guarantees the full and punctual payment when due, whether at
stated maturity, by required prepayment, declaration, acceleration or
otherwise, of all Obligations of the Borrowers now or hereafter
existing, whether for principal, interest (including interest accruing
at the then applicable rate provided in the Agreement after the
occurrence of any Default set forth in SECTION 8.1.9, whether or not a
claim for post-filing or post-petition interest is allowed under
applicable law following the institution of a proceeding under
bankruptcy, insolvency or similar laws), fees, Reimbursement
Obligations, expenses or otherwise (including all such amounts which
would become due but for the operation of the automatic stay under
Section 362(a) of the United States Bankruptcy Code, 11 U.S.C. Section
362(a), and the operation of Sections 502(b) and 506(b) of the United
States Bankruptcy Code, 11 U.S.C. Section 502(b) and Section 506(b));
and
(b) indemnifies and holds harmless each Lender Party for any and
all reasonable costs and expenses (including reasonable attorneys'
fees and expenses) incurred by such Lender Party after the occurrence
and during the continuance of an Event of Default in enforcing any
rights under this Agreement;
Each Obligor's obligations under this Article constitute a guaranty of payment
when due and not of collection, and each Obligor specifically agrees that it
shall not be necessary or required that any Lender Party exercise any right,
assert any claim or demand or enforce any remedy whatsoever against any Obligor
or any other Person before or as a condition to the obligations of such Obligor
hereunder.
SECTION 10.2. REINSTATEMENT, ETC. Each Obligor hereby agrees that its
obligations under this Article shall continue to be effective or be reinstated,
as the case may be, if at any time any payment (in whole or in part) of any of
the Obligations is invalidated, declared to be fraudulent or preferential, set
aside, rescinded or must otherwise be restored by any Lender Party, including
upon the occurrence of any Default set forth in SECTION 8.1.9 or otherwise, all
as though such payment had not been made.
SECTION 10.3. GUARANTY ABSOLUTE, ETC. Each Obligor's obligations under this
Article shall in all respects be a continuing, absolute, unconditional and
irrevocable guaranty of payment, and shall, unless thereafter reinstated in
accordance with SECTION 10.2, remain in full force and effect until the
Termination Date. Each Obligor guarantees, to the fullest extent permitted under
applicable law, that the Obligations will be paid strictly in accordance with
the terms of each Loan Document under which they arise, regardless of any law,
regulation or order now or hereafter in effect in any jurisdiction affecting any
of such terms or the rights of any Lender Party with respect thereto. The
liability of each Obligor under this Article shall, to the
-98-
fullest extent permitted under applicable law, be absolute, unconditional and
irrevocable irrespective of:
(a) any lack of validity, legality or enforceability of any Loan
Document (other than this ARTICLE X);
(b) the failure of any Lender Party:
(i) to assert any claim or demand or to enforce any right or
remedy against any other Obligor or any other Person (including
any other Guarantor) under the provisions of any Loan Document or
otherwise, or
(ii) to exercise any right or remedy against any other
Guarantor of, or collateral securing, any Obligations;
(c) any change in the time, manner or place of payment of, or in
any other term of, all or any part of the Obligations, or any other
extension, compromise or renewal of any Obligation;
(d) any reduction, limitation, impairment or termination of any
Obligations for any reason, including any claim of waiver, release,
surrender, alteration or compromise, and shall not be subject to (and
each Obligor hereby irrevocably waives, until payment of all
Obligations, any right to or claim of) any defense or setoff,
counterclaim, recoupment or termination whatsoever by reason of the
invalidity, illegality, nongenuineness, irregularity, compromise,
unenforceability of, or any other event or occurrence affecting, any
Obligations or otherwise;
(e) any amendment to, rescission, waiver, or other modification
of, or any consent to or departure from, any of the terms of any Loan
Document;
(f) any addition, exchange or release of any collateral or of any
Person that is (or will become) a Guarantor of the Obligations, or any
surrender or non-perfection of any collateral, or any amendment to or
waiver or release or addition to, or consent to or departure from, any
other guaranty held by any Lender Party securing any of the
Obligations; or
(g) any other circumstance which might otherwise constitute a
defense available to, or a legal or equitable discharge of, any
Obligor, any surety or any Guarantor.
SECTION 10.4. WAIVER, ETC. Except for any notices expressly required to be
delivered to an Obligor hereunder, each Obligor hereby waives promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Obligations and the guaranty set forth in this ARTICLE X and any requirement
that any Lender Party protect, secure, perfect or insure any Lien, or any
property subject thereto, or exhaust any right or take any action against any
Obligor or any other Person (including the Parent) or entity or any collateral
securing the Obligations, as the case may be.
-99-
SECTION 10.5. POSTPONEMENT OF SUBROGATION, ETC. Each Obligor agrees that it
will not exercise any rights which it may acquire by way of rights of
subrogation hereunder, nor shall such Obligor seek or be entitled to seek any
contribution or reimbursement from any Obligor, in respect of any payment made
hereunder, until following the Termination Date. Any other amount paid to any
Obligor on account of any such subrogation rights prior to the Termination Date
shall be held in trust for the benefit of the Lender Parties and shall
immediately be paid and turned over to the Administrative Agent for the benefit
of the Lender Parties in the exact form received by such Obligor (duly endorsed
in favor of the Administrative Agent, if required), to be credited and applied
against the Obligations, whether matured or unmatured, in accordance with
SECTION 4.7; PROVIDED that if the Obligors have made payment to the Lender
Parties of all or any part of the Obligations and the Termination Date has
occurred, then at an Obligor's request, the Administrative Agent (on behalf of
the Lender Parties) will, at the expense of the Parent, execute and deliver to
such Obligor appropriate documents (without recourse and without representation
or warranty) necessary to evidence the transfer by subrogation to such Obligor
of an interest in the Obligations resulting from such payment. In furtherance of
the foregoing, at all times prior to the Termination Date, such Obligor shall
refrain from taking any action or commencing any proceeding against any other
Obligor (or its successors or assigns, whether in connection with a bankruptcy
proceeding or otherwise) to recover any amounts in respect of payments made
hereunder to any Lender Party.
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. WAIVERS, AMENDMENTS, ETC. The provisions of each Loan
Document may from time to time be amended, modified or waived, if such
amendment, modification or waiver is in writing and consented to by each Obligor
party thereto and the Required Lenders; PROVIDED, HOWEVER, that no such
amendment, modification or waiver shall:
(a) modify this Section or CLAUSE (a) of SECTION 11.10 without
the consent of all Lenders;
(b) increase the aggregate amount of any Credit Extensions
required to be made by a Lender pursuant to its Commitments or extend
the final Commitment Termination Date of Credit Extensions made (or
participated in) by a Lender, in each case without the consent of such
Lender (it being agreed, however, that any vote to rescind any
acceleration made pursuant to SECTION 8.2 and SECTION 8.3 of amounts
owing with respect to the Loans and other Obligations shall only
require the vote of the Required Lenders);
(c) reduce the principal amount of or rate of interest on any
Lender's Loan, reduce any fees described in ARTICLE III payable to any
Lender or extend the date on which interest or fees are payable in
respect of such Lender's Loans, in each case without the consent of
such Lender;
(d) reduce the percentage set forth in the definition of
"Required Lenders" or modify any requirement hereunder that any
particular action be taken by all Lenders or Required Lenders without
the consent of all Lenders;
-100-
(e) increase the Stated Amount of any Letter of Credit unless
consented to by the Issuer of such Letter of Credit;
(f) (i) change the definition of "Borrowing Base Amount",
"Eligible Account", "Eligible Inventory", "Eligible PP&E", "Maximum
PP&E Advance Amount", "Orderly Liquidation Value" or "Net Asset Value"
(in each case if the effect of such change would be to require a
Lender to make or participate in a Credit Extension in an amount that
is greater than such Lender would have had to make or participate in
immediately prior to such change), (ii) amend, modify or waive SECTION
3.1.1(b) or (iii) amend or waive any condition precedent to the making
of a Revolving Loan or the issuance of a Letter of Credit without the
consent of Lenders holding at least 75% of the Revolving Loan
Commitments; or
(g) except as otherwise expressly provided in a Loan Document,
release (i) VHC from its financial Obligations under the Loan
Documents or the Parent or all or substantially all of the Borrowers
(other than VHC) and the Subsidiary Guarantors their respective
financial Obligations under the Loan Documents (ii) all or
substantially all of the collateral under the Loan Documents (other
than in connection with the PP&E Release Event), in each case without
the consent of all Lenders;
(h) waive any Event of Default, or reverse the effects of any
resulting acceleration of the Obligations, under CLAUSE (b), (c) or
(d) of SECTION 8.1.9, unless consented to by all of the Lenders; or
(i) affect adversely the interests, rights or obligations of the
Administrative Agent (in its capacity as the Administrative Agent) or
any Issuer (in its capacity as Issuer), unless consented to by the
Administrative Agent or such Issuer, as the case may be.
No failure or delay on the part of any Lender Party in exercising any power or
right under any Loan Document shall operate as a waiver thereof, nor shall any
single or partial exercise of any such power or right preclude any other or
further exercise thereof or the exercise of any other power or right. No notice
to or demand on any Obligor in any case shall entitle it to any notice or demand
in similar or other circumstances. No waiver or approval by any Lender Party
under any Loan Document shall, except as may be otherwise stated in such waiver
or approval, be applicable to subsequent transactions. No waiver or approval
hereunder shall require any similar or dissimilar waiver or approval thereafter
to be granted hereunder.
SECTION 11.2. NOTICES; TIME. All notices and other communications provided
under each Loan Document shall be in writing or by facsimile and addressed,
delivered or transmitted, if to a Borrower, the Parent, the Administrative
Agent, a Lender or an Issuer, to the applicable Person at its address or
facsimile number set forth on SCHEDULE II hereto or, in the case of a Lender
that becomes a party hereto after the date hereof, set forth in the Lender
Assignment Agreement pursuant to which it became a Lender, or at such other
address or facsimile number as may be designated by such party in a notice to
the other parties. Any notice, if mailed and properly addressed with postage
prepaid or if properly addressed and sent by pre-paid courier
-101-
service, shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when the confirmation of transmission thereof
is received by the transmitter. The parties hereto agree that delivery of an
executed counterpart of a signature page to this Agreement and each other Loan
Document by facsimile shall be effective as delivery of an original executed
counterpart of this Agreement or such other Loan Document. Unless otherwise
indicated, all references to the time of a day in a Loan Document shall refer to
New York time.
SECTION 11.3. PAYMENT OF COSTS AND EXPENSES. The Borrowers agree, jointly
and severally, to pay on demand all reasonable out-of-pocket fees, costs and
expenses of the Agents (including the reasonable fees and out-of-pocket expenses
of Mayer, Brown, Xxxx & Maw, counsel to the Agents, and of local counsel, if
any, who may be retained by or on behalf of the Agents) in connection with:
(a) the syndication by the Syndication Agent and the Lead
Arranger of the Loans and Commitments, the negotiation, preparation,
execution and delivery of each Loan Document, including schedules and
exhibits, and any amendments, waivers, consents, supplements or other
modifications to any Loan Document as may from time to time hereafter
be required, whether or not the transactions contemplated hereby are
consummated; and
(b) the filing or recording of any Loan Document (including the
Filing Statements) and all amendments, supplements, amendments and
restatements and other modifications to any thereof, searches made
following the Closing Date in jurisdictions where Filing Statements
(or other documents evidencing Liens in favor of the Lender Parties)
have been recorded and any and all other documents or instruments of
further assurance required to be filed or recorded by the terms of any
Loan Document, in each case as necessary to create, maintain or
continue perfection of the Liens purported to be granted pursuant to
the Loan Documents;
(c) the preparation and review of the form of any document or
instrument relevant to any Loan Document; and
(d) all costs and out-of-pocket expenses (including per diem
rates of and out-of-pocket expenses incurred by employees or agents of
the Administrative Agent in connection with any Borrowing Base Audit
or Asset Appraisal performed by the Administrative Agent) incurred by
the Agents in connection with any Asset Appraisal or Borrowing Base
Audits; PROVIDED, HOWEVER, that the cost to the Borrowers of any Asset
Appraisal shall not exceed $100,000 for each such appraisal.
The Borrowers further agree, jointly and severally, to pay, and to save each
Lender Party harmless from all liability for, any stamp and other similar which
may be payable in connection with the execution or delivery of each Loan
Document, the Credit Extensions or the issuance of the Notes. The Borrowers also
agrees, jointly and severally, to reimburse each Lender Party upon demand for
all reasonable out-of-pocket expenses (including reasonable attorneys' fees and
legal expenses of counsel to such Lender Party) incurred by such Lender Party
after the occurrence and during the continuance of an Event of Default in
connection with (x) the
-102-
negotiation of any restructuring or "work-out" with any Borrower, whether or
not consummated, of any Obligations, (y) the enforcement of any Obligations and
(z) to the extent permitted under applicable law, the participation in or
monitoring of any bankruptcy or other reorganization or insolvency proceeding
relating to any Borrower or any of their respective Subsidiaries.
SECTION 11.4. INDEMNIFICATION. In consideration of the execution and
delivery of this Agreement by each Lender Party, each of the Parent and each
Borrower, on a joint and several basis, to the fullest extent permitted under
applicable law, hereby indemnifies, exonerates and holds each Lender Party and
each of their respective officers, directors, employees and agents and each
other Person controlling any of the foregoing within the meaning of either
Section 15 of the Securities Act of 1933, as amended, or Section 20 of the
Securities Exchange Act of 1934, as amended (collectively, the "INDEMNIFIED
PARTIES") free and harmless from and against any and all actions, causes of
action, suits, losses, costs, liabilities and damages, and expenses
(irrespective of whether any such Indemnified Party is a party to the action for
which indemnification hereunder is sought), including reasonable attorneys' fees
and disbursements, whether incurred in connection with actions between or among
the parties hereto or the parties hereto and third parties (collectively, the
"INDEMNIFIED LIABILITIES"), in each case incurred by the Indemnified Parties or
any of them as a result of, or arising out of, or relating to
(a) any transaction financed or to be financed in whole or in
part, directly or indirectly, with the proceeds of any Credit
Extension, including all Indemnified Liabilities arising in connection
with the Transactions;
(b) the entering into and performance of any Loan Document by any
of the Indemnified Parties (excluding any successful action brought by
or on behalf of any Borrower as the result of any failure by a Lender
to make any Credit Extension required to be made by it hereunder);
(c) with respect to any properties of the Obligors, any
investigation, litigation or proceeding related to any environmental
cleanup, audit or noncompliance with or liability under any
Environmental Law relating to the use, ownership or operation by any
Obligor or any Subsidiary thereof of any Hazardous Material;
(d) any investigation, litigation or proceeding related to any
acquisition or proposed acquisition by any Borrower or any of its
Subsidiaries of all or any portion of the Capital Securities or assets
of any Person, whether or not each Agent, such Issuer, such Lead
Arranger or such Lender is party thereto; or
(e) the presence on or under, or the escape, seepage, leakage,
spillage, discharge, emission or releases from, any real property
owned or operated by any Obligor or any Subsidiary thereof of any
Hazardous Material present on or under such property in a manner
giving rise to liability during or prior to the time such Obligor or
Subsidiary owned or operated such property (including any losses,
liabilities, damages, injuries, costs, expenses or claims asserted or
arising under any Environmental Law), regardless of whether caused by,
or within the control of, such Obligor or Subsidiary;
-103-
except (i) for any such Indemnified Liabilities arising for the account of a
particular Indemnified Party by reason of the gross negligence or willful
misconduct of such Indemnified Party or (ii) any such Indemnified Liabilities
arising for the account of a particular Indemnified Party by reason of any
Hazardous Materials that are manufactured, emitted, generated, treated,
released, stored or disposed of on any real property of the Parent or any of its
Subsidiaries or any violation of Environmental Law that occurs on or with
respect to any real property of the Parent or any of its Subsidiaries to the
extent occurring after such real property is transferred to any Indemnified
Person or its successor by foreclosure sale, deed in lieu of foreclosure, or
similar transfer, except to the extent such manufacture, emission, release,
generation, treatment, storage or disposal or violation is actually caused by
the Parent or any of its Subsidiaries. Each of the Borrowers and the Parent and
their respective successors and assigns hereby waive, release and agree not to
make any claim or bring any cost recovery action against, any Indemnified Party
under CERCLA or any state equivalent, or any similar law now existing or
hereafter enacted, except to the extent arising out of the gross negligence or
willful misconduct of any Indemnified Party or arising out of any Hazardous
Materials that are manufactured, emitted, generated, treated, released, stored
or disposed of on any real property of the Parent or any of its Subsidiaries or
any violation of Environmental Law that occurs on or with respect to any real
property of the Parent or any of its Subsidiaries to the extent occurring after
such real property is transferred to any Indemnified Person or its successor by
foreclosure sale, deed in lieu of foreclosure, or similar transfer, except to
the extent such manufacture, emission, release, generation, treatment, storage
or disposal or violation is actually caused by the Parent, any Borrower or any
of their respective Subsidiaries. It is expressly understood and agreed that to
the extent that any Indemnified Party is strictly liable under any Environmental
Laws, the Borrowers' and the Parent's obligations to such Indemnified Party
under this indemnity shall, to the extent permitted under applicable law
likewise be without regard to fault on the part of any Obligor with respect to
the violation or condition which results in liability of an Indemnified Party.
Notwithstanding anything to the contrary herein, each Lender Party shall be
responsible with respect to any Hazardous Materials that are manufactured,
emitted, generated, treated, released, stored or disposed of on any real
property of any Borrower or any of their Subsidiaries or any violation of
Environmental Law that occurs on or with respect to any such real property to
the extent it occurs after such real property is transferred to any Indemnified
Party or its successor by foreclosure sale, deed in lieu of foreclosure, or
similar transfer, except to the extent such manufacture, emission, release,
generation, treatment, storage or disposal or violation is actually caused by
the Parent, any Borrower or any of their respective Subsidiaries. If and to the
extent that the foregoing undertaking may be unenforceable for any reason, each
of the Borrowers and the Parent agrees to make the maximum contribution to the
payment and satisfaction of each of the Indemnified Liabilities which is
permissible under applicable law.
SECTION 11.5. SURVIVAL. The obligations of the Borrowers under SECTIONS
4.3, 4.4, 4.5, 4.6, 11.3 and 11.4, and the obligations of the Lenders under
SECTION 4.8 and SECTION 9.1, shall in each case survive any assignment from one
Lender to another (in the case of SECTIONS 11.3 and 11.4) and the occurrence of
the Termination Date. The representations and warranties made by any Obligor in
any Loan Document shall survive the execution and delivery of such Loan
Document.
SECTION 11.6. SEVERABILITY. Any provision of any Loan Document which is
prohibited or unenforceable in any jurisdiction shall, as to such provision and
such jurisdiction, be
-104-
ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions of such Loan Document or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 11.7. HEADINGS. The various headings of each Loan Document are
inserted for convenience only and shall not affect the meaning or
interpretation of such Loan Document or any provisions thereof.
SECTION 11.8. EXECUTION IN COUNTERPARTS, EFFECTIVENESS, ETC. This Agreement
may be executed by the parties hereto in several counterparts, each of which
shall be an original and all of which shall constitute together but one and the
same agreement. This Agreement shall become effective when counterparts hereof
executed on behalf of the Parent, the Borrowers, the Administrative Agent and
each Lender (or notice thereof satisfactory to the Administrative Agent), shall
have been received by the Administrative Agent.
SECTION 11.9. GOVERNING LAW; ENTIRE AGREEMENT. EACH LOAN DOCUMENT (OTHER
THAN THE LETTERS OF CREDIT, TO THE EXTENT SPECIFIED BELOW AND EXCEPT AS
OTHERWISE EXPRESSLY SET FORTH IN A LOAN DOCUMENT) WILL EACH BE DEEMED TO BE A
CONTRACT MADE UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF
NEW YORK
(INCLUDING FOR SUCH PURPOSE SECTIONS 5-1401 AND 5-1402 OF THE GENERAL
OBLIGATIONS LAW OF THE STATE OF NEW YORK). EACH LETTER OF CREDIT SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OR RULES DESIGNATED IN
SUCH LETTER OF CREDIT, OR IF NO LAWS OR RULES ARE DESIGNATED, THE INTERNATIONAL
STANDBY PRACTICES (ISP98--INTERNATIONAL CHAMBER OF COMMERCE PUBLICATION NUMBER
590 (THE "ISP RULES")) AND, AS TO MATTERS NOT GOVERNED BY THE ISP RULES, THE
INTERNAL LAWS OF THE STATE OF NEW YORK. The Loan Documents constitute the entire
understanding among the parties hereto with respect to the subject matter
thereof and supersede any prior agreements, written or oral, with respect
thereto.
SECTION 11.10. SUCCESSORS AND ASSIGNS.
(a) 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 neither the
Parent nor any Borrower may assign or otherwise transfer any of its
rights or obligations hereunder (other than, in the case of any
Borrower that is a Subsidiary of VHC, pursuant to a merger,
consolidation or liquidation permitted under SECTION 7.2.10) without
the prior written consent of each Lender (and any attempted assignment
or transfer by either the Parent or any Borrower 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
Indemnified Parties) any legal or equitable right, remedy or claim
under or by reason of this Agreement.
-105-
(b) Any Lender may assign to one or more Eligible Assignees
pursuant to a Lender Assignment Agreement, all or any portion of its
rights and obligations under this Agreement (including all or a
portion of its Commitments and/or the Loans at the time owing to it);
PROVIDED, HOWEVER, that (i) except in the case of an assignment of the
entire remaining amount of the assigning Lender's Commitments and/or
the Loans at the time owing to it or in the case of an assignment to a
Lender or an affiliate of a Lender or an Approved Fund with respect to
a Lender, the aggregate amount of the Commitments (which for this
purpose includes Loans outstanding thereunder) and/or principal
outstanding balance of the Loans of the assigning Lender subject to
each such assignment (determined as of the date the Lender Assignment
Agreement with respect to such assignment is delivered to the
Administrative Agent) shall not be less than $5,000,000 unless each of
the Administrative Agent and, so long as no Event of Default has
occurred and is continuing, the Borrowers otherwise consent (each such
consent not to be unreasonably withheld or delayed), (ii) 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
with respect to the Loans and/or the Commitments assigned and (iii)
the parties to each assignment shall execute and deliver to the
Administrative Agent a Lender Assignment Agreement. The assignor
Lender or the Assignee Lender must pay a processing fee in the amount
of $3,000 to the Administrative Agent upon delivery of any Lender
Assignment Agreement assigning any Revolving Loans and/or any
Revolving Loan Commitments; PROVIDED, however that if assignments are
made to or from an Approved Fund or any other Lender or affiliate of a
Lender, such fee shall be waived. Subject to acceptance and recording
thereof by the Administrative Agent pursuant to CLAUSE (c) of this
Section, from and after the effective date specified in each
Assignment and Acceptance, the Eligible Assignee thereunder shall be a
party hereto and, to the extent of the interest assigned by such
Lender Assignment Agreement, 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 Lender
Assignment Agreement, be released from its obligations under this
Agreement (and, in the case of a Lender Assignment Agreement 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 any provisions of this
Agreement which by their terms survive the termination of this
Agreement). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this clause
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 CLAUSE (d).
(c) The Administrative Agent shall record assignments made in
accordance with this Section in the Register in accordance with CLAUSE
(b) of SECTION 2.7.
(d) In the event that S&P, Xxxxx'x or Xxxxxxxx'x BankWatch (or
InsuranceWatch Ratings Service, in the case of Lenders that are
insurance
-106-
companies (or Best's Insurance Reports, if such insurance company is
not rated by Insurance Watch Ratings Service)) shall, after the date
that any Lender with a Commitment to make Revolving Loans or
participate in Letters of Credit becomes a Lender, downgrade the
long-term certificate of deposit rating or long-term senior unsecured
debt rating of such Lender, and the resulting rating shall be below
BBB-, Baa3 or C (or BB, in the case of Lender that is an insurance
company (or B, in the case of an insurance company not rated by
InsuranceWatch Ratings Service)) respectively, then the Issuer or the
Borrowers (with the consent of the Agents and the Issuer) shall have
the right, but not the obligation, upon notice to such Lender and the
Agents, to replace such Lender with an Eligible Assignee in accordance
with and subject to the restrictions contained in this Section, and
such Lender hereby agrees to transfer and assign without recourse (in
accordance with and subject to the restrictions contained in this
Section) all its interests, rights and obligations in respect of its
Revolving Loan Commitment under this Agreement to such Eligible
Assignee; PROVIDED, HOWEVER, that (i) no such assignment shall
conflict with any law, rule and regulation or order of any
governmental authority and (ii) such Eligible Assignee shall pay to
such Lender in immediately available funds on the date of such
assignment the principal of and interest and fees (if any) accrued to
the date of payment on the Loans made, and Letters of Credit
participated in, by such Lender hereunder and all other amounts
accrued for such Lender's account or owed to it hereunder.
(e) Any Lender may, without the consent of, or notice to, any
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/or obligations under this Agreement
(including all or a portion of its Commitments and/or the Loans owing
to it); PROVIDED, that (i) such Lender's obligations under this
Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrowers, 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. 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 to approve any amendment,
modification or waiver of any provision of this Agreement; PROVIDED
that any amendment, modification or waiver with respect to the
following: (i) any reduction in the interest rate or amount of fees
that such Participant is otherwise entitled to, (ii) a decrease in the
principal amount of, or an extension of the final stated maturity date
of, any Loan in which such Participant has purchased a participating
interest, (iii) a release of all or substantially all of the
collateral security under the Loan Documents or all or substantially
all of the Borrowers that are Subsidiaries of VHC and the Subsidiary
Guarantors from their Obligations, in each case except as otherwise
specifically provided in a Loan Document or (iv) a change in the date
fixed for payment of any interest or fees on any Loan in which such
Participant has purchased a participating interest, may require the
consent of the applicable Participant(s). The Borrowers acknowledge
and agree that, to the fullest extent permitted under applicable law,
each
-107-
Participant, for purposes of SECTIONS 4.3, 4.4, 4.5, 4.6, 4.8, 4.9,
7.1.1, 11.3 and 11.4, shall be considered a Lender. Each Participant
shall only be indemnified for increased costs pursuant to SECTION 4.3,
4.5 or 4.6 if and to the extent that the Lender which sold such
participating interest to such Participant concurrently is entitled to
make, and does make, a claim on any Borrower for such increased costs.
Any Lender that sells a participating interest in any Loan, Commitment
or other interest to a Participant under this Section shall indemnify
and hold harmless the Borrowers and the Administrative Agent from and
against any taxes, penalties, interest or other costs or losses
(including reasonable attorneys' fees and expenses) incurred or
payable by the Borrowers or the Administrative Agent as a result of
the failure of the any Borrower or the Administrative Agent to comply
with its obligations to deduct or withhold any taxes from any payments
made pursuant to this Agreement to such Lender or the Administrative
Agent, as the case may be, which taxes would not have been incurred or
payable if such Participant had been a Non-U.S. Lender that was
entitled to deliver to the Borrowers, the Administrative Agent or such
Lender, and did in fact so deliver, a duly completed and valid Form
W-8BEN or W-8ECI (or applicable successor form) entitling such
Participant to receive payments under this Agreement without deduction
or withholding of any United States federal taxes.
(f) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement (i)
to secure obligations of such Lender, including any pledge or
assignment to secure obligations to a Federal Reserve Bank or in
support of its obligations to its trustee, as applicable and (ii) in
connection with any securitization of any portfolio loans of such
Lender, in each case without the prior written consent of any other
Person; 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 pledgee, trustee or assignee for such Lender as
a party hereto.
(g) Notwithstanding anything to the contrary contained herein,
any Lender (a "GRANTING BANK") may grant to a special purpose funding
vehicle (a "SPC"), identified as such in writing from time to time by
the Granting Bank to the Administrative Agent and the Borrowers, the
option to provide to any Borrower all or any part of any Loan that
such Granting Bank would otherwise be obligated to make to any
Borrower pursuant to this Agreement; PROVIDED that (i) nothing herein
shall constitute a commitment by any SPC to make any Loan and (ii) if
an SPC elects not to exercise such option or otherwise fails to
provide all or any part of such Loan, the Granting Bank shall be
obligated to make such Loan pursuant to the terms hereof. The making
of an Loan by a SPC hereunder shall utilize the Commitment of the
Granting Bank to the same extent, and as if, such Loan were made by
such Granting Bank. Each party hereto hereby agrees that no SPC shall
be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting
Bank). In furtherance of the foregoing, each party hereto hereby
agrees (which agreement shall survive the termination of this
Agreement) that, prior to the date that is one year and one day after
the payment in full of all outstanding commercial paper or
-108-
other senior indebtedness of any SPC, it will not institute against,
or join any other person in instituting against, such SPC any
bankruptcy, reorganization, arrangement, insolvency or liquidation
proceedings under the laws of the United States or any State thereof.
In addition, notwithstanding anything to the contrary contained in
this Section, any SPC may (i) with notice to, but without the prior
written consent of, the Borrowers or the Administrative Agent and
without paying any processing fee therefor, assign all or a portion of
its interests in any Loans to the Granting Bank or to any financial
institutions (consented to by the Borrowers and Administrative Agent)
providing liquidity and/or credit support to or for the account of
such SPC to support the funding or maintenance of Loans and (ii)
disclose on a confidential basis any non-public information relating
to its Loans to any rating agency, commercial paper dealer or provider
of any surety, guarantee or credit or liquidity enhancement to such
SPC.
SECTION 11.11. OTHER TRANSACTIONS. Nothing contained herein shall preclude
the Administrative Agent, any Issuer or any other Lender from engaging in any
transaction, in addition to those contemplated by the Loan Documents, with any
Borrower or any of their respective Affiliates in which such Borrower or such
Affiliate is not restricted hereby from engaging with any other Person.
SECTION 11.12. FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION
BASED HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN
DOCUMENT, OR ANY COURSE OF CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL
OR WRITTEN) OR ACTIONS OF THE ADMINISTRATIVE AGENT, THE LENDERS, ANY ISSUER, THE
PARENT OR ANY BORROWER IN CONNECTION HEREWITH OR THEREWITH MAY (TO THE EXTENT
PERMITTED UNDER APPLICABLE LAW) BE BROUGHT AND MAINTAINED IN THE COURTS OF THE
STATE OF NEW YORK LOCATED IN NEW YORK COUNTY OR IN THE UNITED STATES DISTRICT
COURT FOR THE SOUTHERN DISTRICT OF NEW YORK; PROVIDED, HOWEVER, THAT ANY SUIT
SEEKING ENFORCEMENT AGAINST ANY COLLATERAL OR OTHER PROPERTY MAY BE BROUGHT, AT
THE ADMINISTRATIVE AGENT'S OPTION, IN THE COURTS OF ANY JURISDICTION WHERE SUCH
COLLATERAL OR OTHER PROPERTY MAY BE FOUND. THE BORROWERS AND THE PARENT
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED MAIL, POSTAGE
PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF NEW YORK AT THE
ADDRESS FOR NOTICES SPECIFIED IN SECTION 11.2. EACH BORROWER AND THE PARENT
HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW,
ANY OBJECTION WHICH IT MAY HAVE OR HEREAFTER MAY HAVE TO THE LAYING OF VENUE OF
ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT REFERRED TO ABOVE AND ANY CLAIM
THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. TO THE
EXTENT THAT ANY BORROWER OR THE PARENT HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY
FROM JURISDICTION OF ANY COURT OR FROM ANY LEGAL PROCESS (WHETHER THROUGH
SERVICE OR NOTICE, ATTACHMENT PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION
OR OTHERWISE) WITH RESPECT TO ITSELF OR ITS PROPERTY, EACH BORROWER AND THE
PARENT HEREBY IRREVOCABLY
-109-
WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW SUCH IMMUNITY IN RESPECT OF ITS
OBLIGATIONS UNDER THE LOAN DOCUMENTS.
SECTION 11.13. WAIVER OF JURY TRIAL. THE ADMINISTRATIVE AGENT, EACH LENDER,
EACH ISSUER, THE PARENT AND EACH BORROWER HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE TO THE FULLEST EXTENT PERMITTED BY LAW ANY RIGHTS THEY MAY
HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED HEREON, OR ARISING
OUT OF, UNDER, OR IN CONNECTION WITH, ANY LOAN DOCUMENT, OR ANY COURSE OF
CONDUCT, COURSE OF DEALING, STATEMENTS (WHETHER ORAL OR WRITTEN) OR ACTIONS OF
THE ADMINISTRATIVE AGENT, SUCH LENDER, SUCH ISSUER, THE PARENT OR SUCH BORROWER
IN CONNECTION THEREWITH. EACH BORROWER AND THE PARENT ACKNOWLEDGE AND AGREE THAT
THEY HAVE RECEIVED FULL AND SUFFICIENT CONSIDERATION FOR THIS PROVISION (AND
EACH OTHER PROVISION OF EACH OTHER LOAN DOCUMENT TO WHICH EACH IS A PARTY) AND
THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE ADMINISTRATIVE AGENT, EACH
LENDER AND EACH ISSUER ENTERING INTO THE LOAN DOCUMENTS.
SECTION 11.14. CONFIDENTIALITY. The Lenders, the Issuers and the Agents
shall hold all non-public information obtained pursuant to or in connection with
this Agreement about, or obtained by them based on a review of the books and
records of, the Parent or any of its Subsidiaries in accordance with their
customary procedures for handling confidential information of this nature, but
may make disclosure to any of their examiners, affiliates, outside auditors,
counsel and other professional advisors or to any direct or indirect contractual
counterparty in swap agreements or such contractual counterparty's professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this
Section) in connection with this Agreement or as reasonably required by any
potential BONA FIDE transferee, participant or assignee, or in connection with
the exercise of remedies under a Loan Document, or as requested by any
governmental agency or representative thereof or pursuant to legal process or to
any quasi-regulatory authority (including the National Association of Insurance
Commissioners); PROVIDED, HOWEVER, that
(a) unless specifically prohibited by applicable law or court
order, each Lender, each Issuer and each Agent shall notify VHC of any
request by any governmental agency or representative thereof (other
than any such request in connection with an examination of the
financial condition of such Lender by such governmental agency) for
disclosure of any such non-public information prior to disclosure of
such information;
(b) prior to any such disclosure pursuant to this Section, each
Lender shall require any such BONA FIDE transferee, participant and
assignee receiving a disclosure of non-public information to agree in
writing (i) to be bound by this SECTION 11.14; and (ii) to require
such Person to require any other Person to whom such Person discloses
such non-public information to be similarly bound by this Section; and
-110-
(c) except as may be required by an order of a court of competent
jurisdiction and to the extent set forth therein, no Lender shall be
obligated or required to return any materials furnished by the Parent
or any of its Subsidiaries.
SECTION 11.15. ADDITIONAL BORROWERS. Any wholly-owned U.S. Subsidiary of
VHC that is required to execute a Joinder Agreement pursuant to SECTION 7.1.8(a)
shall become a Borrower hereunder by executing and delivering to the
Administrative Agent a Joinder Agreement and a counterpart of this Agreement.
Upon delivery of such Joinder Agreement and related counterparts, such
Subsidiary shall automatically become a Borrower hereunder with the same force
and effect as if originally named as a Borrower hereunder. The execution and
delivery of any such Joinder Agreement or counterpart shall not require the
consent of any other Obligor or Lender Party hereunder. The rights and
obligations of each other Obligor hereunder shall remain in full force and
effect notwithstanding the addition of any new Borrower as a party to this
Agreement.
SECTION 11.16. RELEASE OF CERTAIN BORROWERS. Upon any Borrower (other than
VHC) ceasing to be a Subsidiary of the Parent pursuant to a transaction
permitted under this Agreement, such Borrower shall be released from all of its
rights and obligations hereunder and under the Loan Documents and shall cease to
be Borrower for any purpose hereunder or thereunder; PROVIDED that such release
shall not affect the aggregate Obligations of the other Borrowers hereunder.
SECTION 11.17. LIMITATION ON OBLIGATIONS OF CERTAIN BORROWERS. Anything in
this Agreement to the contrary notwithstanding, each Borrower shall only be
liable under this Agreement and the other Loan Documents for Loans borrowed by
it hereunder and for the maximum amount of other Obligations that it can incur
without rendering the agreements contained herein and in such other Loan
Documents, as they relate to such Borrower, voidable under applicable law
relating to fraudulent conveyance or fraudulent transfer, and not for any
greater amount.
-111-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized as of the day
and year first above written.
BORROWERS :
XXX XXXXXXXX HOLDINGS INC.
By:
-------------------------------------------
Title:
XXX XXXXXXXX CORPORATION
By:
-------------------------------------------
Title:
H&S GRAPHICS, INC.
By:
-------------------------------------------
Title:
PRECISION OFFSET PRINTING COMPANY,
INC.
By:
-------------------------------------------
Title:
PREFACE, INC.
By:
-------------------------------------------
Title:
-112-
ONE THOUSAND REALTY & INVESTMENT
COMPANY
By:
-------------------------------------------
Title:
-113-
AGENTS:
THE CIT GROUP/BUSINESS CREDIT, INC.,
as the Administrative Agent and as a Lender
By:
-------------------------------------------
Title:
-114-
CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH,
as the Syndication Agent, the Lead Arranger
and as a Lender
By:
-------------------------------------------
Title:
By:
-------------------------------------------
Title:
-115-
U.S. BANK NATIONAL ASSOCIATION,
as the Documentation Agent and as a Lender
By:
-------------------------------------------
Title:
-116-
ISSUER:
U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------------
Title:
-117-
LENDERS:
THE CIT GROUP/BUSINESS CREDIT, INC.
By:
-------------------------------------------
Title:
-118-
CREDIT SUISSE FIRST BOSTON, CAYMAN
ISLANDS BRANCH
By:
-------------------------------------------
Title:
By:
-------------------------------------------
Title:
-119-
U.S. BANK NATIONAL ASSOCIATION
By:
-------------------------------------------
Title:
-120-
THE BANK OF NOVA SCOTIA
By:
-------------------------------------------
Title:
-121-
IBJ WHITEHALL BUSINESS CREDIT
CORPORATION
By:
-------------------------------------------
Title:
-122-
LASALLE BUSINESS CREDIT, INC.
By:
-------------------------------------------
Title:
-123-
TRANSAMERICA BUSINESS CAPITAL
CORPORATION
By:
-------------------------------------------
Title:
-124-
CREDIT INDUSTRIEL ET COMMERCIAL
By:
-------------------------------------------
Title:
-125-
SCHEDULE I
DISCLOSURE SCHEDULE TO CREDIT AGREEMENT
ITEM 6.7 Litigation.
None
ITEM 6.8 Existing Subsidiaries.
1. One Thousand Realty & Investment Company
2. H & S Graphics, Inc.
3. Preface, Inc.
4. Precision Offset Printing Company, Inc.
ITEM 6.11 Employee Benefit Plans.
None
ITEM 6.12 Environmental Matters.
None
ITEM 7.2.2(b) Existing Indebtedness.
CREDITOR OUTSTANDING PRINCIPAL AMOUNT
-------- ----------------------------
1. HSBC Bank USA
Subordinated Exchange Debentures $ 45,017,736.11 $ 2,211,496.29
2. HSBC Bank USA
Senior Subordinated Notes $ 100,000,000.00 $ 3,957,291.66
ITEM 7.2.3(b) Ongoing Liens.
1. Dell Financial Services, LP - equipment liens:
Xxx Xxxxxxxx Press, Inc. DE, UCC-1 1135420, filed 10/09/01
H&S Graphics, Inc. - DE, UCC-1 1135422, filed 10/09/01
Precision Offset Printing Company, Inc. - DE, UCC-1 1135404, filed
10/09/01
Xxx Xxxxxxxx Graphics, Inc. - DE, UCC-1 1135421, filed 10/09/01
Preface, Inc. - DE, UCC-1 1135402, filed 10/09/01
2. Toyota Motor Credit Corp. - equipment lien:
Xxx Xxxxxxxx Press, Inc. - MO, UCC-1 4180803, filed 06/28/01
3. Toyota Financial Services - equipment liens:
Xxx Xxxxxxxx Press, Inc. - MO, UCC-1 20018044072C, filed 10/09/01
Xxx Xxxxxxxx Graphics, Inc. - MO, UCC-1 20018050553E, filed 12/27/01
4. Bayer Financial Services- equipment lien:
H & S Graphics, Inc. - IL, UCC-1 003896877, filed 08/20/98 5. AGFA
5. AGFA Division, Bayer Corporation - equipment lien:
H & S Graphics, Inc. - IL, UCC-1 004002655, filed 03/11/99
6. Waminet, Inc. - equipment lien:
H & S Graphics, Inc. - IL, UCC-1 004072584, filed 07/29/99
7. AGFA Corp. - equipment lien:
H & S Graphics, Inc. - IL, UCC-1 004080861, filed 08/18/99
8. American Express Business Finance Corp. - equipment lien:
Xxx Xxxxxxxx Graphics, Inc. - MO, UCC-1 20018044668K, filed 10/10/01
ITEM 7.2.5(a) Ongoing Investments.
Wholly-owned Subsidiaries as of 3/26/02
INVESTMENT AMOUNT NOTE PAYABLE
H & S Graphics, Inc. $6,125,103 $13,795,715
Preface, Inc. 534,414 1,015,182
Precision Offset Printing Company, Inc. 5,100,868 16,500,000
One Thousand Realty & Investment Co. 1,087,000 -----------
-127-
SCHEDULE II
NOTICE INFORMATION FOR BORROWERS AND PARENT:
Parent: Borrowers:
Xxx Xxxxxxx Holdings Inc c/o Xxx Xxxxxxx Corporation
0000 Xxxxxx Xxxxxx 0000 Xxxxxx Xxxxxx
Xx. Xxxxx, XX 00000 Xx. Xxxxx, XX 00000
Contact: Xxxxx X. Xxxxxxxx Contact: Xxxxx X. Xxxxxxxx
Telephone: (000) 000-0000. Telephone: (000) 000-0000
PERCENTAGES;
LIBOR OFFICE;
DOMESTIC OFFICE
NAME AND NOTICE ADDRESS OF LENDER LIBOR OFFICE DOMESTIC OFFICE PERCENTAGE
--------------------------------- ------------ --------------- ----------
The CIT Group/Business Credit, Inc. The CIT Group/Business Credit, Inc. The CIT Group/Business Credit, Inc. 17.77778%
0000 Xxxxxx of the Americas 1211 Avenue of the Americas 0000 Xxxxxx xx xxx Xxxxxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxx Xxxxxxxx
Credit Suisse, First Boston, Cayman Islands Branch Credit Suisse, First Boston, Credit Suisse, First Boston, 6.66667%
00 Xxxxxxx Xxxxxx Xxxxxx Xxxxxxx Branch Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000 00 Xxxxxxx Xxxxxx 00 Xxxxxxx Xxxxxx
Attn: Xxx Xxxxxxxxx Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
U.S. Bank National Association U.S. Bank National Association U.S. Bank National Association 15.55556%
721 Locust 000 Xxxxx Xxxxx Xxxxxx 000 Xxxxx Xxxxx Xxxxxx
Xx. Xxxxx, XX 00000 Xxxxxxxxxxx, XX 00000 Xxxxxxxxxxx, XX 00000
The Bank of Nova Scotia The Bank of Nova Scotia The Bank of Nova Scotia 6.00000%
000 X. Xxxxxxx Xxxxxx, Xxxxx 0000 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000 000 Xxxxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, XX 00000 Xxxxxxx, XX 00000 Xxxxxxx, XX 00000
Attn: Xxxxxxx Xxxxxxx/Xxxx Xxxxxxx
NAME AND NOTICE ADDRESS OF LENDER LIBOR OFFICE DOMESTIC OFFICE PERCENTAGE
--------------------------------- ------------ --------------- ----------
IBJ Whitehall Business Credit Corporation IBJ Whitehall Business Credit IBJ Whitehall Business Credit 13.33333%
One Xxxxx Xxxxxx, 0xx Xxxxx Corporation Corporation
Xxx Xxxx, XX 00000 One Xxxxx Xxxxxx, 0xx Xxxxx One Xxxxx Xxxxxx, 0xx Xxxxx
Attn: Xxx Xxxxxx Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
LaSalle Business Credit, Inc. LaSalle Business Credit, Inc. LaSalle Business Credit, Inc. 13.33333%
0000 Xxxxxx Xxxxxx, 0xx Xxxxx 000 Xxxxx Xxxxxx, 00xx Xxxxx 000 Xxxxx Xxxxxx, 00xx Xxxxx
Xxxxxxxxxxxx, XX 00000 Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxxxxx Xxxxxxxx
Transamerica Business Capital Corporation Transamerica Business Capital Transamerica Business Capital 13.33333%
000 Xxxxxxxx Xxxxx Xxxxxx, Xxxxx X-000 Corporation Corporation
Xxx, XX 00000 555 Xxxxxxxx Xxxxx Avenue, 555 Xxxxxxxx Xxxxx Avenue,
Attn: Xxxxxxx XxXxxx Xxxxx X-000 Xxxxx X-000
Xxx, XX 00000 Xxx, XX 00000
Credit Industriel et Commerce Credit Industriel et Commerce Credit Industriel et Commerce 13.33333%
000 Xxxxxxx Xxxxxx, 00xx Floor 000 Xxxxxxx Xxxxxx, 00xx Floor 000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000 Xxx Xxxx, XX 00000
Attn: Xxxx Xxxxxxx
SCHEDULE III
REAL ESTATE
PROPERTY
Jefferson City, MO
000 Xxxxxx Xxxxx
Xxxxxxxxx, XX 00000
(Xxxx County)
Crestwood, MO
0000 Xxxxxx Xxx.
Xxxxxxxxx, XX 00000
(St. Louis County)
Owensville, MO
000 Xxxxx Xxx.
Xxxxxxxxxx, XX 00000
(Gasconade County)
Xxxxxxxx, IA
(ScottCounty)
Leesport, PA
000 Xxxx Xxxxxx
Xxxxxxxx, XX
(Berks County)
Dauberville, PA
1149 Railroad Rd.
Dauberville [Centre Township], PA
(Berks County)
Frederick, MD
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX
(Xxxxxxxxx County, MD)
Owensville, MO
(Gasconade County)
Rolling Meadow, IL
SCHEDULE IV
SUBSIDIARY GUARANTORS
None
SCHEDULE V
EXISTING LETTERS OF CREDIT
1. Sentry Insurance Company 12/31/01 1,350,000
SCHEDULE VI
DEPOSIT ACCOUNTS
OBLIGOR BANK ACCOUNT NUMBER
------------------------------------------------------------------------------------
XXX XXXXXXXX HOLDINGS INC. US Bank Corporation 1001613403
XXX XXXXXXXX CORPORATION US Bank Corporation 0000010537
US Bank Corporation 3500710789
US Bank Corporation 121713605
Branch Banking & Trust 5150916161
US Bank Corporation 1891015495
XX Xxxx Xxxxxxxxxxx 0000000000
XX Xxxx Xxxxxxxxxxx 000000
XX Bank Corporation 3500707280
US Bank Corporation 1001235272
US Bank Corporation 1001613379
US Bank Corporation 7060
Central Bank 000272
Cass Bank 00-0000000-0
ONE THOUSAND REALTY & INVESTMENT CO. US Bank Corporation 1001485406
PRECISION OFFSET PRINTING COMPANY Allfirst Bank 00620-6530-0
Allfirst Bank
H & S GRAPHICS, INC. American National Bank 5330330351
American National Bank 37215
PREFACE, INC. American National Bank 5330330378
American National Bank 37236
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1. Defined Terms.........................................................................2
SECTION 1.2. Use of Defined Terms.................................................................34
SECTION 1.3. Cross-References.....................................................................34
SECTION 1.4. Accounting and Financial Determinations..............................................34
ARTICLE II
COMMITMENTS, BORROWING AND ISSUANCE PROCEDURES, NOTES AND
LETTERS OF CREDIT
SECTION 2.1. Commitments..........................................................................35
SECTION 2.1.1. Revolving Loan Commitment and Swingline Loan Commitment.........................35
SECTION 2.1.2. Letter of Credit Commitment.....................................................36
SECTION 2.1.3. Lenders Not Permitted or Required to Make the Loans.............................36
SECTION 2.2. Reduction or Increase of Commitment Amounts..........................................36
SECTION 2.2.1. Optional Reductions.............................................................37
SECTION 2.2.2. Optional Increase of Revolving Loan Commitment Amount...........................37
SECTION 2.3. Borrowing Procedures.................................................................39
SECTION 2.3.1. Revolving Loans.................................................................39
SECTION 2.3.2. Swingline Loans.................................................................39
SECTION 2.4. Continuation and Conversion Elections................................................41
SECTION 2.5. Funding..............................................................................41
SECTION 2.6. Issuance Procedures, etc.............................................................41
SECTION 2.6.1. Other Lenders' Participation....................................................42
SECTION 2.6.2. Disbursements...................................................................42
SECTION 2.6.3. Reimbursement...................................................................43
SECTION 2.6.4. Deemed Disbursements............................................................43
SECTION 2.6.5. Nature of Reimbursement Obligations.............................................44
SECTION 2.7. Notes................................................................................45
SECTION 2.8. Notice of Cash Dominion..............................................................45
-i-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE III
REPAYMENTS, PREPAYMENTS, INTEREST AND FEES
SECTION 3.1. Repayments and Prepayments; Application..............................................46
SECTION 3.1.1. Repayments and Prepayments......................................................46
SECTION 3.1.2. Application.....................................................................50
SECTION 3.2. Interest Provisions..................................................................50
SECTION 3.2.1. Rates...........................................................................50
SECTION 3.2.2. Post-Default Rates..............................................................51
SECTION 3.2.3. Payment Dates...................................................................51
SECTION 3.3. Fees.................................................................................51
SECTION 3.3.1. Commitment Fee..................................................................51
SECTION 3.3.2. Letter of Credit Fee............................................................52
ARTICLE IV
CERTAIN LIBO RATE AND OTHER PROVISIONS
SECTION 4.1. LIBO Rate Lending Unlawful...........................................................52
SECTION 4.2. Deposits Unavailable.................................................................53
SECTION 4.3. Increased LIBO Rate Loan Costs, etc..................................................53
SECTION 4.4. Funding Losses.......................................................................53
SECTION 4.5. Increased Capital Costs..............................................................54
SECTION 4.6. Taxes................................................................................54
SECTION 4.7. Payments, Computations, etc..........................................................57
SECTION 4.8. Sharing of Payments..................................................................57
SECTION 4.9. Setoff...............................................................................58
SECTION 4.10. Mitigation...........................................................................58
SECTION 4.11. Replacement of Lenders...............................................................58
ARTICLE V
CONDITIONS TO CREDIT EXTENSIONS
SECTION 5.1. Initial Credit Extension.............................................................59
SECTION 5.1.1. Resolutions, etc................................................................59
SECTION 5.1.2. Transaction Documents...........................................................60
SECTION 5.1.3. Closing Date Certificate........................................................60
SECTION 5.1.4. Consummation of Transactions....................................................60
SECTION 5.1.5. Closing Fees, Expenses, etc.....................................................61
-ii-
TABLE OF CONTENTS
(continued)
PAGE
SECTION 5.1.6. Financial Information, Material Adverse Change, etc.............................61
SECTION 5.1.7. Compliance Certificate..........................................................61
SECTION 5.1.8. Opinions of Counsel.............................................................61
SECTION 5.1.9. [Reserved]......................................................................61
SECTION 5.1.10. Pledge and Security Agreement...................................................61
SECTION 5.1.11. [Reserved]......................................................................62
SECTION 5.1.12. Filing Agent, etc...............................................................62
SECTION 5.1.13. [Reserved]......................................................................62
SECTION 5.1.14. Insurance.......................................................................62
SECTION 5.1.15. Delivery of Notes...............................................................63
SECTION 5.1.16. Litigation, etc.................................................................63
SECTION 5.1.17. Governmental Approvals..........................................................63
SECTION 5.1.18. Satisfactory Legal Form.........................................................63
SECTION 5.1.19. Perfection Certificate..........................................................63
SECTION 5.1.20. Solvency Certificate............................................................63
SECTION 5.1.21. Cash Management Arrangements, etc...............................................63
SECTION 5.1.22. Initial Borrowing Base Certificate..............................................63
SECTION 5.1.23. Audit of Accounts Receivable, Accounts Payable, Inventory, etc..................63
SECTION 5.1.24. Asset Appraisal.................................................................64
SECTION 5.2. All Credit Extensions................................................................64
SECTION 5.2.1. Compliance with Warranties, No Default, etc.....................................64
SECTION 5.2.2. Credit Extension Request, etc...................................................64
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. Organization, etc....................................................................65
SECTION 6.2. Due Authorization, Non-Contravention, etc............................................65
SECTION 6.3. Government Approval, Regulation, etc.................................................65
SECTION 6.4. Validity, etc........................................................................66
SECTION 6.5. Financial Information................................................................66
SECTION 6.6. No Material Adverse Change...........................................................66
SECTION 6.7. Litigation, Labor Controversies, etc.................................................66
SECTION 6.8. Subsidiaries.........................................................................66
SECTION 6.9. Ownership of Properties..............................................................67
SECTION 6.10. Taxes................................................................................67
SECTION 6.11. Pension and Welfare Plans............................................................67
SECTION 6.12. Environmental Warranties.............................................................67
SECTION 6.13. Accuracy of Information..............................................................68
SECTION 6.14. Regulations U and X..................................................................68
-iii-
TABLE OF CONTENTS
(continued)
PAGE
SECTION 6.15. Issuance of Senior Notes; Status of Obligations as Senior
Indebtedness, etc..................................................................69
SECTION 6.16. Solvency.............................................................................69
SECTION 6.17. Accounts.............................................................................69
SECTION 6.18. Fair Labor Standards Act.............................................................69
ARTICLE VII
COVENANTS
SECTION 7.1. Affirmative Covenants................................................................70
SECTION 7.1.1. Financial Information, Reports, Notices, etc....................................70
SECTION 7.1.2. Maintenance of Existence; Compliance with Laws, etc.............................73
SECTION 7.1.3. Maintenance of Properties.......................................................73
SECTION 7.1.4. Insurance.......................................................................74
SECTION 7.1.5. Books and Records; Borrowing Base Audits........................................74
SECTION 7.1.6. Environmental Law Covenant......................................................75
SECTION 7.1.7. Use of Proceeds.................................................................75
SECTION 7.1.8. Future Subsidiaries.............................................................75
SECTION 7.1.9. Future Leased Property and Future Acquisitions of Real
Property: Future Acquisition of Other Property...............................76
SECTION 7.1.10. Collection of Accounts..........................................................77
SECTION 7.1.11. Notification to Account Debtors.................................................77
SECTION 7.1.12. Mortgages.......................................................................78
SECTION 7.1.13. Phase I Environmental Reports...................................................78
SECTION 7.1.14. Deposit Account Control Agreements..............................................78
SECTION 7.2. Negative Covenants...................................................................79
SECTION 7.2.1. Business Activities.............................................................79
SECTION 7.2.2. Indebtedness....................................................................79
SECTION 7.2.3. Liens...........................................................................81
SECTION 7.2.4. Financial Condition and Operations..............................................83
SECTION 7.2.5. Investments.....................................................................84
SECTION 7.2.6. Restricted Payments, etc........................................................85
SECTION 7.2.7. Capital Expenditures, etc.......................................................87
SECTION 7.2.8. No Prepayment of Other Debt.....................................................87
SECTION 7.2.9. Issuance of Capital Securities..................................................88
SECTION 7.2.10. Consolidation, Merger, etc......................................................88
SECTION 7.2.11. Permitted Dispositions..........................................................88
SECTION 7.2.12. Modification of Certain Agreements..............................................89
SECTION 7.2.13. Transactions with Affiliates....................................................90
SECTION 7.2.14. Restrictive Agreements, etc.....................................................90
SECTION 7.2.15. Sale and Leaseback..............................................................91
-iv-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE VIII
EVENTS OF DEFAULT
SECTION 8.1. Listing of Events of Default.........................................................91
SECTION 8.1.1. Non-Payment of Obligations......................................................91
SECTION 8.1.2. Breach of Warranty..............................................................91
SECTION 8.1.3. Non-Performance of Certain Covenants and Obligations............................91
SECTION 8.1.4. Non-Performance of Other Covenants and Obligations..............................91
SECTION 8.1.5. Default on Other Indebtedness...................................................92
SECTION 8.1.6. Judgments.......................................................................92
SECTION 8.1.7. Pension Plans...................................................................92
SECTION 8.1.8. Change in Control...............................................................92
SECTION 8.1.9. Bankruptcy, Insolvency, etc.....................................................92
SECTION 8.1.10. Impairment of Security, etc.....................................................93
SECTION 8.1.11. Failure of Subordination........................................................93
SECTION 8.2. Action if Bankruptcy.................................................................93
SECTION 8.3. Action if Other Event of Default.....................................................94
ARTICLE IX
THE ADMINISTRATIVE AGENT
SECTION 9.1. Actions..............................................................................94
SECTION 9.2. Funding Reliance, etc................................................................95
SECTION 9.3. Exculpation..........................................................................95
SECTION 9.4. Successor............................................................................95
SECTION 9.5. Credit Extensions by Each Agent......................................................96
SECTION 9.6. Credit Decisions.....................................................................96
SECTION 9.7. Copies, etc..........................................................................96
SECTION 9.8. Reliance by Administrative Agent.....................................................96
SECTION 9.9. Defaults.............................................................................97
SECTION 9.10. Lead Arranger........................................................................97
SECTION 9.11. The Syndication Agent, The Documentation Agent and The Administrative Agent..........97
ARTICLE X
Guaranty
SECTION 10.1. Guaranty.............................................................................97
SECTION 10.2. Reinstatement, etc...................................................................98
SECTION 10.3. Guaranty Absolute, etc...............................................................98
SECTION 10.4. Waiver, etc..........................................................................99
SECTION 10.5. Postponement of Subrogation, etc.....................................................99
-v-
TABLE OF CONTENTS
(continued)
PAGE
ARTICLE XI
MISCELLANEOUS PROVISIONS
SECTION 11.1. Waivers, Amendments, etc............................................................100
SECTION 11.2. Notices; Time.......................................................................101
SECTION 11.3. Payment of Costs and Expenses.......................................................102
SECTION 11.4. Indemnification.....................................................................102
SECTION 11.5. Survival............................................................................104
SECTION 11.6. Severability........................................................................104
SECTION 11.7. Headings............................................................................105
SECTION 11.8. Execution in Counterparts, Effectiveness, etc.......................................105
SECTION 11.9. Governing Law; Entire Agreement.....................................................105
SECTION 11.10. Successors and Assigns..............................................................105
SECTION 11.11. Other Transactions..................................................................109
SECTION 11.12. Forum Selection and Consent to Jurisdiction.........................................109
SECTION 11.13. Waiver of Jury Trial................................................................110
SECTION 11.14. Confidentiality.....................................................................110
SECTION 11.15. Additional Borrowers................................................................111
SECTION 11.16. Release of Certain Borrowers........................................................111
SECTION 11.17. Limitation on Obligations of Certain Borrowers......................................111
SCHEDULE I - Disclosure Schedule
SCHEDULE II - Percentages; LIBOR Office; Domestic Office
SCHEDULE III - Real Estate with Title Insurance Policies
SCHEDULE IV - Subsidiary Guarantors
SCHEDULE V - Existing Letters of Credit
SCHEDULE VI - Deposit Accounts
EXHIBIT A-1 - Form of Revolving Note
EXHIBIT A-2 - Form of Swingline Note
EXHIBIT B-1 - Form of Borrowing Request
EXHIBIT B-2 - Form of Issuance Request
EXHIBIT B-3 - Form of Continuation/Conversion Notice
EXHIBIT B-4 - Notice of Cash Dominion
EXHIBIT C - Form of Perfection Certificate
EXHIBIT D - Form of Closing Date Certificate
EXHIBIT E-1 - Form of Compliance Certificate
EXHIBIT E-2 - Form of Borrowing Base Certificate
EXHIBIT E-3 - Form of Solvency Certificate
EXHIBIT F - Form of Joinder Agreement
EXHIBIT G - Form of Pledge and Security Agreement
EXHIBIT H - Form of Mortgage
EXHIBIT I - Form of Lender Assignment Agreement
-vi-
EXHIBIT J-1 - Form of Opinion of Counsel for the Obligors
EXHIBIT J-2 - Form of Opinion of Special Local Counsel for the Obligors
-vii-
